TMI Tax Updates - e-Newsletter
April 9, 2022

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. RECENT CHANGES IN INCOME TAX ACT, 1961

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Tax Revenues in 2021-22 exceed the Union Budget estimates by ₹5 lakh crore

2. Shri Piyush Goyal invites Australian businesses to Make in India and calls for more engagements between each other’s Startups

3. Monetary Policy Statement, 2022-23 Resolution of the Monetary Policy Committee (MPC) April 6-8, 2022

4. Cabinet approves signing of Bilateral Memorandum of Understanding (MoU) between Securities and Exchange Board of India and Financial Regulatory Commission, Mongolia

5. Over 520 lakh subscribers under various Schemes of National Pension System as of March 2022 , showing year-on-year increase of more than 22%

6. Revenue Deficit Grant of ₹ 7183.42 crore released to 14 States

7. Processing and Settlement of Small Value Export and Import related payments facilitated by Online Export-Import Facilitators - Draft Guidelines for Comments

8. More than 34.42 crore loan accounts amounting to ₹ 18.60 lakh crore opened since launch of Pradhan Mantri Mudra Yojana

Notifications

Customs

1. G.S.R. 283 (E) - dated 7-4-2022 - Cus

Corrigendum - Notification No. 14/2022-Customs, dated the 1st February, 2022

2. G.S.R. 282(E) - dated 7-4-2022 - Cus

Corrigendum - Notification No. 60/2021-Customs, dated the 30th December, 2021

3. G.S.R. 281(E) - dated 7-4-2022 - Cus

Corrigendum - Notification No. 57/2021-Customs, dated the 29th December, 2021

4. G.S.R. 280 (E) - dated 7-4-2022 - Cus

Corrigendum - Notification No. 55/2021-Customs, dated the 29th December, 2021

5. 32/2022 - dated 7-4-2022 - Cus (NT)

Rate of exchange of one unit of foreign currency equivalent to Indian rupees - Supersession Notification No. 18/2022-Customs(N.T.), dated 17th March, 2022

GST - States

6. 233/XI-2-22-9(47)/17-T.C.182-U.P.Act-1-2017-Order-(233)-2022 - dated 31-3-2022 - Uttar Pradesh SGST

Seek to amend notification No-KA.NI.-2-809/XI-9(47)/17-U.P.Act-1-2017-Order-(37)-2019 Dated 28.05.2019

7. 232/XI-2-22-9(47)/17-T.C.181-U.P.Act-1-2017-Order-(232)-2022 - dated 31-3-2022 - Uttar Pradesh SGST

Seek to amend notification No-KA.NI.-2-807/XI-9(47)/17-U.P.Act-1-2017-Order-(35)-2019 Dated 28.05.2019

8. 231/XI-2-22-9(47)/17-T.C.180-U.P.Act-1-2017-Order-(231)-2022 - dated 31-3-2022 - Uttar Pradesh SGST

Conditional Concessional rate @6% on Bricks without I.T.C.

9. 230/XI-2-22-9(47)/17-T.C.179-U.P.Act-1-2017-Order-(230)-2022 - dated 31-3-2022 - Uttar Pradesh SGST

Seek to amend notification No-KA.NI.-2-836/XI-9(47)/17-U.P.Act-1-2017-Order-(06)-2017 Dated 30.06.2017

10. 63/XI-2-22-9(42)/17-T.C.160-U.P.GST Rules-2017-Order-(229)-2022 - dated 24-3-2022 - Uttar Pradesh SGST

Seek to make amendments (54th Amendment,2022) to the UPGST Rules,2017

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/CFD/CMD1/CIR/P/2022/47 - dated 8-4-2022

Clarification on applicability of Regulation 23(4) read with Regulation 23(3)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in relation to Related Party Transactions

2. SEBI/HO/CFD/SSEP/CIR/P/2022/48 - dated 8-4-2022

Standard Operating Procedures (SOP) for dispute resolution available under the stock exchange arbitration mechanism for disputes between a listed company and its shareholder(s)/ investor(s)

Highlights / Catch Notes

GST

• Court Disapproves Provisional Attachment u/s 83 CGST Act, Orders Release of Frozen Accounts and Seized Electronics.

  Case-Laws - HC : Provisional attachment order of property - section 83 of the CGST Act, 2017 - This Court did not approve the provisional attachment of the goods, stock and receivables, more particularly, when the entire stock and receivables have been pledged and a floating charge has been created for the purpose of availing the cash credit facility with the provisional attachment of the goods, stock and receivables the entire business will come to a standstill. - Further dement account is also released - So far the prayer of the writ applicants with regard to release of electronic items including Mobile Phone, laptop and other documents seized during the search proceedings are concerned, same is also directed to be released forthwith, subject to conditions - HC
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• Tertiary Treated Water qualifies for exemption under entry Serial No. 99 of notification no. 02/2017-C.T. (Rate).

  Case-Laws - AAAR : Classification of goods - Tertiary Treated Water - ‘purified water’, or not - the term “purified”, mentioned under the exemption clause of the relevant entry, will definitely not include the TTW. Hence, the impugned product, i.e., TTW, is rightfully eligible for exemption under entry at SI. No. 99 of the exemption notification no. 02/2017-C.T. (Rate) - AAAR
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• Road Construction Contract Taxable Value Must Include Escalated Costs u/s 15 of GST Act.

  Case-Laws - AAR : Valuation of service - contract for construction of road to the applicant by NHAI - time of supply - the escalated value shall be added to the original value of the contract and the total of the escalated value plus the original value of the contract will be the transaction/taxable value u/s 15 of the Act, on which GST must be discharged by the applicant. - AAR
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• Works Contract for Central Railways: Earthwork Over 75% Qualifies for 5% IGST Under CGST Act, Notification No. 11/2017-CTR.

  Case-Laws - AAR : Classification of supply - the applicant is supplying Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, involving predominantly earth work (that is, constituting more than 75per cent, of the value of the works contract) and such supply is being provided to the Central Government, i.e. Central railways. Therefore, the impugned supply of the applicant is covered under the provisions of Sr. No. 3 (vii) of Notification No. 11/2017 - CTR dated 20.06.2017 as amended from time to time. - Taxable @5% of IGST - AAR
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• Supply Valuation of Superior Kerosene Oil Must Include Pre-Delivery Charges per GST Guidelines in West Bengal.

  Case-Laws - AAR : Valuation of supply - supply of Superior Kerosene Oil (SKO) made by the applicant to MR Dealers (ration dealers) in terms of the license granted by the Director of Consumer Goods, Government of West Bengal - in respect of supply of goods, any amount charged for anything done by the supplier at the time of, or before delivery of goods shall be a part of the value of supply. - AAR
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• Court Grants Default Bail in Fraud Case Involving Input Tax Credit; Conditions Apply for Accused's Release.

  Case-Laws - DSC : Seeking grant of Default Bail - availment and passing input tax credit fraudulently - The evidence in this case is mostly of documentary nature and also consists of digital record and it is in the custody of GST department and therefore, there does not appear any chances of tampering with the prosecution evidence, if the accused is released on bail - applicant-accused can be released on bail subject to certain conditions. - DSC
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Income Tax

• Court Rules Welfare Project for HIV/AIDS Patients Qualifies for Tax Exemption u/ss 11 and 12 of Income Tax Act.

  Case-Laws - HC : Exemption u/s 11 and 12 - The entire amount spent by the Assessee is through societies and trusts. It also runs its own project for the welfare of HIV and AIDS patients. In the above circumstances it has been held that merely because the Assessee charges management fees to defray the administrative costs it would not make its essential activity a business activity - HC
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• Rental Income Classified as Non-Business Income by Authorities, Not as Business Income from Asset Exploitation.

  Case-Laws - HC : Characterization of income - rental income earned by the assessee as income from the business - The parting of possession of godown, particularly in the circumstances of the case, is more as an owner of a business asset, but not for exploiting a commercial asset. Assessing Officer, the Appellate Authority, and the Tribunal have considered the case in the right perspective and disallowed the claim of rental income as business income. - HC
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• Principal Commissioner Challenges AO's Decision on Expense Deductions in Non-Delivery Coal Trading u/s 263.

  Case-Laws - AT : Revision u/s 263 - disallowance of expenses - AO had after deliberating at length arrived at a plausible view i.e., allowing of the assessee’s claim for deduction of expenses to the extent the same were genuinely incurred in the course of its coal trading transactions on a non-delivery basis. In sum and substance, the Assessing Officer had after due application of mind restricted the assessee’s claim for deduction to only those expenses which were related to its non-delivery based transactions or paper transactions. - Pr.CIT had approached the issue in question absolutely on the basis of misconceived and incorrect facts - AT
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• Income Computation Error Corrected: Depreciation Adjusted Before Section 80IA Deduction u/s 154.

  Case-Laws - AT : Rectification of mistake - Computation of income u/s. 154 - the non adjustment of brought forward depreciation from profits and gains of business and profession, for determining the quantum of deduction u/s 80IA of the Act is a patent mistake amenable to rectification u/s 154 - The rectification so effected in the present case by adjusting brought forward depreciation against profits of the business before granting deduction u/s 80IA of the Act is therefore upheld. - AT
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• CIT's Section 263 Revision Lacks Independent Investigation, Relies on JCIT Letter; Lacks Guidance for Further AO Enquiry.

  Case-Laws - AT : Revision u/s 263 by CIT - reopening on the basis of letter written by JCIT - In the case in hand the Ld. Revisional Authority has done no homework on its end but merely on basis of letter of JCIT pointing short comings, held that enquiry done by Ld. AO was not satisfactory. Infact where the Revisional Authority intends to set aside assessment order for lack of enquiry the direction in the order exercise of Revisional power should set or indicate the possible and prospective path of enquiry that the AO should follow further. Which is also not done in present case. - AT
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• CIT's Revision u/s 263 on Unaccounted Sales Found Unjustified; AO's Original View Deemed Legally Plausible.

  Case-Laws - AT : Revision u/s 263 by CIT - unaccounted sales/purchases - AO took a view which was legally plausible and possible at that point of time. Subsequent information could be a basis for initiating new re-assessment proceedings but not the basis for a revisionary proceedings u/s. 263 of the Act. Therefore, the exercise of revisional jurisdiction by the Ld. PCIT is without any justification. As far as the alternate plea of the assessee challenging the re-assessment proceedings is concerned, we are not inclined to go into the same as we have already held the proceedings u/s. 263 of the Act to be bad in law. - AT
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Customs

• Valuation of Imported Goods Can't Be Increased Solely on Similar Goods' Assessed Values in Bill of Entry.

  Case-Laws - AT : Valuation of imported goods - enhancement of value on the basis of contemporaneous goods - the assessed value of bill of entry of similar goods cannot be the basis of enhancement of declared value by the appellant - AT
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Indian Laws

• High Court rules cheque dishonor trial continues with legal heirs after complainant's death; no abatement required.

  Case-Laws - HC : Dishonor of Cheque - acquittal of the accused - abatement of proceedings on death of the original complainant - there is no provision in the Code of Criminal Procedure or in the Negotiable Instruments Act laying down that on account of death of payee, trial must be abate and merely because original complainant payee has died, there could not be abatement of the proceedings and legal heirs of original complainant are entitled to come forward and ask for their substitution in place of the complainant so as to proceed further with the trial. - HC
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Service Tax

• Business Entity Wins Service Tax Refund for Legal Consultancy; No Tax Liability Without Business Activities Post-2008.

  Case-Laws - AT : Refund of Service tax paid under protest - legal consultancy services received for winding up of business - business entity or not - Merely because the appellant is still registered under the Companies Act and has not get the said registration cancelled does not mean that they are carrying out business activity. It is nowhere the case of the Revenue that the appellant is indulged into any activity relating to its business after the year 2008. The learned Commissioner has specifically recorded in the impugned order that there is no dispute that the appellant have stopped their business activity and are in the process of winding up - The appellant cannot be saddled with any tax liability only on the basis of apprehension. - AT
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• Court Rules Toll Services Not Business Auxiliary; Circular No.152/3/2012 Misapplied, Appellant Pays NHAI Weekly.

  Case-Laws - AT : Classification of services - business auxiliary services or not - Toll Charges - Applicability of Circular No.152/3/2012 - No fixed amount has been retained by the Appellant, on the contrary, he is required to pay a fixed amount on weekly basis to NHAI. Thus, consideration is flowing from the Appellant to NHAI and not vice-versa. Therefore, the said circular is not applicable in the scenario and the department has erred in applying the circular in the present case. - AT
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• Court Denies Appeal Due to 595-Day Delay; Appellant's Negligence and Inaction Cited as Insufficient Justification.

