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TMI Tax Updates - e-Newsletter
May 22, 2020
Case Laws in this Newsletter:
GST
Income Tax
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Exemption from income-tax - compensation received in respect of award or agreement which has been exempted from levy of income-tax vide section 96 of the RFCTLARR Act shall also not be taxable under the provisions of income-tax Act, 1961 even if there is no specific provision of exemption for such compensation in the Income-tax Act, 1961
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Reopening of assessment u/s 147 - reason to believe - there was tangible material before the AO to reopen the concluded assessment as the assessee is claiming huge exemption of income by making incomplete, untrue and wrong claim before the AO and scrutiny assessment having not been made earlier by Revenue by invoking provisions of Section 143(3) read with Section 143(2) while originally processing return of income, and reopening of the concluded assessment u/s 147 is sought to be done within four years from the end of assessment, the Revenue is within its right to reopen the concluded assessment u/s 147
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There is no provision u/s.142(1) that assessee is required to sign the document thrust upon him when the assessee himself has denied the content of the document and denied having maintaining such bank account. Penalty u/s. 271(1)(b) is leviable only when there is failure on the part of the assessee to comply with the notice issued u/s.142(1).
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TDS u/s 195 - Payments made to Steria France for purchase of computer software licenses for the reason of failure to deduct tax at source - ax was not required to be deducted at source.
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Penalty u/s 271D - violation of provisions of section 269SS - The nature of amount so received is the cash advance against supply of goods and not loan/deposit or specified sum in relation to transfer of an immoveable property and the same cannot therefore be subject to the rigour of the provisions of section 269SS
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No doubt the discretion to levy the penalty or to drop the penalty proceedings is entirely the discretion of the appropriate authority who is authorized under the statute, however, where in case of same bank, different approach is adopted by the same authority in exercise of its powers so bestowed by the statutory, the same reflect arbitrariness in absence of any distinguishing facts and circumstances so highlighted and any such arbitrary levy of penalty reflects non-application of mind by such authority and penalty so levied is liable to be deleted.
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Penalty imposed u/s 271C - non-deduction of TDS on submission of Form No. 15G/15H - where the assessee bank has relied on the declaration so furnished by the customer, there is no malafide which is reflected in the action of the assessee bank in not deducting the TDS and the assessee bank cannot be fastened with the penalty u/s 271C.
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Difference between the provisions of the TDS and TCS - where the specific amendment has been brought in by the legislature accepting the ratio so laid down by the Hon'ble Supreme Court, we see no infirmity in the findings of the Id CIT(A) where he has held that the ratio so laid down continues to apply in context of collection of taxes at source.
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Reopening of assessment u/s 147 - In the reasons for reopening, AO has not nowhere indicated that the business loss suffered by the assessee can be treated speculation loss and only in the revised assessment order, AO came to the conclusion that this loss can only be speculation loss. - the re-assessment order is only a change of opinion.
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Extension of the stay of demand - pandemic Covid-19 situation and worldwide lockdown - limited working of courts - the stay already granted by the Tribunal vide order dated 8th November, 2020 stood extended till 15th June, 2020 by virtue of the order of the Hon'ble Delhi High Court
Corporate Law
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Admiralty Act - action in rem - no leave is required under Section 446 of the Companies Act, 1956 for the commencement or continuation of an Admiralty Suit in rem where a winding up order has been made or the Official Liquidator has been appointed as Provisional Liquidator of the company.
Indian Laws
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Dishonor of Cheque - The revisional court is not meant to act as an appellate court. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the High Court shall not interfere with such finding or decision in exercise of its revisional jurisdiction
Service Tax
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Refund of the CENVAT Credit - time limitation - in case of export of services, the relevant date must be the date of realisation of foreign exchange. We find that CBEC has also subsequently come to the same conclusion and issued Notification No. 14/2016-CE(NT), dated 01.03.2016, removing the lacuna in the initial Notification No. 25/2012-CE, dt. 18.06.2012 and bringing it in harmony with the decisions of the Tribunal.
Central Excise
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Supply of bus chassis to Delhi Metro Railway Corporation (DMRC) - The final order stands modified and the matter is remanded to the original adjudicating authority for re-quantification of duty liability considering the exemption now available to the appellant as per exemption Notification No. 06/2006 CE
Case Laws:
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GST
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2020 (5) TMI 467
Constitutional validity of Section 96(2) of the Rajasthan Goods and Service Tax Act, 2017 and Section 96 of the Central Goods and Service Tax Act, 2017 - petitioner has placed reliance on an order dated 03.05.2019 passed by this Court in the case of CHAMBAL FERTILISERS AND CHEMICALS LIMITED VERSUS UNION OF INDIA [ 2019 (7) TMI 943 - RAJASTHAN HIGH COURT] wherein similar challenge has been raised and while issuing notice by this Court, it is directed that no coercive steps shall be taken against the petitioner - HELD THAT:- The record of the Chambal Fertilisers and Chemicals Limited be called for and tagged to this brief. Issue notice to respondent No.2, returnable on 08.06.2020 - List the matter on 08.06.2020.
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2020 (5) TMI 466
Recovery proceedings - Validity of assessment order - present writ petitions filed challenging the impugned demand issued on 10.03.2020 and 13.03.2020, while the writ petitions filed by the very same petitioner challenging the assessment orders, are yet to be heard by this Court - HELD THAT:- Considering the fact that these writ petitions are filed only against the consequential demand notices and considering the apprehension of the petitioner that the respondent will indulge in recovering the dues as per the demand notices immediately, this Court is of the view that the very apprehension of the petitioner is not well founded in view of the statement made by the learned Government Advocate by placing reliance on the above Notification No.35 of 2020 dated 03.04.2020. Petition disposed off.
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Income Tax
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2020 (5) TMI 465
Exemption from income-tax under the RFCTLARR Act [Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013] - compensation received for compulsory acquisition of agricultural land and non-agricultural land - compensation received in respect of award or agreement which has been exempted from levy of income-tax vide section 96 of the RFCTLARR Act - HELD THAT:- There is force and merit in the submissions. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 came into force with effect from 01.01.2014. It is a matter of record that the parties to the lis; viz., the petitioner and the acquisition authority, for the purpose of coming out the way development had in unison agreed to acquire and give the land on the basis of certain conditions in fixing the market value. Petitioner, in lieu, thereof received 80% of the amount, i.e., ₹ 43,51,786/-. I would not be commenting on the claim of the petitioner with regard to the balance amount, as the matter is subjudice in this Court. The language of Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, do not leave any doubt in the mind that if the land is either acquired or the result of an agreement, it could not fall within the mischief of Income Tax Act, in other words, exemption is liable to be granted. Central Board of Direct Tax vide the Circular No.36/2016 dated 25.08.2016 came out with a clarification that compensation received in respect of award or agreement which has been exempted from levy of income-tax vide section 96 of the RFCTLARR Act shall also not be taxable under the provisions of income-tax Act, 1961 even if there is no specific provision of exemption for such compensation in the Income-tax Act, 1961 - Thus assessment and demand notice cannot sustain and are hereby quashed. Decided in favour of assessee.
