Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 15, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
Indian Laws
Articles
News
Notifications
Customs
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47/2021 - dated
13-5-2021
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Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver-
Income Tax
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66/2021 - dated
13-5-2021
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IT
Central Government specifies the pension fund, namely, the OMERS Administration Corporation
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65/2021 - dated
13-5-2021
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IT
Central Government specifies the pension fund, namely, the Government Employees Superannuation Board
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64/2021 - dated
13-5-2021
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IT
Central Government specifies the pension fund, namely, the Public Sector Pension Investment Board
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63/2021 - dated
13-5-2021
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IT
Central Government specifies the sovereign wealth fund, namely, the Ministry of Economy and Finance (of the Republic of Korea)
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62/2021 - dated
13-5-2021
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IT
Central Government specifies the sovereign wealth fund, namely, the CDC Group Plc.
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Validity of assessment order - non-filing of GSTR-3B return - best judgment assessment under Section 62 of Telangana GST Act - the matter is remitted back to the 1st respondent for fresh consideration - HC
Income Tax
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Order passed before the time prescribed for filing the reply - Validity of assessment - violation of principles of natural justice - there shall be a stay on the operation of the impugned assessment order dated 22.04.2021, as well as the notice of demand issued under Section 156 and the notice initiating penalty proceedings under Section 270A of the Act. - HC
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Order passed before the time prescribed for filing the reply - Validity of assessment - violation of principles of natural justice - faceless assessment scheme - The impugned order is thus set aside. The petitioner will file its response to show cause notice dated 19.03.2021 within a period of two weeks from today and the assessment shall be completed de novo within a period of six (6) weeks from today, after hearing the petitioner. - HC
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Stay of demand - We are of the view that rejection of the stay-application is nothing but harassment to the assessee as there is no distinction between the facts of the pending appeals from the order of the Tribunal and CIT(Appeals) rendered in favour of the assessee for the earlier years and hence, CIT (Appeals) is bound to follow the order of the Tribunal for earlier years. - HC
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Addition u/s 68 r.w.s 115BBE - As cash receipts represent the sales which the assessee has rightly offered for taxation. We have gone through the trading account and find that there was sufficient stock to effect the sales and we do not find any defect in the stock as well as the sales. Since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. - AT
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Condonation of delay in filing in appeal - Since, in this case there was mistake on the part of the Assessing Officer, as he did not bring the addition made by him in the computation of taxes and did not create the demand, and that is why, assessee’s issue has not been adjudicated. The assessee should not suffer because of the mistake made by the Assessing Officer. Hence, assessee deserves that delay in filing appeal against the order under section 154 should be condoned. - AT
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Penalty u/s 271(1)(c) - Disallowance of interest expenditure under section 43B as well as disallowance export product development expenses - Just because the assessee has not preferred further appeal before the appellate authority against the quantum addition that itself cannot attract imposition of penalty. Under the above facts and circumstances, the penalty levied under section 271(1)(c) of the Act towards disallowance of interest expenditure under section 43B of the Act as well as disallowance export product development expenses stand deleted - AT
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TDS u/s 194A - Disallowance of interest expenses u/s 40(a)(ia) - non deduction of TDS - it is noticed that counsel of the assessee has voluntarily agreed for the disallowance of interest expenditure since the assessee has failed to make compliance with the provision of section 40(a)(ia) of the Act. Keeping in view of the aforesaid undisputed facts and circumstances, we do not find any infirmity in the decision of ld. CIT(A) - AT
Customs
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The filing of appeal in the instant case would not be regarded as filing of appeals repeatedly since the earlier order came to be passed by the third respondent not on merits but only on the sole ground of failure on the part of the petitioner herein to comply with the mandatory requirement of law but not on merits. In the considered opinion of this Court, the said order, dated 03.11.2020, by any stretch of imagination, cannot be regarded as the order on merits but is only an order refusing to entertain the appeal. Therefore, the contention of the learned Senior Standing Counsel that the petitioner herein is required to be relegated to the alternative remedy of appeal to the CESTAT cannot be sustained and is, accordingly, rejected. - Matter restored before the CESTAT - HC
Indian Laws
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Dishonor of Cheque - acquittal of the accused - the trial Court has rightly held that the accused was successful to rebut the presumption available to her under Section 139 of Negotiable Instruments Act and concluded that the evidence placed on record by the complainant is not sufficient to prove the case against the accused beyond all reasonable doubt and accordingly acquitted her. - HC
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Dishonor of cheque - the complaints filed under Section 200 Cr.P.C. through Power of Attorney holder maintainable or not - If the the Power of Attorney holder is having knowledge and belief with regard to the transaction of facts and he has verified the contents of the complaints to the said effect., he can file the complaint - The petitioners failed to establish any ground warranting interference of this Court in exercise of its power under Section 482 Cr.P.C - HC
IBC
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Approval of Resolution Plan - provision for the payment of Provident Fund dues not made - After approval of the Resolution Plan under Section 31, the claims as provided in the Resolution Plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors including the Central Government, any State Government or any Local Authority, Guarantors and other Stakeholders. On the approval of the Resolution Plan by the Adjudicating Authority, all such claims that are not a part of the Resolution Plan shall stand extinguished. - AT
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Initiation of CIRP - Corporate Debtor failed to make repayment of its dues - time limitation - the guarantor(s) on 20.02.2018 had executed ‘Balance and Security Confirmation Letters’ in respect of the account of Corporate Debtor in respect of the ‘Term Loan Facility’, which clearly point out that there was an ‘Acknowledgement of Debt’, in terms of Section 18 and 19 of the Limitation Act, 1963. - AT
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Liquidation of company - It must be borne in mind that the IBC treats the CIRP and Liquidation process as two separate stages and the proof of claim is to be filed separately at each stage and hence the submissions of the Learned Counsel for the Applicant that claims filed during CIRP should be treated as the Claim filed during the Liquidation process would render the CIRP and Liquidation Process as envisaged under the provisions of IBC, 2016 as nugatory. - Tri
Service Tax
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Defaulter under the SVLDRS scheme or not - failure to pay the amount mentioned in SVLDRS-3 in time - Seeking adjustment of refund under Income Tax with amount payable under SVLDRS - Merely because the Principal Chief Commissioner of Income Tax accorded approval for adjusting income tax refund against dues to the Service Tax Department, the action of the 3rd respondent, which is per se illegal and in violation of Section 245 of the Income Tax Act, 1961, does not get validated - HC
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Levy of service tax on freight charges - GTA Services - Appellant being manufacturer - No consignment note was issued by any of the transporters - delivery of the goods by the transporters in the instant case does not fall under GTA services in terms of Section 65(105)(zzp) of the Act. Consequently, the said transporters cannot be said to be “Goods Transport Agency” within the meaning of Section 65(50b) of the Act. - AT
Central Excise
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Reversal of Cenvat Credit - cenvat credit on common inputs - The relevant provisions and procedure nowhere requires that an assessee should pay an amount higher than that of the actual amount calculated under the procedure prescribed under Rule 6(3A) of the Cenvat Credit Rules.- AT
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CENVAT Credit - common inputs and input services - it is an undisputed fact that the appellant had reversed the entire amount of Cenvat credit as required under Rule 6(3)(ii) read with Rule 6(3A)(c) of the Cenvat Credit Rules - the demand confirmed under Rule 6(3)(i) of the Cenvat Credit Rules by the Adjudicating Authority/Commissioner (Appeals) by choosing such option in the show cause notice cannot be sustained. - AT
Case Laws:
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GST
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2021 (5) TMI 465
Attachment of Seized vehicle - HELD THAT:- Draft amendment is allowed. Let, necessary incorporation be carried out. Ms. Shah learned Government Pleader upon instruction has stated that vehicle earlier seized under Section 67(2) of the GST Act and subsequently attached under Section 83 of the GST Act, 2017 would be released within a week from today i.e. by 13.5.2021. Rest of the goods seized and attached which include mobile phone and dairy may continue with the department if it so desired. The concerned officers are indisposed as such sometime may be granted for filing counter affidavit in response to the draft amendment and the additional affidavit if any. For the said purpose, two weeks time may be granted. This matter be listed upon opening after summer vacation on 15.6.2021.
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2021 (5) TMI 464
Delay in filing of appeal - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes due and complying with other formalities, the GST return filed by the Petitioner, provided it is filed on or before 5th July, 2021, will be accepted by the Opposite Parties. Petition disposed off.
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2021 (5) TMI 453
Validity of assessment order - non-filing of GSTR-3B return - best judgment assessment under Section 62 of Telangana GST Act - HELD THAT:- Since the impugned order appears to be prima facie arbitrary and contrary to the provisions of the Telangana GST Act, 2017, the impugned order is set aside - the matter is remitted back to the 1st respondent for fresh consideration; the 1st respondent shall issue notice to the petitioner indicating the method of assessment under the best judgment assessment provision contained in Section 62 of the said Act; grant a personal hearing to the petitioner. Petition allowed by way of remand.
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2021 (5) TMI 449
Validity of assessment order - detention of goods - HELD THAT:- The petitioner has preferred this writ petition at interim stage when he was directed to show cause. Now final order has been passed and the said order is an appealable order under the statute. In this view of the matter, I am not inclined to entertain the instant writ petition against show cause notice which has ultimately culminated in final order. This writ petition is disposed of with liberty to the petitioner to avail the alternate remedy as is available in law.