  Case-Laws - AT : Condonation of delay of 595 days in filing the appeal - sufficient cause for delay existing or not - declaration under “Arrears category” of the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 (SVLDRS) - Section 5 of Limitation Act - Doctrine of Equality - None of the said two grounds explains the delay that occurred between 11.12.2018 and 11.03.2019. The non-filing of appeal by the consultant also is not the ‘sufficient cause’ because appellant was required to pursue his consultant and to ensure that his appeal gets filed before 11.03.2018 but appellant failed - the same is definite inaction on part of appellant resulting out of his negligence. - AT
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Central Excise

• CO2 from Beer Fermentation Not Subject to Excise Duty; Seen as Inevitable By-Product, Not Manufactured Good.

  Case-Laws - AT : Levy of duty of excise - captive consumption of by-production - It is observed that CO2 herein is produced in the fermentation tank during fermentation of a mixture called “wort” which ultimately ferments to Beer, the final product however with the simultaneous inevitable emission of CO2 gas. This particular observation is sufficient to hold that formation of CO2 cannot be called as manufacture - no separate treatment is given to “wort” mixture for emission of CO2 which is inevitable consequence of fermentation of said “wort” mixture into Beer that CO2 in the present facts and circumstances cannot be held to have been manufactured product which is excisable. - AT
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Case Laws:

• GST

• 2022 (4) TMI 411
  Seeking grant of Bail - statement extracted by coercion and made under duress or otherwise - applicant contends that the applicant has been falsely implicated in the instant case - HELD THAT:- There are merit in the submissions of learned counsel for the applicant and accordingly it is held that the applicant is entitled to be enlarged on bail. Let the applicant-Rohit Rastogi be released on bail subject to condition imposed - bail application allowed.

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• 2022 (4) TMI 410
  Cancellation of GST registration of petitioner - petitioner has failed to file returns continuously for a period of six months - HELD THAT:- The issue that arises for consideration in this Writ Petition was detailed considered by this Court in the case TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST), THE ASSISTANT COMMISSIONER (CIRCLE), SALEM BAZAAR. [ 2022 (2) TMI 933 - MADRAS HIGH COURT] , wherein, considering the revenue of the Government, certain reliefs were granted to the petitioners therein - it was held in the case that Since, no useful will be served by not allowing persons like the petitioners to revive their registration and integrate them back into the main stream, I am of the view that the impugned orders are liable to be quashed and with few safeguards. The petition is allowed.

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• 2022 (4) TMI 409
  Refund of IGST paid - goods exported in connection with the shipping bills - Zero Rated Supplies - HELD THAT:- The issue is no longer res integra in view of two pronouncements of this High Court (i) in the case of M/S AMIT COTTON INDUSTRIES THROUGH PARTNER, VELJIBHAI VIRJIBHAI RANIPA VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS [ 2019 (7) TMI 472 - GUJARAT HIGH COURT] and (ii) AWADKRUPA PLASTOMECH PVT. LTD. VERSUS UNION OF INDIA [ 2020 (12) TMI 1116 - GUJARAT HIGH COURT] . Awadkrupa Plastomech was challenged by the Union of India before the Supreme Court. Leave was granted, and ultimately, the appeal of the Union came to be dismissed. The order passed by the Supreme Court in the UNION OF INDIA AND ORS. VERSUS AWADKRUPA PLASTOMECH PVT. LTD. [ 2021 (8) TMI 349 - SC ORDER] , it was held that There is a clear finding of fact which has been recorded by the Division Bench of the High Court of Gujarat in its order dated 15 December 2020 that the respondent had claimed an IGST export refund only to the extent of the customs component. We see no error in the finding of the High Court. The respondents are directed to sanction the respective refunds of the IGST paid in respect of the goods exported i.e. Zero Rated Supplies with 6% simple interest from the date of the shipping bills till the date of actual refund - application allowed.

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• 2022 (4) TMI 408
  Refund of Unutilized Input Tax Credit - mismatch in the refund application - HELD THAT:- The application is disposed of with the direction that, the Principle Commissioner, CGST Delhi (North) need not join the proceedings on the next date fixed in the matter i.e., 05.04.2022, in case the stand taken by the petitioner is found viable, and a refund order, as sought, is issued in favour of the petitioner.

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• 2022 (4) TMI 407
  Provisional attachment order of property - section 83 of the CGST Act, 2017 - HELD THAT:- The respondent no.2, inspite of repeated reminder by this Court in various decisions has once again overlooked the aforesaid guidelines issued by the Central Board of Indirect Taxes and Customs dated 23.02.2021, which otherwise in clear terms provides the guidelines to be adhered while exercising powers conferred upon the respondent authority under Section 83 of the GST Act. This Court in the case of VALERIUS INDUSTRIES VERSUS UNION OF INDIA [ 2019 (9) TMI 618 - GUJARAT HIGH COURT] has held that power of provisional attachment under section 83 of the act should be exercised by the authority only if there is reasonable apprehension that the assessee may default the ultimate collection of the demand that is likely to be raised on completion of the assessment. It should therefore be exercised with extreme care and caution. The Court held that power under section 83 of the act should not be used as a tool to harass the assessee nor should it be used in as manner which may have irreversible detrimental effect on the business of the assessee . In the facts of the case, undisputedly, the respondent no.2 has not only provisionally attached the stock of goods lying at the factory premise of the writ applicants, at the same time, the respondent No.2 has also provisionally attached the demat account and current account of the writ applicants. These are the valuable assets of the writ applicants, more particularly, raw material and the finished goods are valuables which are otherwise necessary for running of the business of the applicants. Even operating the demat account and current account are essentially required for the routine business of the writ applicants. Time and again, this Court as well as even the instructions instructions issued by the higher authority of the respondents, has directed the proper officer to ensure that their action of the provisional attachment should not hamper normal business activities of the taxable person - This Court did not approve the provisional attachment of the goods, stock and receivables, more particularly, when the entire stock and receivables have been pledged and a floating charge has been created in favour of the Kalupur Commercial Bank Limited for the purpose of availing the cash credit facility with the provisional attachment of the goods, stock and receivables the entire business will come to a standstill. The order of the provisional attachment dated 27.11.2021 qua the stock of goods, two demat accounts as well as current account of the writ applicants is set aside - So far the prayer of the writ applicants with regard to release of electronic items including Mobile Phone, laptop and other documents seized during the search proceedings are concerned, same is also directed to be released forthwith on condition that the writ applicants shall file an undertaking before the respondent no.2 thereby declaring that the aforesaid goods electronic items including mobile phone, laptop and other seized documents shall be retained in its original form and shall not be disposed of pending the investigation, if any. Petition disposed off.

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• 2022 (4) TMI 406
  Classification of goods - Tertiary Treated Water - whether the impugned product, TTW, supplied by the Appellant to M/s. Mahagenco, can be construed as purified water , or not? - HELD THAT:- On perusal of the facts of the case, it is seen that the impugned product, i.e., TTW, is obtained after carrying out various physical and biological processes on the sewage water. By carrying out the said physical and biological processes on the sewage water inside the Sewage Treatment Plant and Tertiary Treatment Plant, the sewage water is made free from various organic and inorganic substances, such as suspended particles, grit, clays, pollutants like nitrogen, phosphorus, etc. However, even after carrying out the said physical and biological processes, water coming out from the Tertiary Treatment Plant still contains various biological contaminants, such as bacteria, virus, along with other impurities. Thus, it can be safely concluded that the resultant water is not pure due to presence of the said impurities and foreign elements. Thus, it is adequately clear that water containing anything apart from the Hydrogen and Oxygen will not be construed as pure water. It is further observed that even potable water, which is fit for human consumption, will also not be treated as pure water due to the presence of various minerals and other elements like chlorine, which are added in it to kill the harmful micro-organisms that cause diseases. Further, on application of the legal construction of noscitur a sociis to derive the meaning of the expression purified , which has not been defined under the GST law, it is seen that all the expressions of the exclusion clause of the relevant entry surrounding the word purified have got certain specific characteristics and usage - it is amply clear that the term purified , mentioned under the exemption clause of the relevant entry, will definitely not include the TTW. Hence, the impugned product, i.e., TTW, is rightfully eligible for exemption under entry at SI. No. 99 of the exemption notification no. 02/2017-C.T. (Rate) dated 28.06.2017. The Appellant s contention is agreed upon in as much as that the Government, whether the Central Government or State Government, has never intended to tax water of general purposes. Even under the GST regime, Government has clarified its intention of not levying GST on the supply of general-purpose water by way of issuance of the CBIC Circular No. 52/26/2018 dated 09 August 2018, wherein it has been clarified that supply of drinking water, for public purposes, if not supplied in sealed containers, is exempted from GST. Thus, by applying the canon of purposive construction , which gives effect to the legislative purpose/intendment, it is held that the impugned product, i.e., TTW, which can aptly be construed as water of general purpose as discussed earlier, is eligible for exemption under the relevant entry at SI. No. 99 of the exemption notification no. 02/2017-C.T. (Rate) dated 28.06.2017.

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• 2022 (4) TMI 405
  Classification of service - rate of GST - service of Coastal and transoceanic water transport - input Credit of Goods Service can be claimed or not - HELD THAT:- Section 95 of the CGST Act, 2017 allows this authority to decide the matter in respect of supply or undertaken or proposed to be undertaken by the applicant. It is found that the impugned question is not in respect of supply of goods or services or both, being undertaken or proposed to be undertaken by the applicant, rather the impugned question is in relation a supply which has already been rendered before the date of filing of the subject application. Thus, the condition under Section 95 is not satisfied by the applicant and hence, the issue cannot be decided by this authority and therefore, the subject application is held to be non-maintainable. The subject application for advance ruling made by the applicant is rejected under the provisions of Section 95 of the CGST Act, 2017.

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• 2022 (4) TMI 404
  Valuation of service - contract for construction of road to the applicant by NHAI - time of supply - escalation in value during the course of completion of service, i.e. construction of road as per contract - whether such escalated value shall be added to the taxable value u/s 15 of the act or otherwise? - HELD THAT:- Section 15 (1) says that the value of a supply of goods or services or both shall be the Transaction value and the transaction value in the subject case will also include the escalated value (as per the impugned contract), which is being recovered from NHAI by the applicant, both being unrelated parties. Therefore, such escalated price/value which is added to contract price shall be liable for payment of GST as per the said provision of Section 15 of the Act - As per the provisions of Section 15(1) of CGST Act, 2017, the actual transaction value which includes the escalated value should be considered for payment of tax under GST Laws. Thus, the escalated value shall be added to the original value of the contract and the total of the escalated value plus the original value of the contract will be the transaction/taxable value u/s 15 of the Act, on which GST must be discharged by the applicant.

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• 2022 (4) TMI 403
  Classification of supply - Rate of GST - composite supply of works contract - work order of the Central Railway Department carried out by the tax payer - predominantly earth work or not - taxable at 5% as per sub clause (Vii) of the clause 119 of Section 2 of the CGST Act 2017 or otherwise - applicability of N/N. 31/2017-C.T. (Rate) dated 13.10.2017 - Government entity or not - HELD THAT:- The three conditions to be satisfied for the impugned supply to be considered under the above mentioned Sr. No 3 (vii) are:-(a) the supply should be a Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, (b) such supply should be involving predominantly earth work (that is, constituting more than 75per cent, of the value of the works contract) and (c) such supply should be provided to the Central Government, State Government, Union territory, local authority, a Governmental Authority or a Government Entity. In the subject case, as per the impugned tender, the applicant is to undertake the earthwork in embankment, cutting and bridge approaches and construction of minor bridges and RUBs in the section between Beed to Parli from Ch. 175000 to 185000 m under Ahmednagar-Beed-Parli vajinath New Broad Gauge line project (project) by the Central Railway Department. From the submissions made by the applicant, it is found that in the subject case there is a supply of both, goods as well as services and therefore we have no hesitation in holding that the subject activity is a composite supply - thus, the impugned activity is a Composite supply of works contract as defined in clause (119) of section 2 of the CGST Act, 2017. The second condition mentioned in para 5.6 (b) is that the said Composite supply of works contract as defined in clause (119) of section 2 of the CGST Act, 2017 should be involving predominantly earth work (that is, constituting more than 75 per cent of the value of the works contract) - In the subject case as per the submissions, the impugned activities conducted by the applicant majorly involve, the supply consists majorly of activities such as Blasting/Cutting the Hard Rock, Removing of Excavated Stuff, levelling the ground, Cement Concreting, rock bolting, construction of approach roads to bridges, earthwork filling in embankments, etc. - the submissions made on the basis of site photographs etc. by the jurisdictional officer is relied upon that the applicant is supplying Composite Supply of Works Contract as defined in clause (119) of section 2 of the CGST Act, 2017 involving predominantly earth work (that is, constituting more than 75 percent of the value of the works contract). The third condition mentioned in para 5.6 (c) is that, the impugned supply should be provided to the Central Government, State Government, Union territory, local authority, a Governmental Authority or a Government Entity. The Central Government means the President and the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of the President - the Central railway Department, which has given the impugned work to the applicant, can be termed as Central Government. The status of Railways is that of Government only but it is a business entity. Hence, in the subject case, the applicant is making the impugned supply to Central Government. Thus, the applicant is supplying Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, involving predominantly earth work (that is, constituting more than 75per cent, of the value of the works contract) and such supply is being provided to the Central Government, i.e. Central railways. Therefore, the impugned supply of the applicant is covered under the provisions of Sr. No. 3 (vii) of Notification No. 11/2017 - CTR dated 20.06.2017 as amended from time to time.