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2020 (5) TMI 464
Reopening of assessment u/s 147 - reason to believe - LTCG - non-compete fee which is a capital receipt and is exempt from tax - recomputation of Long Term Capital Gains arising or accruing as a result of sale of shares in so far as the exclusion of the garnishee payment from the cost of acquisition/cost of improvement/expenses incurred in relation to transfer - HELD THAT:- Revenue has rightly invoked provisions of Section 147 and we uphold reopening of the concluded assessment within four years from the end of the assessment as was made by Revenue in the instant case and more-so even scrutiny assessment was not framed by Revenue initially u/s 143(3) of the 1961 Act and return was merely processed u/s 143(1) - we reject the contentions of the assessee and uphold the reopening of the concluded assessment by Revenue u/s 147 - While upholding reopening of the concluded assessment u/s 147 in the instant case, we note that there was tangible material before the AO to reopen the concluded assessment as the assessee is claiming huge exemption of income by making incomplete, untrue and wrong claim before the AO and scrutiny assessment having not been made earlier by Revenue by invoking provisions of Section 143(3) read with Section 143(2) while originally processing return of income, and reopening of the concluded assessment u/s 147 is sought to be done within four years from the end of assessment, the Revenue is within its right to reopen the concluded assessment u/s 147 . Ratio of decision in the case of Rajesh Jhaveri Stock Brokers Private Limited [ 2007 (5) TMI 197 - SUPREME COURT] shall be clearly applicable as processing of return of income u/s 143(1) cannot be equated to scrutiny assessment u/s 143(3) read with Section 143(2) of the 1961 Act. As laid down by Hon ble Supreme Court in the case of P.V.S. Beedies [ 1997 (10) TMI 5 - SUPREME COURT] that reopening of concluded assessment u/s 147 can be made by AO based on factual errors pointed out by audit team of department. In the instant case, we hold that the Revenue was within its right to reopen the concluded assessment u/s 147 and we uphold the reopening of the concluded assessment by Revenue in the instant case. Long Term Capital Gains - Shares were held by Minor sons of the assessee - The minor sons of the assessee were neither Director of Aditya Leather Exports Private Limited nor guarantors for the said loan granted by Indian Bank to Aditya Leather Exports Private Limited - assessee being natural guardian of minor son has no right to use sale proceeds belonging to minor sons to discharge Indian Bank Loan without permission of the Court and then turn back and say that the said amount paid to Indian bank is to be allowed deduction on the ground of diversion of overriding tittle, which will lead to traversity of justice and illegality. Assessee has not come to Court with clean hand and we cannot be party to such illegal and perverse act of the assessee. We hold that the said amount of ₹ 4.25 crores was paid by assessee out of non compete fee received by assessee and further it is mere application of income and there is no diversion by overriding title as the shares were never part of the charge in favour of Indian Bank. The said amount of ₹ 4.25 crores was paid by assessee to Indian Bank to settle defaulted loan obligation of Aditya Leather Exports Private Limited. Further, the assessee has entered into simultaneous agreement for sale of shares as well for non compete fee and Indian Bank was also in a position to exercise restraint over non compete fee which belonged to assessee and even Indian Bank could not have exercised any extended lien over shareholding of minor sons in Kris Srikanth Sports Entertainment Private Limited without permission of Court keeping in view laws prevailing in India relevant to minor and guardianship. No such permission was ever taken from Courts by Indian Bank or by assessee under the laws applicable to minor and guardianship and hence extended lien if at all it is available was over non compete fee which in any case is held to be an exempt income. Assessee will not get any deduction from taxable income of amount paid to Indian Bank to discharge liability of Aditya Leather Exports Private Limited of the misconceived cannot be part of scheme of illegitimate tax evasion undertaken by assessee. Further, we also hold that payments made to Indian Bank by assessee to the tune of ₹ 4.25 crores was merely an application of income. Reference is drawn to decision of Perfect Thread Mills Limited v. DCIT [ 2019 (10) TMI 1198 - ITAT MUMBAI] . We order accordingly. a) We uphold reopening of concluded assessment by AO invoking provisions of Section 147 of the 1961 Act. b) We hold that sale consideration of ₹ 7.50 crores was duly received for sale of shares of Kris Srikanth Sports Entertainment Private Limited which is to be brought to tax under provisions of 1961 Act including Section 60-64 of the 1961 Act. c) We hold that non compete fee of ₹ 7.50 crores was exempt from tax being capital receipt. d) We hold that payment of ₹ 4.25 crores was made by assessee to Indian Bank to settle loan availed by Aditya Leather Exports Private Limited which was in default, out of non compete fee earned by assessee which we have already held to be exempt from tax and now it is academic whether there was any diversion of income by overriding title or not. In any case for completeness, we hold that the assessee was not entitled for deduction by way of diversion by overriding title as there was no charge held by Indian Bank and there was merely a compromise entered into by assessee with Indian Bank voluntarily to pay defaulted loans availed by said Aditya Leather Exports Private Limited . Thus, the payment to Indian Bank was merely an application of income and that too of an exempt income. e) The question of taxability of ₹ 3 crores which was not received by assessee is again an academic question as we have already held that this non receipt of ₹ 3 crores was on account of non compete fee which is held to be exempt income.
