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TMI Tax Updates - e-Newsletter
May 23, 2020
Case Laws in this Newsletter:
Income Tax
Benami Property
Customs
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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TDS u/s 195 - Petitioner was merely prospecting such business and therefore engaged the services of the said UK company as a consultant. As the petitioner has not established any business, the payment would not come within the purview of the exception provided in the Section 9(1)(vii)(b).
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Reopening of assessment u/s 147 - denial of deduction u/s 80IB - there were deliberations on the very issue as to whether the activity undertaken by the petitioner amounted to manufacture or not before the respective assessment orders were passed for the respective Assessment Years by the respondent’s predecessor. - Reopening of the assessment to deny the deduction under Section 80IB is therefore without jurisdiction.
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Assessment u/s 153A - Documents recovered from the laptop - presumption - If the documents seized does not show any income earned by the assessee, then ld AO cannot rest on provision of section 292C without bringing any corroborative material on record.
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TDS u/s 194H - Whether sale of recharge vouchers and prepaid vouchers and prepaid cards to the sole distributors does not establish Principal-Agent relationship liable to TDS under section 194H? - other High Court’s decisions are binding on the Tribunal to take a decision, but, since there exist two contradictory decisions other High Courts, if a statutory provision is capable of more than one view, then the view which favours the tax payer should be preferred.
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Interest on refund - Where it is found that no refund has been granted pursuant to intimation u/s 143(1), the assessee shall be granted relief from such levy of interest u/s 234D and consequentially, levy of interest u/s 220(2) will also undergo a change and the Assessing officer is directed to recompute the interest u/s 220(2) after granting credit for amount paid towards the outstanding taxes instead of interest u/s 234D as done correctly.
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Penalty u/s 271AAB - there is no finding in the penalty order to this effect that undisclosed income so found and surrendered during the course of search falls under the definition of “undisclosed income” as so defined in section 271AAB and in absence thereof, on this ground itself, the impugned penalty proceedings deserve to be set-aside.
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Condonation of delay - delay of 583 days - Due to subsequent developments wherein the assessee runs a serious risk of prosecution where the penalty is confirmed, he was advised to file the present appeals - there exists sufficient and reasonable cause for condoning the delay of 583 days in filing the present appeals where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. I
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Business expenditure u/s 37(1) - when a payment by way of impost or by way of penalty or interest is purely compensatory and not penal in nature, the same should be allowed as expenditure u/s 37(1) - A payment of compensation for breach of contract can by no stretch of imagination be termed as penalty for infraction of law
Customs
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Waiver / remission from payment of demurrage charges,Transshipment and other charges - If indeed there was a complete breakdown due to alleged arrest and resulted in disruption of the operations at the Air Cargo Complex, the petitioner should be compensated as such delay cannot be attributed by the petitioner. This would require proper facts being established by the petitioner.
Indian Laws
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Dishonor of Cheque - non-payment of 20% of compensation amount as per Section 148 of N.I. Act - Since, condition stipulated therein has been violated by the respondent, he cannot longer take benefit of the same and plead at this stage that these are his legal right - The respondent cannot be allowed to abuse the process of law and pertinently this aspect has not considered by the learned trial Court.
Service Tax
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100% EOU - Refund of service tax paid - When the appellant has exported the goods paying service tax on the services availed for exporting the goods, the department cannot deny the refund stating reasons beyond the Customs Act as well as Finance Act - Since the department does not have a case that the appellants have violated provisions of the Finance Act or the notification, the rejection of refund claim cannot sustain.
Case Laws:
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Income Tax
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2020 (5) TMI 491
Revision petition u/s 264 - waiver of interest from deducting tax at source for the payments made to the said non-resident company under Section 195 - 2nd respondent ordered deducting of tax at the source of payment at 20% under the Double Taxation Avoidance Agreement (hereinafter referred as DTAA) entered between the Government of India and the Government of UK HELD THAT:- From the reading of letter dated 01.01.2011 of the said MD IN Services Private Limited UK, the non-resident overseas company indicates that the service provided by them to the petitioner was in the nature of consultancy services - payments made by the petitioner to the said UK company would be an income deemed to accrue/arise in India within the meaning of Section 9(1)(vii)(b) of the Income Tax Act, 1961. Payments made by the petitioner to the said UK company cannot be said to be towards fees payable in respect of services utilised in a business or profession carried out by the petitioner outside India as no such business had been established at the time of such payment. Petitioner was merely prospecting such business and therefore engaged the services of the said UK company as a consultant. As the petitioner has not established any business, the payment would not come within the purview of the exception provided in the Section 9(1)(vii)(b). Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with United Kingdom of Great Britain and Northern Ireland also makes it clear that payments for fees towards technical services may also be taxed in the contracting state in which they arise and according to the law of that states. The expression fees for technical service has been defined in Article 13 Paragraph 4 to mean payments of any kind of any person in consideration for the rendering of any technical or consultancy services (including the provision of services offered technical or other personnel). Exception to the definition of fees for technical services in Paragraph 4 has been specified in Paragraph 5 to Article 13. It is to be noted that none of the exception provided in Paragraph 5 are attracted. W.P. dismissed.