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Income Tax
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2021 (5) TMI 467
Order passed before the time prescribed for filing the reply - Validity of assessment - violation of principles of natural justice - petitioner's claim that the respondent, in breach of its own timeline, passed an assessment order under Section 143(3) read with Section 144B - petitioner placed its grievance before the revenue via the e-filing portal on 22.04.2021, in which, it, inter alia, stated that although at about 22:00 hours, it had tried to upload a response to the aforementioned show cause notice-cum-draft assessment order, the same could not be uploaded - HELD THAT:- Since Revenue, seeks an accommodation to revert with instructions, list the matter on 19.05.2021. In the meanwhile, there shall be a stay on the operation of the impugned assessment order dated 22.04.2021, as well as the notice of demand issued under Section 156 and the notice initiating penalty proceedings under Section 270A of the Act. This order will operate till further orders of the court.
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2021 (5) TMI 466
Eligibility of Deduction u/s 10AA - manufacture u/s 2(29BA) - Has the Tribunal correctly applied the definition of manufacture given in SEZ Act 2005, which is applicable only for section 10AA of the IT Act and which imposes various conditions for the utilisation of profits? - Do the Assessee s Units manufacture or produce any product? - HELD THAT:- Definition of manufacture was removed when sections 10A and 10B of the Act were amended by the Finance Act, 2001. These two provisions suffered a further amendment through the Finance Act, 2003. Explanation (iv) is merely inclusive as it declares that manufacture or produce shall include the cutting and polishing of precious and semi-precious stones. On the other hand, clause (iii) of Explanation to section 10AA adopts the definition of manufacture clause (r) of section 2 of the SEZ Act, 2005. As defined under clause (r) of section 2 of the SEZ Act, manufacture means to make, produce, fabricate, assemble, process or bring into existence, by hand or by machine, a new product having a distinctive name, character or use and shall include processes such as refrigeration, cutting, polishing, blending, repair, remaking, reengineering and includes agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture, viticulture and mining . This definition is both exhaustive ( means ) and inclusive ( shall include ), too. The inclusive part is merely clarificatory, though. Later, through the Finance Act, 2009, clause (29BA) was inserted in section 2 of the IT Act, defining the expression manufacture : On facts, Chowgule [ 1980 (11) TMI 61 - SUPREME COURT] has held that diverse quantities of ore possessing different chemical and physical compositions are blended to produce ore of the requisite chemical and physical composition demanded by the foreign purchaser. And obviously, as a result of this blending, the quantities of ore mixed in the course of loading through the mechanical ore handling plant experience change in their respective chemical and physical compositions. Thus, what is produced by such blending is ore of a different chemical and physical composition. In other words, when the chemical and physical composition of each kind of ore which goes into the blending is changed, there can be no doubt that the operation of blending would amount to processing of ore. After relying on Chowgule, the Tribunal has concluded that even blending of iron ore for export involves change in the chemical and physical composition of iron ore. It has, then, gone one step ahead and observed that the Assessee is not only blending iron ore but also carrying out various processes to make the crude ore usable. In this context, it has referred to clause (b) of section 2 (29BA) of the Act-that bringing into existence a new and distinct object or article or thing with a different chemical composition or integral structure is tantamount to manufacture . We do accept that Chowgule was rendered in a different statutory backdrop. But under the CST Act, too, the term processing has not been defined. Then, applying the common parlance meaning of processing Chowgule ruled. Does the processing of the original commodity bring into existence a commercially different and distinct commodity? In fact, Pio Food Packers[ 1980 (5) TMI 30 - SUPREME COURT] has answered that question affirmatively. If we interpret section 2 (29BA) in the context of the case-holdings of both Chowgule and Pio Food Packers, the inevitable conclusion is that for the purposes of Income Tax Act, both manufacture and process are synonymous. Thus we hold that on the first substantial question of law, the Tribunal has rightly rendered its findings and those findings require no interference. Determination of price - Has the Tribunal correctly directed the AO to restrict the open market right of the iron ore to average purchase value by applying section 10B (7) read with section 80 IA (8) of the IT Act though there are differences in grade/quality and though it was not at arm s length price? - Is Tribunal right in not considering pro rata overhead costs in determining profits from EVUs? - HELD THAT:- It is a fact that the Assessee has also purchased crude ore, ROM, from outside parties, that is from the mines belonging to other parties. The price paid by the Assessee to these outside parties, according to the Tribunal, can be regarded as the best evidence for determining the market value of the crude ore the Assessee extracted from its own mine and used. Tribunal has felt that the determination of market value requires verification by the Revenue. So, it has restored this issue. That restoration or remand is to enable the AO to determine the market value of the crude ore the Assessee consumed, based on the value paid by the assessee for the crude ore from the third parties during the year. Thus, there should be re-computation of the profit the Assessee derived from the 100% EOU units eligible for exemption u/s 10B. Tribunal has directed the AO to recompute the exemption available u/s 10B to the assessee in respect of Amona as well as Chitradurga units after ascertaining the market value of the crude ores transferred by the assessee to these units from its extraction divisions. It must be based on the average market value as the assessee has paid to the third-party suppliers the crude ore. And the determination must be after the AO s giving proper and sufficient opportunity to the assessee to adduce material evidence in this regard. We reiterate that the remand or the restoration of the issue is complete, and the AO shall determine the price untrammelled by the Tribunal s observations, if any. And that determination is in accordance with law and only after accounting for the quality or grade of the iron ore supplied. Disallowance u/s 14A - Tribunal deleted the disallowance u/s 14A in accordance with Rule 8D of IT Rules as held in ITO v. Daga Capital Management Pvt. Ltd [ 2008 (10) TMI 383 - ITAT MUMBAI] - HELD THAT:- In Daga Capital Management, the question was whether section 14A of the IT Act, 1961 applies to dividend income earned by the assessee engaged in the business of dealing in shares and securities, on the shares held as stock-in-trade and when earning of such dividend income is, therefore, incidental to trading in shares . Given the factual disparity, we need not examine the Tribunal s decision in Daga Capital Management. We may rely on this Court s earlier decision M/S. SOCIEDADE DE FOMENTO INDUSTRIAL PVT. LTD., [ 2020 (11) TMI 277 - BOMBAY HIGH COURT] only issue was whether the respondent incurred any expenditure while earning that exempted income and whether it included that expenditure in the common indirect expenditure of its own. The Court ruled in the respondent-assessee s favour. First, unlike Sociedade De Fomento, the AO accepted that the Assessee had not borrowed funds. Second, the Assessee has deducted certain proportionate expenditure, which the AO has not disbelieved or disputed. Finally, given the volume of investment, the Assessee is said to have received charge-free services from the banks and other financial institutions with whom they have invested. So there is said to be no expenditure. We reckon the ratio Sociedade De Fomento squarely applies to this case. And, thus, the third substantial question of law, too, shall stand answered against the Revenue.
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2021 (5) TMI 461
Order passed before the time prescribed for filing the reply - Validity of assessment - violation of principles of natural justice - faceless assessment scheme - Pre-assessment notice was issued calling upon the petitioner to show cause why assessment should not be completed in line with the draft assessment order - HELD THAT:- In conclusion, the petitioner was called upon to submit his response by 23:59 hours of 23.03.2021.However, even prior to the elapse of time granted, the impugned order of assessment has come to be passed on the same day, i.e., 23.03.2021, one assumes during the working hours. Hence, there is a violation of principles of natural justice writ large of the document. One need hardly refer to the decision of the learned single Judge of this Court in the case of S.Velupalandar V. Deputy Commercial Tax Officer [ 1971 (8) TMI 42 - MADRAS HIGH COURT] wherein this Court has stated that it was incumbent upon an Officer to wait till the end of the working day when the matter had been posted to finalize proceedings. This is an even better case than in the matter of Velupalandar (supra), since the Assessing Officer had himself granted time till 23:59 hours on 23.03.2021. The impugned order is thus set aside. The petitioner will file its response to show cause notice dated 19.03.2021 within a period of two weeks from today and the assessment shall be completed de novo within a period of six (6) weeks from today, after hearing the petitioner.
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2021 (5) TMI 460
Reopening of assessment u/s 147 - assessee submitted that notice issued beyond the period of limitation of six years from the end of the relevant assessment year - HELD THAT:- In view of these facts and circumstances, if at all the ground regarding the limitation exists, then the petitioner is at liberty to raise the same before the Authority Competent and certainly not before this Court. The notice under Section 148 of the Act, which is impugned in the present writ petition, reveals that the respondent has reason to believe that the income chargeable to tax for the assessment year 2011-2012 has escaped assessment within the meaning of Section 147 of the Act. Thus the procedures as contemplated in case of GKN Driveshafts (India) Ltd [ 2002 (11) TMI 7 - SUPREME COURT] is to be followed for the purpose of further adjudication and this Court is of an opinion that the present writ petition is premature. Writ against a notice is not entertainable in a routine manner. Undoubtedly, a notice can be challenged if the authority issued such notice has no competence of jurisdiction or if the notice is issued beyond the period of limitation. In the present case, the respondent has filed certain documents to establish that the notice was issued within the period of limitation and an additional typed set of paper is also filed. Thus, the petitioner is at liberty to raise the point of limitation before the authority with relevant documents and evidences and the Authority Competent is well within his power to adjudicate the same and take decision on merits and in accordance with law. WP dismissed.
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2021 (5) TMI 456
Validity of reopening of assessment - notice to dead person - notice addressed to one Smt.K.Srivalli, who is the mother of the writ petitioner / Mr.K.Rajesh and it is contended that the assessee / Smt.K.Srivalli died on 02.07.2016 - Standing counsel appearing on behalf of the respondents objected the said contentions by stating that an adjudication / enquiry is required for the purpose of establishing these facts and in this regard, the petitioner has to submit the details and documents before the authorities, enabling them to form an opinion and proceed in accordance with law - HELD THAT:- This Court is of the considered opinion that all such material facts and circumstances are to be established by submitting proof and evidences and such an exercise cannot be done by the High Court under Article 226 of the Constitution of India. The authorities competent must conduct an enquiry in this regard and take a decision and thereafter, proceed in accordance with law and by following the procedures. For this purpose, the matter is remanded back to the respondents for fresh adjudication. Accordingly, the notice issued by the first respondent under Section 148 of the Income Tax Act, 1961 dated 28.02.2018 is quashed and the matter is remanded back to the respondents for fresh adjudication by affording opportunity to the writ petitioner and pass orders on merits and in accordance with law and by following the procedures as contemplated.