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2020 (5) TMI 463
Extension of the stay of demand - pandemic Covid-19 situation and worldwide lockdown - limited working of courts - HELD THAT:- Due to the extraordinary circumstances arising on account of COVID-19 Virus, the Hon ble Delhi High Court has taken suo-moto cognizance and initially passed an order where any interim orders concerning stay, etc. would stand automatically extended till 25.03.2020 or until further orders [ 2020 (3) TMI 1186 - DELHI HIGH COURT] . Thereafter, the Hon ble Delhi High Court vide its order [ 2020 (5) TMI 417 - DELHI HIGH COURT] has further extended the period of interim order till 15.06.2020 or until further orders. In case, the extension as mentioned hereinabove of the interim order causes any hardship of an extreme nature to any party to such proceeding, they are at liberty to avail appropriate remedy as per law. At present, there is no necessity to go into the merits of the captioned stay application
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2020 (5) TMI 462
Penalty u/s 271 (1) (c) - credit card expenditure incurred through the credit card of the assessee for the purpose of business of another company, partly disallowed in the hands of that company, added in the hands of the assessee as perquisites - Addition made in the hands of the assessee as perquisites based on the disallowance made of expenses claimed by one of the companies, which was controlled by the sons of the assessee - HELD THAT:- The assessee has disclosed complete details that these are the expenditure, which has been incurred by the assessee through his credit card; these expenses have been paid by one of the company as those expenses were pertaining to that company. Directors of that company examined during the course of search stated that this expenditure belonged to that particular company. The company claims such expenditure as allowable expenditure in its return of income, which travelled up to the level of the Commissioner of income tax appeals, who allows the appeal of that company and deleted the substantial part of the expenditure holding that they were for the purpose of the business of that company. In all these facts, the assessee has not concealed any particulars of his income. This was the statement of the assessee during the course of search also. This is confirmed by the directors of the company who were the relatives of the assessee. In view of this we do not find any merit in levy of the penalty on the assessee. There is another facet of the issue also. During the course of assessment proceedings where the assessment has been made, while making an addition, the learned assessing officer has not recorded any satisfaction whether the assessee has concealed his income or has furnished inaccurate particulars of income. At the time of levy of the penalty in the penalty order the assessing officer in para number 2 has categorically held that a show cause notice was issued on 30/3/2014 wherein the assessee was called upon to explain that it has concealed the particulars of its true income and furnished inaccurate particulars of its income in terms of explanation 271 (1) (C) of the income tax act 1961. In the same order in para number 4, while issuing the other show cause notice for levy of penalty on 16/2/2016, the twin challenges were shown to the assessee for the explanation. As per para number 6 of the penalty order, the learned assessing officer has categorically held that assessee has concealed his income. CIT A has also confirmed the penalty for concealment of income. Thus from the above facts it is clear that none of the twin challenges were specifically confronted to the assessee at the time of assessment order, at the time of issuing two different notices for levy of the penalty. Penalty was levied on one of the charges i.e. of concealment of income. The purpose of the issue of notice is to put forth specific charge before the assessee for his explanation. It cannot be allowed that no specific charges are made against the assessee and at the time of passing of the penalty order penalty is levied on one of those charges. This issue is squarely covered in favour of the assessee by the decision of Sahara India Life Insurances Co Ltd [2019 (8) TMI 409 - DELHI HIGH COURT ] is so held that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1) (c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. Therefore, also, the penalty levied by the learned assessing officer and confirmed by the learned CIT A cannot be upheld. In the result, we direct the learned assessing officer to delete the penalty imposed under section 271 (1)( c) of the act. - Decided in favour of assessee.
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2020 (5) TMI 461
Allowability of the bad debts or business loss - HELD THAT:- AO as well as the Appellate Authorities under the law can review the facts of the case and redetermined the taxability of income and the claims to be allowed against the same in the subsequent years and if certain mistake or wrong decisions has been rendered in the earlier years, the same cannot be perpetuated for subsequent year and it will not be a legal impediment even though the assessment for the earlier years has attained finality. Another important thing is that the claim of income or loss or any deduction has to be examined afresh in the year in which it is claimed. Law as culled out from the aforesaid judgment is that the bad debt or loss which is claimed in this year has to be determined in this year only without distributing the earlier assessment which has attained finality, and therefore, we hold that the claim of loss made in this year is allowable as business loss. Business loss or bad debt - Set off - One fundamental principle while deciding such kind of matters is that, tax due should be collected as enshrined in the taxing statute and which is also the mandate of the Constitution of India. Here assessee is fastened with tax liability on a hypothetical income which did not materialize /received and in this situation a justice oriented approach is warranted when assessee has, on one hand incurred huge loss and on other, tax is charged merely on technicality that, since assessee had offered the tax under one particular head which it is claiming in this year to be set-off in the other head, is precluded from doing so. When assessee itself has pointed out its bonafide and legal claim before the AO that correct head in which it is assessable is business income , then acquiescence by the assessee in earlier year cannot be the ground to tax the same or deny any legal claim. We hold that the claim for the amount as business loss or bad debt is allowable in revenue account in this year and is allowed to be set-off in the revenue account as claimed by the assessee and not as a capital loss. - Decided in favour of assessee. Addition pertaining to sale of property in terms of Section 50C - Reference to DVO - HELD THAT:- Before the Appellate Authority, the assessee has categorically stated that though the circle rate of the vicinity area was higher than prevailing market rate but the land in question which was sold was adjacent to cremation ground which adversely affected the market rate of the property, and therefore, the property could not be fetched the circle rate and was sold at the lower rate than the circle rate. As the buyer who has to contest the stamp value of the property before the Valuation Authority in which assessee has no control. In any case, when the assessee has disputed the stamp duty valuation because of clinching circumstances, then in our opinion matter should have been referred to DVO for the valuation of the said property. Accordingly, we remand this issue to the file of the Assessing Officer who shall refer the matter for the valuation of the property to the DVO and assessee will substantiate its case before the AO or DVO to justify the sale price. Accordingly, this ground is partly allowed for statistical purpose. Disallowance u/s.14A - suo motu disallowance - HELD THAT:- It is an admitted fact that firstly the dividend yielding investment were only ₹ 4,54,065/- and disallowance @ 0.5% worked out to ₹ 2196/- which has been suo motu offered for disallowance in the return of income. This Tribunal in assessee s own case in the case of Vireet Investment Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] held that average value of investment which has yielded income during the year shall only be considered for the purpose of disallowance u/s.14A, and therefore, respectfully following the same no addition over and above can be made. In any case, the dividend income received by the assessee is merely which in any case the disallowance could not have been exceeded the exempt income. Thus, the order of the ld. CIT(A) is upheld and the grounds raised by the Revenue is dismissed.