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2020 (5) TMI 490
Reopening of assessment u/s 147 - denial of deduction u/s 80IB - change in opinion of an AO - HELD THAT:- In the impugned communications dated 14.12.2015 and 28.11.2016, the respondent has not denied that the petitioner had truly and fully disclosed all the materials that were required for completing the assessments. The respondent has merely stated that while passing the respective assessment orders, the Assessing Officer did not examine the issue or has formed any opinion and since no opinion was formed in the 1st place question of change of opinion does not arise. To invoke Section 148 for the purpose of proviso to Section 147 there should be a case of failure to truly and fully disclose material facts required for the assessment. In this case, I find that there were deliberations on the very issue as to whether the activity undertaken by the petitioner amounted to manufacture or not before the respective assessment orders were passed for the respective Assessment Years by the respondent s predecessor. Unable to countenance this stand of the respondent. In any event it would not clothe the Assessing Officer with the power to reopen the completed assessment under Section 148 of the Income Tax Act, 1961 for the purpose of proviso to Section 147 of the Income Tax Act, 1961 if there was truly and fully disclosure for assessment. Central Excise Department has also accepted the fact that the petitioner was engaged in the manufacture of excisable goods which were eligible for exemption under Notification No.56 of 2002-CE dated 14.11.2002 as amended by Notification No.34 of 2008CE dated 10.06.2008. Therefore, a change of opinion based on report of Asst. Commissioner of Income Tax, Circle 1, Jammu under Section 131 of the Income Tax Act, 1961 cannot amount to failure on the part of an assessee to truly and fully disclose information/documents required for the purpose of completing the assessments. Reopening of the assessment to deny the deduction under Section 80IB is therefore without jurisdiction. If in the course of such proceedings the respondent comes to a conclusion that there were other grounds on which assessment can be reopened, the respondent can assess or reassess such income in the light of Explanation 3 to Section 147. Direct the petitioner to participate in the proceedings before the respondent. The respondent is however precluded from disturbing the deductions allowed to the petitioner in the respective assessment orders under Section 80IB. The respondent may however look for such other aspects which may come within the purview of Explanation 3 to Section 147 to demand tax while passing orders. Since the dispute pertains to the Assessment Years 2009-10 and 2010-2011, the respondent is directed to bring a closure to the proceedings within a period of three months from the date of receipt of a copy of this order in the light of the above observations. - Decided in favour of assessee.
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2020 (5) TMI 489
Addition u/s 68 - transaction of receipt of money in the form of shares of other private limited companies - HELD THAT:- No infirmity in the order of the learned assessing officer in making addition under section 68. The more surprisingly the assessee being a company which does not have any stream of revenue is engaging in buying the shares of private limited company and selling the shares of private limited companies speaks volume about the nature of the activities carried on. The additional arguments raised by the assessee in the additional grounds are also dealt with. In the first argument, assessee has submitted that mere book entry without actual receipt of money cannot be covered under the definition of section 68. It is apparent that in the books of accounts of the assessee has credited as sales consideration. Thus sum is found credited in the books of assessee. From Thirst plantations private limited, the assessee has received the shares subsequently, therefore it is apparent that against the money receivable from Thirst plantations private limited, which is sale consideration credit in the books of account, the debit arises in the account of Thirst plantations private limited, which has been subsequently realized by further receipt of shares by the assessee. There is actual transaction of receipt of money in the form of shares of other private limited companies. Provisions of section 68 would be applied on the sale consideration credited in the books of accounts and not on the debit arising in the account of thirst plantations private limited. All judicial precedents relied up on by the assessee are distinguishable on facts. In view of this we dismiss all the grounds of appeal raised by the assessee and confirmed the action of the learned assessing officer and the learned CIT A with respect to the addition under section 68 - Appeal filed by the assessee is dismissed.
