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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter May 1, 2020 Case Laws in this Newsletter: GST Income Tax Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles Truth about small SHOPKEEPER , clerk, peon, factory workers vis a vis DAILY WORKERS in India and some issues about monthly receipts on which people depends. Note on decision of Apex Court in the case of Yum! Restaurants (Marketing) P. ltd. GSTR-3B : A brief Note Key Highlights of RBI Liquidity Support to Mutual Funds due to COVID-19 News NFRA invites comments from regulated entities on the Draft Procedure for Submission of Audit Files to NFRA GUIDELINES FOR FUNDING FOR RESEARCH STUDIES ON CORPORATE GOVERNANCE DPIIT Control Room playing a pivotal role in monitoring the issues of Industry and Trade, and solving the difficulties faced by various stakeholders during the lockdown period; Notifications Companies Law G.S.R. 268 (E) - dated 29-4-2020 - Co. Law Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2020 GST - States 41/GST-2. - dated 29-4-2020 - Haryana SGST Notification regarding Exemption of foreign airlines from not furnishing reconciliation statement in FORM GSTR-9C under the HGST Act, 2017 F A-3-49-2019-1-V(06) - dated 14-2-2020 - Madhya Pradesh SGST Amendment in Madhya Pradesh Goods and Services Tax Rules, 2017 F A-3-48-2019-1-V(09) - dated 14-2-2020 - Madhya Pradesh SGST Seeks to notify the class of registered person required to issue invoice having QR Code F A-3-33-2017-1-V(05) - dated 14-2-2020 - Madhya Pradesh SGST Seeks to amend Notification No. F-A3-33-2017-1-V (42) dated the 29th June, 2017 F A-3-29-2019-1-V(08) - dated 14-2-2020 - Madhya Pradesh SGST State Government appoints the 1st day of April, 2020, as the date from which the provisions of the Madhya Pradesh Goods and Services Tax Rules, 2019, shall come into force F A 3-44/2019/1/ V(04) - dated 6-2-2020 - Madhya Pradesh SGST Madhya Pradesh Goods and Services Tax (Eighth Removal of Difficulties) Order, 2019 F A 3-32-2017-1-V(02) - dated 6-2-2020 - Madhya Pradesh SGST CORRIGENDUM - Notification, No. F A 3-32-2017-1-V (37), dated 17th May, 2019 Circulars / Instructions / Orders SEBI SEBI/HO/IMD/DF3/CIR/P/2020/76 - dated 30-4-2020 Relaxation in compliance with requirements pertaining to Mutual Funds Customs PUBLIC NOTICE NO. 77 2020 - dated 29-4-2020 Maintaining or Social Distancing in an the Sections Of Air Cargo Complex PUBLIC NOTICE NO. 62/2020 - dated 28-4-2020 Guidelines for conduct of personal hearings in virtual mode under Customs Act, 1962 PUBLIC NOTICE NO. 09/2020 - dated 24-4-2020 COVID- 19 Pandemic- Waiver of Demurrage Charges levied by Terminal Operators / Ports/ CFSs/ ICDs during lockdown- Ministry of Shipping Order No. IDD-14033/4/2020-PD dated 21.04.2020 PUBLIC NOTICE No. 32/2020 - dated 23-4-2020 IGST refunds on exports-extension in SB005 alternate mechanism Public Notice No. 27/2020 - dated 22-4-2020 Reveiw of Circular No. 17/2020 dated 03004.2020 namely Measures to facilitate trade during the lock down period' — Section 143AA of the Customs Act, 1962 TRADE FACILITY NO. 11/2020 - dated 22-4-2020 Review of Circular No. 17 / 2020 dated 03.04.2020 namely, 'Measures to facilitate trade during lockdown period- section 143AA of the Customs Act, 1962' TRADE FACILITY NO. 12/2020 - dated 22-4-2020 IGST refunds on exports-extension in SB005 alternate mechanism- PUBLIC NOTICE. NO. 31/2020 - dated 22-4-2020 IGST refunds on exports-extension in SB005 alternate mechanism. PUBLIC NOTICE NO. 27/2020 - dated 20-4-2020 Paperless Customs-Electronic Communication of PDF based Gate pass and OOC Copy of Bill of Entry to Custom Brokers/Importers PUBLIC NOTICE NO. 26/2020 - dated 17-4-2020 Paperless Customs-Electronic Communication of PDF based Gate pass and OOC Copy of Bill of Entry to Custom Brokers/Importers PUBLIC NOTICE NO. 29/2020 - dated 15-4-2020 Measure to facilitate trade during the lockdown period - section 143AA of the customs Act, 1962 PUBLIC NOTICE NO. 11/2020 - dated 14-4-2020 Measure to prevent Covid 19 from spreading and to make lockdown successful PUBLIC NOTICE. NO. 28/2020 - dated 14-4-2020 Paperless Customs — Electronic Communication Of PDF based Gate pass and OOC Copy of Bill of Entry to Custom Brokers/ Importers PUBLIC NOTICE NO. 51/2020 - dated 9-4-2020 Procedure in respect of en bloc Rail movement of Import containers from Port Terminals / Jawaharlal Nehru Port (JNPT) to ICD, Tarapur (Vaishno Container Terminal), Mahagaon, Boisar and clearance thereof PUBLIC NOTICE NO. 25/2020 - dated 8-4-2020 COVID-19 facilitation measure- Temporary provision for filing IGM/EGM without submission of hard copy Public Notice No. 46/2020 - dated 7-4-2020 COVID-19 Facilitation measures- Procedure for assessment in cases of non submission of Original Country of Origin Certificates PUBLIC NOTICE NO. 23/2020 - dated 7-4-2020 Measure to facilitate trade during the lockdown period - section 143AA of the Customs Act, 1962 — Acceptance of Undertaking in lieu of Bonds PUBLIC NOTICE NO. 21/2020 - dated 3-4-2020 Relaxation from submitting bonds with a view to expedite Customs clearance of goods and for maintaining balance between Customs control and facilitation of legitimate trade, in the event of COVID pandemic. PUBLIC NOTICE NO. 41/2020 - dated 3-4-2020 Measure to facilitate trade during the lockdown period – section 143 AA of the Customs Act, 1962 PUBLIC NOTICE NO. 08/2020 - dated 3-4-2020 Facilitation of clearance of Import Cargo due to delay arising due to outbreak of Corona Virus TRADE CIRCULAR NO. 10/2020 - dated 1-4-2020 Movement and clearance of Import/Export Cargo PUBLIC NOTICE NO. 07/2020 - dated 30-3-2020 Request for Amendments and Waiver of Late Fee Charges in the Bills of Entry and regularization of Prior & Advance Bills of Entry through e-mail procedure as facilitation during outbreak of COVID-19 PUBLIC NOTICE NO. 10/2020 - dated 30-3-2020 Request for Amendments and Waiver of Late Fee Charges in the Bills of Entry and regularization of Prior & Advance Bills of Entry through e-mail procedure as facilitation during outbreak of COVID-19 PUBLIC NOTICE NO. 22/2020 - dated 30-3-2020 Outbreak of COVID-19- Facilitation Measures During lockdown period PUBLIC NOTICE NO. 34/2019-20 - dated 27-3-2020 Practice of assessment of Petroleum products under Chapter 27-Review thereof PUBLIC NOTICE NO. 35/2020 - dated 27-3-2020 Request for Amendments and Waiver of Late Fee Charges in the Bills of Entry through e-mail procedure as facilitation during outbreak of COVID-19 PUBLIC NOTICE NO. 36 /2020 - dated 27-3-2020 Request For Regularization of Prior & Advance Bills Of Entry through E- Mail Procedure – A Facilitation Measure During outbreak of COVID-19 PUBLIC NOTICE NO.37/2020 - dated 27-3-2020 Print out of Final Bill of Entry– A Facilitation Measure During breakout of COVID-19 PUBLIC NOTICE NO. 21/2020 - dated 26-3-2020 Facilitation of Clearance Of Import Cargo Due To Delay Arising Due to Outbreak Of Corona Virus- waiver of late fee PUBLIC NOTICE NO. 06/2020 - dated 3-3-2020 ICES Advisory 09/2020 (Turant Customs) - Customs Compliance Verification and System OOC - Implementation on All India basis PUBLIC NOTICE NO. 05/2020 - dated 28-2-2020 Application for Empanelment of Chartered Engineer for valuation of second hand machinery PUBLIC NOTICE NO. 11/2020 - dated 14-2-2020 Issuance of H, G and Self category customs pass/ card under regulation 13 of the CBLR 2018 Companies Law 19/2020 - dated 30-4-2020 Extension of the last date of filing of Form NFRA-2 Highlights / Catch Notes GST Rate of tax - Benefit Composition Scheme available or not - Supply of services and goods - the applicant is eligible to be in the composition scheme under section 10 of the CGST Act, 2017 if the turnover of services of the applicant does not exceed ten per cent of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher. Visit to Get Source Levy of GST - selling of religious books - Classification of goods - The printed books are covered under the HSN Code 4901 10 10 - Covered by the exemption notification - hence exempted from GST/SGST - The inter-State supply of printed books are exempt under the IGST Act, 2017 Visit to Get Source Classification of supply - supply of goods or not - software - the goods which are supplied by the applicant cannot be used without the aid of the computer and has to be loaded on a computer and then after activation, would become usable and hence the goods supplied is “computer software” and more specifically covered under “Application Software”. Hence the supply made by the applicant is covered under “supply of goods” and the goods supplied are covered under the HSN 8523. Visit to Get Source Classification of services - Healthcare Services or not - Human Leukocyte Antigen (TILA) testing services performed by the overseas laboratory outside India on the Human Buccal Swabs sent by DKMS-BMST from India - this is a for the treatment of an illness, the same is covered under “health care services” as per the definition given to it. - The applicant satisfies the condition of Clinical Establishment - Benefit of exemption available. Visit to Get Source Classification of goods - rate of tax - sale of Poha Bran or Avalakki Bran or Bran of beaten rice which supplied to cattle feed manufacturing units - . The present classification applied by the applicant for Poha bran under HSN 2304 00 90 is incorrect as it is applicable to those from soyabean - Rate of GST is 5% Visit to Get Source Levy of GST - Administration fees - post connection fees - pre-connection fees - The issue of the exemption activities carried out by the applicant with reference to administration and Pre and Post connection charges towards supply of electricity is pending before Honorable Supreme Court of India - Since the matter is sub-judice therefore advance ruling on aforesaid issue cannot be given. Visit to Get Source Classification of supply - Composite Supply or independent of supply of power packs - the supply of power packs and the supply of freight and insurance services involved in such power packs shall be treated as the “supply of power packs” and the applicable tax related to such power packs and the time of supply would apply to the entire transaction as it applies to the “supply of power packs”. Visit to Get Source Income Tax Exemption u/s 11 - entitled to registration as Charitable Trust u/s 12AA read with Section 80G - the Income Tax Act, 1961 does not make any distinction with regard to the objectives of the Charitable and Religious purposes and the Trusts having both these objectives can also be registered under Section 11 or 12AA of the Act. Visit to Get Source Reopening of assessment u/s 147 - reasons to suspect OR reasons to believe - Power u/s 147 cannot be exercised merely on reason of suspicion but there should be reason to believe. Visit to Get Source Contribution to National H.V..D.C. Project - Deduction u/s 37(1) - Allowable revenue expenditure - It was not a voluntary contribution/donation but was given on specific directions of the Government of India - it was wholly, necessarily and exclusively for the purpose of business - Claim of deduction of expenditure cannot be denied. Visit to Get Source Rectification of mistake - the finding arrived at in the impugned order on the basis of the decision, which was was not cited or discussed by either the applicant or the respondent at any stage, should have been brought to the notice of the concerned parties. Inadvertently, the Bench failed to bring to the notice of the parties the above decision. MAs are allowed. Visit to Get Source Characterization of income - One time membership entrance fees as one time membership fees for life time membership of club (15 years) - membership fee received is liable to spread over the period of time for which such fee is received Visit to Get Source LTCG for investment in REC Bonds - Computation of capital gain - The liabillity of long term capital gains cannot differ between the co-owners of a property. Even though there is no res judicata in tax proceedings, the principle of consistency has to be applied. Visit to Get Source Deemed dividend u/s 2(22)(e) - Payment of advances to the assessee against purchase of land - these transactions are towards business and commercial purpose and there is no benefit accruing to the assessee from such transaction. Visit to Get Source Deduction u/s 80IB - Manufacturing activity - claim denied as assessee company is only providing services to mineral oil concerns and generation of logs does not amount to manufacture or production of article or thing - assessee company is an industrial undertaking engaged in the business of manufacturing or production of an article or thing for the purpose of section 32A and section 80IB Visit to Get Source Validity of reopening of assessment - when the assessee has specifically challenged service of notice u/s 148 as well as u/s 142 (1) since the stage of assessment it is the duty of the Revenue to prove the service of notice. - Merely producing the carbon copy of notice and dispatch register entry does not prove service of notice on the assessee. Visit to Get Source Revision u/s 263 - the assessment framed u/s 143(3) was after detailed enquiries and verification and merely because the assessment order is silent, the same cannot be considered as erroneous and prejudicial to the interest of the revenue Visit to Get Source Estimation of income - on-money received by the assessee on booking of flats and shops - only element of income embedded in the on-money received by the assessee for booking of flats/shops in “Vesu Project” is required to be assessed in its hand in all these years. Visit to Get Source Deduction u/s. 80IB on the cancellation charges - when the assessee sells the apartments subsequently in later years which were cancelled by the buyers in earlier years the amounts forfeited/retained by the assessee on account of cancellations shall have to be reduced from the sale price and only on the balance sale consideration/income, the assessee is entitled for deduction u/s.80IB Visit to Get Source Business promotion expenses - the expenses incurred by the assessee towards distribution of gold coins/certificates etc., for promoting its business through a promotional scheme is nothing but expenses incurred wholly and exclusively for the purpose of business. Visit to Get Source Addition u/s 50C - Capital Gains - For the purposes of third proviso to S. 50C(1) of I.T.Act; the valuation of the property by DVO has no relevance; and what is material is the valuation by Stamp Valuation Authority. When the value as per Stamp Valuation Authority is more than 105 percent of sale consideration as per sale deed; the assessee is not eligible for benefit under third proviso to S. 50C(1) Visit