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• 2022 (4) TMI 402
  Maintainability of Advance Ruling Application - ITC Refund Claim - the authorised representative of the applicant submits that the proper officer has already decided the issue and disposed of the application for refund - HELD THAT:- The instant application is, therefore, found liable for rejection. The aforesaid observation has been brought to the notice to the authorised representative of the applicant in terms of provision laid down in sub-section (2) of section 98 of the Act ibid who has admitted the same. The application is, rejected in terms of sub-section (2) of section 98 of the GST Act.

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• 2022 (4) TMI 401
  Valuation of supply - supply of Superior Kerosene Oil (SKO) made by the applicant to MR Dealers (ration dealers) in terms of the license granted by the Director of Consumer Goods, Government of West Bengal - HELD THAT:- In the instant case, the applicant admittedly charges, other than price of kerosene, commission, transportation charges, stationery charges, compensation on handling evaporation loss, to the recipient of goods i.e., dealers which are permitted / approved by the Director of Consumer Goods, Department of Food and Supplies, Government of West Bengal. The amount received by the applicant against supply of S.K. Oil together with consideration received in respect of other elements as discussed earlier, shall form a part of the value of supply on which tax shall be levied in terms of sub-section (1) of section 9 of the GST Act. The value of supply, as per clause (c) of sub-section (2) of section 15, shall include incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services. Thus, in respect of supply of goods, any amount charged for anything done by the supplier at the time of, or before delivery of goods shall be a part of the value of supply.

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• 2022 (4) TMI 400
  Valuation of supply of services - exempt supply or not - services provided by the applicant for conversion of wheat provided by the State Government, into wheat meal atta and fortify it by premixing of micro nutrients for further distribution by the State Government through Public Distribution System - rate of GST applicable on the value of supply - components are to be included in calculation of the % of value of goods in the total value of composite supply for the purpose of Notification No. 2/2018 Central Tax (Rate) - supply is made by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution or not - HELD THAT:- There was a difference of opinion between the State GST authorities and Central GST authorities in respect of rate of tax applicable on the supply provided by the applicant. Though this issue has been clarified by the CBIC vide Circular No. 153/09/2021-GST dated the 17th June, 2021, the rate is applicable only when the supply of services does not qualify as an exempt supply vide entry serial number 3A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017. Further, whether the supply stands exempted or not in terms of entry serial number 3A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, determination of value of the composite supply along with the value of supply of goods involved in the said supply is an essential element - applicant has filed the instant application seeking advance ruling on what is the value of supply of services provided by the applicant and also what components are to be included to determine the value of the goods. No ruling is given for the instant case since the questions raised in the instant application is a subject matter which is found to be pending in case of the applicant under the provisions of the GST Act.

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• 2022 (4) TMI 399
  Seeking grant of Default Bail - availment and passing input tax credit fraudulently - HELD THAT:- From the say of the prosecution and more particularly from the prosecution papers placed on record, it is evident that the three main accused Sameer Khan, Imran Bahalwan and Ketan Dugad were responsible for availing and passing on input tax credit by raising fake invoices and the applicant acted upon the instructions of the main accused with whom he was working as a tax consultant. It appears that the applicant received remuneration of Rs. 20,000/per month for doing his job. It does not appear that the applicant is beneficiary of the transactions involved. The three main accused are already released on default bail. The evidence is in the form of documentary nature which has already been collected during investigation and earlier inquiry. It does not appear that there is anything to be recovered from the present applicant. It seems that investigation can be carried out without further detention of the applicant. Under such circumstances, the further detention of the applicant-accused is not warranted although the investigation is shown to be still in progress, especially when till this date there are no formal accusations against the applicant in the form of FIR or complaint. The evidence in this case is mostly of documentary nature and also consists of digital record and it is in the custody of GST department and therefore, there does not appear any chances of tampering with the prosecution evidence, if the accused is released on bail - applicant-accused can be released on bail subject to certain conditions. Bail application allowed.

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• Income Tax

• 2022 (4) TMI 398
  Substantial question of law - HELD THAT:- As the impugned order passed by the High Court is a non-speaking and non-reasoned order and even the submissions on behalf of the revenue are not recorded, the impugned order passed by the High Court dismissing the appeal is unsustainable. Under the circumstances, the impugned order is hereby quashed and set aside. The matter is remanded to the High Court to decide and dispose of the appeal afresh in accordance with law and on its own merits. If the High Court is of the opinion that the proposed questions of law are not substantial questions of law and they are on factual aspects, it will be open for the High Court to consider the same in accordance with law, however, the High Court to pass a speaking and reasoned order after recording the submissions made on behalf of the respective parties. The present appeal is allowed to the aforesaid extent.

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• 2022 (4) TMI 397
  Exemption u/s 11 and 12 - Whether ITAT was not justified in allowing exemption under Sections 11 and 12 to the assessee, when the actual work of the assessee is to receive and simply transfer grants to other NGOs and the assessee is found to be charging service charges from its donor in various forms like management fee, etc. for execution of projects? - HELD THAT:- Admittedly, the present case is covered by the decision passed by learned predecessor Division Bench of this Court in assessee s own case for the Assessment Year 2010-11 in CIT (Exemption), Delhi vs. M/s India HIV/AIDS Alliance [ 2019 (1) TMI 1268 - ITAT DELHI] as held Assessee is a company registered under Section 25 of the Companies Act. It gives 85% of the donation received by it to the Government of India for HIV Aids and only 15% of its total donation is given to other societies for awareness and treatment of poor HIV Patients. The entire amount spent by the Assessee is through societies and trusts. It also runs its own project for the welfare of HIV and AIDS patients. In the above circumstances it has been held that merely because the Assessee charges management fees to defray the administrative costs it would not make its essential activity a business activity - No substantial question of law arises.

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• 2022 (4) TMI 396
  Characterization of income - rental income earned by the assessee as income from the business - whether the rental income is income from business or income from house property? - HELD THAT:- The arrangement is made or entered into more to adjust the outstanding liability of the assessee to KSBC. The clauses in the agreement refer to an owner of property transferring lease-hold rights. As rightly held by the appellate authority, the additional advantage or reduction in overheads is not the deciding factor for meriting a claim as business income. The crux of the matter is whether the object of the transaction, whether the assessee continues to do business or not, chances of revival, nature of asset in which third-party enjoyment right is created for consideration are relevant and essential. Looking at the circumstance stated by the assessee, it is clear that the assessee was doing the same business before the subject Assessment Year and continued to do the same business of manufacture of IMFL. The assessee has let several portions of available building on lease to different individuals/entities. The parting of possession of godown, particularly in the circumstances of the case, is more as an owner of a business asset, but not for exploiting a commercial asset. Assessing Officer, the Appellate Authority, and the Tribunal have considered the case in the right perspective and disallowed the claim of rental income as business income. We hold that the Tribunal and the authorities have rendered available findings of fact on the assessee s claim of rental income as business income and rejected the claim. No ground warranting interference is made out. The question is answered against the assessee and in favour of the Revenue.

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• 2022 (4) TMI 395
  Revision u/s 263 by CIT - Admissibility of deduction u/s.80P(2)(d) - As per CIT AO has erred in not allowing deduction u/s.80P(2)(d) of the Income Tax Act, 1961 without properly verifying the details of investee - HELD THAT:- We are unable to concur with the view taken by the lower authorities in so far the declining of the assessee s society claim for deduction u/s 80P(2)(d) qua the interest received on its investments with co-operative banks. In our considered view as a Cooperative bank falls within the realm of the definition of a Co-operative Society as contemplated in Section 2(19) of the Act, therefore, the view taken by the lower authorities that interest income received by the assessee from Belgaum Industrial Co-Op Bank Ltd; and Belgaum District Central Co-Op Bank Ltd. i.e co-operative Banks, would not be eligible for deduction u/s. 80P(2)(d) cannot be sustained. We not being able to persuade ourselves to subscribe to the view taken by the lower authorities, thus, vacate the disallowance of the assessee s claim for deduction u/s.80P(2)(d) Whether the lower authorities had erred in declining the assessee s claim for deduction u/s. 80P(2)(e) i.e., without properly verifying the lease deeds and wrongly construing the purpose for which the godowns and sheds had been let out? - On a perusal of the confirmations of the aforementioned parties that have been filed by the assessee before the lower authorities, we find that it has specifically been stated by the respective parties that the premises in question were being used by them as godowns for storing/stocking various materials. Backed by the aforesaid facts, we are of the considered view that the lower authorities had grossly erred in loosing sight of the aforesaid material documentary evidence while adjudicating the issue in hand. We, thus, in all fairness restore the issue to the file of the Assessing Officer with a direction to re-adjudicate the assessee s claim for deduction u/s.80P(2)(e) after taking due cognizance of the documentary evidence i.e. confirmations of the respective tenants - Ground raised by the assessee is allowed for statistical purposes in terms of our aforesaid observations.

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• 2022 (4) TMI 394
  Revision u/s 263 - Deduction u/s.80P(2)(a)(i) - HELD THAT:- Adverting to the view taken by the Pr. CIT that the interest income earned by the assessee society on its deposits with scheduled banks would not be eligible for deduction u/s.80P(2)(a)(i) we are unable to persuade ourselves to subscribe to the view so arrived at by the Pr. CIT. In our considered view the issue in hand i.e., as to whether or not interest income on deposits with the scheduled banks would be eligible u/s.80P(2)(a)(i) has been subjected to two schools of thoughts at the relevant point of time when the assessment order was passed by the AO. In so far the interest income arises from short-term deposit of money for which there are no takers at the relevant point of time, the same had been held to be duly eligible for deduction u/s.80P(2)(a) (i). We are of the considered view, that now when the issue in hand is a debatable one and the AO had taken one of the plausible view, therefore, the same could not be held as erroneous in so far it is prejudicial to the interest of the revenue by the Pr. CIT in exercise of his jurisdiction u/s.263 - we are of the considered view that now when the AO had taken one of the plausible view qua the issue in hand i.e. entitlement of the assessee co-operative society for deduction of interest income earned on deposits with scheduled banks u/s. 80P(2)(a)(i) of the Act, therefore, the same could not have been revised by the Pr. CIT u/s.263 - We, thus, in terms of our aforesaid observations set-aside the order passed by the Pr. CIT u/s.263 qua the aforesaid issue in hand. Deduction of delayed deposit of employees share of contribution towards PF u/s.36 (i)(va) - Deduction for payment of employees contribution cannot be disallowed in case the contribution to the employee s welfare fund was credited on or before the due date of filing of return of income by the assessee. Backed by the aforesaid position of law, we are of the considered view that the Pr. CIT had wrongly held that the failure on the part of the AO to add back the delayed deposit of the employees share of contribution towards PF that was disallowable u/s.36(1)(va) of the Act, had rendered his order as erroneous in so far it was prejudicial to the interest of the revenue u/s 263 of the Act. We, thus, in terms of our aforesaid observations not being able to persuade ourselves to subscribe to the view taken by the Pr. CIT qua the aforesaid issue in hand, thus, set-aside the same to the said extent. We not being able to uphold the order passed by the Pr.CIT u/s. 263 as regards either of the aforesaid three issues on the basis of which he had held the assessment order passed by the AO u/s. 143(3), dated 09.02.2016 was erroneous in so far it was prejudicial to the interest of the revenue, thus, set aside the order passed by him u/s.263 and restore the order passed by the AO u/s.143(3).