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2020 (5) TMI 488
Disallowance under the head Maintenance Expenses - AO held that maintenance income should be charged as income from house property only and that the maintenance charges were not deductible as expenditure once the benefit of statutory deduction u/s 24 (a) had been given - CIT (A) held that maintenance expenses were deductible although the loss was to be disallowed - Department seeks relief by praying for restoration of disallowance of maintenance expenses whereas the assessee seeks taxing of maintenance income under income from other sources after deduction of the maintenance expenses incurred therefrom - HELD THAT:- We are in agreement with the contention of the Ld. Sr. Department Representative that the Ld. CIT (A) could not have deleted the disallowance of expenditure of maintenance services if he was treating the entire income from rent and maintenance charges as income from house property and thereafter was allowing statutory deduction u/s 24(a) of the Act @ 30% of the annual value. It is settled law that no other expenditure apart from the standard statutory deduction of 30% and the municipal taxes actually paid can be claimed as deduction from income from house property. Only the rental income should be charged to tax under income from house property after allowing deductions in respect of the Municipal taxes paid and of the 30% standard statutory deduction u/s 24(a) of the Act. On the other hand, the income from maintenance services should be brought to tax under income from other sources after allowing benefit of deduction towards expenditure incurred on maintenance charges. Accordingly, we set aside the order of the Ld. CIT (A) and direct the Assessing Officer to charge only the rental income under income from house property and allow the statutory permissible deductions there from. The expenditure on maintenance services is not to be deducted from income from house property and neither the income from maintenance charges recovered is to be treated as income from house property. Thus, the appeal of the Department stands allowed to that extent. Gross income from maintenance charges and the expenditure incurred thereon would have to be charged to tax under income from other sources and to that extent the assessee also gets relief and the Cross Objections stands allowed to that extent. However, the quantum of the maintenance charges received and the maintenance expenses incurred by the assessee, as claimed by the assessee, would have to be necessarily verified by the Assessing Officer and the computation under income from other sources would have to be made only after due verification of the income and expenditure by the Assessing Officer with respect to maintenance income and charges. Accordingly, this issue is restored to the file of the Assessing Officer who will recomputed the assessee s income in terms of our directions after giving proper opportunity to the assessee to present its case.
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2020 (5) TMI 487
Exemption u/s 54F - relevant AY - Long term capital gains on sale of shares by claiming that the capital gain has been spent for acquisition of a residential house and the balance which has not been so utilized was deposited in the bank account - transfer during the PY 2002-03 itself - assessee individual and others held the investment in immovable property belonging to M/s Asrani Inns and Resorts Pvt.Ltd. by way of shares and since the rights in shares were released by way of release deed and supplementary MOU - HELD THAT:- The assessee and the other persons shown as owners of the property in the sale deed have signed this release deed and therefore, there is no dispute on the ownership of the property lying solely with the company. Further, in the affidavits filed before Hon ble High Court of AP the Director of the company has mentioned the release deed therein and the dispute was with the Government of A.P. and the Director of Stamps and Registration and not amongst the assessee and others. Further, assessee himself has declared the capital gain in his return of income and has claimed exemption u/s 54F of the Act. Therefore, irrespective of the date when the release deed has been registered, there is a transfer of shares during the PY 2002-03 as far as assessee is concerned. Therefore, I do not find any reason to interfere with the order of the AO and CIT(A) holding that the transfer has taken place during the PY 2002-03 relevant to AY 2003-04. Grounds 2 and 3 are thus rejected. Exemption from long term capital gain u/s.54F - Assessee has claimed that he had invested upto ₹ 45,42,000/- before filing of the return of income. The assessee has filed details of such expenditure before the Tribunal by way of additional evidence. Therefore deem it fit and proper to admit such additional evidence and remand it to the file of AO for verification of the same. After verification, the AO shall recompute the eligible exemption u/s.54F of the Act and the un-utilized capital gain shall be brought to tax as provided under the proviso to Section 54F of the Act.