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2021 (5) TMI 454
Addition u/s 68 - ITAT deleted the addition - HELD THAT:- Tribunal has permitted the assessee to adduce additional evidence along with details of 483 customers pertaining to the advances received along with PAN numbers of 182 customers. The Tribunal has also considered that the developments which have taken post facto institution of the appeal filed in the year 2012 were placed on record by the assessee to show that total 75 customers were stated to be the cases wherein the amount is refunded due to cancellation of plot registration and sale deeds were executed on 31.3.2016 with regard to 21 members who had made advances to the assessee. The Tribunal considering such additional documents on record, remitted the issue back to the Assessing Officer for conducting necessary verification as per law and confirmed the remaining addition wherein the assessee was not able to rebut the findings of the Assessing Officer as confirmed by the CIT(Appeals). Tribunal has therefore, after considering the materials on record, remitted the matter back to the Assessing Officer for verification of the documents produced before the Tribunal so that correct amount liable to tax can be worked out. - Decided against revenue.
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2021 (5) TMI 452
Stay of demand - refund claim - outstanding demand raised by the respondent against the petitioner for AYs 2017 -2018, 2018-2019 and 2019 -2020 pertains to denial of exemption benefit to the petitioner under sections 11 and 12 of the Act, 1961 treating the petitioner liable to pay the tax on the income assessed on denial of concept of mutuality - AO assess the income of the petitioner without giving the benefit of exemption despite the petitioner succeeding before the Tribunal and raised demand so as to adjust the same against the existing refunds year after year and thereby not issuing refund to the petitioner - HELD THAT:- The respondents were required to use their discretion for granting stay, more particularly, when the Tribunal in earlier year has held in favour of the petitioner assessee and therefore, from the narration of the facts and the provisions noticed above, the conditions necessary for exercise of discretion in favour of the assessee under section 220(6) of the Act apparently exists in favour of the assessee in the present case. This Court in case of AIR Conditioning Specialists Pvt. Ltd. v. Union of India [ 1995 (3) TMI 14 - GUJARAT HIGH COUR ] has held that it is settled law that unless and until decision is reversed by a superior Court, it holds the field and when a point is concluded by a decision by the higher Courts, all Subordinate Courts and authorities within the territory of the appellate authority are bound by it and must scrupulously follow the said decision in letter and spirit. Respondent no.1Assessing Officer is therefore, bound by the order passed by the Tribunal in the earlier years on the same issue of granting exemption from income tax to the petitioner. It may be true that the Assessing Officer would like to keep the issue live till the highest court concludes and arrive at final decision and therefore, may have taken a contrary view than the decision of the Tribunal but,in such circumstances, when the appeal is preferred by the assessee before CIT(Appeals) under section 246 of the Act, 1961, the assessee is entitled to get complete stay against the demand not by treating the assessee being in default in respect of amount in dispute in appeals. We are of the view that rejection of the stay-application is nothing but harassment to the assessee as there is no distinction between the facts of the pending appeals from the order of the Tribunal and CIT(Appeals) rendered in favour of the assessee for the earlier years and hence, CIT (Appeals) is bound to follow the order of the Tribunal for earlier years. The Principal CIT therefore, ought to have granted complete stay of the outstanding demand in the pending appeals for AYs 2017 -2018, 2018 -2019 and 2019 -2020 as the issue arising for consideration stands concluded by the decision of the higher forum i.e. the Tribunal as the view taken by the Assessing Officer in the appeal against the petitioner is contrary to what has been held in the previous years, without there being any material change in facts or law. Prayer of the petitioner to grant refund for the earlier years - Refund as due to the petitioner assessee, pursuant to the order giving effect passed by the Assessing Officer on account of the appeals preferred by the petitioner being allowed by the Tribunal, issue is no more res integra. This Court in case of Jugal Kishore Mahendra Biyani v. Income Tax Officer [ 2019 (8) TMI 1338 - GUJARAT HIGH COURT ] has held that when Revenue accepted that the assessee was entitled to refund as claimed and when the petitioner-assessee has made repeated requests and sent reminders to the respondent authority, if no refund is granted and now the contention is taken before this Court that under section 245 of the Act, refund cannot be granted as same is required to be adjusted against outstanding demand pending against the petitioner, cannot be accepted because, as of now as the demand raised against the petitioner for the assessment years 2017 -2018, 2018 -2019 and 2019 -2020 are already stayed by this order, the respondent authorities are required to process the refund payable to the petitioner and issue refund due at the earliest. We dispose of this petition with a direction to the respondents to grant stay against outstanding demand for A.Y. 2017 -18 to 2019 20 during the pendency of the appeals before the CIT(Appeals) and further direct to release the refund to which the petitioner- assessee is entitled to for the earlier years from assessment year 2002 -2003 onwards in accordance with the provisions of section 244A(1)
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2021 (5) TMI 450
Maintainability of the writ application - alternative remedy u/s 246A - This Court jurisdiction under Article 226 of the Constitution of India with the assessment order passed by AO under the Income Tax Act when an equal efficacious alternative remedy is available to the writ applicant under Section 246A - HELD THAT:- In view of the law laid down by the Apex Court in the case of Chhabil Dass Agrawal [ 2013 (8) TMI 458 - SUPREME COURT ] this Court cannot overlook the settled law that, ordinarily the writ petition under Article 226 of the Constitution of India ought not to be entertained, if an effective remedy is available, except in case if falls within the well defined exception as observed by the Apex Court in para 15 of the above judgment. We take the notice of the undisputed fact that, the notices under Sections 143(2) and 142(1) of the Act were served upon the writ applicant on 17.08.2007, 10.07.2018 and 27.08.2018 respectively to submit the explanation and/or documents to explain the cash deposit made by the writ applicant in his bank account. The writ applicant replied to the notices in part. The revenue authority had served the show-cause notice on 13.11.2018. The writ applicant sought an adjournment for 15 days for hearing and accordingly, the matter was fixed for hearing on 04.12.2018 and on that day, in absence of the writ applicant, the matter was concluded finally and ex parte assessment order came to be passed. It is required to be noted that, the whole exercise undertaken by the respondent authority was faceless, in other words, everything to be submitted online as per the CBDT guidelines in a time bound manner. Thus it cannot be said that, the writ applicant had not been given a fair opportunity of hearing. Considering Section 264A of the Income Tax Act, which provides statutory alternative remedy against the impugned order of assessment, we decline to entertain this writ application as the writ applicant failed to make out his case for invoking the discretionary jurisdiction of this Court under Article 226 of the Constitution of India. Consequently, we relegate the writ applicant to avail the alternative remedy by way of filing statutory appeal before the competent authority. If the appeal is filed, the appellate authority shall not raise technical issue of limitation and decide the same on merits in accordance with law. However, it is made clear that, this writ application is hereby disposed off on the ground of availability of statutory remedy and we have not expressed any opinion on merits including the issue of principles of natural justice. Therefore, the writ applicant may raise the issue of principles of natural justice before the Appellate Authority and the same may be considered by the Appellate Authority in accordance with law.
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2021 (5) TMI 448
Addition on account of sale of property - addition relying upon statement of Smt. Jaya Sharma-Seller recorded under section 131 in which she has admitted to have received cash from the assessee and her husband on account of sale of property - assessee argued on AO's failure to provide person for cross-examination on whose basis addition is made - HELD THAT:- It is well settled Law that any material collected at the back of the assessee or any statement recorded at the back of the assessee cannot be read in evidence against the assessee, unless the same is confronted to the assessee and that assessee should be allowed to cross-examine to such statements. In this case, the A.O. has failed to produce Smt. Jaya Sharma before assessee for cross-examination on behalf of the assessee particularly when Smt. Jaya Sharma has retracted from her statement. It was the duty of the A.O. to produce Smt. Jaya Sharma at the reassessment proceedings to allow cross-examination to her statement on behalf of the assessee. Therefore, such statement and material collected at the back of the assessee, cannot be read in evidence against the assessee. We rely upon the Judgments of Hon ble Supreme Court in the cases of Kishan Chand Chellaram [ 1980 (9) TMI 3 - SUPREME COURT] and Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT] - CIT(A) without any justification has rejected the contention of assessee that is not an absolute right of assessee to cross-examine the statement of Smt. Jaya Sharma. These facts clearly disentitle the Revenue to use the statement of Smt. Jaya Sharma recorded under section 131 of the I.T. Act in evidence against the assessee. Therefore, we set aside the Orders of the authorities below and direct that such statement cannot be read in evidence against the assessee. A.O. also referred to statement of husband of the assessee recorded during the course of survey in which he has admitted to have sold the property to M/s. Mapple Destination Dreambuilt P. Ltd., and received the cash amount. The present case is with respect to purchase of property of Dera Mandi, Chattarpur, New Delhi from the Seller-Smt. Jaya Sharma. Therefore, the statement of husband of assessee is not relevant to the matter in issue. A.O. has referred to statement of Shri Rakesh Sejwal, Manager of Lingaya s Society who was assigned various works with reference to transactions of different properties who have confirmed collecting cash on sale of property on behalf of the assessee and her husband. This statement is also not relevant to the matter in issue because transaction is a different one. Therefore, the statement of husband of assessee and Shri Rakesh Sejwal are not relevant to the matter in issue and as such they cannot be the basis for making any addition against the assessee in assessment year under appeal. There were no basis for the A.O. to make any addition against the assessee - we delete the addition. This ground of appeal is allowed.