to Get Source Customs Guidelines for conduct of personal hearings in virtual mode under Customs Act, 1962 - Trade Notice Visit to Get Source Refund of sugar cess paid on raw sugar imported - Though there may be decisions in which it is held that sugar cess is also duty of excise, the circular issued by the Board is binding on the department. Visit to Get Source Corporate Law Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2020 - Notification Visit to Get Source Indian Laws Arbitration application - the respondent failed to participate in the proceedings before the Arbitrator and did not raise any submission that the Arbitrator did not have jurisdiction or that he was exceeding the scope of his authority, the respondent must be deemed to have waived all such objections. - The High Court was in error in setting aside said Order. Visit to Get Source Service Tax Nature of activity - sale or service - photography service - use of the paper upon which an image is printed using certain consumables and chemicals - interpretation of term ‘sale’ appearing in exemption Notification No.12/03-ST - The substantial questions of law are answered in favour of the assessee Visit to Get Source Classification of Services - Summing up the demand on account of stevedoring services and by inclusion of transportation charges under the category of CHA services is not sustainable - Since the demands are not sustainable, there is no justification for imposition of any of the penalty Visit to Get Source Refund of Swachh Bharat Cess - the Swachh Bharat Cess paid on input services has to be available as Cenvat Credit and the same can be discharged by utilizing Cenvat Credit and the appellant therein are entitle for refund of it. Visit to Get Source Central Excise Demand of CENVAT Credit by invoking extended period of limitation since process is not amount to manufacture - the erroneous payment of the appellant made as central excise duty was not detected by the department despite the appellant disclosing in their returns the details which they were mandatorily required to disclose. - Demand set aside. Visit to Get Source VAT Withholding of refund of GST - Sec.33-E and 33-F of the APGST Act give 6 months time to the respondents to complete the verification and the authorities cannot with hold the refund beyond the said period - Thus there has been an ex-facie abuse of power by the respondents 1 and 2 in denying refund to the petitioners. Visit to Get Source Case Laws: GST 2020 (4) TMI 874 Rate of tax - Benefit Composition Scheme available or not - Supply of services and goods - appellant engaged in the business of supplying goods under the trade name Empathic Trading Centre and is also a supplier of ser-vice of renting of immovable property - rate of composition tax applicable is 1% for the turnover of goods (sales) and 6% for the turnover of service (rent) - HELD THAT:- The applicant admittedly is supplying services and hence the eligibility for composition scheme is dependent on the satisfaction of the condition stipulated in the second proviso to sub-section (1) of section 10. If the turnover of services of the applicant exceeds ten per cent of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher, then he shall not be eligible to composition scheme. Even if the applicant obtains separate registration, one for the goods and other for the services, he would not be eligible for composition for both the lines of business. Hence the applicant is not eligible for composition under section 10 of the CGST Act if the turnover of services of the applicant exceeds ₹ 5 Lakhs or ten percent of turnover is the state, whichever is higher. N/N. 2/ 2019 - Central Tax (Rate) dated 07.03.2019 - HELD THAT:- The said notification prescribes the rate of tax for the first supplies of goods or services or both upto an aggregate turnover of fifty lakh rupees made on or after the 1st day of April in any financial year, by a registered person and is not issued under section 10 of the CGST Act, 2017. Hence it is not a composition scheme but is an optional scheme. If the applicant opts out of the Composition levy and he obtains separate registrations for the two lines of business, as per second condition, he shall be liable to pay tax at 3% CGST and 3% SGST on the each of the turnovers of the registrations. The tax is on the entire aggregate turnover i.e all the first supplies of goods or services or both upto an aggregate turnover of ₹ 50 Lakhs . Hence the applicant is liable to pay tax under CGST Act at 3% and at 3% under KGST Act, if he opts to pay tax under the said Notification after opting out of Composition levy on the entire value of supplies made and he cannot apply different schemes for different types of transactions. Thus, the applicant is eligible to be in the composition scheme under section 10 of the CGST Act, 2017 if the turnover of services of the applicant does not exceed ten per cent of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher. 2020 (4) TMI 873 Levy of GST - selling of religious books - Classification of goods - rate of GST - Exempt goods or not - HELD THAT:- The supply is made by the applicant to the Madarasas for a consideration and the contract is for the supply of books for consideration. This being in the course of business would amount to a supply of books as per sub-section (1) of section 7 of the Central Goods and Services Tax Act, 2017. There is no direct link between the recipient of books and the supplier of the content and the final product is supplied to the recipient of books and the content provider has no role to play in the selection of the recipient or the sale. Hence it is sale simpliciter of books. HSN Code - rate of tax - HELD THAT:- The printed books are covered under the HSN Code 4901 10 10 and are covered under entry no. 119 of Notification No.2/2017- Central Tax (Rate)dated 28.06.2017 and hence are exempt from tax under the CGST Act, 2017. Further they are covered under entry no. 119 of Notification (02/2017) No. FD 48 CSL 2017 dated 29.06.2017 and hence exempted from the Karnataka Goods and Services Tax Act, 2017 - The inter-State supply of printed books are exempt under the IGST Act, 2017 as they are covered under entry no. 119 of Notification No.2/2017 -Integrated Tax (Rate) dated 28.06.2017. 2020 (4) TMI 872 Classification of supply - supply of goods or not - software supplied by the applicant - Computer Software or not - Applicability of N/N. 45/2017-Central Tax (Rate) and 47/2017-Integrated Tax (Rate) dated 14.11.17 to the supplies made to the institutions given in the notification - HELD THAT:- The applicant states that he purchases the off-the-shelf software which are not developed for any specific client and the same software is sold to all the clients. Hence the software sold by the applicant is a pre-developed or pre-designed software and made available through the use of encryption keys and hence it satisfies all the conditions that are required to be satisfied to cover them under the definition of goods . Further, the goods which are supplied by the applicant cannot be used without the aid of the computer and has to be loaded on a computer and then after activation, would become usable and hence the goods supplied is computer software and more specifically covered under Application Software . Hence the supply made by the applicant is covered under supply of goods and the goods supplied are covered under the HSN 8523. Applicability of N/N. 45/2017- Central Tax (Rate) dated 14th November, 2017 - HELD THAT:- The computer software are covered in the column (3) of the Table present in the Notification No. 45/2017 - Central Tax (Rate) dated 14th November, 2017 as amended from time to time. If they are sold to such recipients as covered under Column (2) of the Notification and if they are satisfies the conditions specified in Column (4) of the Notification, then the supply of such computer software would be liable to tax at 2.5% under the CGST Act. 2020 (4) TMI 871 Classification of services - Healthcare Services or not - Human Leukocyte Antigen (TILA) testing services performed by the overseas laboratory outside India on the Human Buccal Swabs sent by DKMS-BMST from India - entry no.74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - HELD THAT:- The service of HLA typing is to identify the potential donors and is related directly to a transplantation to be done on a future date to a patient requiring such transplant. Analogous to testing of Blood Group, HLA typing identifies the alleles of the donor and these alleles are matched with the alleles of the recipient of transplant. The applicant gets the HLA of the potential donors typed and uploaded to the databases for the doctors to identify the potential donors. Hence the service is to received only to shortlist the potential donors and increase chances of getting the perfect donors from a big list of potential donors and going through the entire process of testing ab initio and matching between the patient and the donor individually - Other than for obtaining an organ from a potential donor, this HLA testing is not done for any other purpose in clinical set up and hence this is a for the treatment of an illness, the same is covered under health care services as per the definition given to it. Whether the supplier of services is a clinical establishment, the term clinical establishment is defined in paragraph 2 of Notification No.12 /2017-Central Tax (Rate) dated 28.06.2017? - HELD THAT:- It is seen that the HLA testing involves various tests which are for the identification of the alleles of the donor cells and also the suitability of the potential donor for treatment of a patient of illness, i.e. blood cancer and other blood disorders. Hence any institution which does these investigative services would be covered under the definition of clinical establishment as contemplated in the said definition. Hence, the LSL DE is a clinical establishment under the meaning given to it - Hence the services provided by LSL DE to the applicant in the form of HLA Typing would be covered under Health Care Services by a Clinical Establishment and hence is exempt from tax under the IGST Act. Reverse Charge mechanism - HELD THAT:- Since the service itself is exempt, the applicant is not liable to pay tax on the services obtained in the form of HLA testing and typing from LSL DE on reverse charge basis. Applicability of tax based on the contention of the applicant that the entire service is provided outside India - HELD THAT:- The issue involves the determination of the place of supply which is outside the mandate provided to this Authority and hence no discussion is made on this issue. 2020 (4) TMI 870 Classification of goods - rate of tax - sale of Poha Bran or Avalakki Bran or Bran of beaten rice which supplied to cattle feed manufacturing units - Taxability - HELD THAT:- The said poha bran is nothing but rice bran and is by product of Poha or Avalakki manufacturing process from paddy. Both rice bran and poha bran are derived from Paddy and the constituents of both are same. They are given different commercial narnes due to the different process of manufacture which give rise to them. Both are used as ingredient for manufacturing of cattle feed. The composition of the poha bran contains oil to the extent of 3 to 4 % and fibre to the extent of 35%. Hence poha bran is nothing but Rice bran - As for as classification of Poha bran is concerned the said goods can be classified under HSN chapter /heading vide HSN 2302 40 00. The present classification applied by the applicant for Poha bran under HSN 2304 00 90 is incorrect as it is applicable to those from soyabean. Taxability - HELD THAT:- The poha bran, which is same as Rice bran is covered under entry no. 103B of Schedule I of Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 6/2018 - Central Tax (Rate) dated 25.01.2018 and the same is liable to tax at 2.5% from 25.01.2018 under the CGST Act. Similarly the same is also liable to tax at 2.5% under the KGST Act, 2017 from 25.01.2018. 2020 (4) TMI 869 Levy of GST - Administration fees - post connection fees - pre-connection fees - same matter pending decision - HELD THAT:- The applicant will fix and recover non-tariff charges as per provisions of the Karnataka Electricity Act 2003 and regulations of the KERC and Karnataka Electricity Regulatory Commission (KERC) 1999 - As per Circular no. 34/8/2018-GST dated 1st March, 2018 issued by Ministry of Finance, Government of India, it was clarified that the services by way of transmission or distribution of electricity by an electricity transmission or distribution utility is only exempted as per entry number 25 of notification No. 12/2017- CT (R) dated 28.06.2017 and other services provided by the applicant to consumer are taxable - it was clarified in the circular that the other services such as meter rent, application fees, testing fees for meters etc. provided by these companies to their consumers are taxable. The facts of the judgment is narrated that the ancillary charges collected by Electricity Distribution Company towards application fee, meter rent, other pre and post connection charges for shifting of lines, etc are covered by entry 25 of exemption notification number 12/2017-Central Tax (Rate) dated 28-06-2017 relating to transmission and distribution of electricity. Hence the same would constitute composite supply as per section 8 of the GST Act. The issue of the exemption activities carried out by the applicant with reference to administration and Pre and Post connection charges towards supply of electricity is pending before Honorable Supreme Court of India vide UNION OF INDIA AND ORS. VERSUS TORRENT POWER LTD. AND ANR. [ 2019 (8) TMI 779 - SC ORDER ] - Since the matter is sub-judice therefore advance ruling on aforesaid issue cannot be given. 