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2020 (5) TMI 460
Penalty u/s 271(1)(b) - assessee has not complied with the notice u/s.142(1) - Assessment u/s 153A - assessee has not furnished the requisite information/document, i.e., complete bank statement as well as failure to give consent letter - HELD THAT:- Once there was no incriminating material, neither any such information was available with AO, then where is the question of roping such an addition or making such inquiry in the assessment proceedings. If there would have been any incriminating document pertaining to the alleged bank account found directly or indirectly linking the said bank account with the assessee during the course of search, then only the entire scope of inquiry for the purpose of assessment could have been made; and if there is no such incriminating material or seized document, then ostensibly assessment has to be confined to the seized document relating to the assessee. Here the information which was available prior to the date of search was itself vague in so far as there was no mention of any account with HSBC Geneva Switzerland for which AO has levied the penalty that the assessee has not signed the consent waiver form. Consent waiver form was addressed to the HSBC Bank Geneva Switzerland and when the information itself did not mention such bank account, then where was the default of the assessee. It could be very difficult to justify the levy of penalty for non compliance of notice u/s. 142(1), firstly, when the scope of inquiry by the AO is circumscribed to material found during the course of search; and secondly, there is no specific information or document that the assessee was maintaining any account with HSBC Bank Geneva Switzerland. There is no provision u/s.142(1) that assessee is required to sign the document thrust upon him when the assessee himself has denied the content of the document and denied having maintaining such bank account. Penalty u/s. 271(1)(b) is leviable only when there is failure on the part of the assessee to comply with the notice issued u/s.142(1). Here there is no failure on part of the assessee for non compliance as assessee has duly replied and filed submission before the AO and also before the Ld. CIT (A). The assessee thus can produce any such document or account, which is necessary for the purpose of making an assessment; or if assessee is having such account or document, then if required by the Assessing Officer, he has to file or produce the same. If assessee is neither having such document nor she was in possession of any such document or is denying the document, then where is the question of default on the part of the assessee in terms of Section 142(1). Nowhere Section provides that the assessee has to create a document for furnishing it before the Assessing Officer what is contemplated is that whatever the information or document or account is available with the assessee the same has to be produced before the AO. We are in tandem with the submission of Mr. Bindal that there is genuine and bona fide belief that the assessee was not require to sign the consent waiver form, because as per the averments made by assessee, he never had any kind of bank account in overseas leave alone HSBC Bank Geneva Switzerland; and secondly, nothing incriminating was found during the course of search wherein the assessee was found to be directly or indirectly involved in opening any bank account with HSBC Geneva Switzerland. If all these circumstances have been duly explained before the AO, then not signing of consent waiver form constitutes reasonable cause and therefore in terms of Section 273 B penalty is leviable. Accordingly, the penalty is deleted on this count also. - Appeals of the assessee are allowed.
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2020 (5) TMI 459
TP Adjustment - Comparable selection - HELD THAT:- NTPCESL is entirely provided work by its holding company, NTPC, and various projects and contracts are being awarded by Government companies/Departments and as such, is functionally dissimilar vis- -vis the taxpayer. What has been discussed above, we are of the considered view that ld. DRP has rightly excluded NTPCESL as a comparable on ground of functional dissimilarity.
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2020 (5) TMI 458
Transfer Pricing Adjustment with respect to IT Enabled Services segment - comparable - HELD THAT:- Infosys BPO Ltd. cannot be considered as a comparable to the assessee company for the simple reason that the assessee company is engaged in rendering system integration, enterprise solutions and software development services to the clients of its Associated Enterprises (AE) and also to independent customers in the United Kingdom, the United State of America and others countries in Europe as well as India while being a subsidiary of Steria (UK). On the other hand Infosys BPO Ltd. is a part of the Infosys Group, a giant in the field of Information Technologies Services and being a part of the Infosys Group, Infosys , it thus enjoys significant brand presence and brand value plays a significant role in its ability to generate profit. We direct the AO/Ld. TPO to exclude BPO Infosys Ltd from the final set of comparables. Foreign exchange fluctuations gains/losses should be treated as operating item if the same are in relation to the trading items emanating from the international transactions - HELD THAT:- It only remains to be verified as to whether the foreign exchange fluctuations incurred by the assessee relate to the trading items emanating from the international transactions or not. Therefore, for the limited purposes of verifying that the foreign exchange fluctuations of the assessee relate to the trading activities of the assessee, the issue is restored to the file of the Assessing Officer/Ld. TPO to verify the same and if it is found that the foreign exchange fluctuation relate to trading with the associate enterprises the Assessing Officer/Ld. TPO is directed to treat the same as operating item. Thus, this issue stands allowed for statistical purposes. Transfer Pricing Adjustment in the Software Development Segment - HELD THAT:- The issue of Transfer Pricing Adjustment in the Software Development Segment is restored to the file of the AO/Ld. TPO for the limited purposes of verifying the computation of 35th and 65th percentiles and if the same is found correct then no Transfer Pricing Adjustment would have to be made. AO/Ld. TPO is also directed to verify as to whether the foreign exchange fluctuation in this segment relates to the trading activities with the AEs and if it is so found then the same is to be treated as operating item. TDS u/s 195 - management services fees u/s 40(a)(i) - HELD THAT:- Beneficial provision in the DTAA between India and UK can be automatically incorporated in India-France DTAA by applying the Most Favoured Nation clause present in the Protocol to India-France (DTAA). It was also held that the services rendered by Steria France were managerial in nature and were, therefore, outside the ambit of definition of fee for technical services and further that the payments made to Steria France were not liable to withholding of tax under the provisions of section 195 of the Act. Thereafter, for Assessment Years 2010-11 and 2011-12, the Hon ble Delhi High Court went on to decide the issue in favour of the assessee [ 2017 (11) TMI 200 - DELHI HIGH COURT] - Decided in favour of the assessee. TDS u/s 195 - Payments made to Steria France for purchase of computer software licenses for the reason of failure to deduct tax at source - HELD THAT:- In the present case, considering that the issue under consideration is payment made towards software, which is a copyrighted article/asset, it needs to be considered whether the payment made is for obtaining rights in respect of copyright in the software, which is governed by the provisions of Copyright Act, 1957. Further, it would be pertinent to note that the Steria France is a resident of France (TRC and no PE certificates are placed in the paper book). As per section 90(2) of the Act, the provisions of the Act shall be overridden by the provisions of the DTAA, to the extent the latter are more beneficial to a nonresident assessee. In the present case, Article 13 of India - France DTAA deals with taxability of royalty paid by an Indian resident to French resident. Accordingly, respectfully following the ratio in DIT vs. Infra Soft Ltd [ 2013 (11) TMI 1382 - DELHI HIGH COURT] we are of the considered the opinion that tax was not required to be deducted at source in respect of the payment made to Steria France for the purchase of computer software license/s and therefore, in view of the above cited judgment we direct the AO/TPO to delete the disallowance. - Decided in favour of assessee.
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2020 (5) TMI 457
Penalty u/s 271D - violation of provisions of section 269SS - notice barred by limitation u/s 275 - HELD THAT:- We find that there is no dispute that the assessee has supplied electrical goods to M/s Shri Om Sai Stones Industries vide sale bill no. 237 dated 24.05.2012 for a sum of ₹ 4,58,430/-. It is also not in dispute that the cash amount of ₹ 1 lac received earlier from M/s Shri Om Sai Stones Industries during the last quarter of the impugned financial year has been adjusted against the said sales and only the balance amount of ₹ 3,58,430/- has been received by the assessee. The nature of amount so received is the cash advance against supply of goods and not loan/deposit or specified sum in relation to transfer of an immoveable property and the same cannot therefore be subject to the rigour of the provisions of section 269SS of the Act. The consequent penalty u/s 271D so levied is hereby directed to be deleted and the matter is decided in favour of the assessee.