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2021 (5) TMI 447
Addition u/s 68 r.w.s 115BBE - assessee had deposited the sum in high denominations of specified bank notes (SBNs) post demonetization - CIT-A deleted the addition - HELD THAT:- The assessee produced the newspaper clippings of The Hindu, The Tribune and demonstrated that there was huge rush of buying the jewellery in the cities consequent to declaration of demonetization of ₹ 1000 and ₹ 500 notes on 08.11.2016. As cash receipts represent the sales which the assessee has rightly offered for taxation. We have gone through the trading account and find that there was sufficient stock to effect the sales and we do not find any defect in the stock as well as the sales. Since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. This view is also supported by the decision of Hon ble Delhi High Court in the case of Kailash Jewellery House [ 2010 (4) TMI 1070 - DELHI HIGH COURT ] and Vishal Exports Overseas Ltd. [ 2012 (7) TMI 1110 - AHMEDABAD HIGH COURT ] Hence, we do not see any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. - Decided against revenue.
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2021 (5) TMI 446
Revision u/s 263 - Deduction u/s 80P(2)(d) - assessee submits that the assessee earned interest from its investment in cooperative bank - HELD THAT:- Considering the legal position that when there are conflicting decisions of non-jurisdictional High Courts, on similar issue, the decision of Jurisdictional High Court is having binding precedent. Thus, keeping in view of the decision Hon'ble Jurisdictional High Court in Surat Vankar Sahakari Sangh Ltd. [ 2016 (7) TMI 1217 - GUJARAT HIGH COURT] wherein the assessee-co-operative society is held eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank, we conclude that the order passed by assessing officer is not erroneous. Hence, the grounds of appeal raised by assessee are allowed.
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2021 (5) TMI 445
Revision u/s 263 - Deduction u/s 80IB(10) - as per PCIT housing project in respect of which the assessee firm has claimed deduction u/s 80IB(10) was approved on 03.02.2009, whereas section 80IB(10) allows deduction of profits from such housing project which has to be approved before the 31st day of March 2008 by a local authority, therefore, the claim of deduction u/s 80IB(10) allowed by assessing officer was not found to be correct - HELD THAT:- From the order under section 143(3) of the Act, it is clear that during the original assessment proceedings, the issue relating to deduction under section 80-IB (10) has been discussed and adjudicated by the assessing officer, therefore, after expiry of two years, ld. PCIT should not have exercised his jurisdiction on the issue which has already been discussed and adjudicated in the original assessment proceedings. Thus, ld PCIT has violated the provisions of sub-section 2 of section 263 of the Act. We also note that the said issue, relating to deduction under section 80-IB (10), has already been adjudicated in favour of assessee in AY 2009-10 vide assessment order passed under section 143(3) of the Act dated 27.09.2011 for A.Y. 2009-10, wherein the issue has been discussed in assessment order. PCIT did not revise the order of assessing officer under section 263 of the Act for the assessment year 2009-10. Based on the principle of consistency the claim of the assessee is genuine. The Principle of consistency applies to an order under section 263 of the Act as well, as held in the case of H.P. Cotton Textile Mills Ltd, . [ 2007 (8) TMI 321 - PUNJAB AND HARYANA HIGH COURT] Assessing Officer has adopted one of the courses permissible in law and even if it has resulted in loss to the revenue, the said decision of the Assessing Officer cannot be treated as erroneous and prejudicial to the interest of the revenue as held by Hon ble Supreme Court in Malabar Industries Ltd. vs. CIT [ 2000 (2) TMI 10 - SUPREME COURT] . - Decided in favour of assessee.
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2021 (5) TMI 439
Addition u/s.69A of cash deposit in Bank Accounts - facilitator v/s owner of the money deposited in his bank accounts - HELD THAT:- As appreciated that the assessee had not deposited his own fund in the impugned bank accounts but he had deposited the amount received from his clients to facilitate payment of premiums to the insurance company. The insurance premium paid from the said bank accounts was not unaccounted receipt or income of the assessee but the said deposits were clearly identifiable amount attributable to the premium of his clients. The assessee had given detailed explanation of each deposits and provided sufficient details and evidences to suggest that the impugned deposits were not in the nature of income of the assessee. During the course of assessment proceedings, the assessee had clearly identified the premium amount of his respective clients and also submitted their premium receipts issued in the names of respective insurers (not the assessee) wherein the details of banks drafts were also mentioned which were issued from the impugned bank account. The evidences like insurance premium receipts of different persons along with corresponding deposited amount in the bank account clearly established the nexus of source of deposits and their subsequent outflow in form of insurance premium. When all the corroborative evidence were clearly suggestive of the fact that the assessee had simply acted as a facilitator to make payment on behalf of the policy holders and where each entries were traceable and identifiable the addition should not be made in the hands of assessee. This way, the assessee had fully discharged his onus of explaining the source of deposits in the bank account particularly with evidences, hence there was no reason for the assessing officer to make addition under section 69A. The assessee was never found to be the owner of the impugned deposits in the said bank accounts particularly in view of the fact that all the said deposits were immediately transferred to the insurance company by wav of insurance premium in the names of the respective insurers and hence there was no question of not recording such investment in the books of accounts of the assessee in as much as there was no investment of the assessee himself. It can be seen from the copies of premium receipts that the mode of payment i.e. demand draft numbers and bank details were mentioned in the premium receipts which showed that the premiums in the names of insurers were paid through the assessee's impugned bank accounts. Therefore, the assessee was only facilitator and was not the owner of the money deposited in his bank accounts. AO has failed to bring any evidence on record to demonstrate that evidences and documents submitted by the assessee, which are mentioned in para Nos.8 and 9 of this order, are false and untrue. Thus, it is quite clear that the learned assessing officer wrongly invoked the provisions of section 69A - Decided in favour of assessee.
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2021 (5) TMI 438
Condonation of delay in filing in appeal - non-filing of appeal due to error in the order - Rectification under section 154 - addition made by assessing officer under section 68 on account of unexplained share application money, which was not adjudicated by the ld.CIT(A) - HELD THAT:- We note that Assessing Officer has discussed the addition under section 68 in his assessment order and made addition under section 68. However, the Assessing Officer did not bring this said addition in the computation of total income and consequently did not create the demand. However, later on the Assessing Officer has rectified his assessment order under section 154. We note that order under section 154 of the Act is appealable order, however, the assessee did not file the appeal before the ld CIT(A) against the rectification order under section 154 of the Act. The assessee filed the appeal before the ld CIT(A) against the order passed by the assessing officer under section 143(3) CIT(A) has rightly pointed out that order passed under section 154 of the Act is a separate order for which assessee need to file appeal separately , but the assessee has failed to do so. The ld CIT(A) has also stated that assessee deserves full sympathetic consideration with regard to condonation of delay in filing appeal against order passed u/s 154 of the Act. . Taking into account the factual position narrated above and to meet the end of justice, we remit this issue back to the file of the Ld. CIT(A) for de novo adjudication. We direct the assessee to file an appeal before the Ld. CIT(A) against the order under section 154 dated 09.04.2014 within one month from the date of receipt of this order. Since, in this case there was mistake on the part of the Assessing Officer, as he did not bring the addition made by him in the computation of taxes and did not create the demand, and that is why, assessee s issue has not been adjudicated. The assessee should not suffer because of the mistake made by the Assessing Officer. Hence, assessee deserves that delay in filing appeal against the order under section 154 should be condoned. Therefore, we direct the Ld. CIT(A) to condone the entire delay in filing the appeal against the order under section 154 of the Act dated 09.04.2014 and adjudicate the appeal of the assessee on merits. Disallowance being 10% of various expenses - Non rejection of books of accounts - HELD THAT:- there is no material on record to show that any part of these expenses was incurred for non-business purposes. We note that assessee`s books of accounts are audited by Chartered Accountant. The reports of the auditors could be said to be material on which reliance could be placed by the Income Tax authorities. The Income Tax authorities not only to accept the auditors' report, but also to draw the proper inference from the same. Here in assessee`s case, the AO has not passed any order u/s 144 of the Act. The AO thus without rejecting the books of account of the assessee has gone for estimation on suspicion and conjectures that the assessee may be inflating its expenses. It may be pertinent to mention here that there was no material on record to show that any part of these expenditures were not for the purpose of business. Therefore, we delete the ad hoc addition Set off of unabsorbed depreciation loss and carried forward business loss of previous years from the assessed income of the assessee - HELD THAT:- Based on the material before us assessee is entitled to claim set-off of unabsorbed depreciation and carry forward of business loss.Therefore, we direct the assessing officer to examine the return of income of the assessee and the charts, and after due verification, allow the claim of assessee in accordance with law. Therefore, statistical purposes the ground Nos. 3 and 4 are treated to be allowed.
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2021 (5) TMI 437
Penalty u/s 271(1)(c) - assessee has furnished inaccurate particulars by not accounting the income earned from the execution of contract works and earned undisclosed income which is not disclosed to the department - HELD THAT:- As penalty has been imposed by the AO on the ground of non-disclosure of the contract works and addition made on estimated basis, on which penalty has been imposed by the AO for furnishing of inaccurate particulars of income during the year. Penalty cannot be levied on the estimate addition. We set aside the order of the CIT(A) and direct the AO to cancel the penalty levied u/s 271(1)(c) of the Act. - Decided in favour of assessee.
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2021 (5) TMI 436
Reopening of assessment u/s 147 - Disallowance of deduction under section 35(1)(ii) - HELD THAT:- We held that A.O. was having bona fide belief, when he received information from the Investigation Wing of the department that income has been escaped assessment and assessee has not declared true and correct material fact for the purpose of original assessment. CIT(A) has rightly dismissed this ground of appeal and same does not require any kind of interference at our end. Ground relating to reopening are dismissed. Disallowance of deduction u/s 35(1)(ii) - As assessee has claimed to have made donation to School of Human genetics Population Health (SHG PH). - Since at the time of donation, donee was having all the requisite approval and permission from the authorities in order to accept the donation as per law we allow appeal of the assessee.