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• 2022 (4) TMI 393
  Revision u/s 263 - disallowance of expenses - as per CIT AO had erroneously disallowed only certain expenses, viz. manufacturing expenses, consultancy charges, travelling expenses, professional fees, selling expenses, interest paid to bank and others and bank commission, and had failed to disallow the remaining expenses on Interest on unsecured loans, Brokerage charges on unsecured loans and Processing charges - CIT was of the view that the failure on the part of the A.O to disallow the aforesaid balance expenses had rendered his order erroneous in so far as it was prejudicial to the interest of the revenue - HELD THAT:- CIT had proceeded with absolutely on the basis of misconceived facts. The very basis for the Pr. CIT to infer that the assessee company was not carrying out any actual business and was only involved in paper transactions and accommodation entries is absolutely incorrect and fallacious. In fact, we may herein observe, that the reference to paper transactions of the assessee by the Assessing Officer was in the context of the fact that the assessee was carrying out coal trading transactions which were non-delivery based i.e. no physical delivery of the commodity was therein involved. AO on the basis of his aforesaid observations that the assessee was engaged in the business of coal trading transactions which were non-delivery based i.e. trading on spot delivery basis, had thus, for the said reason concluded that the assessee s claim for deduction of expenses were to be restricted only to those which were related to non-delivery transactions or paper transactions. Pr. CIT had construed the paper transactions of the assessee as if no actual business was being carried out by it. In our considered view, not only the basis adopted by the Pr. CIT is found to be fallacious, but also, the same is not consistent with the past history of the assessee. As brought to our notice by the Ld. AR, the AO while framing assessment in the assessee s own case for the immediately preceding year i.e, assessment year 2010-11, had observed, that the assessee s claim for deduction of the expenses was to be restricted to only those expenses which were related to non-delivery based transactions or paper transactions and had allowed those expenses which were genuinely incurred to carry out such transactions. AO had after deliberating at length arrived at a plausible view i.e., allowing of the assessee s claim for deduction of expenses to the extent the same were genuinely incurred in the course of its coal trading transactions on a non-delivery basis. In sum and substance, the Assessing Officer had after due application of mind restricted the assessee s claim for deduction to only those expenses which were related to its non-delivery based transactions or paper transactions. Apart from that, the view so taken by the Assessing Officer is found to be in conformity with that taken in the assessee s own case for the assessment year 2010-11 [ 2019 (3) TMI 1966 - ITAT NAGPUR] Pr.CIT had approached the issue in question absolutely on the basis of misconceived and incorrect facts i.e., by construing the term non-delivery based transactions or paper transactions as if no actual business was done by the assessee. Also, as observed by us hereinabove, the view taken by the Assessing Officer i.e, allowing of the assessee s claim for deduction of certain expenses that were genuinely incurred in the course of its non-delivery based coal trading transactions is in conformity with the order passed by the Tribunal in the assessee s own case for the immediately preceding year - Decided in favour of assessee.

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• 2022 (4) TMI 392
  Rectification of mistake - Computation of income u/s. 154 - adjusting brought forward assessed unabsorbed depreciation of assessment year 2004-05 against gross total income of the assessee, resulting in the revised total income coming to Nil and consequently denying any deduction u/s 80IA under Chapter VIA of the Act - HELD THAT:- Profits eligible for deduction u/s 80IA of the Act have to be calculated after adjusting brought forward depreciation therefrom. Meaning thereby that law clearly provides for deduction u/s 80IA to be granted after set off of unabsorbed depreciation. There is no scope for any other interpretation, we find, nor has any been pointed out by the assessee before us. We therefore hold that the non adjustment of brought forward depreciation from profits and gains of business and profession, for determining the quantum of deduction u/s 80IA of the Act is a patent mistake amenable to rectification u/s 154 - The rectification so effected in the present case by adjusting brought forward depreciation against profits of the business before granting deduction u/s 80IA of the Act is therefore upheld. In the case of Royal Cushion [ 2008 (10) TMI 707 - BOMBAY HIGH COURT] the rectification carried out by denying deduction u/s 80HHC of the Act for the purposes of computing Book Profits u/s 115JB of the Act, was held to relate to the debatable issue of computation of deduction u/s 80HHC of the Act. The decision in the case of Hirsh Bracelet [ 2019 (9) TMI 250 - ITAT BANGALORE] goes against the assessee and supports our findings since it holds that Unabsorbed depreciation is deemed to be current years depreciation to be set off against all incomes as per section 32(2) r.w.s 71 of the Act. In the case of SRA systems [ 2021 (3) TMI 1133 - MADRAS HIGH COURT] was seized with the issue of set off of unabsorbed depreciation prior to deduction u/s 10A of the Act, which it was held was not tenable in law since deduction u/s 10A of the Act was to be made while computing the gross total income under chapter IV of the Act and not at the stage of computation of total income under chapter VI of the Act, being exemption provisions. In the present case the issue relates to deduction u/s 80IA of the Act which is to be made at the stage of computation of total income under chapter VI of the Act. Hence the ratio laid down in the said decision cannot apply to the present case. Appeal dismissed.

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• 2022 (4) TMI 391
  TP Adjustment - arm s length price of international transaction pertaining to payment of management services fees by appellant to its Associated Enterprises (AE) - HELD THAT: In similar circumstances on identical facts, this Tribunal in assessee s own case for A.Y. 2009-10 [ 2019 (9) TMI 1313 - ITAT PUNE ] reversed the order of DRP and directed the AO to accept the value of management services as claimed by the assessee. Similarly, this Tribunal in A.Y. 2010-11 [ 2020 (2) TMI 114 - ITAT PUNE ] also taking into consideration the findings of Tribunal in A.Y. 2009-10 allowed ground raised therein and directed the AO to accept the value of management services as claimed by the assessee by reversing the order of DRP - Appeal of assessee allowed.

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• 2022 (4) TMI 390
  Disallowance of employees contribution to provident fund and ESI u/s 36 (1)(va) - HELD THAT:- We have to follow the judgment of the Hon`ble Jurisdictional High Court of Gujarat in the case of Gujarat State Road Transport Corporation [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] .The mere fact, that further appeal (SLP) has been filed, before the Hon`ble Supreme Court against the judgment of Hon`ble Gujarat High Court, in no way, means that Gujarat High Court`s decision under consideration is not operational and effective. Unless and until the decision of Gujarat High Court is reversed by Hon`ble Supreme Court, the same has to be given due effect. Thus, judicial discipline demands that order of the Hon`ble Gujarat High Court should be followed by the Surat Income Tax Appellate Tribunal in [ 2022 (4) TMI 330 - ITAT SURAT] We have already noted that against the order of the Hon ble Gujarat High Court, in the case of Gujarat State Road Transport Corporation (supra), the SLP has been filed by the assessee, which has not been adjudicated yet therefore we are of the view that the issue may be remitted back to the file of the Ld. CIT(A) to decide the matter after taking into account the judgment of the Hon ble Supreme Court as and when will be passed by the Hon ble Supreme Court. Therefore these appeals at this stage are dismissed. However, if the Supreme Court reverses the judgment in the case of the Hon`ble Gujarat High Court in the case of CIT vs. GSRTC [Supra], it would be open for the assessees to revive these appeals by filing an application for such purpose within three months from the date of the judgment. Appeals filed by the assessee, are allowed for statistical purposes.

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• 2022 (4) TMI 389
  Revision u/s 263 by CIT - reopening on the basis of letter written by JCIT - HELD THAT:- Assessment order cannot be said to be erroneous on face of it. There was sufficient and exhaustive inquiry on the issues by the AO and merely because the inquiry made were not considered satisfactory on higher or different parameters, the assessment order cannot be said to be prejudicial to the interest of revenue requiring exercise of Revisional powers. There is also nothing in the order of AO which can be considered to set a bad trend or pattern for similar assessments so to be taken as prejudicial to the interest of revenue administration. The settled position of law is that for the purpose of exercising jurisdiction u/s. 263 of the Act, the conclusion that the order of the AO is erroneous and prejudicial to the interest of the revenue has to be preceded by some minimal enquiry. If the Revisional authority is of the view that the AO did not undertake any enquiry, it becomes incumbent on the Revisional Authority to conduct such enquiry. If the Revisional Authority does not conduct such basic exercise then the he is not justified in setting aside the order u/s. 263. In the case in hand the Ld. Revisional Authority has done no homework on its end but merely on basis of letter of JCIT pointing short comings, held that enquiry done by Ld. AO was not satisfactory. Infact where the Revisional Authority intends to set aside assessment order for lack of enquiry the direction in the order exercise of Revisional power should set or indicate the possible and prospective path of enquiry that the AO should follow further. Which is also not done in present case. The appeal of assessee is allowed and the impugned order u/s. 263 of the Act is set aside.

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• 2022 (4) TMI 388
  Reopening of assessment u/s 147 - search under section 132 - Deduction u/s 35AC denied - as per AO all the expenses of the Trust were merely book entries and no genuine expenses were made by the Trust for section 35AC - One of the trustee also accepted that all these expenses are bogus and donations received in cheques were returned in cash to all the doners after ongoing normal commission - HELD THAT:- We find that all the judicial precedents available were prior to the decision of Honourable supreme court in case of CIT V Batanagar Education trust [ 2021 (8) TMI 139 - SUPREME COURT] where cancellation of registration of The Trust u/s 12 A as well as 80 G were upheld. When the recipient of donation has confirmed that donation were taken in lieu of cash and no activity is done, it would be too na ve to believe that assessee has donated sum in good faith. We do not find any infirmity in the order of the learned CIT(A) and accordingly, we do not find merit in this appeal.

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• 2022 (4) TMI 387
  TDS u/s 195 - disallowance u/s 40(a)(ia) - claim of the assessee in respect of foreign commission expenses - Assessee submitted chart showing details of commission on sale paid to various foreign nationals and domestic persons and also Form No. 15CB issued by the Chartered Accountants on the nature of remittance and rate of TDS as per section 195(6) of the Act relating to various parties - HELD THAT:- As new documents were filed before the Tribunal for the first time, the AO has no occasion to examine copies of these documents while finalizing the assessment, therefore in the interest of justice, we restore this issue to the file of the Assessing Officer for reconsideration of the commission payment. The assessee is directed to furnish all evidences to support its case before the Assessing Officer, and thereafter, the AO shall pass an order after providing reasonable opportunity to the assessee. Thus, this ground of appeal is allowed for statistical purpose. Disallowance under section 14A read with Rule 8D - whether disallowance under Rule 8D(2)(iii) in respect of administrative expenses to the extent of 0.5% of average investment was correct or not? - HELD THAT:- It is not discernible from the order of the Ld. CIT(A) how he arrived at the figure of Rs. 42,00,867/- being the average investment. The disallowance under section 14A read with rule 8D is to be in relation to the income which does not form part of the total income and this can be done only by taking into consideration the investment which has given rise to this income which does not form part of the total income. Under the circumstances, we are of the considered view that the computation of the disallowances under section 14A read with rule 8D(2)(iii), which is issue in the assessee s appeal, is to be restored in the file of the AO for re-computation for identifying average investments which actually yielded dividend income to the assessee and on that basis recompute disallowance u/s. 14A of the Act read with Rule 8D(2)(iii) of the IT Rule. Disallowance under section 14A is to be added to the income computed as per Section 115JB for MAT purpose - This issue is covered in favour of the assessee by the decision of Special Bench in the case of ACIT Vs. Vireet Investment P. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] wherein Special Bench held that computation under MAT provisions was to be made without resorting to the computation as contemplated under section 14A read with Rule 8D. Respectfully following the same, we delete disallowance for the purpose of calculation of book profits u/s. 115JB. Addition on account of mismatch of TDS as per Form 26AS - HELD THAT:- This fact that the assessee has given advances to TESCO Projects P. Ltd., and the party was not paying either interest or repaying the principal amount, and the assessee has filed a civil suit against the party for recovery of the principal amount and interest. Even some cheques issued by the said borrower have been returned by the bank unpaid. These facts are not disputed by the authorities below. In this connection, the assessee has also filed a paper book which contained copies of legal notice issued to the said TESCO Projects Ltd., and copy of cheques returned by the bank. We are of the view that the contentions of the assessee cannot be simply brushed aside for the very reasons that the evidence produced before us clearly demonstrated that the borrower has not honoured its commitment either to pay the interest or principal amount, as the cheque issued by the party was returned by the banker as unpaid. The assessee has filed civil suit against the party for recovery of the same. As per the assessee, though the borrower has deducted TDS but corresponding interest payment was not received by the assessee. This requires further verification. Therefore, in the fitness of things, we restore this issue back to the file of the AO for re-examination of the issue.

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• 2022 (4) TMI 386
  Correct head of income - interest on margin money, interest on loans to employees, interest on day to day balance with bank in current account, interest on blocked money and interest income on margin money / FDR - business income income from other sources - HELD THAT:- We are of the considered view that since the income under consideration is tax neutral and assessee has not pressed this ground being academic in nature, the same is dismissed. However, this issue is kept open and the decision taken for the year under consideration shall not be treated as precedent for the later years. Disallowance u/s 14A r.w.r. 8D while computing the book profits u/s. 115JB - HELD THAT:- In view of what has been discussed above and by following the order passed by the Tribunal in assessee s own case for A.Y. 2007-08 [ 2020 (11) TMI 809 - ITAT MUMBAI] we are of the considered view that when the assessee while computing the income under normal provisions of the Act had made suo moto disallowance which has been upheld by the Tribunal For A.Y. 2009-10 the same has to be adopted even while computing the book profit under section 115JB of the Act. So we direct the AO to restrict the disallowance under section 14A while computing the book profit under section 115JB of the Act. Consequently, additional grounds No.1 2 raised by the assessee are decided in favour of the assessee.