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2020 (5) TMI 456
Penalty imposed u/s 271C - non-deduction of TDS on submission of Form No. 15G/15H in cases where interest paid exceeds basic exemption limit - HELD THAT:- Section 271C provides that if any person fails to deduct whole or any part of the tax as required, then he shall be liable to pay by way of penalty a sum equal to the amount of tax which he has failed to deduct. Section 273B of the Act provides that notwithstanding the provisions contained under Section 271C, no penalty shall be imposable upon the person or the assessee for any failure referred to in the aforesaid provision if the person or the assessee concerned proves there was reasonable cause for the said failure. Assessee bank is expected to carry out basic verification of such declarations before the same are accepted and similarly, where the interest paid/credited exceeds the basic exemption limit during the relevant financial year, such declarations shouldn t form the basis for non-deduction of TDS as the same would not be in consonance with assessee s bank obligation under section 194A read with section 197A(IB) which overrides the provisions of section 197A(IA) - in terms of section 197A(1C), it has been provided that no deduction of tax shall be made in the case of an individual resident in India, who is of the age of sixty years or more at any time during the previous year, if such individual furnishes to the person responsible for paying any income of the nature referred to section 194A, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil. Coming to the specific transactions under considerations, the assessee bank has relied on the declaration in Form 15G furnished by Shri Vimal Mehta for financial year 2010-11 and 2011-12 and in Form 15H furnished by Smt Prem lata Bhateja who is over sixty years of age during the financial year 2012-13 and 2013-14 respectively and has not deducted tax while crediting/paying the interest in the respective financial years. As far as payment/credit of interest to Smt Prem Lata Bhateja who is over sixty years of age during the financial year 2012-13 and 2013-14, in terms of provisions of section 197A(1C), there is a reasonable cause for non-deducting the TDS and the assessee bank cannot be fastened with the penalty u/s 271C. There is no dispute that the information so provided in the declaration is the responsibility of the customer who is furnishing such declaration and where the assessee bank relies on such declaration, no fault can lie solely with the assessee bank except that certain basis verification is expected while accepting such declarations and uploading the same in bank IT system. In the instant case, we therefore find that where the assessee bank has relied on the declaration so furnished by the customer, there is no malafide which is reflected in the action of the assessee bank in not deducting the TDS and the assessee bank cannot be fastened with the penalty u/s 271C. Add. CIT (TDS) has dropped the penalty proceedings vide his order dated 19.10.2016 in case of another branch of the same bank and there is nothing on record which reflects the basis for taking a different view in the case of present branch of the same bank while passing the impugned order which was subsequently passed on 12.01.2017. No doubt the discretion to levy the penalty or to drop the penalty proceedings is entirely the discretion of the appropriate authority who is authorized under the statute, however, where in case of same bank, different approach is adopted by the same authority in exercise of its powers so bestowed by the statutory, the same reflect arbitrariness in absence of any distinguishing facts and circumstances so highlighted and any such arbitrary levy of penalty reflects non-application of mind by such authority and penalty so levied is liable to be deleted. We find that there exist a reasonable cause for non deducting the TDS by the assessee bank and the penalty so levied for the respective years is hereby directed to be deleted and the matter is decided in favour of the assessee bank and against the Revenue.
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2020 (5) TMI 455
Non collection of Tax at Source (TCS) - Order u/s 206C(6) r/w 206C(7) - requisite jurisdiction with ITO Jaipur - order as barred by limitation - HELD THAT:- Ground relating to challenging the order passed by the Assessing officer for want of jurisdiction was taken before the ld CIT(A), however, it appears that the ld CIT(A) has wrongly read the ground relating to jurisdiction and limitation together and has dismissed both these grounds as not pressed. Given that this ground was taken by the assessee before the ld CIT(A) and not adjudicated upon, the matter deserve to be set-aside to the file of the ld CIT(A) to adjudicate the said ground of appeal after providing reasonable opportunity to the assessee. In the result, the ground no. 1 is allowed for statistical purposes. Demand towards TCS - sale of Tendu leaves - HELD THAT:- We find merit in the contention of the Id AR that the amount of ₹ 1,77,360 represents the sale amount on which the TCS is to be determined and it doesn't represent the amount of TCS and therefore, the liability of the assessee is only to the extent of TCS on such sales and not on the whole sale amount. The matter is accordingly set-aside to the file of AO to verify the same and determine the quantum of TCS and consequent interest thereon which is payable by the assessee in relation to the impugned transaction. The ground of appeal is thus allowed for statistical purposes. Charging of interest under section 206C(7) - Short / Non Collection of tax at source under section 206C(6) alleging that assessee has committed a clear default of non-collection of TCS - HELD THAT:- Assessee firm shall be liable to pay interest from the date on which such tax was collectible to the date of furnishing of return of income by the respective buyers excluding the period prior to 1.07.2012 in respect of which no interest shall be leviable. The decision of the Coordinate Bench in case of Chandmal Sancheti [ 2016 (8) TMI 952 - ITAT JAIPUR ] the decision of the Hon'ble Karnataka Court in case of Bharat Hotels [ 2015 (12) TMI 1469 - KARNATAKA HIGH COURT ] and Solar Automobiles [ 2011 (9) TMI 637 - KARNATAKA HIGH COURT ] were rendered for the period prior to the amendment brought in by the Finance Act, 2012 whereby proviso to section 206C(7) has been inserted with effect from 1.7.2012, have not considered the said provisions as amended and are therefore, distinguishable and doesn't support the case of the assessee firm - findings of the ld CIT(A) which are in consonance with the proviso to section 206C(7) are hereby confirmed subject to the modification that no interest shall be leviable for the period prior to 1.07.2012 and to that extent, the assessee shall be eligible for relief. The ground of appeal is thus partly allowed. CIT(A) not considering that the case fall under under section 206C(1A) r/w Rule 37C in as much as the entire subjected sales of Tendu leaves was made to the ultimate consumers for use in manufacturing, processing or producing of Beedies and hence the provision of section 206C was not applicable and have been wrongly invoked by the AO - whether there is a reasonable cause for such delay in furnishing such certificates and the delay can be condoned and such certificates can be taken on record and admitted under Rule 29? - HELD THAT:- there is no culpable negligence or malafide on the part of the assessee in not obtaining these declarations and the assessee cannot be penalized where all along it acted diligently based on advice of his Counsel and subsequently, when the Revenue made it aware of its obligation to obtain such declarations, it made necessary efforts and finally got these declarations. As held by the Courts, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. The delay in filing such declarations being a technical breach is thus condoned and the same are being admitted as there is substantial compliance with the requirement of filing the