2020 (4) TMI 868 Classification of supply - Composite Supply or independent of supply of power packs - supply of powerpacks, freight and insurance service and commissioning/ installation services - freight and insurance service and commissioning / Installation - HELD THAT:- The supply of installation and commissioning service would be and independent service and is not a part of the composite supply. The rate of tax applicable to the installation and commissioning service needs to be applied for such supply of service. The applicant has to transport the goods and deliver the power packs to the recipient and the amount charged to do this is a part of the value of the goods supplied. Hence the freight and insurance charges are part of the value of supply of power packs, since the supply contract is a contract for supply of power packs and the value of the contract is the sum total of the value of the power pack plus all charges charged to the recipient for anything done till the goods are delivered to the recipient - Even if these supplies, i.e. supply of power pack and supply of freight and insurance are distinct supplies, the same would be covered under the definition of composite supply as per section 2(30) of the CGST Act, 2017, as the same are naturally bundled and supplied in conjunction with each other in the ordinary course of business - The principal supply in the case is the supply of power packs. Thus, the supply of power packs and the supply of freight and insurance services involved in such power packs shall be treated as the supply of power packs and the applicable tax related to such power packs and the time of supply would apply to the entire transaction as it applies to the supply of power packs . Income Tax 2020 (4) TMI 866 Bogus transaction relating to sale of the jewellery - addition made on account of accommodation entry - HELD THAT:- As decided in Anil Kumar Bansal and Nagar Mal Bansal [ 2018 (5) TMI 1991 - ITAT DELHI] for giving independent finding of the fact whether the sale of jewellery by the assessee is a genuine transaction or not , the matter need to be restored to the file of the Assessing Officer. We order accordingly and direct the Assessing Officer to decide the issue following the direction of the Tribunal given in order of the tribunal in the case of Gunvir Kumar Jain [ 2018 (4) TMI 398 - ITAT DELHI]. - Revenue appeal allowed for statistical purposes. 2020 (4) TMI 862 Exemption u/s 11 - entitled to registration as Charitable Trust under Section 12AA read with Section 80G - HELD THAT:- The issue involved in this case is no longer res integra and has been decided by the Coordinate Bench of this Court in the case of Director of Income Tax (Exemptions) -Vs- Seervi Samaj Tambaram Trust [ 2014 (2) TMI 32 - MADRAS HIGH COURT] following the Supreme Court decision in the case of Commissioner of Income Tax -Vs- Upper Ganges Sugar Mills Ltd. [ 1997 (8) TMI 4 - SUPREME COURT] and another case decided by the Honourable Supreme Court in State of Kerala -Vs- MP.Shantiverma Jain [ 1998 (5) TMI 24 - SUPREME COURT] in which the Honourable Supreme Court has held that the Income Tax Act, 1961 does not make any distinction with regard to the objectives of the Charitable and Religious purposes and the Trusts having both these objectives can also be registered under Section 11 or 12AA of the Act. Tribunal was justified in allowing the appeal filed by the Assessee and upholding the registration of the Trust under Section 12AA read with Section 80G of the Act. The appeal filed by the Revenue is devoid of any merits - Decided in favour of assessee. 2020 (4) TMI 861 Exemption u/s 11 - CIT jurisdiction to cancel the registration certification granted in favour of a trust in exercise of power u/s 12-A - HELD THAT:- Such power could be exercised by the CIT only on and after 1.10.2004 as the amendment in question was not retrospective but is prospective in nature. Similar is the position in the present case also. On 15.10.2001, the assessee was granted registration by the CIT u/s 12A and the exemption under Section 80G on 18.3.2002. The order withdrawing the said registration with retrospective effect was passed by the CIT on 12.8.2003 i.e. much prior to coming into force of the aforesaid amendment enacting sub-section (3) in Section 12AA of the Act conferring the powers on the CIT to withdraw/cancel/recall the registration granted by him to any firm/trust/society. Indeed, the functions exercisable by the CIT u/s 12A are neither legislative nor executive but as mentioned above they are essentially quasi judicial in nature. It is for all these reasons the CIT had no jurisdiction to cancel the registration certificate once granted by him u/s 12A of the Act till the power was expressly conferred on the CIT by Section 12AA (3) of the Act w.e.f. 1.10.2004. Since the Supreme Court in Industrial Infrastructure Development Corporation [ 2018 (2) TMI 1220 - SUPREME COURT] had already held that the amendment in question was not retrospective but was prospective in nature, it would be deemed that in the present case also the CIT at the time of passing the aforesaid orders had no express power to recall/withdraw registration certificate granted to the assessee trust. The substantial question of law framed is thus, answered accordingly. - Decided against the revenue. 2020 (4) TMI 860 Reopening of assessment u/s 147 - reasons to suspect OR reasons to believe - HELD THAT:- As noticed that the AO had reopened the case without any evidence and that too after the block assessment was over and even the regular assessment u/s 143(3) was also completed. There was no evidence found during the course of search that there was undisclosed production - no information was available with the Revenue that there was unaccounted production. Tribunal concurred with the view of CIT(A) and in this view of the matter, dismissed the appeal of the Revenue holding that it was not a case for suppressed production as per the process of manufacturing which is applied in production of Beer. As noticed that even the Kerala State Excise Mannual which was applied by the AO in the case of the assessee who was operating in State of Madhya Pradesh, was of no help to the reasoning given by the Assessing Officer, as it was a case of pretence and reasons to suspect only. Power u/s 147 cannot be exercised merely on reason of suspicion but there should be reason to believe. Therefore, keeping in view the findings recorded by the CIT(A) which have been affirmed by the learned Tribunal and considering the same on the touchstone and anvil of the arguments advanced by the learned counsel for the appellant-Revenue, we find no reason to differ, as no illegality or perversity has been pointed out by learned counsel for the Revenue in the aforesaid findings of fact, which may warrant interference by this Court. - Decided in favour of assessee. 2020 (4) TMI 859 Contribution to National H.V..D.C. Project - Deduction u/s 37(1) - Allowable revenue expenditure - HELD THAT:- There was material before the AO to adjudge the admissibility of the said deduction in favour of the assessee particularly when the said step taken by the assessee was in accordance with Section 24 of the Electricity (Supply) Act, 1948 which was applicable to assessee. Section 24 of the said Act enabled the Electricity Board to subscribe to associations constituted for the purpose conducive to development of electricity and promotion of common interest of persons engaged in generation, distribution and supply of electricity. The provision was also considered by the AO but without dealing with the same, he held the said subscription to be of capital nature and/or by way of donation - expenses/grant-in-aid was in conformity with Section 24 of the Electricity Act, as stated above which required the assessee to subscribe to the associations constituted for the purpose conducive to development of electricity. Thus expenditure in question was to be allowed u/s 37(1) as the same was incurred in ordinary course of the business of the assessee and as a part of obligation to its consumers to develop electricity - contribution was made as per the order of the Government of India and it was wholly, necessarily and exclusively for the purpose of business. It was not a voluntary contribution/donation but was given on specific directions of the Government of India. In this view of the matter, we do not find any error in the finding recorded by the learned Tribunal in this regard. Addition of Provident Fund which was not paid on due date under section 36(1)(va) - HELD THAT:- Assessee had got exemption from depositing the money with the Provident Fund Commissioner and instead, was allowed to deposit the same with the P.F. Trust and as per Regulation 11 of the PF Regulations which are applicable to the respondent, there is no specific date for deposit of the provident fund by the Board. In M.P.E.B. s case [ 2015 (7) TMI 1350 - ITAT JABALPUR] which has been relied upon by learned counsel for the assessee, similar question raised by the Revenue was answered against them on the basis of order dated 30.12.2010 passed by the Assessing Officer accepting the same principle in respect of assessment year 2003-2004. Thus, there is nothing to take any different view in the present case. In view of the foregoing reasons in addition to the findings recorded by the learned Tribunal coupled with the view taken by the Division Bench of this Court in M.P.E.B. s case [ 2015 (7) TMI 1350 - ITAT JABALPUR] , we do not find any case is made out in favour of the Revenue. 2020 (4) TMI 858 Reopening of assessment u/s 147 - addition of excess allowance of income from tonnage tax - computing the non taxable relevant shipping income u/s 115VI(1) - HELD THAT:- The notice u/s 148 has been issued by the AO in the instant case, within a period of four years from the end of the relevant assessment year. As the AO formed an opinion that the above income is not derived either from the core or from the incidental activities as envisaged u/s 115VI, he has rightly issued notice u/s 148 of the Act. Thus, we dismiss the grounds of appeal raised by the assessee against the reopening made by the AO. Section 115VF provides that a tonnage tax company shall offer its tonnage income computed as per the Act for tax and it further gives exemption from tax to the relevant shipping income of such tonnage tax company. The relevant shipping income has been defined in section 115VI of the Act, as profit derived from core activities or incidental activities. While the incidental activities are exhaustive list provided in Rule 11R of the I.T. Rules, the core activities are inter alia activities from operating ships. We find that in the instant case the interest income on fixed deposits with the banks arises because of bank guarantee that the assessee has given to its clients, including Performance guarantees, bid bond guarantees etc. If the assessee was not undertaking the business of operating ships, it would not have received the interest on fixed deposits kept as guarantees - fixed deposits made in pursuance of guarantee which lead to interest income is directly related to the activity of the assessee of operating ships - these bank guarantees pertain to qualifying as well as non qualifying ships and in the absence of clear bifurcation between the guarantees, the interest income has to be apportioned at 36.44% to determine the part of the relevant shipping income for the assessee. The assessee has claimed 36.44% of the total receipt from insurance claim amounting to ₹ 29.74 lakhs as exempt income. In the instant case, the sums pertaining to insurance claim are amounts expended for the repair of the vessel parts and regular maintenance of the vessels. These vessels are deployed for the business of the assessee of operating ships. As the insurance claim are directly related to operation of ships, they have to be considered while arriving at the profits of the tonnage tax company under the Act. Certain expenditure incurred towards repairs and maintenance of vessels and other core activities relating to operation of ships was no longer required to be paid which lead to writing back of the creditors. As it pertains to qualifying as well as non-qualifying ships, the portion pertaining to relevant shipping income had to be appropriated on 36.44% basis. The writing back of sundry creditors or debtors give rise to income arising due to the activity of operating ships and, therefore, the receipts due to writing back has to be considered when determining profits arrived from core activities u/s 115VI. As mentioned earlier, the assessee had obtained loan in the foreign currency, the repayment of which lead to accrual of gain due to fluctuation in foreign exchange rate and the loan had been taken by the assessee for acquiring vessels which are its business asset. Hence, the gain being a capital receipt is not chargeable to tax. We set aside the order of the Ld. CIT(A) and delete the addition of excess allowance of income from tonnage tax made by the AO - assessee is entitled to claim of refund, which is subject to its contentions as stated in the Statement of Facts dated 13.05.2016 filed before the Tribunal that however, during appellate proceedings before the learned CIT(A), it was submitted that even though the return filed in response to notice u/s 148 shows a lower income than the originally returned income, the learned CIT(A) may give directions to the effect that the assessed income after giving effect to his order can in no case go below the originally returned income, to which proposition the appellant is fully agreeable to and direct the AO to work it out. - Appeal is partly allowed. 