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• 2022 (4) TMI 385
  Unexplained cash credit received - disallowance of interest paid on said loans - Onus to prove - HELD THAT:- We are of the considered view that the assessee has successfully proved the identity and creditworthiness of M/s KCL Infra Projects Private Limited and has also proved that the genuineness of the transaction of loan taken by the assessee for business purpose and there remains no scope for the Ld. AO to make any addition u/s 68 of the Act for the alleged cash credit, as well as disallowance of interest paid thereon - Appeal of assessee allowed. Addition u/s 14A - HELD THAT:- We find that the assessee has not earned any dividend income during the year. Therefore, Ld. CIT(A) has rightly deleted the addition in light of the judgment of CIT vs. Correcteh Energy [ 2014 (3) TMI 856 - GUJARAT HIGH COURT] and Adani Enterprises Ltd. [ 2016 (8) TMI 163 - GUJARAT HIGH COURT] . Thus, we find no infirmity in finding of Ld. CIT(A) deleting disallowance u/s 14A - Thus, ground no.2 raised by the revenue is dismissed. Adhoc disallowance of expenses - HELD THAT:- AO has made disallowance on ad hoc basis @ 5% of the expenses. No specific observation with regard to any irregularity in the records and Books of accounts has been pointed out by Ld. AO. Thus in the given facts where the assessee owns cranes, dumpers, trailors, trolleys and trucks etc., records regarding fuel expenses, daily allowance of drivers and toll tax paid are maintained, we find no justification in such ad hoc disallowance made by the Ld. AO ignoring the books of account and the tax audit report. Thus Ld. CIT(A) has rightly deleted the said disallowance. Ground no.3 raised by the revenue is dismissed. Disallowance of agricultural income - HELD THAT:- We find that the ownership of the agricultural land by the assessee is not in dispute and only estimation of income has been made by the Ld. AO. However looking to the fact that assessee has not filed complete details, also Ld. AO has made general remarks, therefore, being fair to both the parties we estimate the disallowance of agricultural income at Rs. 1 lakh and partly allow revenue s ground no.4 by confirming the deletion of addition at Rs. 5,80,640/- and sustaining disallowance of agricultural income at Rs. 1 lakhs. Thus ground no.4 of the revenue s appeal is partly allowed. Disallowance of depreciation for personal use of motor car, disallowance of depreciation claimed on cameras - HELD THAT:- As we find no justification in the finding of Ld. AO as cameras are required for day to day business activities and disallowance for personal elements is not justified. However, as far as the disallowances of depreciation on motor cars are concerned we find that assessee is an individual and own ten motor cars. Undoubtedly looking to the nature of business assessee needs motor cars, however, one cannot ignore the personal element in use of the motor cars. But the action of the Ld. AO of disallowing the total depreciation claimed on Mercedes and fortuner car at Rs. 9,93,337/- is not justified as it cannot be said that these two cars have not at all being used for business purpose. Thus in order to meet end to justice 10% of disallowance of depreciation claimed on these two motor cars is sustained is disallowed. Disallowance of contribution to Provident Fund u/s 36(1)(va) - Payment before the due date of filing return of income u/s 139(1) - HELD THAT:- Recently in the case of Lumino Industries Ltd. [ 2021 (11) TMI 926 - ITAT KOLKATA] has held that the amendment brought in by the Finance Act 2021 w.e.f. 01.04.2021 inserting explanation to section 36(1)(va) of the Act and section 43B of the Act are prospective in nature and shall be inforce from assessment 2021-22 and onwards and therefore, for the period before such amendment, if assessee has deposited the contribution of PF and ESI for the year concerned before the due date of filing return of income u/s 139(1) of the Act, which in the instant case is well proved by the finding of Ld. CIT(A) itself, no disallowance could be made u/s 36(1)(va) of the Act. Thus, no interference is called for in the finding of Ld. CIT(A) deleting the said disallowance. Appeal of assessee allowed.

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• 2022 (4) TMI 384
  Revision u/s 263 by CIT - unaccounted sales/purchases - assessee s case had earlier been reopened on the same issue u/s. 148 - as per CIT AO had failed to examine the dispute between the assessee and NESL and had also not examined the issue on merits so as to logically conclude the re-assessment - HELD THAT:- From the assessment order passed u/s. 147/143 (3) in the office note AO has mentioned that a letter u/s. 133(6) of the Act had been issued on 20.12.2018 which was duly served through email to NSEL, Mumbai calling information i.e. copy of trading account along with copy of the letter in which the assessee allegedly admitted to pay the outstanding liability - subsequent reminders are also issued to the NSEL but no compliance had been made by the NSEL. It is also stated in the office note that, therefore, in the absence of any evidence regarding this information, no adverse inference was called for and the Assessing officer noted that, further, if any information will be received, subsequently, suitable action u/s. 148/263 of the Act may be considered. Thus, at the time of completion of re-assessment proceedings on 29.12.2018 (undisputedly, the reassessment was getting time barred on 31.12.2018), the Assessing officer, after duly considering the explanation offered by the assessee and the documents furnished in this regard, arrived at one of the possible views which could be taken in the present case. It is our considered opinion that the Assessing officer, after duly calling for required information and after duly considering the explanations and evidences before him, reached a conclusion which was a possible view to be taken by him and he cannot be faulted for not having waited for a response from NSEL which was not forthcoming even after two reminders. AO took a view which was legally plausible and possible at that point of time. Subsequent information could be a basis for initiating new re-assessment proceedings but not the basis for a revisionary proceedings u/s. 263 of the Act. Therefore, the exercise of revisional jurisdiction by the Ld. PCIT is without any justification. As far as the alternate plea of the assessee challenging the re-assessment proceedings is concerned, we are not inclined to go into the same as we have already held the proceedings u/s. 263 of the Act to be bad in law. Accordingly, we set aside the order passed u/s. 263 of the Act and allow the appeal of the assessee.

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• 2022 (4) TMI 383
  Income from other sources - Addition on account of interest paid or incurred on the loans taken, against the income earned from interest being income from other sources under the provisions of Section 57 - HELD THAT:- In the present case, it is noticed that a similar issue having identical facts was a subject matter of the appeals by the Family members of the assessee [ 2021 (3) TMI 1354 - ITAT CHANDIGARH] decided that there is no allegation that the assessee has used the interest bearing funds for some other purposes. Under the circumstances, in our view, the assessee is entitled to set off the interest expenditure against the interest income earned by the assessee and the net of the same has rightly been offered by the assessee for taxation. In view of above discussion, the addition made by the Assessing Officer is ordered to be deleted. - Decided in favour of the assessee.

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• 2022 (4) TMI 382
  Exchange loss on account of foreign currency loan availed from external sources - AO has disallowed total loss incurred on account of exchange fluctuation by holding that it is in the nature of capital loss - As argued assessee has borrowed foreign currency loans for the purpose of acquiring capital asset as well as for general business purpose and thus, if at all, disallowance is required to be made, then proportionate disallowance is required to be made in respect of exchange loss pertains to loans borrowed for acquiring capital asset - HELD THAT:- We find that the assessee never disputed fact that foreign exchange loss debited into profit loss account also includes loss pertain to loans borrowed for acquiring capital asset. The only plea raised before us is that the Assessing Officer has considered very same issue for subsequent assessment year 2016-17 and has made proportionate disallowance towards for foreign exchange loss u/s. 43A of the Act, in respect of loss pertaining to loans borrowed for acquiring capital asset. Therefore, considering arguments of the learned A.R for the assessee that the Assessing Officer has considered a similar issue and made proportionate disallowance, we are of the considered view that the issue needs to go back to the file of the Assessing Officer to re-consider the issue in light of the Assessing Officer s subsequent assessment year for 2016-17, keeping in mind rule of consistency and thus, we set aside the appeal and restore the issue to the file of the Assessing Officer and direct the A.O. to reconsider the issue in light of arguments of the assessee that proportionate disallowance is required to be made in line of disallowance made by the Assessing Officer for subsequent assessment year 2016-17. Appeal of assessee is treated as allowed for statistical purposes.

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• 2022 (4) TMI 381
  Reopening of assessment u/s 147 - reopening has been done beyond four years - Addition of Income to Income from House Property made by the Learned Assessing Officer - HELD THAT:- In the present case as mandated by the Act no reopening can be done unless there is failure on the part of the assessee to disclose fully and truly all material facts. Since details of the house property was duly available with the Assessing Officer when original assessment under section 143(3) was done in my considered opinion the reopening after four years is bad and liable to be quashed. Accordingly, hold that the Assessing Officer has no jurisdiction to pass the order in this case. As regards the merits of the case addition has been made on the basis of percentage of the value of the house property. No case has been made out by the Assessing Officer that there was attempt by the assessee to reduce value of the house property income. It is not the case that the Assessing Officer has made any inquiry about the prevalent rental income or he has examined the State Municipal value. Without such examination, such a substitution of house property income upon whimsies and fancies of the Assessing Officer is not sustainable on the touchstone of Tip Top Typography [ 2014 (8) TMI 356 - BOMBAY HIGH COURT] - Thus hold that addition on merits is also not sustainable. Appeal of assessee allowed.

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• 2022 (4) TMI 380
  Exemption u/s 80P - income of the assessee included income from letting of godown - HELD THAT:- Assessee is cooperative society and it claimed NIL income after claiming exemption u/s 80P of the Act. The income of the assessee included various heads of income including transportation and rent. However, the activities in which the assessee is engaged is not coming out of the records. Clause a to f relates to various types of cooperative societies on the basis of their working and against which there is exemption of various classes of income. Therefore, we deem it appropriate to remit the matter back to AO who after verifying the nature of activities of the assessee will reexamine the claim of the assessee and will allow the same in accordance with law. Appeal of the assessee is allowed for statistical purposes.

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• 2022 (4) TMI 379
  Belated payment of employees contribution of PF u/s 36(1)(va) r.w.s.2(24) - HELD THAT:- It is noticed that there is a delay of one or two day in depositing the employees contribution to Provident Fund by the employer assessee when seen with reference to due date of accrual of salary. It is the case of the assessee that the salary also has been paid belatedly and when seen with reference to the actual date of payment of salary, no delay has occurred in depositing the employees contribution to Provident Fund. Thus, the assessee has tried to demonstrate before the CIT(A) towards contribution of the employees to the PF has been deposited by the assessee employer before the due date in terms of interpretation rendered by the decision of Kanoi Paper and Industries Ltd. [ 2001 (5) TMI 139 - ITAT CALCUTTA-E] - We observe that the decision of the Hon ble Gujarat High Court [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] does not apply where the payment has been made on or before the due date. The deduction under s.36(1)(va) in such case is available without any fetters. It may be pertinent to observe that disallowance u/s 43B r.w.s. 36(1)(va) of the Act in respect of non-payment of provident fund etc. within the due date is not intended to cover genuine and routine cases on late payment but only those where the employer has mis-utilized the funds collected from the assessee. Addition/disallowance u/s 43B of the Act for such delay of bare one or two days in depositing the employees provident fund would thus be wholly disproportionate to the default committed, if any. Thus, seen from any angle, the addition/disallowance under s. 36(1)(va) r.w.s. 2(24)(x) of the Act is not justified in the instant case. - Appeal of assessee allowed.

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• 2022 (4) TMI 355
  Delayed payments of employees contribution to ESI PF account within the due date provided under the PF ESI Act - HELD THAT:- As decided in Lumino Industries [ 2021 (11) TMI 926 - ITAT KOLKATA] if employees contribution received by an assessee and paid to ESI and PF accounts before the due date of filing of the return, then the assessee will be eligible to claim the deduction of such amounts. With the assistance of Ld. representatives, we have specifically gone through the record and find that payments have been made within the due dates of filing of the return. With the above observation, this appeal of the assessee is treated as allowed. The disallowances stand deleted in this appeal.

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• 2022 (4) TMI 354
  Correct head of income - income declared by assessee under the head capital gains or business income on account of construction and sale of apartments - HELD THAT:- As in the case of PCIT vs. Smt. Chamundeswari,[ 2019 (1) TMI 861 - KARNATAKA HIGH COURT] wherein following the decision of Hon ble Supreme Court in the case of G. Venkataswamy Naidu [ 1958 (11) TMI 5 - SUPREME COURT] held that property purchased with the intention of profit is business income but in case, assessee holds the property for a long period and investing in the property in an intention to hold and enjoy the property and sells it for capital appreciation, the profit deriving there from is taxable under the head capital gains . The intention was to construct property, to hold property and to enjoy the property as the assessee was enjoying this property since 2003, as she was not having any other house property. The compulsion to the assessee for sale of this property was only that she was under heavy debt and to release the debt she has to sell the property and actually by selling these flats she has settled the loans and hence in the given facts, we cannot say that the assessee has entered into any trade or any case adventure in the nature of trade . Hence, we reverse the orders of lower authorities and direct the AO to assess the profit arising out of sale as capital gains and allow the appeal of the assessee.