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2021 (5) TMI 428
Penalty u/s 271(1)(c) - Validity of notice u/s 274 - whether there is concealment of income or furnishing of inaccurate particulars of income and as such the notice issued under section 274 ? - HELD THAT:- At the first instance, while replying to the penalty show-cause notice the assessee has not protested that the show-cause notice issued by the Department was not proper as there was no basis for issuance of the notice under section 271(1)(c) of the Act and both limbs in the said provision do not get attracted in assessee s case. Since the assessee has not been objected to the issuance of the show-cause notice that the same was not proper. Accordingly, the ground raised by the assessee stands dismissed. Disallowance of interest expenditure under section 43B as well as disallowance export product development expenses - In this case, when there was no revival of assessee s business while the business was closed down permanently, the question of enduring benefit does not arise. Whether the expenditure is in the form of capital or revenue in nature are always debatable issue. Therefore, though the assessee has claimed the capital expenditure as revenue expenditure that itself is not sufficient to levy penalty. The non-acceptance of the claim of the assessee cannot tantamount to furnishing of inaccurate particulars warranting levy of penalty as has been held by the Hon ble Supreme Court in the case of CIT v. Reliance Petroproducts Pvt. Ltd.. [ 2010 (3) TMI 80 - SUPREME COURT] The considerations for imposition of penalty under section 271(1)(c) of the Act are however entirely different. It requires existence of mens rea on the part of the assessee and either of the twin conditions of (i) concealment of income or (ii) filing of inaccurate particulars by the assessee, are required to be satisfied and the burden of proving that lies upon the revenue authority and not on the assessee. Merely because the claim of expenditure made by the assessee was found to be a wrong claim and is disallowed, it does not per se attract imposition of penalty under section 271(1)(c) of the Act. Just because the assessee has not preferred further appeal before the appellate authority against the quantum addition that itself cannot attract imposition of penalty. Under the above facts and circumstances, the penalty levied under section 271(1)(c) of the Act towards disallowance of interest expenditure under section 43B of the Act as well as disallowance export product development expenses stand deleted - Decided in favour of assessee.
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2021 (5) TMI 424
Addition on account of short term capital gain u/s 50C - sale of agricultural land by observing that the land sold by the appellant are capital assets within the meaning of section 2(14)(iii) of the Act and liable for capital gains - assessee claimed that the land in question was agricultural land under the provision of section 2(14)(iii) of Act being situated beyond 8 km from the limit of the Municipal Corporation - HELD THAT:- In the case on hand, the ld. CIT-A has given a very clear finding that the land in dispute was not used for the agricultural. The land was sold after the purchases within a short span of time. Thus a cumulative reading of the facts as discussed above, it is transpired that the assessee was not intending to use the land in dispute for the purpose of agricultural operations. Before parting, there is no information available on record whether the land in dispute was used for the agricultural operations prior to the date of purchase by the assessee viz a viz whether the land in dispute was to be used for agricultural operations in future by the buyer of the land from the assessee. To our understanding, the information for the prior and the future use of the land was necessary to arrive at the conclusion whether the land in dispute was an agricultural land within the meaning of the provisions of section 2(14). We are inclined to restore the issue to the file of the AO for fresh adjudication as per the provisions of law and in the light of the above stated discussion. Hence the ground of appeal of the assessee is allowed for the statistical purposes.
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2021 (5) TMI 423
Addition u/s. 36(1)(va) - delayed employees contribution towards EPF and ESIC - HELD THAT:- It is undisputed fact that assessee has paid employees contribution to PF and towards ESIC beyond the period prescribed in the specified act. Therefore following the decision of Gujarat State Road Transport Corporation [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] we do not find any infirmity in the decision of ld. CIT(A). Therefore, this ground of appeal of the assessee is dismissed. TDS u/s 194A - Disallowance of interest expenses u/s 40(a)(ia) - non deduction of TDS on payment of interest - HELD THAT:- The assessee has not furnished any material to controvert the aforesaid finding of the Assessing Officer for not making compliance with the provision of section 40(a)(ia). In addition to above, it is also noticed that counsel of the assessee has voluntarily agreed for the disallowance of interest expenditure since the assessee has failed to make compliance with the provision of section 40(a)(ia) of the Act. Keeping in view of the aforesaid undisputed facts and circumstances, we do not find any infirmity in the decision of ld. CIT(A). - Decided against assessee.
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2021 (5) TMI 422
Estimation of income - Bogus purchases - AO disallowed an amount being 12.5% of the alleged non genuine purchases - HELD THAT:- Considering the fact that the assessee is a trader in non ferrous metal on which the normal profit rate as per industry norms varies between 2% to 5%, the disallowance made at 12. 5% appears to be on a much higher side. Therefore, direct the assessing officer to restrict the disallowance to 5% of the non genuine purchases. Ground is partly allowed. AO is also directed to give due credit for the advance-tax paid by the assessee after verifying facts and materials on record and in accordance with law. - Decided partly in favour of assessee.
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2021 (5) TMI 421
Best judgement assessment u/s 144 - assessee not responded to notices issued under sections 143(2), 142(1)(b), 271(1)(b) - Addition u/s 68 - HELD THAT:- Since the assessee has not responded to notices issued under sections 143(2), 142(1)(b), 271(1)(b) of the Act and despite levying penalty due to non-compliances of the above notices, the Assessing Officer has rightly proceeded to conclude best judgement assessment under section 144 . During the course of appellate proceedings, the ld. CIT(A) posted the appeal for hearing on 19.06.2017, 19.07.2017, 20.09.2017 and final opportunity was given on 13.10.2017 to the assessee to submit all details such as when the advances were given, amount of fresh advance during the year, nature of advances, purpose of advances, details of payment, etc. However, the assessee has not furnished any of the above details called for. CIT(A) concluded the appellate order by confirming the additions made by the Assessing Officer. Since the ld. Counsel for the assessee has prayed for one more opportunity of being heard to the assessee, we direct the Assessing Officer to give one more final opportunity of being heard to the assessee for filing complete details - Appeal filed by the assessee is allowed for statistical purposes.
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Customs
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2021 (5) TMI 459
Confiscation - Smuggling - Gold Bars - rejection also on the ground of non-compliance of the provisions of Section 129-E of the Act - order passed under the Act by an officer of the Customs, lower in rank than the Principal Commissioner of Customs or Commissioner of Customs, to file appeal before the Commissioner (Appeals) - HELD THAT:- In the instant case, though the petitioner herein initially filed appeal on 17.08.2020, before the third respondent, it is clear from Form-CAI that the appellant undertook to pay the mandatory pre-deposit of 7.5% of the disputed amount but did not make any deposit to the said effect. Obviously, on the ground that the petitioner herein failed to comply with the above referred mandatory requirement of pre-deposit, the third respondent-appellate authority, by way of the order, dated 03.11.2020, rejected the appeal filed by the petitioner herein in limini on the sole ground of non-compliance of the provisions of Section 129-E of the Act. It is also not in controversy that once again on 03.12.2020, by complying with the said mandatory requirement, as stipulated under Section 129-E of the Act, petitioner herein preferred the appeal. The filing of appeal in the instant case would not be regarded as filing of appeals repeatedly since the earlier order came to be passed by the third respondent not on merits but only on the sole ground of failure on the part of the petitioner herein to comply with the mandatory requirement of law but not on merits. In the considered opinion of this Court, the said order, dated 03.11.2020, by any stretch of imagination, cannot be regarded as the order on merits but is only an order refusing to entertain the appeal. Therefore, the contention of the learned Senior Standing Counsel that the petitioner herein is required to be relegated to the alternative remedy of appeal to the CESTAT cannot be sustained and is, accordingly, rejected. The appeal filed by the petitioner herein on the file of the third respondent on 03.12.2020 stands restored to file for consideration of the same by the third respondent, strictly in accordance with law, on merits after giving opportunity of being heard to the petitioner before passing appropriate orders - Petition allowed.