2020 (4) TMI 857 Addition under the head sundry creditors - AO treated 20% of the unproved credits - HELD THAT:- Assessee himself has stated before the AO as well as the Ld.CIT(A) that the difference was due to unaccounted sales. The assessee has taken different argument before the ITAT stating there were mistakes in the order of Ld.CIT(A) with regard to unaccounted sales, which is nothing but an afterthought and argued that the assessee is taking inconsistent stand before the CIT(A) and ITAT, hence no credence to be given to the argument of the Ld.AR with regard to submission of factual mistakes. The assessee thought that estimation of gross income would be beneficial to him on unaccounted sales, therefore, submitted before the Ld.CIT(A) that the difference was due to unrecorded sales or the inflation of purchases and stock for bank loan purposes. When the Ld.CIT(A) has given a clear finding that the assessee failed to produce the purchases book, stock register etc to verify the purchases or the unaccounted sales, the assessee has taken a different stand before the ITAT and argued that the difference was not related to purchase and sales and it was due to the amounts received and the supplies made to the creditor. In any case there was a difference in creditors account which was shown excess credit balance and in the absence of proper reconciliation and the source the entire difference of credit balance required to be brought to tax. Hence argued that no interference is called for in the order of the Ld.CIT(A). Enhancement of income by the CIT(A) - objection of the assessee that the CIT(A) has enhanced the assessment without giving the enhancement notice - HELD THAT:- AO made the addition of ₹ 47,64,594/- under the head unproved sundry creditors and the Ld.CIT(A) confirmed the addition of ₹ 25,50,000/-, thus given part relief to the assessee. Since there was no enhancement of addition made by the AO, there is no case for giving enhancement notice, hence the order passed by the Ld.CIT(A) is within the law. In addition to the above, the Ld.CIT(A) has accepted the written submissions and forwarded the same to the AO. The remand report was furnished to the assessee, calling his objections. As per the remand report, there was a difference of ₹ 25,50,000/- in respect of sundry creditor, M/s Sri Venkateswara Iron Corporation, for which the assessee was given opportunity to explain difference, thus the Ld.CIT(A) has followed all formalities adhering to the principles of natural justice, thus, there is no violation of law. Therefore, we dismiss the ground of the assessee on this issue. Unaccounted sales - as per assessee certain sale transactions might not have been reflected in the books of accounts as such transactions might have been included in the closing stock itself - HELD THAT:- Before us, the Ld.AR advanced argument stating that there was a factual mistake in the order of the Ld.CIT(A) and the difference was due to payments received. The argument of the assessee is inconsistent and not acceptable without proper reconciliation. The assessee has furnished the account copy for the period 15.06.2013 to 30.10.2013 with brought forward balance, but has not furnished the complete account. However, it is undisputed fact there was a difference of ₹ 25,50,000/- which the assessee has over stated as at the end of the year under consideration and it is the obligation of the assessee to reconcile the difference and explain the reasons for difference with documentary proof. During the appeal hearing, the assessee was asked to explain the difference and reconcile the difference for which the Ld.AR could not offer any explanation. Therefore, we do not see any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. Assessment of gross profits @5.58% on the difference amount - In the absence of proper reconciliation and evidence for purchase and sales and sources thereof, estimation of gross profit on the unreconciled difference is correct, hence, we dismiss the grounds raised by the assessee for estimation of gross profit. Assessee appeal dismissed. 2020 (4) TMI 856 Disallowance of bad debts written off - assessee is in the business of advertising and had written off against irrecoverable debts - HELD THAT:- As per section 36(2)(i) in order to claim deduction under section 36(1)(vii) of the Act, the precondition is that the debt or part thereof should have been taken into account in computing the income of the Assessee of the previous year in which the amount of such debt or part thereof is written off or of an earlier previous years - Assessee has already provided the details of the year in which the revenue pertaining to bad debts were offered to tax before the authorities below. We also note that the Central Board of Direct Taxes ('the CBDT') vide Circular No. 551 dated 23 January 1990 has provided that bad debt written off is allowed as deduction in the year in which it is written off as irrecoverable in the account. Assessee would be entitled to deduction of the impugned dad debt written off during the year under consideration. Further, we note that the issue as to whether the assessee is required to justify the writing off the debts in the books of accounts as bad in the year has now been settled and decided in the case of TRF limited v. CIT [ 2010 (2) TMI 211 - SUPREME COURT] wherein it has been held that it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable and the accounting entry for write off is sufficient to claim the deduction for bad debts - Claim of bad debt actually written off in the books of the assessee should be allowed as deduction and, therefore, we allow the appeal of the assessee. Credit of TDS short granted - HELD THAT:- We are of the considered opinion that this factual issue needs to be verified by AO and if the credit of TDS has not been given to the assessee then it should be given in accordance to law. 2020 (4) TMI 855 Rectification of mistake - mistake apparent on record - reliance placed by the Tribunal on the decision in the matter of Bovis Lend Lease (I) Pvt. Ltd. v. ITO [ 2009 (8) TMI 853 - ITAT BANGALORE] which was not cited or discussed by either the applicant or the respondent at any stage nor mentioned by the Hon ble Members during the original hearing AND even when the appeal was re-fixed for clarifications by the Tribunal amounts to violation of principles of natural justice and therefore, suffers from patent mistakes apparent from record - HELD THAT:- There is merit in the submission of the Ld. counsel that the reliance placed by the Tribunal on the decision in the matter of Bovis Lend Lease (I) Pvt. Ltd. (supra), which was not cited or discussed by either the applicant or the respondent at any stage nor mentioned by the Hon ble Members during the original hearing before the Tribunal or even when the appeal was re-fixed for clarifications by the Tribunal amounts to violation of principles of natural justice and therefore, the impugned order suffers from patent mistake apparent on record. As per the ratio laid down by the Hon ble Bombay High Court in Inventure Growth Securities Ltd. v. ITAT [ 2010 (5) TMI 99 - BOMBAY HIGH COURT] , the finding arrived at in the impugned order on the basis of the decision in Bovis Lend Lease (I) Pvt. Ltd. (supra) should have been brought to the notice of the concerned parties. Inadvertently, the Bench failed to bring to the notice of the parties the above decision. MAs are allowed. 2020 (4) TMI 854 Characterization of income - One time membership entrance fees as one time membership fees for life time membership of club (15 years) - AO treated the said receipt as revenue receipt against the assessee s treatment for treating it as a capital receipt - HELD THAT:- Considering the decision in the case of E.D. Sasoon, [ 1954 (5) TMI 2 - SUPREME COURT], Madras Industrial Corporation Ltd. [ 1997 (4) TMI 5 - SUPREME COURT], Calcutta Co. Ltd. [ 1959 (5) TMI 3 - SUPREME COURT] and in the case of Rotork Controls India Pvt. Ltd. [ 2009 (5) TMI 16 - SUPREME COURT] it was held that membership fee received for 33/25 years was liable to spread over the period of time for which such fee is received. Respectfully following the same, we direct the AO to tax following the earlier orders of ITAT i.e [ 2015 (11) TMI 1810 - ITAT MUMBAI] Disallowance on account of amortization of additional premium paid on lease hold land - HELD THAT:- As in Associated Cement Co. Ltd. [ 1988 (5) TMI 2 - SUPREME COURT] held that it is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more effectively or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. In the instant case, the advantage which was secured by the assessee by making the expenditure in question was the securing of absolution or immunity from liability to pay municipal rates and taxes under normal conditions for a period of 15 years. If the liability had to be paid, the payments would have been on revenue account and, hence, the advantage secured was in the field of revenue and not capital. And as a result of the expenditure incurred, there was no addition to the capital assets of the assessee and no change in its capital structure. With utmost regard to the decision of Hon ble Supreme Court, in our humble view, the ratio of the decisions are not helpful to the assessee. In the present case, there is no obligation under lease agreement to pay amortization of lease premium by assessee to the super lesser. There is no evidence on record that the land which was released by UDA was under the occupation of assessee or is part of business asset, in other word it was a part and partial of the plot of land leased to assessee. Thus, the ratio of the decision of Hon ble Apex Court is not applicable on the present case. In the result, ground of appeal raised by assessee is dismissed. Disallowance under section 14A r.w.r. 8D - HELD THAT:- On appeal before the ld. CIT(A), directed not to consider the investment made in Lift and Shift India Pvt. Ltd., being made in group companies. And rest of the disallowance under Rule 8D(2)(iii) was affirmed. Assessing Officer wrongly deducted ₹ 1739/- from disallowance of Rule 8D(2)(iii) which was directed to be rectified. Before us, the ld. AR of the assessee vehemently argued that only those investment which yielded the exempt income should be considered for considering the average value of investment for disallowance under Rule 8D(2)(iii). Considering the decision of Special Bench of Delhi Tribunal in Vireet Investment Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] we direct the AO to re-compute the disallowance under Rule 8D(2)(iii) by considering only those investment which yielded exempt income. Needless to direct that before computing the disallowance, the Assessing Officer shall grant opportunity to the assessee. This ground of appeal is party allowed. However, we may make it clear that in case any other investment made in group concern and generated exempt income be also considered for taking average value of investment, if those investment yielded exempt income as per the decision of Special Bench of Vireet Investment (supra). Professional Fees Payment - disallowance of professional fees paid to Bhagwan Madhav on the ground that no projects were undertaken by assessee during the Assessment Year under consideration - CIT(A) affirmed the action of Assessing Officer that professional charges paid for housing developed project in the past cannot be accepted for reasons that assessee failed to establish against which professional charges were incurred and that assessee failed to establish the nexus - HELD THAT:- Assessee is engaged in construction activities. The services of Civil Engineer are integral part of civil project construction activities. The Assessing Officer has not made any investigation about the genuineness of payment and services rendered by the Civil Engineer. The Assessing Officer simply disallowed the charges paid to Civil Engineer by taking view that project is yet to start. Similarly, the ld. CIT(A) the action of Assessing Officer holding that assessee failed to establish the nexus between the expenses and corresponding income without disputing the fact that services of Civil Engineer are integral part of civil construction activities. Considering the fact that professional charges paid to Civil Engineer are disallowed without bringing any adverse evidence on record and business of assessee is not in dispute, we direct the Assessing officer to delete the addition. In the result, this ground of appeal is allowed. 2020 (4) TMI 853 Estimation of income - Bogus purchases - disallowance u/s 69C - assessee categorically contended that the assessee has shown that they have declared gross profit at 10.37% and if the addition at 100% of the alleged bogus purchases is sustained, gross profit would raise to 24.44% and ultimate net profit would raise to 20.61% which is impossible - HELD THAT:- In case the transaction is not verifiable or the parties were failed to prove the entire transaction, only profit embedded in such transaction is liable to be taxed and not the entire transaction. Thus, considering the nature and activities of the assessee and the fact that the lower authorities have recorded that assessee failed to produce sufficient evidence to prove the genuineness, we are of the view that in order to check the possibility of revenue leakage, a reasonable disallowance of purchases / amount / disputed purchases would be sufficient to meet the ends of justice. Therefore, considering the nature of business, the disallowances are restricted to 12.5% of the amount / disputed purchases. The AO is directed accordingly. 2020 (4) TMI 852 LTCG for investment in REC Bond s - Computation of capital gain - fair market value (FMV) of the land and building as on 01/04/1981 was calculated on the basis of valuation report of two chartered engineers - HELD THAT:- In the hands of one of the co-owners, the assessment was completed u/s. 143(3) by accepting the computation of long term capital gains made by the co-owner (Shri Thinkal Govind Kumar). In the case of Shri Thinkal Govind Kumar, the assessment was taken up for scrutiny based on AIR information that he had sold an immoveable property at Chennai on 05/10/2005. The liabillity of long term capital gains cannot differ between the co-owners of a property. Even though there is no res judicata in tax proceedings, the principle of consistency has to be applied. The Hon ble Supreme Court in the case of Union of India Others vs. Kaumudini Narayan Dalal and Another [ 2000 (12) TMI 101 - SC ORDER] was considering an issue whether it is open to revenue to accept a judgment in the case of one assessee and appeal against identical judgment in the case of another assessee. In this context it was held by Hon ble Apex Court that such a differential treatment on the same set of facts was not permissible in law. The same view was taken by the Hon ble Supreme Court in the case of Berger India Ltd. [ 2004 (2) TMI 4 - SUPREME COURT] In the instant case, the assessee has adopted the FMV as on 01/04/1981 based on the valuation reports of two chartered engineers and is not without any basis - in the hands of one of the co-owners (Shri Thinkal Govind Kumar) the computation of long term capital gains calculated by him which was identical to the LTCG computed by the assessee was accepted in scrutiny assessment. Long term capital gains computed by the assessee needs to be accepted. - Appeal of the assessee is allowed. 