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• Customs

• 2022 (4) TMI 378
  Levy of Fine and penalty u/s 125 and Section 112(a) of the Customs Act, 1962, at a reduced rate - deliberate undervaluation or mis-declaration to avoid duty, or not - HELD THAT:- It would not be inappropriate to mention here that the Appellant s case is squarely covered by the judgment of Hon ble Madras High Court in Commissioner of Customs (Sea), Chennai-I Vs. M.R. Associates [ 2013 (8) TMI 275 - MADRAS HIGH COURT] wherein it was clearly held that enhancement of value based on voluntary statement concerning acceptance of value, may be for early clearance of goods, would not invoke penal provisions nor confiscation of goods can be made in lieu of redemption fine, and learned Commissioner (Appeals) has placed his reliance heavily on it but erroneously understood that in the said judgment there was confirmation of confiscation and redemption fine. In the instant case, as could be seen from the case record, Appellant had filed Bill of Entry on the basis of the item description mentioned by the supplier in the import document and had agreed to pay duty on the enhanced value after the same was found to be item of different size. Learned Commissioner (Appeals) had observed in unequivable terms that the same importer i.e. Appellant had cleared some goods at or around the same time at higher rate for which deliberate undervaluation or mis-declaration to avoid duty is farfetched (underlined to emphasize). More importantly, he had also observed that in valuation of imported goods, there is no place for minimum Customs value but appellant preferred not to challenge the departmental action. Therefore, it cannot be said that appellant had made a tie or contract for payment of higher value, so as to make him liable for violation of Civil Obligations for the purpose of imposing penalty on him and it has been settled through judicial precedent that voluntarily acceptance of higher value and willingness to pay the duty at the enhanced rate would exempt the Appellant from liability of confiscation and redemption fine. The appeal is allowed.

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• 2022 (4) TMI 377
  Levy of ADD - Coumarine - on perusal of Import Database, it was noticed by D.R.I that the same importer had imported and cleared three consignments of goods declared as Coumarine and had not paid the ADD - main case of appellant is that as the de novo adjudication has already been conducted and the matter is reserved for orders, the present appeal has become infructuous - HELD THAT:- The adjudicating authority has already conducted de novo hearing of the appeal and reserved the matter for orders. The present appeal has become infructuous. Appeal is dismissed.

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• 2022 (4) TMI 376
  Valuation of imported goods - mixed lot of Polyester Knitted Fabric (Rolls of Assorted Colours Weight) - enhancement of value on the basis of contemporaneous goods - Adjudicating Authority found the goods as per declaration but without assigning any reason loaded the proposed loaded the assessable value - HELD THAT:- The facts of the case are not in dispute that the Adjudicating Authority sought to load the value on the basis of assessed value available of the similar goods. The value is to be adopted for contemporaneous goods of assessed value and not declared value. In appellant s own case, M/S. SEDNA IMPEX INDIA PVT. LTD. GARG IMPEX VERSUS CC, FARIDABAD [ 2016 (10) TMI 517 - CESTAT CHANDIGARH] this Tribunal has held that the value of imported goods in question cannot be enhanced on the basis of DRI alert and the basis of assessed bill of entry in question, therefore the impugned orders are set aside. Thus, the assessed value of bill of entry of similar goods cannot be the basis of enhancement of declared value by the appellant. In fact it should be transaction value - appeal allowed - decided in favor of appellant.

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• 2022 (4) TMI 375
  Levy of penalty u/s 112 of Customs Act, 1962 - undervalued imports - appellant is a beneficiary out of the offence of undervaluation or not - cross-examination of witnesses - violation of principles of natural justice - HELD THAT:- There is no dispute that there is no admission by the appellant as regards the allegation made in the show-cause notice. This has been admitted by the adjudicating authority. It is clear that Shri Rajesh Jain has not made any implicatory admission in his statement and the adjudicating authority has solely relied upon the statements given by Shri K.V. Venugopal and Shri R. Jayachandran - the adjudicating authority has even not referred the request of the appellant for cross examination of the witnesses in his order. In the facts of the present case, the appellant has not given any inculpatory statement and not admitted the allegation made against him - For imposition of penalty against the appellant, the sole reliance was made on the statements of 3rd parties. In such a situation, it is incumbent on the adjudicating to allow the cross examination of the witnesses as mandated under Section 135 of Customs Act, 1962. We find that the adjudicating authority surprisingly neither allowed the cross examination nor even whisper in the impugned order to reject the request for cross examination made by the appellant. Therefore, the order of the adjudicating authority is in clear violation of principles of natural justice. The entire case needs to be reconsidered only after conducting cross examination of the witnesses whose statements were used against the appellant for imposition of penalty - appeal allowed by way of remand.

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• Insolvency & Bankruptcy

• 2022 (4) TMI 374
  Fraudulent transactions - Transaction covered under Section 43, 45, 49 and 66 is mandatory to be filed within the period of 135th Day of the Insolvency Commencement Date - time period prescribed under Regulation 35A of the CIRP Regulations, 2016 - mandatory or directory? - defrauding the Creditor under section 49 - fraudulent trading or wrongful trading within meaning of Section 66 - fraud as contemplated by Section 49 and 66 of the Code. Whether an Application by the Resolution Professional relating to a Transaction covered under Section 43, 45, 49 and 66 is mandatory to be filed within the period of 135th Day of the Insolvency Commencement Date and in event the Application is filed beyond such period, the same is liable to be rejected due to non-compliance of Regulation 35A of CIRP Regulations, 2016? - Whether time period prescribed under Regulation 35A of the CIRP Regulations, 2016 is mandatory or directory? - HELD THAT:- Regulation 35A of the CIRP Regulations imposes a duty on the Resolution Professional to take measure within the timeline as prescribed. In performance of such duty the public in general has no control including the Corporate Debtor. In event it is held that any action taken by Resolution Professional beyond the time prescribed in Regulation 35A of the CIRP Regulations is prohibited, it shall cause serious general inconvenience or injustice to the Corporate Debtor. One of the objective of the Code is to maximise the assets of the Corporate Debtor. In event the actions taken by the Resolution Professional after the timeline prescribed in Regulation 35A of the CIRP Regulations are to be annulled, the undervalued and fraudulent transactions will go out of the reach of Resolution Process, reach of the Court and shall cause great inconvenience and injustice to Corporate Debtor - thus, the timeline prescribed in Regulation 35A of the CIRP Regulations is only directory and any action taken by the Resolution Professional beyond the time prescribed under Regulation 35A of the CIRP Regulations cannot be held to be non-est or void only on the ground that it is beyond the period prescribed under Regulation 35A of the CIRP Regulations. There may be genuine and valid reasons for Resolution Professional not to file application for avoiding the transactions within time prescribed which are question relating to each case and has to be examined on case-to-case basis and if there are reasons due to which Resolution Professional could not file the Application within time the same has to be examined on merit. There was no cooperation by the Suspended Directors, documents and assets were not handed over to the RP, RP had to move an Application under Section 19(2) of the Code. The Order was passed on 09th December, 2019 by the Adjudicating Authority directing the suspended Directors to extend cooperation and it was only thereafter on 15th February, 2020 the lease deed was shared by Respondent No. 1 with the Corporate Debtor. The Transaction Audit Report was finalised on 14th August, 2020 and thereafter the Application was filed. The timeline prescribed in Regulation 35A of CIRP Regulations is directory and not mandatory. Whether the time period prescribed under Section 46 for avoiding undervalued transactions are also to be applied for judging of fraudulent transaction? - HELD THAT:- In so far as the Lease Agreement was concerned that was sought to be questioned under Section 49 and 66 of the Code and whereas the preferential transactions were attacked were under Section 43 of the Code. Thus the Application contained the allegations which were falling both under Section 43, 45 and Section 49, 66 and in so far as the allegations referable to Section 49, 66 the timeline prescribed under Section 46 is not attracted. The Civil Proceedings as referred by Respondent Nos. 1 and 3 does not in any manner cause any impediment in proceeding to decide the Application on merits by the Adjudicating Authority. It is further relevant to notice that even in Appeal before us Respondents who were issued notice and given time to file Reply have chosen not to file any Reply. In the Insolvency Resolution Process, Adjudicating Authority has been empowered to pass appropriate order in the Application which are brought before it as per provisions in the Code, when the RP brought into the notice of the Adjudicating Authority by filing the Application I.A. No. 742 of 2020 it was incumbent on the Adjudicating Authority to consider the Application on merits and take appropriate decision to benefit the Corporate Debtor. Adjudicating Authority committed error in rejecting the Application - Appeal allowed - decided in favor of appellant.

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• 2022 (4) TMI 373
  Approval of Resolution Plan - requirement of inclusion of the Respondent No.3 in the list of Prospective Resolution Applicants or not - convention of meetings for Scheme of Arrangement - HELD THAT:- As per Form- G published, the last date for submission of the Expression of Interest was 31.12.2020. The list of Prospective Resolution Applicants was also uploaded. It is true that in the 18th meeting of the CoC dated 02.03.2021, the CoC took note of the three Resolution Plans which were received from Mainthan Alloys Limited , ESL Steel Limited and Rimjhim Ispat Private Limited . However, minutes of the 18th meeting of the CoC indicate that Resolution Plans were not voted upon in the said meeting. Similarly, in the 19th CoC meeting dated 08.03.2021 detailed discussion was made on the Resolution Plans received from the Resolution Applicants. The minutes under Agenda Item No.5 noticed that Applicants were requested to reconsider the financial proposal made by them. On 20.03.2021, the Resolution Professional issued a final list of the Prospective Resolution Applicants in which Respondent No.3 was also included - delay in submission of Expression of Interest by Tata Steel Mining Limited was condoned by the CoC in its meeting held on 18.03.2021 and e-voting results dated 20.03.2021. It is well settled that the commercial wisdom of the CoC is to be given due regard. The CoC having decided to condone the delay in submission of Expression of Interest by Respondent No.3 and to include the Respondent No.3 in the list of Resolution Applicants, no exception can be taken by the Appellant to the decision of the CoC. The object of the IBC is to maximise the assets of the Corporate Debtor and as noted above, in the 19th CoC meeting, earlier Resolution Applicants were requested to revise the financial proposal. Thus, by the time Respondent Nos.3 was permitted to submit a Resolution Plan neither any Resolution Plan was accepted nor even put to e-vote. Hence, the commercial wisdom of the CoC to accept the Respondent No.3 as Prospective Resolution Applicant cannot be faulted. The submission raised by the Appellant on the basis of Scheme of Arrangement under Section 230 of the Companies Act, 2013 was elaborately considered by the Adjudicating Authority and it has been rightly held that the said Scheme having never been approved by the Creditors cannot come to any benefit of the Appellant and further after initiation of the CIRP, the present Appellant who is Suspended Director of the Corporate Debtor is hit by Section 29A of the Code. The submission of the Learned Counsel for the Appellant, thus, on the basis of Scheme of Arrangement under Section 230 of the Companies Act, 2013 has no substance. The Adjudicating Authority by a very elaborate and well considered order has discussed all the submissions which were raised on behalf of the Appellant and has rightly rejected the submission. The Order passed by the Adjudicating Authority is a well considered order which needs no interference by us in exercise of our Appellate Jurisdiction. There are no merit in the appeal - appeal dismissed.

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• 2022 (4) TMI 372
  Seeking for impleading the legal heir of deceased Personal Guarantor - Rule 53 of the NCLT Rules, 2016 - HELD THAT:- Section 5(22) of the IBC, 2016 makes it clear that the Personal Guarantor is an individual who stood as a Guarantor to a Corporate Debtor and, therefore, on his demise the proceedings against the Personal Guarantor would abate. Besides that, the proceedings under IBC, 2016 is not in the nature of recovery and therefore it would be proper to close the proceedings on the death of the Personal Guarantor. It may also be mentioned that the case of proceedings under Section 95 of the IBC, 2016 for initiation of Insolvency Proceedings against the Personal Guarantor is not a case for recovery of any amount because that will go contrary to the scheme of IBC, 2016. In such a situation on the demise of the Personal Guarantor, an individual who has given the guarantee in favour of the Corporate Debtor, the question of continuing the proceedings against such a dead person through his legal heirs will not arise. Application dismissed.

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• 2022 (4) TMI 371
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtors - existence of debt and dispute or not - Section 95(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Petitioners have complied with Section 95(4), that the demand notices dated 08.11.2021 have been served to the Respondents/Personal Guarantors and that the Respondents/Personal Guarantors failed to make the payment, we have come to the conclusion that there is a default on the part of the Respondents/Personal Guarantors by not fulfilling the debts owed to the Creditor Bank as per the clauses contained in the Consent Terms in respect of the outstanding financial debt which is apparent from the documents placed on record. These petitions filed under Section 95 of the Insolvency and Bankruptcy Code, 2016(IBC) read with Rule 7(2) of the Insolvency and Bankruptcy Rules, 2019 by the State Bank of India against Personal Guarantors of the Corporate Debtor M/s. Orma Marble Palace Private Limited are allowed - moratorium declared.