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2020 (5) TMI 486
Assessment u/s 153A - Documents recovered from the laptop - presumption - Addition of commission - HELD THAT:- If there is income element in the documents seized form the possession of the assessee, then there was no requirement of bringing any corroborative material on record. However, there has to be existence of income in the documents seized. If the documents seized does not show any income earned by the assessee, then ld AO cannot rest on provision of section 292C without bringing any corroborative material on record. AO did not examine buyers of the property with respect to the commission paid by them to the assessee. Even assessee was also not questioned during the course of search with respect to these three letters. As we have already held that there is no income accrues to the assessee based on these three documents, without bringing any corroborative material, it could not have been taxed in the hands of the assessee. While confirming the addition, ld CIT (A) was of the view that TIDCO has won bid for the property in 2006 for ₹ 117 crores, TIDCO sold that property in 2010, therefore, market value of the property would have gone up to ₹ 200 -300 crores and assessee therefore would have received the commission. Sale deed of the property shows consideration of ₹ 122 Crores only. There was no corroboration of the valuation presumed by the dl CIT (A). He did not bring on record even the circle rate of the property to show that market value of the property has increased so much. Alleged commission was only ₹ 17.50 Crores. Had the property price would have gone up by (assuming at the lowest estimate of ld CIT (A) of ₹ 200 crores then the property is appreciated by ₹ 83 Crores ( ₹ 200 -117 ) Crores. Had the appreciation been so much, nobody would have forgone the profit of ₹ 83 Crores for ₹ 17.50 Crors. Therefore, such reason given by the CIT (A) cannot be the basis for confirming the addition. We reverse the orders of the lower authorities and direct the ld AO to delete the addition of commission income in the hands of Mr. Madhur Mittal and Mr. Sumit Mittal - Decided in favour of assessee.
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2020 (5) TMI 485
TDS u/s 194H - discounts allowed on prepaid services as distributor margin - validity of passed under section 201(1) /201(1A) as passed beyond the limitation period - HELD THAT:- Clause (i) to section 201(3) of the Act specifies that no order shall be made under sub-section (1) of section 203 of the Act deeming a period to be an assessee in default for failure to deduct the whole or any part of the tax from a resident in India, at any time after the expiry of two years from the end of the financial year in which the statement is filed in a case where the statement referred to in section 200 has been filed. Here, the assessee has not deducted TDS under section 194H of the Act and thus, the question of filing of quarterly statement as required under section 200 of the Act by the assessee do not arise and therefore, we held that the assessee is not covered by the provisions of section 201(3)(i) of the Act. Accordingly, the ld. CIT(A) has validly confirmed the order passed under section 201(1)/201(1A) of the Act. Thus, the ground raised by the assessee stands dismissed for both the assessment years. TDS u/s 194H - Whether sale of recharge vouchers and prepaid vouchers and prepaid cards to the sole distributors does not establish Principal-Agent relationship liable to TDS under section 194H? - HELD THAT:- As relying on HINDUSTAN COCA COLA BEVERAGES PVT. LTD. [ 2017 (7) TMI 1076 - RAJASTHAN HIGH COURT] and BHARTI AIRTEL LTD. AND [ 2014 (12) TMI 642 - KARNATAKA HIGH COURT] Sale of SIM cards/recharge coupons at discounted rate to distributors is not commission and therefore not liable to TDS under section 194H of the Act. However, we find that while deciding similar issue, the Hon ble Kerala High Court in VODAFONE ESSAR CELLULAR LTD. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX (TDS) [ 2010 (8) TMI 691 - KERALA HIGH COURT] has taken a different view, as the relevant observations are reproduced hereinabove, and decided the issue against the assessee. In the absence of any jurisdictional High Court decision brought to the notice of the Bench, we are of the considered opinion that other High Court s decisions are binding on the Tribunal to take a decision, but, since there exist two contradictory decisions other High Courts, we are of the opinion that the law laid down by the Hon ble Supreme Court in the case of CIT v. Vegetable Products Ltd. [ 1973 (1) TMI 1 - SUPREME COURT] , which says that if a statutory provision is capable of more than one view, then the view which favours the tax payer should be preferred, we decide the issue in favour of the assessee
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2020 (5) TMI 484
TP Adjustment - AMP purposes - existence of international transaction - HELD THAT:- TPO in the instant case has held that the AMP expenditure incurred by the assessee is international transaction. In the manufacturing segment, he computed an upward adjustment by disallowing 50% of the expenditure incurred on products which were sold within the domestic market as well as international market the details of which are already reproduced in the preceding paragraph. We find the Tribunal, following the above order [ 2019 (7) TMI 1620 - ITAT DELHI] has again deleted the addition on account of AMP expenditure. Since the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee s own case for the preceding assessment years i.e., A.Y. 2007-08 and 2008-09, therefore, we are of the considered opinion that no addition on account of AMP expenditure is warranted. Disallowance u/s 37(1) being 20% of the brand expenses - HELD THAT:- We find, the ld.CIT(A) deleted the addition by following the order of his predecessor for A.Y.s 2004-05 and 2005- 06 and the decision of the Hon ble Delhi High Court in the case of Seagram Manufacturing (P) Ltd. (Now merged with the assesseee) [ 2015 (10) TMI 491 - DELHI HIGH COURT] . We do not find any infirmity in the order of the CIT(A) on this issue. We find identical issue had come up before the Tribunal in assessee s own case for A.Y. 2007-08.