declarations. The matter is set-aside to the file of the Assessing officer for verification of declarations so filed by the assessee in Form 27C and examination of claim of the assessee under section 206C(IA) afresh in accordance with law. The ground of appeal is thus allowed for statistical purposes. CIT(A) not allowing relief to the assessee firm on the basis of additional evidence without calling for remand report under Rule 46A and enquiry under Sec 250(4) of the Income Tax Act, 1961 - HELD THAT:- It can't be denied that the assessee submitted the certificates and declarations in Form 27BA exactly in the same manner but the department did not feel aggrieved in that year. Therefore, now filing the appeal on the same issue when the legal and factual position is admittedly the same and without bringing out any material change in the facts of the legal position, the department cannot be permitted to agitate the same issue in later year. This contention is fully supported by the various decisions of the Hon'ble Supreme Court and particularly in the case of Berger Paints India Ltd. v. CIT [ 2004 (2) TMI 4 - SUPREME COURT ] As observed by the Assessing Officer that he has gone through the documentation so submitted by the assessee firm and on perusal thereof, he noticed that complete information in the Form/certificate have not been given by the accountant/party as required by the legislature and most of the columns are either not filled up as required or simply mentioned as per details/enclosure - accountant has signed the forms with conditional remarks As certified by the buyer whereas the forms should have been filled up and certified by the accountant itself on the basis of records. Further, some of the parties have not filed return on or before due dates prescribed under section 139 of the I.T. Act, 1961. Further, on appeal, we find that these certificates in Form 27BA from the Chartered accountant and related declarations from the buyers have again been considered and examined by the ld CIT(A) and the observations of the AO regarding these certificates were not found tenable by the ld CIT(A) and basis his independent review and examination, the relief has been provided to the assessee firm as per his findings in para 5.3 of his order which we have reproduced supra. The Revenue has not pointed out what further evidence by way of additional evidence has been filed by the assessee during the appellate proceedings before the ld CIT(A). Therefore, the ground so taken by the Revenue is hereby dismissed. Assessee deductor failure to make payment of interest under section 206C(7) - whether at the time of submitting the certificates in Form 27BA as required under proviso to section 206C(6A), the assessee is required to deposit interest and give details of such interest deposit in such certificates? - HELD THAT:- All it requires is that the accountant should certify as to whether the buyer has furnished his return of income, has taken into account such amount for computing income in such return of income and has paid taxes due on the income declared by him in such return of income or not. Further, on perusal of Form 27BA, we find that besides such certification, it contains a statement whether the assessee has to specify whether it has paid any interest under section 206C(7) or not for non-collection or short collection of taxes. Thus, there is no mandatory requirement to pay any interest under section 206C(7) as part of certification in Form 27BA and where the assessee has already paid, he has to specify that he has paid and where he has not paid, he has to specify accordingly. It is only an information seeking requirement and not a requirement in absence thereof which will makes the certification in Form 27BA invalid where there is substantial compliance as to the mandatory requirements of certification. In the result, the ground so taken by the Revenue is dismissed. Difference between the provisions of the TDS and TCS - HELD THAT:- Provisions of section 206C are analogous and a measure for compliance of collection of tax at source as a similar measure for compliance of deduction of tax at source is provided under section 201 of the Act. Regarding decision of the Hon'ble Supreme Court in the case of M/s Hindustan Coca Cola (P) Ltd. [ 2007 (8) TMI 12 - SUPREME COURT ] we find that the ratio so laid down therein has been subsequently brought on the statue books by way of proviso to sub-section (6A) to section 206C of the Act. Therefore, where the specific amendment has been brought in by the legislature accepting the ratio so laid down by the Hon'ble Supreme Court, we see no infirmity in the findings of the Id CIT(A) where he has held that the ratio so laid down continues to apply in context of collection of taxes at source. In the result, the ground so taken by the Revenue is hereby dismissed.
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2020 (5) TMI 454
Addition invoking provision of section 44AD - Special provision for computing profits and gains of business on presumptive basis - addition @ 8% on total receipts - HELD THAT:- AO righty invoked the provisions of Section 44AD and applied rate of 8% on the contract receipts of the assessee during the year under consideration. CIT(A) further observed that the request of the assessee to restrict the rate to 3% was never substantiated by the books of accounts nor was a part of the provisions of the Income Tax Act. Thus, there is no need to interfere with the findings of the CIT(A). Therefore, the appeal of the assessee is dismissed.
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2020 (5) TMI 453
Disallowing proportionate expenses of interest - HELD THAT:- Tribunal in immediately preceding year has considered this issue and even the CIT(A) while confirming the disallowance has relied on order in assessment year 2010-11, i.e. immediately preceding year. We also noted that no disallowance of interest expense has been made in the earlier years with regard to opening balance of said borrowings and utilisation thereof. As noted that in this year also the position does not change and assessee is having sufficient own funds in the form of current year s profit before depreciation. Even otherwise, assessee also contended that assessee had at its disposal corresponding interest free advances received from various parties mainly comprising of share application money amounting to ₹ 18.80 crores in aggregate, which exceeds the above interest free advances made by assessee. In terms of the above facts of the present case and the precedent in the immediately preceding year, no disallowance is to be made, as made by CIT(A) on the opening balance qua their utilisation, in earlier year. Hence, we delete the proportionate disallowance of interest expense and allow the appeal of assessee. - Appeal of assessee is allowed.
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2020 (5) TMI 452
Disallowance u/s 14A r.w.r. 8D - expenses relatable to exempt income - HELD THAT:- Relying on the decision of Special Bench in the case of Vireet Investment (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI ] we restore this issue back to the file of Assessing Officer with the direction to recompute the disallowance under Rule 8D(2)(iii) of the Rules r.w.s. 14A of the Act considering only those investments which yielded dividend income during the year for computation of disallowance of expenses relatable to exempt income. Thus, this ground of assessee s appeal is allowed for statistical purposes. Disallowance of expenses relatable to exempt income made u/s 14A r.w.r 8D(2) of the Rules while computing book profit under Section 115JB - HELD THAT:- We noted that no disallowance can be made for expenses relatable to exempt income by invoking provisions of Section 14A of the Act r.w.r. 8D(2)(iii) of the Rules while computing book profit under Section 115JB of the Act in view of decision of Special Bench in the case of Vireet Investment (P.) Ltd. (supra). Respectfully following the same, we direct the Assessing Officer to delete the disallowance. Thus, this issue of assessee s appeal is allowed.