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Corporate Laws
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2021 (5) TMI 430
Seeking to declare the actions of Respondents No. 2 to 5 have been in a manner oppressive to the Petitioners and prejudicial to the interests of the Petitioners - seeking to declare that resolutions passed by Respondents No. 2 to 5 for the period of March 2017 till April 2019 are void - HELD THAT:- The shares held by deceased parents cannot be claimed by either party. And the Parties herein can base their contentions only in respect of shares held by them. Unless the shares in dispute is settled, rights of Parties, as claimed in the instant Company Petition cannot be determined and the same is premature. Admittedly, transmission of shares in question belonging to parents of Petitioner was not effected so far by the Company. Admittedly, the Petitioners cannot question decisions taken during life time of Late Sri Basvapurnaiah and also during his holding position of Managing Director of R 1 Company. The first Petitioner himself claimed that he was at helm of Affairs of R1 Company for a period of 18 years. He has stated that he holds the position of MD of R 1 Company from 2009 and he was further appointed as such for a further period of five years from 2013. When the term of Petitioner No. 1 2 was going to expire in the year 2020 by rotation, they have not opted for re-appointment. Accordingly, the Petitioner No. 1 2 along with Respondent Nos. 2 3, who have not opted for re-appointment deemed to have retired. The first Petitioner, being MD of Company, is admittedly a party to various transactions, as alleged to be acts of oppression and mismanagement in the instant Petition. While alleging that the Respondents have fiduciary duties as Directors, towards affairs of R1 Company, the Petitioner should also understand that he too has such responsibility to other stakeholders of R 1 Company and also public which take service from the Company. Even they cannot take shelters contending that they can file the instant Petition as shareholders of R 1 Company. It is also relevant to point out here that Petitioner Nos. 1 2, when they are going to retire by rotation, they can appear before AGM and press their case for re-appointment. Anyway that issue is not subject matter of the instant case. Therefore, the Petitioner cannot file the Company Petition, and it is liable to be dismissed on these grounds alone without adverting to other contentions of the Petitioners. However, some of allegations made in the Petition are being dealt hereunder. Appointment of Independent Directors - HELD THAT:- The Allegations made by the Petitioners in respect of Independent Directors are vague and general and they are not tenable. Only allegation made in the Petition is that post 03-07-2018, the 2nd Respondent in order to oust the Petitioners from making decisions in the Board, choose to nominate three independent Directors i.e. 7th, 9th Respondent herein and one late Mr. Satyam Yallapalli. The alleged 'independent directors' are not persons, whose antecedents or accomplishments have been disclosed to the Board of the Company. On the other hand, the Respondents have satisfactorily convinced the Tribunal that they are eligible persons possessing requisite qualification and are not relative to them. Various impugned Board proceedings - HELD THAT:- Every act done by Respondents was done with the consent and authority provided by the Board. The Petitioner No. 1 who was appointed as MD by Board in 2009 and again in 2013 for 5 years has been signing and authenticating every financial transaction and annual balance sheets from 2013 till year end 31.03.2019. Registration of land pertaining to property - HELD THAT:- The Board in its meeting held on 11th June, 2010, has duly authorised Dr. P.R. Mohana Rao, President CEO/Authorised signatory of Company to deal with the Property. And the allegations in this regard are unfounded and baseless. Issue of equal representation for petitioners and Respondents group - HELD THAT:- Admittedly, even Wills in question are in dispute before the Hon'ble High Court of Karnataka and thus transmission of shares in question are not effected to determine shareholding of Parties. In such a scenario, question of equal representation do not arise now and it is premature. The Petitioners made general allegations on the affairs of Company rather than to establish prima facie case with to acts of oppression and Mismanagement. The Tribunal cannot enter into roving enquiry of mere allegations and Tribunal cannot find fault with and interfere with decisions taken by the Board in normal course of its business, unless serious illegality taken place. The Petitioners have failed make out any case to interfere in the matter - Petition dismissed.
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Insolvency & Bankruptcy
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2021 (5) TMI 444
Approval of Resolution Plan - provision for the payment of Provident Fund dues not made - failure to consider and appreciate the legislative intent behind the exclusion of Provident Fund dues from the Liquidation Estate of the Corporate Debtor - HELD THAT:- Before coming into force of the Insolvency and Bankruptcy Code 2016 while sanctioning a scheme for rehabilitation of a sick company under Section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 Central Board constituted under the EPF Act was authorised under Section 14B of the Act to reduce or waive off the damages levied about an establishment which is a sick industrial company. In the instant case, the Appellant, despite filing a claim of ₹ 1,95,01,301/- has raised a claim of ₹ 2,84,69,797/-,i.e. much higher than the amount claimed by the Appellant in its claim before the Resolution Professional. The Appellant's claim admitted by Respondent No. 1/RP had been considered while formulating the Resolution Plan of the Corporate Debtor. The said Resolution Plan was further approved by the Adjudicating Authority/NCLT vide its Order dated July 20 2020, in conformity with Section 30 (2) of the I B Code,2016 and the Rules and Regulations framed thereunder. The Appellant has not provided any reason or justification for raising the enhanced claim of ₹ 2,84,69,797/-, which is much higher than the amount claimed. After approval of the Resolution Plan under Section 31, the claims as provided in the Resolution Plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors including the Central Government, any State Government or any Local Authority, Guarantors and other Stakeholders. On the approval of the Resolution Plan by the Adjudicating Authority, all such claims that are not a part of the Resolution Plan shall stand extinguished. No person will be entitled to initiate continuing any proceedings regarding a claim that is not part of the Resolution Plan. The Appellants claim about Provident Fund dues amounting to ₹ 1,95,01,301/-, which was earlier raised at the time of initiation of CIRP and was later admitted, stood frozen and will be binding on all the Stakeholders, including the Central Government. After approval of the Resolution Plan by the Adjudicating Authority, all such claims that are not part of the Resolution Plan shall stand extinguished. No person is entitled to initiate or continue any proceeding regarding a claim that is not part of the Resolution Plan. Appeal dismissed.
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2021 (5) TMI 443
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - scope of IBC - HELD THAT:- The clear cut stand of the 1st Respondent/Bank is that the Corporate Debtor (as agreed) had failed in its repayment of the balance amount, inspite of repeated reminders given by the Bank/ Financial Creditor , in respect of the loan facilities availed by it - It is brought to the fore that the 1st Respondent/Bank/ Financial Creditor had issued a notice to the Corporate Debtor on 02.06.2016, as per Section 13(2) of the SARFAESI Act and that the Corporate Debtor had not paid the debt sum, despite the lapse of 60 days time given to it. The stand of the Appellant is repelled by the 1st Respondent/Bank that the total amount of debt granted on 17.06.2011 was ₹ 90 Crores and on 30.03.2015 was ₹ 18.67 Crores and that the amount claimed to be in default was ₹ 78,74,73,945/- as on 31.03.2016 against the Term Loan-1 and ₹ 4,15,03,499.06 as on 31.03.2016 against the Term Loan-2 , totalling in all, a sum of ₹ 82,89,77,444/- and the total memorandum dues as on 30.06.2019 was ₹ 144,02,51,063.09. Further, the guarantor(s) on 20.02.2018 had executed Balance and Security Confirmation Letters for ₹ 78,74,73,945/- in respect of the account of Saptarishi Hotels Pvt. Ltd. (Corporate Debtor) in respect of the Term Loan Facility , which clearly point out that there was an Acknowledgement of Debt , in terms of Section 18 and 19 of the Limitation Act, 1963. Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Section 3(11) of the I B Code, defines debt meaning a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. Section 3(12) of the code, defines default meaning non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the corporate debtor, as the case may be. Limitation Act, 1963 - HELD THAT:- The Application filed by the 1st Respondent/ Financial Creditor (Punjab National Bank) in July 2019 (vide intimation given by the 1st Respondent/Bank/Financial Creditor s Advocate through communication dated 18.07.2019 addressed to the Saptarishi Hotels Pvt. Ltd.[Corporate Debtor]) is perfectly maintainable in Law, of course, well within the period of Limitation. As such, the Contra Plea taken on behalf of the Appellant that the Application filed by the 1st Respondent/ Financial Creditor (Punjab National Bank) (under Section 7 of the I B Code) is barred by limitation is legally untenable and is rejected. In the present case, the 1st Respondent/Bank ( Financial Creditor ) has proved the existence of Debt and Default (vide documents) filed along with the Application under Section 7 of the Code against the Corporate Debtor and that the conclusion arrived at in admitting the Application by the Adjudicating Authority is free from legal infirmities, as opined by this Tribunal . Appeal dismissed without costs.
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2021 (5) TMI 435
Seeking approval of Tribunal for dissolution of the company - HELD THAT:- The requirement of the provisions of Section 59, read with the relevant rules, have been satisfied by the Liquidator. Since there is no liability on the Company and no fraud has been found against it, either by the Auditors in their report or by the Liquidator, particularly, in the absence of any response from the Registrar of Companies, West Bengal and the Official Liquidator, the dissolution of the Company is ordered. The company stands dissolved - application allowed.
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2021 (5) TMI 434
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- On perusal of the record it is also found that the instant petition filed by the applicant is well within limitation and there is no preexisting dispute regarding the operational debt from the side of the corporate debtor - In the instant application, from the material placed on record by the Applicant, this Authority is satisfied that the application is complete in all respect and the Corporate Debtor committed default in paying the operational debt due and payable to the Applicant - The documents produced by the operational creditor clearly establish the 'debt' and there is default on the part of the Corporate Debtor in payment of the 'operational debt'. This adjudicating authority is of the considered view that operational debt is due to the Applicant and it fulfilled the requirement of I B Code. No dispute has been raised by the respondent at any point of time. That, Applicant is an Operational Creditor within the meaning of Section 5 sub-section 20 of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default and the amount claimed by operational creditor is payable in law by the corporate debtor as the same is not barred by any law of limitation and/or any other law for the time being in force. Thus, the corporate debtor has committed default in payment of operational debt and, therefore, it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - petition admitted - moratorium declared.