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• Service Tax

• 2022 (4) TMI 370
  Classification of services - activity of transportation of the minerals from the stock yard to the railway siding - cargo handling services or Transport of goods by road agency service? - appellant paid service tax under reverse charge mechanism on part of the contract under Transport of goods by road agency service - applicability of reverse charge mechanism - HELD THAT:- The agreement itself provides for detailed break-up of rates for each of the two activities to be undertaken by the Appellant. A plain reading of these rate schedules will show that the essence of the contract is transportation of mineral along with loading of the same in wagons. Since in the present case the contract is vivisectable, the demand for transport work under cargo handling service cannot succeed. Also there is no counter made to the claim of the Appellant on payment of service tax under reverse charge mechanism by the recipient on such amounts by the department - appeal allowed - decided in favor of appellant.

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• 2022 (4) TMI 369
  Refund of Service tax paid under protest - legal consultancy services received for winding up of business - applicability of Reverse Charge Mechanism - business entity or not - HELD THAT:- The term business entity is defined under section 65B(17) to mean any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession. Here ordinarily means normally or in normal course. Therefore, it can be said that business entity is a person who ordinarily carries out activity for profit. However, if any person is not carrying out any activity for profit, then the person cannot be considered as business entity . Therefore, for applicability of this definition the appellant has to normally or in normal course, indulged in any activity which is profit motivated. Merely because the appellant is still registered under the Companies Act and has not get the said registration cancelled does not mean that they are carrying out business activity. It is nowhere the case of the Revenue that the appellant is indulged into any activity relating to its business after the year 2008. The learned Commissioner has specifically recorded in the impugned order that there is no dispute that the appellant have stopped their business activity and are in the process of winding up - The appellant cannot be saddled with any tax liability only on the basis of apprehension. It is the case of the appellant, which has not been denied anywhere by revenue, that they have discharged their employees also at the time of closure of business. Profit or motive for profit is a pre-condition for application of section 65B(17) ibid, which are not available from the facts of this case. Submission of learned Authorised Representative is that after so many years of winding up or/ closure of business the appellant are availing legal consultancy services which raises suspicion - HELD THAT:- The same is also without any basis as no evidence has been placed on record by the department to substantiate it nor it is the case of the department anywhere in the show cause notice or before the authorities below. Appeal allowed - decided in favor of appellant.

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• 2022 (4) TMI 368
  Classification of services - business auxiliary services or not - Toll Charges - collection of Toll under a contract executed by NHAI in favour of the appellant - negative list of services - applicability of Boards Circular No.152/3/2012-ST dated 22.02.2012 - demand against the appellant has been confirmed based on the findings that the appellants were not the owner of the land made available for construction of road nor they had constructed road - invocation of extended period of limitation - penalty - HELD THAT:- Vide the contract the user fee collection rights have been transferred by NHAI in favour of the appellants against a fixed weekly remittance irrespective of the amount of fee collected by the appellant, whether it may be less or may be more. Thus, all risks and rewards stands transferred by NHAI in favour of the appellant. Question of appellant being the agent of NHAI does not at all arise. The contract is apparently on principal to principal basis. Negative list of services or not - HELD THAT:- The activity of collecting toll is covered under the negative list of services. The Appellant has been provided with the Fee Collection Rights i.e., the right to collect toll tax and not to provide any service on behalf of NHAI. Further, the Appellant was not paid any definite collection charges or service charges for collecting the toll, therefore, the service provided by the Appellant by way of granting access to road on payment of toll charges is covered under negative list clause (h) to section 66D of the Finance Act, 1994. No tax is leviable in the scenario - Expounding the same and as per facts of the present case, the Appellant is not carrying out any activity for NHAI, in fact, NHAI is supplying rights to collect fees to the Appellant which falls within the ambit of goods . Further, on receiving the right to collect toll, the amount that the Appellant is collecting from the users of the road squarely falls in the ambit of toll and thus, is not chargeable to service tax as per clause (h) of Section 66D of Finance Act, 1994 and accordingly, there is no liability of tax on the Appellant. Applicability of Circular No.152/3/2012 dated 22.02.2012 - HELD THAT:- As per the facts of the case, there is no retention by the Appellant rather he has to pay a fixed amount on weekly basis to NHAI irrespective of any collection. Hence, the very basis on which ld. Adjudicating Authority has alleged that the Appellant has earned commission is held incorrect - Further, the said circular is applicable when the collection of toll is made on behalf of NHAI and a part of toll collection is retained by the collection agency. However, in the current case, the Appellant was carrying out the said activity as an independent principal. No fixed amount has been retained by the Appellant, on the contrary, he is required to pay a fixed amount on weekly basis to NHAI. Thus, consideration is flowing from the Appellant to NHAI and not vice-versa. Therefore, the said circular is not applicable in the scenario and the department has erred in applying the circular in the present case. Extended period of limitation - Penalty - HELD THAT:- Extended period of limitation cannot be invoked as the Appellant did not suppress any fact with intent to evade duty and issue involves interpretation of law. No corroborative evidence has been put forward by the department to support that there was a deliberate attempt on the part of the Appellant to suppress the material facts with an intent to evade payment of tax - Everything was disclosed to the department at the time of scrutiny, therefore in any case, extended period of limitation is not invokable in the scenario. Further as the Appellant was always in bona fide belief about the exemption on the services provided by him, it is well settled law that extended period of limitation is not applicable case of bona fide belief about the taxability or applicability of exemption on the basis of reasonable grounds - For the same reason no question arises for imposition of penalty. The findings of Commissioner (Appeals) are held to be based on wrong assumptions and interpretations - Appeal allowed - decided in favor of appellant.

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• 2022 (4) TMI 367
  Condonation of delay of 595 days in filing the appeal - sufficient cause for delay existing or not - declaration under Arrears category of the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 (SVLDRS) - Section 5 of Limitation Act - Doctrine of Equality - HELD THAT:- The words sufficient cause for not making the application within the period of limitation have to be understood and applied in a reasonable, pragmatic, practical and liberal manner however depend upon the facts and circumstances of the case and even the type of case. Hon ble Apex Court in the case of PERUMON BHAGVATHY DEVASWOM, PERINADU VILLAGE VERSUS BHARGAVI AMMA (DEAD) BY LRS ORS. [ 2008 (7) TMI 836 - SUPREME COURT] has held that the words Sufficient Cause in Section 5 of Limitation Act should receive a liberal construction so as to advance substantial justice but only in a circumstance when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the appellant. It is observed that the pleas about availing the benefit of Sabka Vishwas Legacy Dispute Resolution Scheme cannot be held to be a sufficient cause because Scheme came into effect from September, 2019 whereas the period of limitation to file the impugned appeal had expired on 11th March, 2019 itself i.e. almost six months prior the Scheme could had come into effect the period of limitation to file impugned appeal had already expired. Another reason about the death of the father in law of the appellant is also an event post-expiration of the period of limitation. None of the said two grounds explains the delay that occurred between 11.12.2018 and 11.03.2019. The non-filing of appeal by the consultant also is not the sufficient cause because appellant was required to pursue his consultant and to ensure that his appeal gets filed before 11.03.2018 but appellant failed - the same is definite inaction on part of appellant resulting out of his negligence. Hence none of the grounds could be considered as the sufficient cause due to which the appellant was restrained from filing the appeal during the prescribed period. The Hon ble Apex Court in the case of COLLECTOR, LAND ACQUISITION VERSUS MST. KATIJI AND OTHERS [ 1987 (2) TMI 61 - SUPREME COURT] though has held that the expression sufficient cause is adequately elastic to apply the law in a meaningful manner to sub-serve the ends of the justice but only in case where delay is not on account of negligence. Also the said judgment simultaneously talks about the doctrine of equality holding that all litigants including the State as a litigant must be accorded an equal treatment and law should be administered in an even manner. The reasons mentioned in the application do not suffice to be called as sufficient cause as it should be in terms of Section 5 of the Limitation Act. The appellant/applicant is rather observed to be absolutely non-diligent and question of exercising any leniency in his favour does not at all arise - Appeal dismissed.

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• 2022 (4) TMI 366
  Time Limitation - Works Contract Service - services of execution of works contract involving composite contract, for supply of materials as well as electrical wiring and other works - principles of unjust enrichment - extended period of limitation - HELD THAT:- It is found from the impugned order of the First Appellate Authority that the appellant was not liable to pay service tax on works contract up to 01/06/2007 and hence, the collection of the tax/duty amounts to the one without the authority of law, which takes away the case of the appellant from the mischief of limitation prescribed under Section 11B of the Central Excise Act, 1944. The jurisdictional Hon ble High Court of Karnataka in the case of Way2Wealth Brokers Pvt. Ltd. Vs. CCT, Bengaluru [ 2021 (10) TMI 488 - KARNATAKA HIGH COURT ] had an occasion to consider the claim of refund of the tax paid when there was no mandate to pay service tax. The denial of refund only on the ground of limitation in the case in hand cannot be sustained and hence, the same is set aside - Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2022 (4) TMI 365
  CENVAT Credit - input services - outward transportation for removal of finished goods - FoR basis - applicability of Board Circular No. 1065/4/2018-CX dated 08.06.2018 - HELD THAT:- It is admitted fact that the appellant had cleared their finished goods on FoR destination basis. Further, admittedly it is the appellant who has borne the freight from their factory premises and also borne the risk of transit. The appellant have right of disposal of the goods during transit, until the goods were delivered at the buyer premises. Thus, in the facts and circumstances, the property of goods got transferred to the buyer at the doorstep of the buyer upon delivery. Thus, in the facts and circumstances, the place of removal is the premises of the buyer. The appellant is entitled to cenvat credit on the outward transport under dispute - Appeal allowed - decided in favor of appellant.

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• 2022 (4) TMI 364
  CENVAT Credit - input services - Courier Services - service provider had collected the consignment from the Appellant s factory gate and delivered the goods at the overseas customers - place of removal - HELD THAT:- The impugned service was used by the Appellant for export of goods. In these circumstances, it is held that the appellant is entitled to avail Cenvat credit on input service namely Courier Services which have been availed by the appellant in the course of their business to export of goods. Further, it is found that in number of cases Tribunal has consistently taken a view that Cenvat Credit in respect of Courier Service is admissible - reliance can be placed in the case of AMUL INDUSTRIES PVT. LTD VERSUS C.C.E. AND S.T., RAJKOT [ 2018 (2) TMI 473 - CESTAT AHMEDABAD] and MODERN PETROFILS DTY DIV VERSUS C.C.E. S.T. -VADODARA AND ASSOCIATED POWER STRUCTURES PVT LTD VERSUS C.C.E. S.T. -VADODARA [ 2017 (9) TMI 206 - CESTAT AHMEDABAD] . Appeal allowed - decided in favor of appellant.