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2020 (5) TMI 483
Loss of revaluation of investment on the HTM category - assessee has claimed losses on account of amortization of premium paid at the time of purchase of securities held under the category of HTM - HELD THAT:- We find that the issue is fully covered by the earlier orders right for assessment years [ 2019 (1) TMI 689 - ITAT DELHI], [ 2018 (12) TMI 50 - ITAT DELHI] . The learned CIT(A) has only followed the principle laid down by the Hon ble Apex Court in the case of UCO Bank [ 1999 (9) TMI 4 - SUPREME COURT] . In the light of the aforesaid binding decision of the Hon ble Apex Court, we do not find any infirmity in the order of CIT(A). In the absence of any material change, as confirmed by both the parties, we hereby delete the addition made by the revenue. Depreciation/loss on investments and on MTM on derivatives - HELD THAT:- We are of the considered opinion that the loss arising on shifting of securities from AFS/HFT categories to HTM category and depreciation is allowable. Appeal of the revenue in this ground is dismissed. Contribution made by PNB employees pension trust - HELD THAT:- As decided in own case [ 2019 (1) TMI 689 - ITAT DELHI] held that similar expenses were allowed in earlier years in the assessments made under section 143 (3) of the Act and the decision of Delhi ITAT in the case of DCIT verses Ranbaxy laboratories Ltd [ 2009 (6) TMI 126 - ITAT DELHI-I] wherein the allowability of expenses towards provision for Pension Fund were held to be allowable expenses and section 43B has no application, is applicable. The fact that the assessee had actually contributed/paid the amount to pension fund makes the case of the assessee even stronger. Expenses claimed u/s 36(1)(viii) - HELD THAT:- CIT(A), however, held that inasmuch as the ld. AO was not satisfied with the method followed by the assessee bank that they had not correctly calculated the deduction under section 36(1)(viii) of the Act and the Ld. AO was of the view that the assessee bank had claimed profit attributable to eligible business and computed the same on proportionate basis, based on the total fund deployed method, Ld. CIT(A) directed the assessee to furnish the correct computation of eligible deduction under section 36(1)(viii) of the Act before the Ld. AO within 30 days and the AO shall verify the same to grant deduction - we hereby refrain from interfering with the order of the ld. CIT (A). Depreciation on goodwill - HELD THAT:- As decided in own case [ 2019 (1) TMI 689 - ITAT DELHI] since, the merging of Nedungadi Bank in the financial year 2002-03, the depreciation on the goodwill of the Nedungadi Bank has been consistently allowed subsequent to the merger for last many years. The AO may examine the computation part of depreciation on the goodwill from the year of merger and allow the claim of the assessee. Disallowance under Rule 8D(2) sec 14A - HELD THAT:- Present assessee before us is also a Bank, where shares were held as stock-in-trade and therefore it becomes business activity of assessee. In our opinion specific observation Hon ble Supreme Court in the case of Maxopp Investment vs CIT [ 2018 (3) TMI 805 - SUPREME COURT] reproduced hereinabove are squarely applicable to facts of present case. Respectfully following the view taken by Hon ble Supreme Court in the case of Maxopp Investment vs CIT (supra), we allow this ground raised by assessee and hold that these were not investments made by assessee in order to fall within the ambit of Rule 8D (iii) of Income tax Rules 1963. Addition on account of Leave Encashment - HELD THAT:- After referring to the decision in the case of Bharat Earth Movers [ 2000 (8) TMI 4 - SUPREME COURT] and in the case of Exide Industries Ltd. Vs Union of India [ 2007 (6) TMI 175 - CALCUTTA HIGH COURT] the constitutional bench of the Hon ble Supreme Court vide order dated 24.04.2020 has upheld the constitutional validity of Clause (f) of Section 43B of the Income Tax Act. Hence, were hereby confirm the disallowance made by the revenue. Assessee appeal allowed.