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2021 (5) TMI 433
Liquidation of company - Treatment of claims of the Applicants submitted during the Corporate Insolvency Resolution Process confirmed by the Hon'ble National Company Law Tribunal - Claims by workmen and employees - direction to ensure that the Applicants herein are considered a part of the Scheme of the Corporate Debtor under Section 230 of the Companies Act, 2013 - HELD THAT:- The claim in respect of workmen and employees alone are required to be admitted by the Liquidator based on the books of accounts of the Corporate Debtor, eventhough the Workmen and Employees have not preferred a claim before the Liquidator as per Regulation 19(4) of the IBBI (Liquidation Process) Regulations, 2016 and no such relaxation is granted/available to the Operational Creditor like the Applicants herein or for that matter for any other class of creditors. Thus filing of the claim with the Liquidator during the Liquidation process within the time period stipulated thereunder is a mandatory requirement under the IBC, 2016 and also it must be noted here that the mere entry of debt in the books of accounts of the Corporate Debtor is also not evidential enough for the claims to be admitted and considered by the Liquidator. It must be borne in mind that the IBC treats the CIRP and Liquidation process as two separate stages and the proof of claim is to be filed separately at each stage and hence the submissions of the Learned Counsel for the Applicant that claims filed during CIRP should be treated as the Claim filed during the Liquidation process would render the CIRP and Liquidation Process as envisaged under the provisions of IBC, 2016 as nugatory. Under Regulation 44(1) of the IBBI (Liquidation Process) Regulations, 2016, the Liquidator is directed to liquidate the Corporate Debtor within one year from the date of commencement of the liquidation proceedings and Regulation 44(2) stipulates that, after the expiry of one year, the liquidator shall file an application to the Authority to continue the liquidation period along with a report and explain why the liquidation has not been completed - Thus, it can be seen that the Liquidation is a time bound process and the Liquidator is being made accountable and required to explain, if there is any delay caused in the liquidation process. In view of the IBC, 2016 being a time bound process as well as the Learned Liquidator being under a compulsion to complete the liquidation process within a period of one year from the date of commencement of liquidation, the application stands dismissed
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2021 (5) TMI 432
Approval of Resolution Plan - whether additional litigation cost is required to be met out of amounts due and payable to the related party financial creditors? - HELD THAT:- All the parties are bound by the terms of the said resolution plan, which has been approved by this Tribunal on and from the date of the Order approving the resolution plan, which also includes the CoC as well as the 1st Respondent and the Resolution Applicant - there are no force in the contention of the 1st Respondent that the CoC has passed a resolution in its 9th CoC Meeting dated 24.06.2019 that additional litigation cost is required to be met out of amounts due and payable to the related party financial creditors like the Applicant herein and that the said expenses are required to be defrayed by the said related party financial creditors out of the amounts due to them. If that were so, the same should have been included in the resolution plan itself, which was placed before the Adjudicating Authority for its approval. There cannot be any open end in relation to the resolution plan and its implementation as sought to be portrayed by the 1st Respondent erstwhile Resolution Professional. If the CoC and RP had not factored the cost in relation to additional litigation and provided for it and having failed to include the same as it should have been included in the resolution plan, the said additional expenditure at a later stage (i.e.,) after approval of the Resolution Plan cannot be mulcted on the related party financial creditors - the 1st Respondent also fairly concedes the additional litigation expenses had not been provided in the Resolution Plan. The amount which is payable to the Applicant is required to be paid out of the total resolution plan amount provided for the stakeholders in a sum of ₹ 28,55,06,654/- by the 1st Respondent without any demur within a period of 90 days from the date of this Order - Application allowed.
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2021 (5) TMI 431
Liquidation of Corporate Debtor - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Since there were no Prospective Investors, in the 6th CoC meeting held on 22.01.2020, the CoC unanimously passed a resolution to seek an order for liquidation of the Corporate Debtor - Thereafter, in the 7th CoC meeting held on 17.03.2020, it was also discussed that it is the essence that the Corporate Debtor cannot be sold as a going concern, since there is no activity in the company. It is ordered that the Corporate Debtor herein shall be liquidated - Application allowed.
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2021 (5) TMI 429
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute, prior to sending to demand notice, or not - HELD THAT:- The Corporate Debtor has not refuted the fact that the Operational Creditor has supplied materials as contended in the petition and he has also confirmed the statement of accounts vide e-mail dated 13.03.2018, he has never raised any issues on the quality of the material supplied by the petitioner. However he has replied to the notice sent under Section 8 of IBC 2016 in which he has raised a counter claim over and above the amount claimed by the Operational Creditor. He has not provided any documentary evidence to prove that he has raised a dispute prior to the issue of Section 8 notice by the petitioner. Prima facie the contentions made by the Operational Creditor in the rejoinder appear to be correct as he has provided adequate documentary evidence to prove his allegations. Application admitted - moratorium declared.
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2021 (5) TMI 427
Liquidation of the Corporate Debtor - no Resolution Plan received by Resolution Professional in spite of publication of Form G twice - HELD THAT:- This is a case where no Resolution Plan has been received in spite of publication of Form G twice and there is no Resolution Plan for consideration of the CoC. The extended period of CIRP has expired on 25/02/2021. Therefore, there is no alternative but to order the liquidation of the Corporate Debtor. The application is allowed and the Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with sub-section (1) thereof.
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2021 (5) TMI 426
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Corporate Debtor (CD) is corporate guarantor of two principal borrowers - Financial Creditors - existence of debt and dispute or not - HELD THAT:- If it is established that default has occurred and no disciplinary proceeding is pending against the IRP and application is complete, the Adjudicating Authority (AA) has no option but to admit the application; if any of the conditions is lacking, the application is liable to be rejected. The applicant falls within the definition of Financial Creditor. The material placed on record further confirms that FC had disbursed loan facilities to the principal borrowers in respect of which guarantees were issued by the CD. The principal borrowers had committed default in repayment of the outstanding financial debt. The FC has placed on record the guarantee agreement (tripartite agreement) executed by CD in favour of FC. The present application is complete in all respects and the FC is entitled to claim outstanding financial debts from the CD and that there has been default in payment of the financial debt - Petition admitted - moratorium declared.
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2021 (5) TMI 425
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Existence of debt and dispute or not - HELD THAT:- The insolvency resolution process has serious civil consequences on the welfare of the company including its members and employees. Admittedly the Applicants are erstwhile directors/shareholders of the aforesaid company which has ceased to exist w.e.f 08.08.2018 and the said company has not been revived and no steps have been taken by the Applicants for restoration of the name of the company. Burden of proof clearly lies on the applicant regarding maintainability of the present application. The applicants however could not prove with documentary evidence as to how they are entitled to file present application as operational creditors of the corporate debtor when they have not supplied any goods or provide any service to corporate debtor in their personal capacity. It is seen that the company is not in existence. Section 250 of the Company Act, 2013 provides for the realization of the amount but this is not a recovery proceeding therefore the provision of the section 250 is not applicable on the application filed under Section 9 of the Code. The applicants are not the creditors of the corporate debtor and therefore they are not entitled to file the present application. That apart the claim has been disputed by respondent even before filing of present application. Petition dismissed.
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Service Tax
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2021 (5) TMI 462
Defaulter under the SVLDRS scheme or not - failure to pay the amount mentioned in SVLDRS-3 in time - Seeking adjustment of refund under Income Tax with amount payable under SVLDRS - modification of garnishee notice based on Form No.SVLDRS-3 issued by 2nd respondent - seeking restraint on respondent nos.1 and 2 from taking any coercive or punitive actions against petitioner-Company s officials and directors - HELD THAT:- The 3rd respondent is a creature of the Income Tax Act, 1961 and is obliged to discharge his functions strictly in accordance with the provisions of the Income Tax Act, 1961; and he is not entitled to act in violation of the said provisions of the said Act by allowing a set off of Income tax refund due to the petitioner against Service tax dues of the petitioner under the Finance Act, 1994 - Merely because the Principal Chief Commissioner of Income Tax, Hyderabad vide letter dt.20.11.2020 accorded approval for adjusting income tax refund against dues to the Service Tax Department, the action of the 3rd respondent, which is per se illegal and in violation of Section 245 of the Income Tax Act, 1961, does not get validated. It would be a travesty of justice to allow the plan of respondent No.s 1 to 3 to somehow or other ensure that petitioner gets the tag of a defaulter in payment of Service Tax dues, to succeed. The petitioner shall be deemed to have made payment of ₹ 18,91,37,548/- determined under Form No.SVLDRS-3 dt.28.01.2020 before 30.06.2020; the respondents are restrained from declaring that the petitioner had committed a default under the SVLDRS Scheme 2019 and also restrained from taking any coercive action against the Directors, officials of the petitioner or against the petitioner; the respondents 1 and 2 are directed to release to the petitioner the amount of ₹ 12,01,23,118/- out of the Income Tax refund amount of ₹ 30,92,60,666/- payable to it within four (4) weeks; the 3rd respondent shall pay petitioner interest on the sum of ₹ 30,92,60,666/- from 21.5.2020 ( the date of expiry of the 3 month period as per Section 243 (1) (b) of the Income Tax Act,1961) till 24.11.2020 at 15% per annum within four (4) weeks; the respondents 1 and 2 shall also pay petitioner interest at 15% per annum on ₹ 12,01,23,118 ₹ 30,92,60,666/- less ₹ 18,91,37,548/- = ₹ 12,01,23,118/- from 25.11.2020 till date of payment within four (4) weeks; costs of ₹ 10,000/- shall also be paid by respondent no.1 and respondent no.3 to the petitioner within four (4) weeks.
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2021 (5) TMI 440
Levy of service tax on freight charges - GTA Services - Goods Transport Agency or not - Appellant being manufacturer - No consignment note was issued by any of the transporters - consignment notes as per Rule 4B of the Rules - HELD THAT:- In the premises, as per legal principles decided by different Benches of the Tribunal, delivery of the goods by the transporters in the instant case does not fall under GTA services in terms of Section 65(105)(zzp) of the Act. Consequently, the said transporters cannot be said to be Goods Transport Agency within the meaning of Section 65(50b) of the Act. As per legal principles decided by different Benches of the Tribunal, delivery of the goods by the transporters in the instant case does not fall under GTA services in terms of Section 65(105)(zzp) of the Act. Consequently, the said transporters cannot be said to be Goods Transport Agency within the meaning of Section 65(50b) of the Act. - Reliance can be placed in the case of M/S. EAST INDIA MINERALS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, BHUNANESWAR-II [ 2020 (3) TMI 851 - CESTAT KOLKATA] . The impugned order of the lower appellate authority is unsustainable - Appeal allowed - decided in favor of appellant.