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2020 (5) TMI 451
Reopening of assessment u/s 147 - long term investment into stock-in-trade during this assessment year and assessee has also offered the long term capital gain on the date of conversion - Speculation loss - HELD THAT:- Assessee sold all the shares and incurred a huge loss and as per the records submitted before us, assessee has claimed it as the business loss considering the fact that assessee has treated the above shares which was sold during the year as stock-in-trade. As per the records brought to our notice by Ld. AR, it clearly indicates that all this information of conversion of shares into stock-in-trade were brought to the notice of the AO in the original assessment itself. All this information was very much available on assessment records and now the AO reopen the assessment on the same set off of information and we rightly notice that Ld. CIT(A) clearly observed that assessee has furnished the details of capital gain which are also on account of treatment of investment into stock-in-trade vide letter dated 31.10.11 before the AO. According to Ld. CIT(A), it cannot be said that AO has not verified this fact. Since the assessee has filed a copy of Board Resolution and workings of long term capital gain before the AO in the original assessment itself and it substantiates the findings of Ld. CIT(A) that all this information were very much available for the AO in the original assessment to complete. Therefore, in our considered view that the findings of Ld. CIT(A) seems to be in order. In the reasons for reopening, AO has not nowhere indicated that the business loss suffered by the assessee can be treated speculation loss and only in the revised assessment order, AO came to the conclusion that this loss can only be speculation loss. Therefore, we are inclined to accept the finding of Ld. CIT(A) that the re-assessment order is only a change of opinion. Accordingly, grounds raised by the revenue stands dismissed.
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2020 (5) TMI 444
Extension of the stay of demand - pandemic Covid-19 situation and worldwide lockdown - limited working of courts - HELD THAT:- Having taken note of such extraordinary situation, the Hon'ble Supreme Court of India in Suo Motu Writ Petition [ 2020 (5) TMI 418 - SC ORDER] exercised the power under Article 142 read with Article 144 of the Constitution of India, and mitigated the difficulties that would be faced by the litigants across the country in filing their petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws by extending such period of limitation with effect from 15th March, 2020 till further orders. Similarly, Hon'ble Delhi High Court [ 2020 (3) TMI 1186 - DELHI HIGH COURT] took suo motu cognizance of the extraordinary circumstances prevailing on account of nationwide lockdown necessitated due to the spread of COVID-19, and directed that, in all matters pending before it or any courts subordinate to it, where any interim orders concerning stay, etc. were subsisting as on 16th March, 2020 and which were to expire thereafter, the same shall stand automatically extended till 15th May, 2020 or until further orders. As in the present case the stay already granted by the Tribunal vide order dated 8th November, 2020 stood extended till 15th June, 2020 by virtue of the order of the Hon'ble Delhi High Court [ 2020 (5) TMI 417 - DELHI HIGH COURT] - We may also note here the submission made by the learned representative of the assessee that, as in the past, the assessee is ready to proceed with the hearings of the appeals on the next date of hearing on 17th June, 2020, and that the stay be extended till such date.
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Corporate Laws
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2020 (5) TMI 450
Admiralty Act - action in rem - Is there a conflict between actions in rem filed under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 and the provisions of Insolvency and Bankruptcy Code, 2016 and if so, how is the conflict to be resolved? - HELD THAT:- An action in rem can be filed and the ship arrested before the moratorium under Section 14 of the IBC comes into force or during the moratorium period or even when the corporate debtor is ordered to be liquidated. A maritime claimant ought to be permitted to enforce his right in rem and obtain an order of arrest of the ship in question. This will enable him to perfect and / or crystallize his maritime lien or maritime claim as available to him under the Admiralty Act. The action in rem will not proceed till the moratorium is in place. This will ensure that the rights under the Admiralty Act are not defeated and at the same time this does not create any conflict with the provisions of the IBC. The action in rem will proceed if the corporate debtor is ordered to be liquidated. As the action in rem will proceed in accordance with the applicable law namely the Admiralty Act, the priorities for payment out of the sale proceeds will also be determined in accordance with the said Act. Section 53 of the IBC will not apply - The ships were eventually sold at scrap value by the Admiralty Court. The sale proceeds were deposited in Court. The corporate debtor was ordered to be liquidated. All costs and expenses incurred by the new managers in respect of the crew and for essential supplies made to the vessel during this period pursuant to contracts entered into by the Resolution Professional, were not paid despite these obviously forming a part of the insolvency resolution process costs and liquidation costs and considered as Sheriff s expenses in the Admiralty proceedings. Payment was opposed by the various banks and this led to more litigation. Abandoned ships pose a great risk not only to the port where they are lying but also to the environment as any accident or incident involving such ships would cause colossal damage. To say that the Admiralty Court is powerless and cannot take steps to protect the ships and ensure that they realise maximum value, would be detrimental to the interest of stakeholders and contrary to the objectives of the IBC - This solution that has come about in the process of interpretation of the provisions of the IBC and the Admiralty Act would, in the opinion of this Court, serve the interests of all stakeholders under both statutes and would be consistent with the objectives of both acts and give effect to the same. Exercise of Admiralty jurisdiction would in such cases will be beneficial and assist rather than hinder insolvency resolution. It would protect the ship and in turn the security of a mortgagee who is a financial creditor. At the same time this would also indicate to the mortgagee that they must take steps to protect and preserve their security and if they do not then the Admiralty Court will step in - The Admiralty Act also permits actions in personam against the owner of the ship. Such suits which are in personam, as against the owner, would have to abide by the provisions of section 14 of the IBC in the event a moratorium is declared by the NCLT or a liquidator is appointed under section 33 of the IBC. Whether leave under Section 446(1) of the Companies Act, 1956 is required for the commencement or continuation of an Admiralty action in rem where a winding up order has been made or the Official Liquidator has been appointed as Provisional Liquidator of the company that owned the ship? - HELD THAT:- On a macro basis the Admiralty Act which is a special act prevails over the Companies Act which is a general act and no leave is required under Section 446(1) of the Companies Act for commencing a suit under the Admiralty Act or proceeding with a pending suit against the Company under the Admiralty Act when a winding up order has been made or the Official Liquidator has been appointed as Provisional Liquidator. Likewise, on a micro basis Section 10 of the Admiralty Act will prevail over Sections 529 and 529A of the Companies Act in the matter of determination of priorities - Further, the Court which is winding up the Company would not have jurisdiction to entertain or dispose of an action in rem against a ship filed in a High Court which has been conferred with Admiralty jurisdiction under the Admiralty Act. Such a suit in rem is not against the company and can only be entertained by the High Court under the provisions of the special Act, viz., the Admiralty Act. If leave is not required under Section 446(1) of the Companies Act then Section 537 of the Companies Act is not applicable and the sale of the vessel by the Admiralty Court cannot be treated as void - Similarly, the powers of the Court to stay or restrain proceedings against the company as provided under Section 442 of the Companies Act, do not affect the question of leave under Section 446 of the Companies Act - thus, no leave is required under Section 446 of the Companies Act, 1956 for the commencement or continuation of an Admiralty Suit in rem where a winding up order has been made or the Official Liquidator has been appointed as Provisional Liquidator of the company.