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• 2022 (4) TMI 363
  Levy of duty of excise - Valuation - captive consumption of by-production - Carbon Dioxide (CO2) gas - manufacture of Beer - non-excisable goods or otherwise? - period from March, 2010 to December 2014 and from January 2015 to June 2015 - denial of benefit under N/N. 67/1995 dated 16.03.1995 - Liability of duty of intermediate goods - Rule 9 of Central Excise Rules - marketability of goods - HELD THAT:- The appellants, admittedly, are engaged in manufacture of alcoholic liquor for human consumption namely Beer excisable under Rajasthan State Excise Act. The duty has been demanded on Carbon Dioxide gas which evolves during the process of manufacture of Beer at fermentation stage which is a separate good under Central Excise Tariff Sub Heading No.28112190 of the First Schedule to Central Excise Tariff Act, 1985. The appellant is manufacturing an alcoholic drink i.e. Beer which is not excisable under Central Excise Act but is excisable under Rajasthan State Excise Act. The show cause notices have been issued under Central Excise Act. This Act is a central legislation enacted pursuant to the legislative power conferred on the Parliament in terms of Article 246 read with Entry 84 of List-I of the Seventh Schedule to the Constitution during the relevant Entry No.84 - perusal makes it ample clear that alcoholic liquors for human consumption as that of Beer are out of the scope of Central Excise Act. Though the goods which are specified in First and Second Schedule to Central Excise Tariff Act, 1985 only are excisable goods: But alcoholic liquors including Beer find no mention in the said Schedules of Central Excise Tariff Act, 1985 because of the above Entry No.84. There is no denial that such alcoholic liquors are subject to Excise Duty under State Excise Law. Since the manufactured good in question is Beer, an alcoholic liquor for human consumption, the manufacturing process is out of the purview of Central Excise Act. Question of any intermediate product arising during such manufacturing process, irrespective find mentioned under Central Excise Tariff, cannot be made liable for Excise Duty under Central Excise Act. Whether the Carbon Dioxide (CO2) evolved herein confirms the double standard test of manufacture and marketability? - HELD THAT:- It is observed that CO2 herein is produced in the fermentation tank during fermentation of a mixture called wort which ultimately ferments to Beer, the final product however with the simultaneous inevitable emission of CO2 gas. This particular observation is sufficient to hold that formation of CO2 cannot be called as manufacture - no separate treatment is given to wort mixture for emission of CO2 which is inevitable consequence of fermentation of said wort mixture into Beer that CO2 in the present facts and circumstances cannot be held to have been manufactured product which is excisable. In the present case, CO2 has emerged in the manufacturing process of such product to which Central Excise Act does not apply. For this reason also Excise Duty cannot be levied upon so emitted CO2 irrespective it has been captively used in further process for manufacturing the impugned alcoholic liquor. Marketability of goods - HELD THAT:- Any good which is known to market attracts Excise Duty when cleared provided it has been manufactured. As already held above CO2 herein was not the product of manufacturing process. However, it is an admitted case that the appellants in addition of using CO2 captively were also purchasing CO2 for the same purpose of giving effervescence to the manufactured Beer. The marketability cannot be denied. Also Carbon Dioxide has a specific Tariff Entry under Central Excise Act cannot be denied. But the fact remains is that impugned CO2 is not a manufactured product, as held above, it fails to satisfy the dual test. Question of levy of Excise even under Central Excise Act does not arise. Applicability of Notification No.67/95 dated 16.03.1995 - HELD THAT:- The Carbon Dioxide irrespective of being an independent product under Central Excise Tariff but in the present case, it is a product that has arisen inevitably in such a manufacturing process that does not attract the levy of Central Excise Duty under Central Excise Act question of imposing demand and confirmation of duty on Carbon Dioxide in given circumstances is highly unsustainable. The captive consumption of such CO2 was only to efficiently manufacture the non-excisable Beer/the final product. The orders confirming duty on the quantity of CO2 being captively used by the appellant is therefore liable to be set aside. Appeal allowed - decided in favor of appellant.

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• 2022 (4) TMI 362
  CENVAT Credit - transfer of the unit - capital goods were shifted on payment of duty in terms of Rule 10 (3) of Cenvat Credit Rules, 2004 - HELD THAT:- It is a fact on record that there were no physical input or were in progress available at the time of shifting of the factory, but Cenvat credit was lying in their Cenvat credit account, therefore, as held by this Tribunal in the case law cited by the learned Counsel of the appellant, particularly in the case of KEVIN ENTERPRISES PVT. LTD. VERSUS COMMISSIONER OF C. EX., VADODARA [ 2006 (6) TMI 449 - CESTAT, MUMBAI] , wherein this Tribunal has held that where the stock did not exist and the capital goods, on which the credit was availed, were duly accounted for, transfer of Cenvat credit lying unutilised, should not be refused. The appellant is entitled for transfer of Cenvat credit lying in their Cenvat credit account on transfer of the factory although no input or work in progress is on record - appeal allowed - decided in favor of appellant.

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• 2022 (4) TMI 361
  Levy of Excise Duty alongwith penalty - cigarettes taken out of quality control checks on production line within the factory which was under physical control of the respondent - period January 2007 to October 2011 - extended period of limitation - HELD THAT:- The disputed period is January 2007 to October 2011 and it is the contention of the appellant that w.e.f. 24.4.2009 the appellant has stopped such practice, therefore, no demand is sustainable after 24.4.2009. To that effect, the appellant has intimated to the Department on 24.4.2009 itself, as the unit of the appellant was under physical control of the Department. As it is evident from the records that the appellant has stopped such practice for which demand sought to be proposed against the appellant, we hold that for the period 24.4.2009 is not sustainable as same is presumptive demand. Therefore, for the period 24.4.2009 till October 2011, the demand of duty is not sustainable as proposed in the impugned show cause notice. Extended period of Limitation - HELD THAT:- The appellant s unit was under physical control of the Central Excise Department, therefore, show cause notice dated 31.1.2012 issued for the period January 2007 till 23.4.2009 is barred by limitation, as the same has been issued by invoking extended period of limitation - demand for period till 23.4.2009 is barred by limitation. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2022 (4) TMI 360
  Recovery of Tax - Exemption from Purchase Tax - Soyabean - Sections 9 and 10 of the Adhiniyam,1994 - breach of doctrine of promissary estoppel or not - Notification No.43 dated 06.06.1995 - HELD THAT:- Earlier exemption notification dated 06.06.1995 was issued giving the benefit of exemption from payment of tax payable under sections 9 and 10 of the Adhiniyam,1994 and pursuant to the aforesaid notification, the Director of Industry has issued a certificate of eligibility for availing the facility of exemption of tax under notification dated 06.06.1995, therefore, a notification from exemption was issued only for those dealers and manufacturers who are liable to pay tax under section 9 and 10 of Adhiniyam,1994. Now by way of section 10-B, a new charging section has been introduced for every dealer who in the course of his business purchases any goods as may be notified by the Government. After the insertion of Section 10-B and issuance of notification classifying Soybean as a class of goods, the respondents are treating the petitioner as out of the purview of section 10, hence withdrawing to avail the benefit of exemption from tax by virtue of notification 06.06.1995. But the respondents have not withdrawn the notification which was valid for the period mentioned in it. Due to the insertion of section 10-B, the petitioner has been brought from section 10 hence any notification issued for granting charging of tax under section 9 and 10 will apply to the petitioner from the date of issuance of notification prospectively. The petitioner has established the soybean extraction plant in the backward area of the State on the incentive in the form of exemptions from the tax for a fixed period under the Adhiniyam, 1994. The Apex court in MAHABIR VEGETABLE OILS (P) LTD. AND ANR. VERSUS STATE OF HARYANA AND ORS. [ 2006 (3) TMI 234 - SUPREME COURT ] has held firstly the doctrine of promissory estoppel operates even in the legislative field, secondly, the attempt to take away the benefit of exemption already granted for fixed period, is not only highly arbitrary, unjust and unreasonable but hits the principles of legitimate expectation and thirdly the exemption from payment of tax in favour of the person under the statute would also constitute a right or privilege. Apart from the above the petitioner has been granted exemption from payment of tax under section 17 of the Adhiniyam, 1994, if Government wanted to levy tax on soyabean then Government could have withdrawn the notification in exercise of power conferred under sub-section (2) of section 17 instead of inserting new charging section which specifically provides that any notification issued under Section 17(1) may be rescinded before the expiry of the period for which it was to have remained in force and on such rescission such notification shall cease to be in force. A notification rescinding an earlier notification shall have prospective effect. Thus, the petitioner shall be entitled to avail the notification dated 06.06.1995 for exemption from payment of tax payable under sections 9 and 10 of the Adhiniyam,1994 a certificate of eligibility for availing the facility of exemption of tax under notification dated 06.06.1995, till its validity period i.e. 31.03.2005 - Even otherwise the period of notification was upto 31.3.2005 and same has not been continued, therefore only for three months period the petitioner has been subjected to payment of entry tax under the Adhiniyam, 1994. The impugned notices dated 09.09.2005 and 13.09.2005 issued to the petitioner are hereby quashed - petition allowed.

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• Indian Laws

• 2022 (4) TMI 359
  Dishonor of Cheque - Rejection of application of the petitioner seeking discharge in the criminal case - petitioners filed an application seeking discharge in criminal case on the ground that since the entire disputed amount has already been paid to the respondent during the period May 2017 to 2018, the complaint under Section 138 of the NI Act and Section 420 of IPC is not maintainable - HELD THAT:- The petitioners have filed copy of statement of leisure account from which payment is said to have been made to the respondent firm. On 26.10.2021 itself, the application of the petitioners has been considered and rejected by the learned JMFC observing that the present case relates to dishonour of cheque, in which on 11.08.2021, the particulars of offence were stated to the accused/petitioners under Section 251 of CrPC, which was denied by him and it was stated that he had given the blank cheque to the respondent firm, which has been misused and thereafter the case was fixed for complainant s evidence. In such circumstances, the present case is a subject matter of evidence, which cannot be decided at this stage without going into merits of the case and accordingly the application of the petitioners was rejected and the case was again fixed for complainant s evidence under Section 254 of CrPC. Applying the principle laid down by the Hon ble Supreme Court in SRIPATI SINGH (SINCE DECEASED) THROUGH HIS SON GAURAV SINGH VERSUS THE STATE OF JHARKHAND ANR. [ 2021 (11) TMI 66 - SUPREME COURT] in the present case as well, it is quite vivid that the present complaint case under Section 138 of the NI Act is a summons trial case and the learned Trial Court has rightly held that prima facie application cannot be decided without going into merits of the case in absence of any evidence. This finding of Trial Court is based on correct appreciation of provisions of law, which cannot be interfered with by this Court. Petition dismissed.

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• 2022 (4) TMI 358
  Maintainability of Criminal proceeding - Dishonor of Cheque - insufficiency of funds - mismatch of signature in the cheque - HELD THAT:- It is clear from the order sheets of Complaint Case No. 230/2021 that the complainant has filed this complaint against the petitioner which has been registered by the learned Judicial Magistrate First Class on 25.01.2021 under Section 138 of Negotiable Instrument Act. Petitioner has filed application under Section 309 of Cr.P.C. on the ground that he wants to file a writ petition before High Court on the ground that his complaint under Section 35 of Consumer Protection Act is pending before the competent Authority, therefore, this petition is not maintainable. Criminal Proceeding under Section 138 of Negotiable Instrument Act for dishonour of cheque is maintainable - petition dismissed.

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• 2022 (4) TMI 357
  Dishonor of Cheque - acquittal of the accused - abatement of proceedings on death of the original complainant - complaint filed under section 406, 420 and 114 of the Indian Penal Code and under section 138 read with section 142 of the Code of Criminal Procedure - HELD THAT:- In the present case, cognizance has been taken by the court and summons was issued by the trial court against the accused and hence on death of the original complainant, the proceedings do not abate and legal heirs of original complainant are entitled to come forward and ask for their substitution in place of the complainant so as to proceed further with the trial. The case relied upon by the appellant in the case of Anil G. Shah [ 1997 (10) TMI 416 - GUJARAT HIGH COURT] is squarely applicable wherein it has been held that once cognizance of offence has been taken by the magistrate, trial will have its end after following due process and procedure as laid down in the code of criminal procedure and there is no provision in the Code of Criminal Procedure or in the Negotiable Instruments Act laying down that on account of death of payee, trial must be abate and merely because original complainant payee has died, there could not be abatement of the proceedings and legal heirs of original complainant are entitled to come forward and ask for their substitution in place of the complainant so as to proceed further with the trial. The impugned judgment and order is hereby quashed and set aside and the matter is remanded to the trial court to decide and dispose of the matter after giving reasonable opportunities to the parties within a period of two months from the date of receipt of this order - appeal allowed.

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• 2022 (4) TMI 356
  Dishonor of Cheque - failure to prove execution of the cheques beyond reasonable doubt - signing of the cheques itself is execution of it, or otherwise? - ingredients to constitute the offence under Section 138 N.I. Act are established, or not - prosecutions launched under Section 142 of the Negotiable Instruments Act, 1881 - HELD THAT:- The issuance of a signed blank cheque is admitted by the accused. According to him, the entries in Ext. P1 cheque were not filled by him. Accordingly, the accused attempted to draw a distinction between signing a cheque and executing it. It is not necessary that the complaint must contain all particulars of the alleged transaction in which the disputed cheque was issued - It is found that materials indicative and communicative of the alleged transaction are incorporated in the complaint. Moreover, the accused failed to dispute the source of the complainant to advance the money. The dispute on source of income is found raised for the first time in the revisions on hand. The defence of the accused was that signed cheque was issued as security in a transaction of borrowal of Rs. 5,00,000/- from the complainant. It is pertinent to note that, no evidence was adduced by the accused to discharge the onus of rebutting the presumption by proving on the contrary. During examination under Section 313 Cr.P.C his specific stand was that of innocence. He failed to say anything in tune with the defence he had taken in the complaint - the arguments advanced were also found raised both before the trial court as well as the Apex Court. The courts below considered the arguments in the proper perspective and arrived at a finding of guilt of the accused concurrently and convicted and sentenced him. A jurisdictional error having not been raised against the impugned judgments, revisions are not liable to be admitted - revision dismissed.

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• 2022 (4) TMI 353
  Dishonor of Cheque - insufficiency of funds - discharge of legally enforceable debt or not - compromise has been entered into between parties - compoundable offences or not - HELD THAT:- The admitted position is that the matter stands settled pursuant to which an application under Section 147 of the Negotiable Instruments Act read with Section 320 Cr.P.C. has been filed. Since, the parties have voluntarily settled the disputes between themselves, it is a fit case for allowing them to compound the offence - Petition allowed - decided in favor of petitioner.

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