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Central Excise
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2021 (5) TMI 458
Recovery of CENVAT Credit - outward transportation of final goods from the factory of the appellant to the customer s premises - Whether the Appellate Tribunal is justified in not considering the Circular bearing No.1065/4/2018-CD, dated 08.6.2018? - HELD THAT:- The aspect of non-consideration of the impact of the Circular, dated 08.6.2018, is fatal to the order passed by the Appellate Tribunal. In the considered opinion of this Court, the matter requires reconsideration by the Appellate Tribunal after taking into account, the impact and effect of Circular bearing No.1065/4/2018-CD, dated 08.06.2018, having regard to the contents of the paragraphs Nos.3 and 4 of the said circular as indicated in the preceding paragraphs. Appeal allowed by way of remand.
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2021 (5) TMI 442
CENVAT Credit - Inputs or not - by-product - wash oil, sulphuric acid, caustic soda, alum, hydrochloric acid, ion exchanger - generation of ammonium sulphate and CO gas - cenvat credit on common inputs which were used in or in relation to, either directly or indirectly in the manufacture and clearance of dutiable final products as well as exempted final products - ammonium sulphate and CO gas - Rule 6(3)(ii) of the Cenvat Credit Rules. Whether wash oil, sulphuric acid, caustic soda, alum, hydrochloric acid, ion exchanger are inputs in or in relation to generation of ammonium sulphate and CO gas? - HELD THAT:- In the case of AARTI DRUGS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III [ 2001 (4) TMI 146 - CEGAT, MUMBAI] which was affirmed by the Hon ble Bombay High Court in COMMISSIONER VERSUS AARTI DRUGS LTD. [ 2009 (2) TMI 800 - BOMBAY HIGH COURT] and further affirmed by the Hon ble Supreme Court in COMMISSIONER VERSUS AARTI DRUGS LTD. [ 2015 (10) TMI 554 - SC ORDER] , a Division Bench of the Tribunal has held that ammonium sulphate obtained from mother liquor is a by-product and the provisions of Rule 57CC(1) of the erstwhile Central Excise Rules, 1944, equivalent to Rules 6(2) and 6(3) of the Cenvat Credit Rules, 2004, is inapplicable and cenvat credit of inputs contained in such by-product was permissible. The facts and the issues contained the decisions of the Apex Court and the Tribunal are, on perusal of the impugned orders, the adjudication orders and the documents on record of the present proceedings are found to be the same and hence the said decisions are fully applicable to the instant cases - credit allowed. Whether demand in terms of Rule 6(3)(i) of the Cenvat Credit Rules is appropriate as the appellant availed cenvat credit on common inputs which were used in or in relation to, either directly or indirectly in the manufacture and clearance of dutiable final products as well as exempted final products, namely ammonium sulphate and CO gas, where the appellant had exercised option to follow Rule 6(3)(ii) of the Cenvat Credit Rules in terms of Rule 6(3A) and whether non-acceptance thereof by the Department was correct? - HELD THAT:- There is no dispute nor denial in either the show cause notices or in the adjudication orders that the appellant had exercised option in terms of Rule 6(3)(ii) of the Cenvat Credit Rules. Once this fact, established from the materials on record, is not disputed, there can be no demand in terms of Rule 6(3)(i) of the Cenvat Credit Rules - The finding that the appellant was required to pay much higher amount in terms of Rule 6(3) of the Cenvat Credit Rules other than that actual reversed is also without any merit. On plain reading of Rules 6(3) and (3A) it is seen that nowhere it is mentioned that an assessee should pay any amount higher than that of the actual amount calculated under the procedure prescribed under Rule 6(3A) of the Cenvat Credit Rules. The finding that the reversal of credit attributable to the inputs used in the manufacture of exempted products was insufficient in accordance to the demanded amount as calculated in the show cause notices is misconceived. The relevant provisions and procedure nowhere requires that an assessee should pay an amount higher than that of the actual amount calculated under the procedure prescribed under Rule 6(3A) of the Cenvat Credit Rules. Appeal allowed - decided in favor of appellant.
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2021 (5) TMI 441
CENVAT Credit - common inputs and input services attributable to exempted goods and goods having nil rate of duty - HELD THAT:- The issue involved in the present case is no longer res integra. The Hon ble Telengana High Court, in M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [ 2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT] , has held that in the event the assessee is found to have availed Cenvat credit wrongly, Rule 14 of the Cenvat Credit Rules empowers the Authority to recover such credit which had been taken or utilized wrongly, along with interest and that the statutory scheme does not vest the Revenue authorities with the power of choice under, inter alia, Rule 6(3)(i) of the Cenvat Credit Rules. This decision has been followed by the Division Bench of this Tribunal in the case of M/S TATA STEEL LTD. VERSUS CCEX. S. TAX, JAMSHEDPUR [ 2020 (7) TMI 698 - CESTAT KOLKATA] . It has been held therein that the demand confirmed under Rule 6(3)(i) of the Cenvat Credit Rules by the Adjudicating Authority/Commissioner (Appeals) by choosing such option in the show cause notice cannot be sustained. In the instant case also it is an undisputed fact that the appellant had reversed the entire amount of Cenvat credit as required under Rule 6(3)(ii) read with Rule 6(3A)(c) of the Cenvat Credit Rules - appeal allowed - decided in favor of appellant.
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Indian Laws
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2021 (5) TMI 463
Dishonor of Cheque - acquittal of the accused - cheques issued towards discharge of legally enforceable debt or not? - Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT:- The amount spent by the complainant was not shown in his income tax returns. As such, the trial Court had rightly held that it creates a doubt regarding the financial position of the appellant and if he really spent that much amount, there must be record for him for withdrawal of amount from his bank account and spending the same. After receiving the notice, dated 27.10.2016, the complainant had filled up the cheques and presented the same on 01.11.2016. Therefore, the trial Court has rightly held that the accused was successful to rebut the presumption available to her under Section 139 of Negotiable Instruments Act and concluded that the evidence placed on record by the complainant is not sufficient to prove the case against the accused beyond all reasonable doubt and accordingly acquitted her. The trial Court was perfectly justified in acquitting the 1st respondent/accused and the citations relied upon by the learned Counsel for the complainant are not applicable to the facts of the present case - Appeal dismissed.
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2021 (5) TMI 457
Dishonor of Cheque - It is the specific case of the accused before the trial Court that PW.2 is not having authorization to represent the petitioner s firm and to give evidence on its behalf - section 138 of NI Act - HELD THAT:- The petitioner did not file the authorization letter given by it in favour of PW.2 and also the deed of partnership. The authorization given in favour of PW.2 was dated 10.04.2002 itself. The deed of partnership is dated 01.04.2002. Despite giving opportunity by the Court below by allowing the applications filed on 27.01.2020, the petitioner did not file the said documents. It is the specific case of respondent Nos.1 and 2 that the petitioner herein invented the said documents only in the year 2020 in order to fill up lacunae. The impugned order is well-reasoned and well-founded and it does not warrant interference by this Court. Thus, the petitioner failed to make out any ground warranting interference by this Court and, therefore, the present criminal petitions are liable to be dismissed. Petition dismissed.
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2021 (5) TMI 455
Dishonor of Cheque - It is claimed by the accused before the Trial Magistrate that on presentation of the cheque by the complainant after having been intimated/requested not to do so does not constitute an offence under Section 138 of the Act - HELD THAT:- The accused runs a SSI unit under the name and style of M/S Indian Pack Industries, at Industrial Complex Rangreth, Srinagar. The unit aforesaid went into losses and, therefore, same was declared sick in the year 1996. Since the unit of the petitioner/accused was covered by the policy of rehabilitation framed by the then Government, the rehabilitation cost of the project of the petitioner was worked out by the complainant to the tune of ₹ 98.16/ lacs, out of which 30% of the amount was released and disbursed by the complainant. As a security for the aforesaid amount, the accused claims to have deposited few undated blank cheques. As, it appears, the accused defaulted and, accordingly, cheque bearing No.219443 dated 4th of September, 2007, for an amount of ₹ 1,22,646/ was put for encashment by the complainant so as to realize first instalment of the amount advance by way of soft loan. The cheque was dishonoured by the banker of the accused for the reason that it exceeded the arrangement. The plea of Mr. Hanan that since the accused had intimated to the complainant in advance for cancellation of the cheques issued by him, the subsequent presentation of the said cheques in the bank and their dishonour would not constitute an offence under Section 138 of the Act, is found to be grossly misconceived. Petition dismissed.
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2021 (5) TMI 451
Dishonor of cheque - the complaints filed under Section 200 Cr.P.C. through Power of Attorney holder maintainable or not - HELD THAT:- A perusal of the Power of Attorney would reveal that there is a specific mention that Power of Attorney will act on behalf of principal to do or to execute all or any of the acts or things which are mentioned therein including filing of the complaint, engaging lawyers etc. It is mentioned in the Power of Attorney, that the acts done by Attorney holder shall be deemed to have been done by the principal himself, his heirs, executors, administrators and legal representatives and ratified to that effect. There is a mention that the Power of Attorney holder is having knowledge and belief with regard to the transaction of facts and he has verified the contents of the complaints to the said effect. However, it is a question of fact which has to be elicited during the full fledged trial. The petitioners will be given an opportunity of cross-examination to prove the said fact that whether the Power of Attorney holder is having knowledge of facts of the present case or not. They can take advantage of the same and get acquitted. Instead of availing the same, the petitioners herein have filed the present complaints seeking to quash the CCs itself. Admittedly, the complaints are of the year, 2018 and the offence is under Section 138 of the Act. It is a summary trial procedure. The petitioners can proceed with the trial and prove that the cheques were not issued towards legally enforceable debt and that the 2nd respondent obtained the said cheques in dispute under threat and coercion. Instead of doing so, the petitioners filed the present petitions - thus, there are several factual aspects which are to be elicited during full fledged trial. The petitioners failed to establish any ground warranting interference of this Court in exercise of its power under Section 482 Cr.P.C. - Petition dismissed.
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