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Service Tax
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2020 (5) TMI 449
Refund of the CENVAT Credit - time limitation as provided in section 11B of CEA - part of the refund rejected on the ground that the claims were filed beyond the period of limitation specified in Section 11B - relevant date is the date of realisation of foreign exchange or not - HELD THAT:- There is no case in which Section 11B mandates that the date of invoice must be considered as the relevant date. The residual category under section11B is the date of payment of duty. In this case there is no payment of duty at all. If this residual category is considered, the relevant date will never begin. If the department s argument has to be accepted, the refund can be claimed at any time. In order to avoid such absurd conclusions, the Tribunal has considered as to what constitutes an export of service under the Export of Service Rules and concluded that the date of realisation of foreign exchange must be the relevant date. If the export is not complete, the exporter of services is not entitled to claim refund under Rule 5 of CCR 2004. Harmoniously reading the Export of Services Rules and Section 11B of Central Excise Act, 1944, the Tribunal has held a view that in case of export of services, the relevant date must be the date of realisation of foreign exchange. We find that CBEC has also subsequently come to the same conclusion and issued Notification No. 14/2016-CE(NT), dated 01.03.2016, removing the lacuna in the initial Notification No. 25/2012-CE, dt. 18.06.2012 and bringing it in harmony with the decisions of the Tribunal. The Commissioner (Appeals) has only followed the orders of the Tribunal - the CBEC has also modified their notification subsequently harmonising it with the decision of the Tribunal - there are no difference on the facts of the case law relied upon by the Commissioner (Appeals) in the present case and - there is nothing in Section 11B to reckon the date of invoices as the relevant date as prayed for in this appeal by the Revenue. Appeal dismissed.
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Central Excise
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2020 (5) TMI 448
Supply of bus chassis to Delhi Metro Railway Corporation (DMRC) - benefit of N/N. 6/2006-CE dated 01.03.2006 - HELD THAT:- The Hon ble High Court in M/S. AZAD COACH PVT. LTD. VERSUS DELHI METRO RAIL CORPORATION LTD. ANR [ 2019 (4) TMI 1863 - DELHI HIGH COURT] and Supreme Court in M/S. AZAD COACH PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE JAIPUR [ 2019 (12) TMI 1303 - SC ORDER] have directed that as the matter relating to valuation for the levy of duty on such bus supplied to the appellant by Tata Motors and finally to DMRC through Tata Motors, the appellant is also entitled for similar exemption under Notification No. 6/2006. Accordingly, the Hon ble High Court read with order of Hon ble Supreme Court referred to in above have directed this Tribunal for re-quantification of the value of duty payable in the light of exemption now available for the transaction under dispute. The final order stands modified and the matter is remanded to the original adjudicating authority for re-quantification of duty liability considering the exemption now available to the appellant as per exemption Notification No. 06/2006 CE. - appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2020 (5) TMI 447
Validity of assessment order - petitioner claims to have filed a petition under Section 84 of the Tamil Nadu Value Added Tax Act, 2006 already on 20.03.2020 before the respondent. The learned counsel for the petitioner submitted that the said application filed under Section 84 of the TNVAT Act, 2006 is still pending - HELD THAT:- Since this Court is not inclined to entertain the writ petition by going into the merits of the impugned order, suffice to dispose the writ petition only with the following directions, which, in the considered view of this Court, would protect the interest of both parties. If any such application under Section 84 of the TNVAT Act, 2006, as claimed by the petitioner, is filed on 20.03.2020 and the same is pending as on today, the same shall be considered by the respondent on its own merits and an order shall be passed on the same in accordance with law, within a period of 8 weeks from the date of receipt of a copy of this order.
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Indian Laws
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2020 (5) TMI 446
Dishonor of Cheque - validity of concurrent verdicts of guilty and conviction made against her by the courts below and the sentence imposed - offence u/s 138 of NI Act - absence of evidence to rebut the presumption under Section 139 of the Act - HELD THAT:- The complainant has no obligation, in all cases under Section 138 of the Act, to prove his financial capacity. But, when the case of the complainant is that he lent money to the accused by cash and that the accused issued the cheque in discharge of the liability, and if the accused challenges the financial capacity of the complainant to advance the money, despite the presumption under Section 139 of the Act, the complainant has the obligation to prove his financial capacity or the source of the money allegedly lent by him to the accused. The complainant has no initial burden to prove his financial capacity or the source of the money. The obligation in that regard would arise only when his capacity or capability to advance the money is challenged by the accused. In the present case, the accused had challenged the financial capacity of the complainant to lend an amount of ₹ 4,50,000/-. The complainant gave evidence regarding the source of the money lent by her to the accused and the courts below have found that such evidence is reliable and acceptable. Moreover, it is a case in which the accused admits that she had borrowed an amount of ₹ 2,90,000/- from the complainant. In such circumstances, the plea of the accused that the complainant had no financial capacity to advance the money, is only to be rejected. The revisional court is not meant to act as an appellate court. Unless the finding of the court, whose decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based on no material or where the material facts are wholly ignored or where the judicial discretion is exercised arbitrarily or capriciously, the High Court shall not interfere with such finding or decision in exercise of its revisional jurisdiction - the conviction of the petitioner/accused for the offence under Section 138 of the Act is only to be confirmed. Petition dismissed.
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2020 (5) TMI 445
Withdrawal of the 3rd financial upgradation granted in the grade pay of ₹ 6600/- along with the recovery process to be initiated by the department of Central Excise and Customs - HELD THAT:- In wake of the pendency of the matter for consideration before the Apex Court in case of Union of India vs. M.V.Mohanan Nair and other five SLPs, the Delhi High Court has been followed by the Tribunal where it noticed the different views by different High Courts. The issues raised before the Tribunal in all these original applications concern the interpretation and clarification of grant of 3rd financial upgradation under the MACP to the superintendents by placing them in pay band- III with grade pay of 6600/- who were granted non-functional grade pay of ₹ 5400/- in pay band- II. Only on the ground that in case of petitioner, there has been no individual examination in wake of pendency of matter before the Supreme Court, let all the matters be examined by the Tribunal on merits, with whatever the scope is left, as individual examination on merit in each petition would be necessary, even if, the legal issue stands covered, more particularly, since certain directions have been issued by the Apex Court to the Union of India in the very decision, which it is bound to follow, the same shall also needed to be applied in case of each of the petitioners. To deny consideration on merit in individual case may amount to jeopardizing the right to be considered. All matters are remanded for fresh consideration on merit in wake of the delivery of the aforesaid decision - petition allowed by way of remand.
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