2020 (4) TMI 851 Deemed dividend u/s 2(22)(e) - Payment of advances to the assessee against purchase of land - assessee and his brother owned 85% of the stake in the company - Instead of payment rent to the promoters, company decided to purchase property from the promoters, as adviced by the banks - HELD THAT:- CIT(A) has examined the nature and scope of the transactions and found that the impugned transactions are towards business and commercial purpose and there is no benefit accruing to the assessee from such transaction. Thus assessee has clearly established that the impugned transactions are not following within the scope of section 2(22)(e). Revenue is not able to dislodge such findings recorded by the Ld. CIT(A) by relevant material. Therefore, the case laws relied on by the Ld DR is not of any help to the revenue on the above facts and circumstances of this case. Hence, we do not find any reason to interfere with the order of the Ld. CIT(A). Therefore, we dismiss the Revenue s corresponding grounds of appeal. Addition under the head house property - assessee is owner of the land and building used by the company towards its business purposes - HELD THAT:- Annual value of property, i.e. the income arising from the house property, has to be assessed to tax u/s.s 22 to 27 of the Income Tax Act. The AO has based the rental income received by the assessee in the immediately succeeding year, as the sum for which the property might reasonably be expected to let from year to year and particularly for this assessment year. On which, the assessee has not placed any material to hold that the amount assessed by the AO is unreasonable. - Decided in favour of revenue 2020 (4) TMI 850 Unaccounted sale - excess stock of finished goods of iron ore (manganese ore) - Assessee not explained the entire shortfall (in physical stock), which he estimated at 35% of the alleged excess book-stock (36,400 MT) - HELD THAT:- There is no reason to, as the assessee does, club the two types of materials, or the iron ore component therein, in seeking to justify the difference/s as found. In doing so, it in fact removes the very basis of the Revenues case. That is, to begin with, there is a complete mis-appreciation of the Revenue s case. State of the assessee s approach in the matter, since accepted, i.e., in principle, by the ld. CIT(A), to be completely misfounded. The complete disharmony between the figures makes a travesty of the assessee s methodology in explaining the difference. While the total difference per the same, and which it therefore seeks to explain, is 36,400 MT, it justifies a difference for a much higher figure of 1,14,250 MT through the certificate of the consulting Geologist. That is, the same has no relation to the obtaining difference between the physical and book figures per its own calculation, which it seeks to justify. The said certificate is, in fact, again a misrepresentation by the assessee, and has rightly been not accepted by any authority. Ascertainment of Difference in stock - Held that:- One could regard the price variation between the two product categories, i.e., lumps and fines, as on account of mineral recovery due to the products physical properties, primarily, the particle size. While the lumps could be easily crushed into fines, making the two equivalent, it may be difficult to, or at least involve cost and technology, to coalesce fines into lumps, resulting in a lower price for the latter. In fact, as explained during hearing, the transportation cost itself, where the technology is not available locally, exceeds the selling price. A product may be saleable at ₹ 3000 (say), while the other lot may not fetch more than ₹ 1000 (say) or even ₹ 500 (say). Surely, the latter is subgrade relative to the former; the price differential across lumps and fines, inasmuch as there is no segregation between the two in the physical stock-taking, being more than 750% ((3050/400) x 100) (Table 4B). As afore-noted (para 4.4), there is no segregation of processed iron ore stock into lumps and fines (see Table 1A). While the assessee consistently maintains of iron ore being saleable in the iron grade class 50%-55%, with that below 50% being sub-grade, per Gd. 5 of its Appeal it claims to be selling iron ore in the grade class 57%-60%, belying its stand of the limitation of the physical processes being carried out by it to improve the iron grade beyond 55%. It thus tacitly admits to projecting incorrect facts, as well as evading royalty, paid on its entire sales in the grade category below 55% . Mention here be also made to the statement of NS, reproduced at page 26 of the impugned order, stating iron ore being saleable in the grade category 54%-55%. If that is indeed so, which fact could be easily proved, or called upon to, the entire material below 54% would stand to be classified as subgrade. Quantification of the income that has escaped assessment - Held that:- Differece between an excess physical stock and excess book-stock, representing opposite situations, even as, as explained hereinbefore, results in an inference of escapement of income from tax and, accordingly, liable to be brought to tax, albeit at different amounts, representing valuation/s thereof. While a positive difference (excess physical stock) would translate into an addition irrespective of any addition made on that count (or for undisclosed assets), it may not necessarily be so in the case of a negative difference (excess bookstock), which indicates, among others, unaccounted disposal of the relevant stock (i.e., as of the date of the physical verification), so that income concomitant to that disposal had escaped assessment (as on that date). Conclusion: The different quantities/figure are not liable to be reconciled and, accordingly, no case for any reconciliation of different figures, or for any addition on the basis of the said categorizations, is accordingly made out, either toward excess physical or book stock. The excess stock is, under the circumstances, only being so/notional. While a positive difference (excess physical stock) would translate into an addition irrespective of any addition made on that count (or for undisclosed assets), it may not necessarily be so in the case of a negative difference (excess bookstock), which indicates, among others, unaccounted disposal of the relevant stock (i.e., as of the date of the physical verification), so that income concomitant to that disposal had escaped assessment (as on that date). It is, accordingly, open to the assessee to make out a case that the past unaccounted income, since admitted and returned, arose on account of such undisclosed disposal. That is, the said escaped income, being sought to be brought to tax for the current year, had already suffered tax in an earlier year. Again, a further clarification may be in order. That is, in a case as the present one, where the escapement of income is on account of unaccounted disposal, the assessee realizes it s value (₹ 100, say), which gets disclosed/returned on the corresponding asset/money being discovered (by the Revenue). The income on this sale, however, would only be after deducting its cost, incurred and reflected in accounts (₹ 40, say), i.e., ₹ 60. This is as the balance ₹ 40, though realized through sale, continues to be reflected in accounts, albeit does not represent an actual capital (of the reporting entity). This needs to be borne in mind, and once again emphasizes the need for bringing the accounts to actuals. The orders of the Revenue authorities are accordingly set aside, and additions deleted. - Decided in favour of assessee. 2020 (4) TMI 849 Condonation of delay filling Rectification application u/s 154 - disallowance u/s 14A - as held by ld. CIT(A) that the assessee has not explained the delay even after dismissal of rectification application - HELD THAT:- Before us neither the assessee has explained the delay nor filed any documentary evidence or copy of application filed before the ld. CIT(A) in seeking condonation of delay. Thus, we do not find any justifiable reason in seeking the condonation of delay before the ld. CIT(A). The ratio in the case law relied by assessee in Collector of Land Acquisition vs. Mst Katiji [1987 (2) TMI 61 - SUPREME COURT] and in Gera Developments (P.) Ltd. [ 2016 (8) TMI 1009 - ITAT PUNE] is not helpful to the assessee as the facts in both the case law are different. The assessee in this case was aware about the disallowance under section 14A, which was not hesitated by him by filing appeal before first appellate authority. No merit in the grounds of appeal raised by assessee. 2020 (4) TMI 848 Deduction u/s 80IB - Manufacturing activity - claim denied as assessee company is only providing services to mineral oil concerns and generation of logs does not amount to manufacture or production of article or thing - HELD THAT:- Following the decision rendered by the Hon ble High Court in assessee s own case [ 2011 (5) TMI 322 - DELHI HIGH COURT] we are of the considered view that assessee company is an industrial undertaking engaged in the business of manufacturing or production of an article or thing for the purpose of section 32A and section 80IB. So, AO as well as CIT (A) have erred in AYs 2004-05, 2007-08 2008-09 in denying the deduction claimed by the assessee company u/s 80IB of the Act on the ground that the assessee company is not a manufacturing concern. Depreciation on plant machinery owned and used below the ground in field operation in mineral oil concern - @ 25% as against 80% claimed by the assessee - HELD THAT:- As held in assessee s own case [ 2011 (5) TMI 322 - DELHI HIGH COURT] assessee s wireline logging and perforation equipments are eligible for a higher depreciation @ 100% under cl. (ii) of s. 32(1) of the Act, r/w item III(3)(ix)(b) of the schedule of rates of depreciation in Appendix I to the Income Tax Rules, 1962. Disallowance u/s 14A - addition @ 15% of the exempted income earned by the assessee company during the year under assessment being the reasonable expenditure incurred to earn dividend income by the assessee company - HELD THAT:- As assessee has stated to have already disallowed expenditure directly related to earning exempt dividend income - when investment is made by the assessee company time and manpower need to be utilized to steer the investment in right places so we reasonably restrict the disallowance made by the AO and CIT (A) from 15% to 5% of the gross exempt dividend income earned by the assessee during the year under assessment. Service-tax payable - AO held the service-tax payable as a trading receipt on the ground that the assessee has raised sales bills and charged service-tax on the same and service-tax is in the nature of revenue receipt - HELD THAT:- When undisputedly aforesaid amount as service-tax payable has not been passed through P L account duly reported in tax audit report nor the assessee has claimed deduction of service-tax payable to the Government, there is no question of disallowance of the deductions not claimed by the assessee. As decided in NOBLE AND HEWITT (I) P. LTD. [ 2007 (9) TMI 238 - DELHI HIGH COURT] since the assessee did not debit the amount to the profit and loss account as an expenditure nor claim any deduction in respect of the amount and considering that the assessee was following that mercantile system of accounting, the question of disallowing the deduction not claimed would not arise - CIT (A) has rightly deleted the addition Revision u/s 263 - Claim of additional depreciation - HELD THAT:- When the assessee company has been held to be engaged in the manufacture or production of an article or thing by the order passed by the Hon ble Delhi High Court affirmed by Hon ble Supreme Court, the assessee is entitled for additional depreciation u/s 32(1)(iia) of the Act and as such, the AO has rightly allowed the additional depreciation to the assessee, hence assessment orders passed by the AO are not erroneous sufficient to exercise revisionary jurisdiction u/s 263 of the Act. Revenue supported the order passed by the ld. CIT on the only ground that the assessee is not engaged in the manufacture of any article or thing, but this issue is no longer res integra as assessee in its own case held to be engaged in manufacture or production of an article or thing. Moreover, since the ld. CIT only modified the assessment directing the AO to withdraw the deduction for additional depreciation allowed u/s 32(1)(iia) but has not set aside the assessment to be framed afresh, Explanation 2 to section 263 of the Act relied upon by the ld. DR for the Revenue is not attracted. So, we are of the considered view that arguments addressed by the ld. DR and his reliance on umpteen number of judgments is not applicable to the facts and circumstances of the case. Consequently, impugned orders passed by the ld. CIT u/s 263 not sustainable in the eyes of law, hence ordered to be quashed. - Decided in favour of assessee. 2020 (4) TMI 847 Validity of reopening of assessment - no proof for service of notice u/s. 148 - HELD THAT:- Referring to narration given by the AO as to issuance of service of notice u/s 148 shows that it does not contain facts if the notice were ever served upon the assessee, it just contains the fact that notices u/s 148 were issued on 05.06.2009. Further examine assessment record viz. order sheet prepared by the AO and dispatch register, no doubt copy of notices dated 05.06.2009 for AYs 2006-07 2007-08 is reportedly issued on 05.06.2009 vide dispatch register but the record is altogether silent if the said notices were served upon the assessee or received back served/unserved nor copy of acknowledgement from the postal authority acknowledging the receipt of notice is there on the file. It is settled principle of law that when the assessee has specifically challenged service of notice u/s 148 as well as u/s 142 (1) since the stage of assessment it is the duty of the Revenue to prove the service of notice. When we examine the order sheet entries for AYs 2006-07 2007-08 prepared in due course of official duty by the AO, except for the fact that notices were issued on 05.06.2009, there is not a whisper even if the said notices were served upon the assessee. Merely producing the carbon copy of notice and dispatch register entry does not prove service of notice on the assessee. Service of notice u/s 148 dated 05.06.2009 for AYs 2006- 07 2007-08 and service of notice dated 24.09.2009 u/s 142 (1) in AY 2008-09 is not proved to have been effected upon the assessee in accordance with provisions contained under section 282 (1) of the Act read with order under Rule XII and Order III Rule 6 of CPC, 1908 which is a jurisdictional pre-condition to finalize the reassessment and as such, Revenue has failed to prove the proper service of notice u/s 148 - Decided against revenue. 2020 (4) TMI 846 Penalty u/s 271(1) (c) - Disallowance of deduction u/s 80IB(10) in respect of project 'Damodar Residency' - HELD THAT:- CIT(Appeals) while deleting the penalty has noted that the Tribunal vide order in BHUJBAL BROTHERS CONSTRUCTION COMPANY [ 2015 (11) TMI 582 - ITAT PUNE] had directed the AO to allow the claim of deduction u/s.80IB(10) - Since deduction on which penalty has been levied has itself been deleted, there remains no basis for sustaining the penalty. DR could not bring any material to demonstrate that the order of Tribunal allowing the claim of deduction u/s.80IB(10) has been set aside/overturned by higher judicial forum meaning thereby that the order granting deduction to assessee u/s.80IB(10) has attained finality. - Decided against revenue. 2020 (4) TMI 845 Revision u/s 263 - return was selected under scrutiny through CASS and the main reason was to examine the share premium - HELD THAT:- Being a limited scrutiny case, we fail to persuade ourselves to believe that the Assessing Officer did not make any enquiry on the issue on the basis of which return was selected for scrutiny assessment. It is a settled proposition of law that in a return selected for limited scrutiny, the Assessing Officer cannot go beyond the issue and from the notice u/s 142(1) of the Act exhibited elsewhere, it can be seen that the Assessing Officer made specific query in relation to details of share premium. The share application money has been received from very same persons from whom share application and share premium amount has been received in earlier years. No adverse inference has been drawn in earlier years in respect of money received from the very same persons. During the year also, in the course of assessment proceedings, the assessee has furnished copy of bank statements in respect of all allottees alongwith their tax returns details. During the course of scrutiny assessment proceedings, the assessee has furnished a certificate from the CA justifying the valuation of shares and the certificate. This clearly shows that the Assessing Officer has examined the share premium received during the year which is supported by the fact that the return was selected for scrutiny assessment only for this limited purpose. No hesitation in holding that the assessment framed u/s 143(3) was after detailed enquiries and verification and merely because the assessment order is silent, the same cannot be considered as erroneous and prejudicial to the interest of the revenue, as held by the Hon'ble High Court of Bombay in the case of Gabriel India Ltd [ 1993 (4) TMI 55 - BOMBAY HIGH COURT] Assessing Officer, after considering the various submissions made by the assessee, has taken a possible view. Therefore, merely because the PCIT does not agree with the opinion of the Assessing Officer, he cannot invoke the provisions of section 263 of the Act to substitute his own opinion. - Decided in favour of assessee. 2020 (4) TMI 844 Estimation of income - on-money received by the assessee on booking of flats and shops in Vesu Project - income offered by the assessee at 8% of the alleged gross receipts - source of payment of cash for purchase of the land - HELD THAT:- On an analysis of the record, it would reveal that during the course of search not only details of on-money received by the assessee on booking of flats and shops in Vesu Project was found, but details of certain expenditure, which are not recorded in the books were also found. This included cash payment for purchase of land. CIT(A) has rightly observed that the gross on-money noticed on the seized paper cannot be considered as income of the assessee. There are certain expenditures which were not recorded in the books. Those expenditure must have been made from this on-money. After going through the well reasoned order of the ld.CIT(A), and in the light of judgment of Hon ble jurisdictional High Court in the case of Panna Corporation [ 2014 (11) TMI 797 - GUJARAT HIGH COURT] as well as Koshor Mohanlal Telwala [ 1998 (9) TMI 106 - ITAT AHMEDABAD-A] we are of the view that only element of income embedded in the on-money received by the assessee for booking of flats/shops in Vesu Project is required to be assessed in its hand in all these years. Element of income involved in this on-money - assessee is showing income at 8%, AND CIT(A) is estimating it at 20% - HELD THAT:- CIT(A) has also not mentioned any attending circumstances for harbouring a belief that 20% could have been earned from this activity. Thus after taking guidance from the judgment of Kishor Mohanlal Telwala [ 1998 (9) TMI 106 - ITAT AHMEDABAD-A] we deem it proper that the assessee has rightly disclosed the profit element embedded in the gross profit at 8%. Accordingly, we allow the ground of appeal raised by the assessee, and hold that profit which has been directed to be adopted by the ld.CIT(A) at 20% of the alleged turnover should be taken at 8%. The income of the assessee is to be computed thereafter. Unexplained expenditure - HELD THAT:- No dispute that during the course of search certain material/loose papers were found exhibiting the fact that the assessee has received cash, over and above, the amounts stated in the booking register. This cash was not accounted for in the books. It has been treated as on-money for sale of flats/shops. Simultaneously certain loose papers were found disclosing the fact that the expenditure were incurred in cash and accounted in the books. CIT(A) made an analysis of this, and then held that the moment assessees income is being assessed at 8% of the gross on-money, then the remaining amount 92% could take care of unexplained expenditure. It can be explained by a simple, viz. an assessee has received ₹ 100/- in cash for sale of flat. Out of that, element of income embedded in this ₹ 100/-has been determined by us at ₹ 8/-. Remaining ₹ 92/- must have been incurred by the assessee for developing that flat. Thus, in other words, the expenditure whose details were found being incurred in cash could be construed as coming out of these ₹ 92/-. Thus, there cannot be any separate addition of unexplained expenditure. CIT(A) has rightly deleted the addition. Addition u/s 68 - unexplained cash credit - HELD THAT:- These are not loans rather these are booking amount and the assessee has produced necessary details viz. PAN, addresses etc. CIT(A) correctly after going through the details deleted the addition by recording the following finding in the Asstt.Year 2014-15. The facts in the Asstt.Year 2015-16 are identical. - Decided against revenue 2020 (4) TMI 843 Deduction for loss arising from foreign exchange fluctuation - hedging contract to cover foreign exchange credit provided by ICICI Bank for payment for the purpose of imported raw material upon accounting of the outstanding hedging contract on market to marked basis at the end of the year - outstanding liability in foreign currency towards import either to the suppliers or to the bank - buyer s credit liability was due in May, 2008 and it was an option contract and in order to hedge against the foreign currency liability the assessee entered a foreign option contract with ICICI Bank - sudden and unexpected fall in the value of USD Vs. Swiss currency in the math of March 2008, the assessee has incurred foreign exchange loss - HELD THAT:- The assessee was engaged in the business of manufacturing of vanaspati and refining of edible oil and the forward contract has been entered in the ordinary course of its business in respect of under lying import/export business. The transactions were carried out for the sole purpose of hedging against losses that may arise on account of adverse fluctuation in the foreign exchange rates. As decided in Hon ble High Court of Bombay in the case of CIT vs. De Chetan Co. [ 2016 (10) TMI 629 - BOMBAY HIGH COURT] wherein it is held that forward contract for purpose of hedging in course of normal business activities of import and export done to cover up losses on account of differences in foreign exchange valuation would not be speculative activity but business activity - Decided against revenue. LTCG - Addition after invoking section 50C on transaction of sale of immovable property in the form of land - HELD THAT:- It is noticed that the assessing officer has made addition of ₹ 15 lacs on the assumption that @ 20 lacs per acre the total market value works out to ₹ 1,22,50,000/- as against the consideration of ₹ 1,07,50,000/- shown by the assessee. It will be appropriate to restore this issue to the file of the assessing officer for deciding afresh after referring the issue to the departmental valuation officer for determining the fair market value of the land sold. Accordingly, the issue is restored to the file of assessing officer for deciding afresh as directed above, therefore, this ground of Cross Objection of the assessee is allowed for statistical purposes. Addition for expenditure incurred on the acquisition of computer software - entitled to depreciation @ 60% - HELD THAT:- It is noticed that Hon ble Gujarat High Court in the case of NJ India Invest Ltd. [ 2013 (7) TMI 738 - GUJARAT HIGH COURT] has held that software development and upgradation would include data administration services, information and technology support services, software asset management services, etc., which was in nature of maintenance, back up and support service to existing hardware and software and did not give any fresh or new benefit. Further we have seen that Hon ble Gujarat High Court in the case of Oriental Bank of Commerce [ 2018 (4) TMI 1534 - DELHI HIGH COURT] has allowed the deduction on software expenses u/s. 37(1) of the act holding that use of software did not confer any enduring right of assessee. Moreover the assessee s objective was not to augment software business rather it used computer software as a tool to maximize its purpose and streamline its efficiency. Disallowance u/s. 40A(2) - HELD THAT:- Total income of the payee KTB Food Pvt. Ltd. for the assessment year 2010-11 was to the amount of ₹ 849,80,730/- on which tax was paid at higher marginal rate @ 30%. We have also gone through the decision of Hon ble High Court in the case of Pr. CIT Vs. Gujarat Gas Financer Services Ltd. [ 2015 (7) TMI 743 - GUJARAT HIGH COURT] wherein it is held that where assessee company as well as assessee s parent company both were assessed to tax at maximum marginal rate, it could not be said that service charge was paid by the assessee company to parent company at unreasonable rate to evade tax. Since revenue could not point out that assessee evaded payment of tax therefore, invocation of section 40A(2) was not valid. Disallowance u/s. 14A - HELD THAT:- No exempt income was earned by the assessee therefore following the decision of Hon ble Jurisdictional High Court of Gujarat in the case of Corrtech Energy Pvt. Ltd. [ 2014 (3) TMI 856 - GUJARAT HIGH COURT] no disallowance is to be made. Disallowance as bad debts written off - amount in question had been taken into income under the head capital gains in earlier assessment years - CIT(A) justification in restricting the addition on the ground that loss was of the nature of capital loss - HELD THAT:- As relying on SAGAR DRUGS PHARMACEUTICALS PVT LTD VERSUS JOINT COMMISSIONER OF INCOME TAX, RANGE-8, AHMEDABAD [ 2019 (1) TMI 1762 - ITAT AHMEDABAD] we restore this issue contested in the cross objection of the assessee to the file of assessing officer for examination of the alternate claim of the assessee to allow impugned loss as capital loss. 2020 (4) TMI 842 Addition u/s 36(1)(iii) - interest pertaining to stock in trade of the assessee - HELD THAT:- In the proceedings before the settlement commission the assessee claimed interest expenses and as per the order dated 28.07.2014 of the settlement commission and during verification proceedings u/s. 245D(3) assessee informed the AO that interest as claimed in the computation of income on ground of interest expenses retained in inventory is deductible under provisions of section 36(1)(iii) - the said amount of interest paid was in respect of capital borrowed for the purpose of business or profession. As further submitted that the construction and development having commenced, the business is in operation, therefore, interest is allowable u/s. 36(1)(iii) As brought to the notice of the AO that in the case of CIT v. Lokandwala constructions Industries Ltd., [ 2003 (1) TMI 93 - BOMBAY HIGH COURT] the assessee s claim for deduction of interest, although the revenue was recognized only on project completion basis in subsequent year, was allowed in the year in which the claim of interest was made - as contended that the interest expenditure incurred during the year is claimed and allowable as expenses even though the same has been inventorised in the Books of Accounts, these contentions were accepted by the revenue and no objection has been raised by the Assessing Officer and the settlement commission has accepted these contentions of the assessee. This fact was also taken note by the CIT(A) in allowing the claim of the assessee. Therefore, since the revenue could not controvert the findings of the CIT(A) that the project constructed by the assessee for which the loans have been taken is not a stock in trade and also the other findings of the Ld.CIT(A), we do not find any valid reason to interfere with the findings of the Ld.CIT(A) and accordingly we sustain the order of the CIT(A) on this issue. Grounds raised by the revenue are rejected. Disallowance u/s. 14A r.w.r. 8D to the exempt income earned by the assessee - HELD THAT:- We find that Ld.CIT(A) restricted the disallowance u/s. 14A of the Act to the exempt income earned by the assessee following the decision of the Hon'ble Madras High Court in the case of Shiva Industries Holdings Ltd v. ACIT [ 2011 (5) TMI 451 - ITAT, CHENNAI] and the decision of Daga Global Chemical Pvt. Ltd., v. ACIT [ 2015 (1) TMI 1204 - ITAT MUMBAI] . This bench is consistently holding that, the disallowance u/s. 14A of the Act shall not be more than the exempt income and shall be restricted to the exempt income earned by the assessee. Thus, the decision of the Ld.CIT(A) is in tune with the consistent view of this Tribunal. Hence we do not find any infirmity in the order passed by the Ld.CIT(A). This ground of the revenue is dismissed. Non-cognizance of the revised return of Income filed by the appellant on 31st March 2015 - filing of original return was delayed by few minutes - non considering the revised return on the ground that the original return filed by the assessee is a nonest and is a belated return - HELD THAT:- Delay is only of two minutes which was caused due to technical glitch and last hour of rush in the website, we direct the Assessing Officer to treat the original return filed by the assessee for the A.Y. 2014-15 as filed in time and consequently to consider the revised return of income filed by the assessee for the purpose of computing the income of the assessee. Disallowance of deduction claimed u/s. 80IB - HELD THAT:- AO restricted the claim for deduction allowable u/s. 80IB(10) by reducing the excess claim which is due to inadvertence of the assessee as admitted and also the cancellation Charges from the total claim made - HELD THAT:- Since, we have directed the Assessing Officer to consider the original return filed with a delay of two minutes due to technical glitch as the return filed in time, we direct the Assessing Officer to allow the deduction as quantified by him in the Assessment Order at ₹.6,93,86,043/. Thus, Ground No.2(a) is allowed. Deduction u/s. 80IB on the cancellation charges - HELD THAT:- Assessee is a builder and developer and the apartments constructed by the assessee are its stock in trade. When the buyer advances monies to the assessee for booking the flats, it is nothing but part of sale consideration and when subsequently if cancellation happens such amounts were forfeited and not refunded. These amounts cannot become a miscellaneous income for the assessee and this income will form part of income from eligible business. Sale of the apartments vis- -vis the advances received for purchase of flats from the buyers are in extricable linked with eligible business of the assessee and therefore the amounts retained on cancellation of the apartments is nothing but business income and is eligible for deduction u/s. 80IB - when the assessee sells the apartments subsequently in later years which were cancelled by the buyers in earlier years the amounts forfeited/retained by the assessee on account of cancellations shall have to be reduced from the sale price and only on the balance sale consideration/income, the assessee is entitled for deduction u/s.80IB - we allow the claim of the assessee for deduction u/s.80IB(10) of the Act on the amounts received on cancellation of flats. Disallowance of business promotion expenses - expenses towards gold coin and bullion purchases by the assessee - HELD THAT:- The increase in volume of turnover from the previous year to the current year is at ₹.209 Crores. The expenses incurred by the assessee on its scheme for distribution of gold coins when compared to the volume of business is very negligible. Therefore, since floating of scheme by the assessee is not in doubt at all, purchases of gold coins and bullion by the assessee from the parties is proved, incurring of expenses on the distribution of gold coins for the purpose of boosting the business of sale of flats by the assessee cannot be doubted - We are of the view that the expenses incurred by the assessee towards distribution of gold coins/certificates etc., for promoting its business through a promotional scheme is nothing but expenses incurred wholly and exclusively for the purpose of business. - Decided in favour of assessee. 2020 (4) TMI 841 Deemed dividend addition u/s 2(22)(e) - as contended on behalf of the assessee that this amount was received by the assessee in the course of regular course of business - HELD THAT:- As per Section 2(22)(e) the addition on account of deemed dividend is to be restricted to accumulated profits. As both sides agree to this, we direct the Assessing Officer to compute accumulated profits (possessed by M/s. Mittal Construction Real Estate Pvt. Ltd.) as per law, and restrict the addition u/s 2(22)(e) on account of deemed dividend to the extent of aforesaid accumulated profits. For the limited purpose of computation of aforesaid accumulated profits as per law, this issue is remanded to the file of the Assessing Officer, for fresh order as per law in accordance with aforesaid direction. Claim of brought forward capital loss - disallow assessee s claim of set off of brought forward capital loss on the ground that the assessee has not filed Return of Income - HELD THAT:- Perusal of records shows that the assessee had filed ROI for assessment year 2009-10 in the office of ITO, Ward 19(2), New Delhi; wherein claim for long term capital loss to be carry forward has been made. Therefore, the basis on which the assessee s claim for brought forward capital loss had been rejected by the Assessing Officer is incorrect. Further, if the date of filing of ROI is not clearly visible in the stamp; it is not the fault of the assessee. The assessee does not bring its own acknowledgement stamp to be fixed on ROI; and the assessee does not himself fix the stamp. It is a stamp of Income Tax Department, and the stamp is fixed by officials of Income Tax Department. If the date of acknowledgement is not clearly visible in the ROI; it is the mistake of Revenue officials. Even when the date of receipt of ROI in Income Tax Department is not clearly visible in the acknowledgement; it is easy for Revenue officials to ascertain date of receipt from reference to records of Income Tax Department. We record our displeasure that no effort was made during appellate proceedings before Ld. CIT(A) to ascertain this date. -direct AO to allow the assessee s claim for long term capital loss unless there is evidence in records of Income Tax Department to show that the return for assessment year 2009-10 was not filed by the assessee within prescribed time limit u/s 139(1) - For this limited purpose, this issue is remanded to the file of the Assessing Officer for fresh order Addition under the head Income from House Property - properties at shop no. 4 and 5 at Kamla Nagar although not occupied by the assessee, was to be deemed to be let out - CIT(A) said assessee was to be treated as owner of the properties u/s 269 UA of Income Tax Act as the assessee had entered into the lease agreement with Sh. N.M. Mittal for a period of 30 years in respect of these properties.HELD THAT:- On perusal of materials before us, we find that the lease deed between Sh. Naresh Mohan Mittal and the assessee, dated 7th January, 1993 was for a period of 4 years only, and not for 30 years as alleged by the Ld. CIT(A). Therefore, Section 269UA(2)(f) has no application to the facts of the case. Moreover, this is not a case of purchase of the properties by central government under chapter XX-C of I.T.Act; and therefore, in any case, S. 269 UA has no application to facts of this case. Thus, the Ld. CIT(A) was in error, both on facts as well as in law, in confirming the aforesaid additions of ₹ 49,000/-. In view of the foregoing, the aforesaid addition has no legs to stand, and we accordingly direct the Assessing Officer to delete this addition. Addition u/s 69 - cash deposit made in the bank accounts of minor children of the assessee - HELD THAT:-Having regard to the fact that the amounts are very small and insignificant in nature; and further, that it is customary and common practice in society to make gifts to the children on ceremonial occasions such as birthdays; we direct the Assessing Officer to reconsider the matter; and to treat a reasonable amount as explained through gifts received by the minor children on ceremonial occasions such as birthdays. For this limited purpose, this issue is remanded to the file of the Assessing Officer for fresh order in accordance with our aforesaid direction. Addition u/s 50C - addition was made in respect of immovable property sold by the Assessee - it is the case of the assessee that the difference between value determined by the DVO and sale consideration as per sale deed, is less than 5% thus the assessee is entitled to benefit under 3rd proviso to Section 50C(1) - HELD THAT:- In the case before us the value as per Stamp Valuation Authority is more than 105 percent of the sale consideration as per sale deed . For the purposes of third proviso to S. 50C(1) of I.T.Act; the valuation of the property by DVO has no relevance; and what is material is the valuation by Stamp Valuation Authority. When the value as per Stamp Valuation Authority is more than 105 percent of sale consideration as per sale deed; the assessee is not eligible for benefit under third proviso to S. 50C(1) of I.T.Act, even when valuation by DVO is less than 105 percent of sale consideration as per sale deed - we decline to interfere with impugned order of the Ld. CIT(A) on this issue. Customs 2020 (4) TMI 840 Refund of sugar cess paid on raw sugar imported - rejection on the ground that N/N. S.O. 102 (E) dt. 07.02.2009 exempting levy of CESS on sugar is not applicable to the refund claim of the appellant and also that since the respondents have not challenged the assessment they are not eligible for refund - Whether decision in the case of PRIYA BLUE INDUSTRIES LTD. VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) [ 2004 (9) TMI 105 - SUPREME COURT] and ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [ 2019 (9) TMI 802 - SUPREME COURT] would apply to the facts of this case? - HELD THAT:- It is not disputed that the respondents have paid the cess at the time of filing the Bill of Entry under protest. The marking of protest itself gives information to the department that there is requirement for re-assessment. Assessment under Section 17 of Customs Act, 1962 cannot be said to be finalized when respondent has marked the protest while paying duty. In case, respondents had paid the entire duty without any mark of protest, in order to claim refund they have to request for reassessment of Bill of Entry. The mark of protest is an information to the department that the respondent is not making payment of cess voluntarily and then department has to initiate proceedings to vacate protest and pass speaking order for reassessment. If the department fails to do so the respondents cannot be put to any disadvantage of rejecting the refund claim - refund cannot be denied on this ground. Whether cess paid by the respondent is eligible for refund? - HELD THAT:- The Board has clarified in a letter dt.10.08.2004 that cess is not a duty of excise. Though there may be decisions in which it is held that sugar cess is also duty of excise, the circular issued by the Board is binding on the department - Therefore the decision placed before us by the Ld.A.R contending that sugar cess is also duty of excise and therefore payable by the respondent does not find favour. There are no grounds to interfere with the reasoned order passed by the Commissioner (Appeals) - appeal dismissed - decided against Revenue. 2020 (4) TMI 839 Principles of Natural Justice - DFIA scheme - order for assessment of Bill of Entry - benefit of N/N. 98/09-Cus. dated 11.09.2009 denied - case of appellant is that the relied upon documents along with show cause notice were not given to them and hence the impugned order was passed in violation of the principles of natural justice - HELD THAT:- The order has been passed in violation of principles of natural justice as the relied upon documents in the show cause notice were not given to the appellants. Hence the orders of the lower authorities cannot be sustained and the matter needs to be remanded back. Appeal allowed by way of remand. Insolvency & Bankruptcy 2020 (4) TMI 865 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - Time Limitation - HELD THAT:- It can be seen that the Operational Creditor has served demand notice in Form 4 dated 04-01-2018 upon the Corporate Debtor successfully. The speed post receipt along with the tracking report showing the delivery of the demand notice is found attached as Annexure-D of the petition. It is observed that the Corporate Debtor has chosen not to reply to the above stated demand notice. It could also be seen that if any dispute as to the outstanding due was there, the same could have been stated in the reply to the demand notice by the Corporate Debtor. Therefore, the pleading of the Corporate Debtor challenging the veracity of the invoices raised by the Operational Creditor lacks force. Time Limitation - HELD THAT:- The Operational Creditor has attached the bank statement of ICICI Bank (Page 148 of the petition) wherein it could be seen that the last payment of ₹ 50,000/- dated 22-07-2015 has been received by the Corporate Debtor from which it could be presumed that the same was received in lieu of the services provided by the Operational Creditor. It could also be inferred from the ledger of the Corporate Debtor (Page 20 of the petition) that the due date for the payment for the last invoice raised on 23-07-2015 is 22-08-2015. It is therefore held that the period of limitation starts from the date 22-08-2015 itself and the petition is very well within the limitation period as the petition has been filed on 17-08-2018 with this Tribunal. The operational debt remains unpaid, the demand notice was delivered to the corporate debtor and reply was received within the stipulated 10 days period. In view of the satisfaction of the conditions provided for in section 9(5)(i) of the Code, the petition for initiation of CIRP is deserves to be admitted - petition admitted - moratorium declared. 2020 (4) TMI 864 Approval of Resolution Plan - time limitation of the process - expiry of the process - the CIRP is stated to have expired on 8-7-2019 and no resolution plan under section 30 (6) of the Code was received by the AA before that date - HELD THAT:- In the instant application filed by the RP, it is stated that despite issue of invitation for Expression of Interest in Form G on 26-12-2018 with last date of submission as 31-1-2019 and extension of the last date to 20-2-2019, three Expressions of Interest were received. It is further stated that despite the last date of 2-4-2019 for submission of resolution plans and extension of the date twice to 3-6-2019, no resolution plan was received. No resolution plans are stated to be received even on 08-11-2019, when the 14th meeting of CoC was convened. It is stated in the instant application that since Agenda Item No. 7 relating to appointing a Liquidator and approving the fees to be paid to the Liquidator was not approved by the CoC in its 14th meeting held on 08-11-2019, the applicant has not given his consent to act as a Liquidator and the AA may appoint a Liquidator for Isolux in terms of section 34 (4) (c) of the Code. On the failure of the RP Shri Vikram Kumar to submit the written consent, the AA is empowered under section 34 (4) of the Code to replace the RP by following the procedure provided for in section 34 (5) to (7) of the Code. As regards Regulation 39B, the CoC did not approve any plan for providing contribution for meeting the difference between the excess of estimated liquidation costs over the liquid assets and was of the view that the estimated liquidation costs can be approved quarterly in the stakeholder consultation committee to be constituted as per Regulation 31A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Liquidation Process Regulations, 2016). The plan under Regulation 39B (3) of the CIRP Regulations, 2016 has not been approved by the CoC - After taking into consideration the discussion by the CoC in the 14th meeting held on 08-11-2019, the Liquidator may take necessary action under Regulation 2A of the Liquidation Process Regulations, 2016. It is directed that all the directions/requirements and provisions of Chapter III of the Code and Liquidation Process Regulations, 2016 shall be strictly complied with. 2020 (4) TMI 863 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Tribunal admits this Petition and orders initiation of CIRP against the Corporate Debtor. Application admitted - moratorium declared. 2020 (4) TMI 838 Inaction of the official respondent in not registering an FIR on the basis of the complaint made by the petitioner - complaint discloses a cognizable offence of forgery being committed for filing a case into the court against the petitioner - whether the High Court in exercise of jurisdiction under Article 226 of the Constitution of India can direct the official respondents to register an FIR on the basis of the complaint made by the petitioner? HELD THAT:- If an act of forgery is resorted to and using such forged document a proceeding is laid in any court, the provisions of Section 195 (1)(b)(ii) of Cr. P.C., does not prohibit the victim from filing a complaint either with the police or before the magistrate under Section 156(3) of Cr.P.C. - Though in the facts of the present case, the petitioner has approached the respondent police authorities by lodging a complaint by e-mail on 03.09.2019 and thereafter on 29.10.2019, the respondent authorities did not register FIR on the basis of the complaint and on the other hand, directed the petitioner to approach NCLT since the matter was pending before such tribunal. Though in the notice issued to the petitioner with regard to the action taken on the complaint, the respondent authorities did not specifically refer to the provisions of Section 195 of the Cr.P.C., the purport of the said communication can clearly be inferred, whereby the respondent authorities wanted a complaint to be made by the concerned court under Section 340 of Cr.P.C., since, the document is already filed into the court. The restriction placed under Section 195 of the code is applicable only when a court is required to take notice judicially of the act of offence complained and the investigation thereinto by the police authorities. Thus, this court is of the view that the respondent police authorities ought to have registered an FIR on the basis of the complaint made by the petitioner and take up investigation in the matter as specified under Section 156 of the Code, instead of issuing notice claiming that a civil dispute is pending before NCLT and directing the petitioner to approach NCLT for redressal. Though this court having come to the conclusion that the respondent police authorities ought to have registered an FIR on the basis of the complaint made by the petitioner, this court cannot in a writ petition direct the respondent police authorities to register an FIR and investigate into the matter being complained of - the main relief sought for in the present writ petition of directing the respondent official to register an FIR on the basis of the complaint cannot be granted and since a notice has been issued to the petitioner informing the action taken on the basis of the complaint lodged, it is left open for the petitioner to approach the concerned Magistrate court having jurisdiction to avail remedies in accordance with law. Petition disposed off. PMLA 2020 (4) TMI 837 Commitment of scheduled offences - Uttar Pradesh State Industrial Development Corporation (UPSIDC), Varanasi - It is the contention of the present appellant that it is a State Authority and has been erroneously shown to have committed the scheduled offences - HELD THAT:- On perusal of the impugned order PAO, it is seen that nowhere there is any allegations made by the ED that the present appellant has committed the scheduled offences or has generated proceeds of crime or laundered any proceeds of crime. In fact, it is admitted in the written reply to the appeal filed by ED that this appellant has been made as a party as it was the lessor of the property over which the defendants no(s) 1 to 3 has rights as lessee and the ED has got no objection if the order of the Adjudicating Authority is modified in relation to the contention of the appellant. On perusal of the materials available on record, it is seen that the Impugned Order has not disclosed as to how the present appellant is a party to the alleged commission of crime or has the possession of proceeds of crime or generated the proceeds of crime and laundered them even remotely. The implication of the present appellant along with other defendants by the Adjudicating Authority is neither proper nor legal. Appeal disposed off. Service Tax 2020 (4) TMI 867 Nature of activity - sale or service - photography service - use of the paper upon which an image is printed using certain consumables and chemicals - interpretation of term sale appearing in exemption Notification No.12/03-ST dated 20.06.2003, is to be given the same meaning as given by Section 2(h) of the Central Excise Act, 1944, read with Section 65(121) of the Finance Act, 1994 - deemed sale - HELD THAT:- Identical substantial questions of law have been answered in favour of the assessee [ 2020 (4) TMI 799 - MADHYA PRADESH HIGH COURT] The Supreme Court in the matter of Safety Retreading Company [ 2017 (1) TMI 1110 - SUPREME COURT] has considered the similar issue. The Apex Court set aside the majority view of the Special Bench of the Tribunal and held that component of gross turnover in respect of which assessee had paid taxes under local Act with which it is registered as works contractor is excluded from service tax. It has been further held that in a contract of retreading of tyres, it cannot be said that there is no sale or deemed sale of parts or other materials used in the execution of contract of repairs and maintenance - demand withheld. The substantial questions of law are answered in favour of the assessee - Appeal allowed. 2020 (4) TMI 836 Classification of Services - Port Services or CHA services - transport of export goods to the custom station or import goods from custom station to the importers premises in their own trucks - charges collected as stevedoring charges - It is the case of the Revenue that the transportation activities undertaken by them is an ancillary service which is part of the composite service of CHA Service - HELD THAT:- The stevedoring activity is loading and unloading of cargo. He explained that this activity is rendered by the appellant on his own behalf. He is actually directly dealing with the party. The appellant is only licensed by the port to undertake the stevedoring activity and these activities had not been done on behalf of the port neither they had been authorized by the port to do any port services. CHA Services - HELD THAT:- This transportation charges are clearly reimbursable from their customers and they have to be necessarily excluded from the amount received from their customers. In these circumstances, the demand of Service tax by including the transportation charges collected by the appellant is not in order. Therefore, this is also liable to be set aside. Summing up the demand on account of stevedoring services and by inclusion of transportation charges under the category of CHA services is not sustainable - Since the demands are not sustainable, there is no justification for imposition of any of the penalty - Appeal dismissed - decided against Revenue. 2020 (4) TMI 835 Refund of Swachh Bharat Cess - the cess paid on the input services used for providing export service - rejection of refund on the ground that there is no provision for refund of Swachh Bharat Cess paid on the input services used for providing export service - HELD THAT:- The issue involved in this appeal is no more res integra in view of the decision of this Tribunal in M/S. STATE STREET SYNTEL SERVICES PVT. LTD. VERSUS COMMISSIONER OF CGST, NAVI MUMBAI [ 2019 (6) TMI 859 - CESTAT MUMBAI ] in which this Tribunal while discussing Section 119 of the Finance Act, 2015 and various case laws, by a detailed order allowed the Appeal filed by the Appellants therein and held that the Swachh Bharat Cess paid on input services has to be available as Cenvat Credit and the same can be discharged by utilizing Cenvat Credit and the appellant therein are entitle for refund of it. The Appellants are entitled for refund of Swatch Bharat Cess used for Export of Services - Appeal allowed - decided in favor of appellant. Central Excise 2020 (4) TMI 834 Permission for withdrawal of appeal - Compounding of duty under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- The present appeal is dismissed as withdrawn - Application allowed. 2020 (4) TMI 833 Process amounting to manufacture or not - repacking of goods (DVDs) and affixing MRP stickers on them - denial of credit by invoking extended period of limitation - denial of CENVAT Credit subsequently on the ground that the there was no manufacture in the first place - HELD THAT:- The packing and repacking, labelling or relabelling amounts to manufacture in respect of the goods which are listed in the Third Schedule to the Central Excise Tariff Act, 1985. This is a legal fiction created by the statute and applies only to such goods which are listed in the third schedule and not to others - In the present case, the DVDs which they have imported were classified under 85234080. This tariff heading is not included in the third schedule. Evidently labelling or relabelling these DVDs will not make them classifiable under a different heading (8708) as has been done by the appellant. Demand of CENVAT Credit by invoking extended period of limitation - HELD THAT:- The excise duty paid by the appellant treating this activity as manufactured is clearly not supported by law. Since the final product is not chargeable to excise duty, cenvat credit cannot be availed on the imported DVDs. However, the appellant has filed the returns which were legally required, with the department. Scrutiny of such returns and calling for any further information would have disclosed this fact that appellant was paying the central excise duty wrongly. The department could have directed them not to pay central excise duty accordingly but the department has not done so. Therefore, the erroneous payment of the appellant made as central excise duty was not detected by the department despite the appellant disclosing in their returns the details which they were mandatorily required to disclose. Under these circumstances, the demand for reversal of CENVAT credit invoking extended period of limitation does not sustain at all - The period in dispute is October 2009 to September 2012 while the SCN was issued well beyond the normal period on 21.02.2015 when this action of the appellant came to light during the audit. It was equally possible for the assessing officers to have scrutinized returns and found that excise duty was being paid wrongly after availing CENVAT credit. If the assessee has treated the activity of manufacture and paid excise duty thereon and availed cenvat credit can cenvat credit be subsequently denied by the department holding that the activity was not manufacture in the first place? - HELD THAT:- The Hon ble High Court of Karnataka in the case of Vishal Precision Steel Tubes Strips Pvt. Ltd. [2017 (3) TMI 1287 - KARNATAKA HIGH COURT] has held that cenvat credit cannot be denied under such circumstances. This ratio of this judgement of the Hon ble High Court of Karnataka binds us to hold that cenvat credit cannot be recovered from the appellant even on this count - As the cenvat credit cannot be denied and recovered from the appellant the demand of interest thereon as well as proposed penalties do not survive. Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2020 (4) TMI 832 Withholding of refund - refund arising out of change in Rate of tax - packing material - Cement - APGST Act - HELD THAT:- In the instant case, the respondents had withheld the refund for 11 years on ground of want of cross-verification details which is not a ground mentioned in Sec.33-C for withholding the refund due to petitioner. Admittedly no proceeding such as an appeal or revision was pending against the petitioner. So Sec.33 F(2) of the APGST Act is also inapplicable - Also a refund withholding order must invariably specify (as per Sec.33C) the period of time during which it will be in force and a refund cannot be withheld indefinitely as has been done in the instant case. Sec.33-E and 33-F of the APGST Act give 6 months time to the respondents to complete the verification and the authorities cannot with hold the refund beyond the said period - Thus there has been an ex-facie abuse of power by the respondents 1 and 2 in denying refund to the petitioners of the sum of ₹ 28,10,432/-. Petition allowed with costs. Indian Laws 2020 (4) TMI 831 Arbitration application - adjudication of dispute between the parties - permanent injunction restraining the appellant from relying on the arbitration clauses contained in the agreements - HELD THAT:- In the present case the arbitration in question is a domestic and an institutional arbitration where CIAA was empowered to and did nominate the Arbitrator. It is not as if there were completely different mechanisms for appointment of Arbitrator in each of the agreements. The only distinction is that according to one of the agreements the venue was to be at Kolkata. The specification of place of arbitration may have special significance in an International Commercial Arbitration, where the place of arbitration may determine which curial law would apply. However, in the present case, the applicable substantive as well as curial law would be the same. It was possible for the respondent to raise submissions that arbitration pertaining to each of the agreements be considered and dealt with separately. It was also possible for him to contend that in respect of the agreement where the venue was agreed to be at Kolkata, the arbitration proceedings be conducted accordingly. Considering the facts that the respondent failed to participate in the proceedings before the Arbitrator and did not raise any submission that the Arbitrator did not have jurisdiction or that he was exceeding the scope of his authority, the respondent must be deemed to have waived all such objections. The High Court was in error in setting aside said Order. In any case, the fact that the cause title showed that the present appellant was otherwise amenable to the jurisdiction of the Alipore Court, could not be the decisive or determining criteria - Appeal allowed. 2020 (4) TMI 830 Registration of FIR - locus standi of the complainant - Mr. M. Subramaniam and Mr. R.V. Prasanna Venkatesan who were not even made parties to the criminal petition, have filed present petition - HELD THAT:- While it is not possible to accept the contention of the appellants on the question of locus standi, we are inclined to accept the contention that the High Court could not have directed the registration of an FIR with a direction to the police to investigate and file the final report in view of the judgment of this Court in SAKIRI VASU VERSUS STATE OF U.P. AND OTHERS [ 2007 (12) TMI 485 - SUPREME COURT] . The direction of the High Court for registration of the FIR and investigation into the matter by the police, is set aside. At the same time, our order would not be an impediment in the way of the first respondent filing documents and papers with the police pursuant to the complaint dated 18.09.2008 and the police on being satisfied that a criminal offence is made out would have liberty to register an FIR - appeal allowed in part.
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