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2020 (5) TMI 482
Reopening of assessment u/s 147 - assumption of jurisdiction by the AO u/s 147 - HELD THAT:- There is no dispute and it is a settled legal proposition that for assumption of jurisdiction u/s 147, the AO must form a prima facie opinion on the basis of material that there is an escapement of income, the opinion formed may be subjective but the reasons recorded or the information available on record must show that the opinion is not a mere suspicion, the reasons recorded and/or the documents available on record must show a nexus and relevancy to the opinion formed by the AO regarding escapement of income and the reasons are required to be read as they were recorded by the AO. It is for the AO to disclose and open his mind through the reasons recorded by him and he has to speak through the reasons. We find that the reopening of the completed assessment u/s 143(3) is without bringing any fresh material on record and where the material relied upon has already been examined by the Assessing officer during the original assessment proceedings, it clearly amounts to change of opinion which as per settled jurisprudence, cannot be sustained and notice so issued u/s 148 seeking to reopen the assessment is liable to be set-aside. Another contention which has been raised by AR is that in the reasons so recorded, the Assessing officer has not alleged that there is failure on the part of the assessee to disclose fully and trully all material facts and where the powers u/s 147 have to be exercised by the AO after a period of four years, there has to be a failure to disclose fully and truly all material facts and information by the assessee which is not alleged by the AO in the instant case. These are all primary facts as to the treatment done by the assessee in its books of accounts of the compensation so paid by it which are duly disclosed and where on appreciation of such primary facts, the AO is of the view that such expenditure is in nature of capital expenditure and not revenue expenditure, it is his inference and analogy which has drawn basis review of such primary facts. As far as onus on the assessee to disclose the primary facts are concerned, the same has been satisfied and there is no such failure and infact, in the reasons so recorded, there is no allegation made by the AO that there is any such failure on the part of the assessee company and as we have stated above, it is for the AO to disclose and open his mind through the reasons recorded by him and he has to speak through the reasons. We agree with the contention so advanced by the ld AR that this being a jurisdiction requirement and in absence of any such failure on part of the assessee company, the AO cannot assume jurisdiction u/s 147 - Decided in favour of assessee.
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2020 (5) TMI 481
Bogus purchases - basis of estimating the gross profit rate of 19.25% - HELD THAT:- In the instant case, the CIT(A) has therefore rightly held that after rejection of books of accounts, the past history of the assessee has to be seen for estimating the gross profit rate. At the same time, we find that the basis of estimating the gross profit rate of 19.25% as against declared GP rate 14.99% is not discernable from the order of the CIT(A) where he has only stated that purchases to the tune of ₹ 2,11,15,458/- were found bogus/unverifiable which constitute 50% of total purchases.He has not taken into consideration the fact that the assessee has started diamond trading business during the year under consideration wherein he has disclosed gross profit rate of 10%. Given that the assessee has disclosed gross profit rate of 10% in respect of diamond trading which is stated to be pretty robust as per industry standards and in respect of trading of semi precious stone and studded jewellery, he has disclosed a gross profit rate of 20% which is better than the average gross profit rate of last three assessment years we find that even where the books of accounts have been rejected, there is no basis for making trading addition in the hands of the assessee. See GOTAN LIME KHANIJ UDHYOG. [ 2001 (7) TMI 19 - RAJASTHAN HIGH COURT]. - Decided in favour of assessee.
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2020 (5) TMI 480
Levy of interest u/s 220(2) and section 234B - Interest on refund u/s 234D - HELD THAT:- We agree with the contention of the ld AR that where there is no basis for levy of interest u/s 234D and such levy is ultimately held to be not valid in the present case, the amount paid by the assessee will go to offset the outstanding tax and interest demand except interest u/s 234D and only on the remaining outstanding demand, the interest u/s 220(2) shall be levied. Coming to levy of interest u/s 234D, we agree with the contention of the ld AR that where no refund has been granted u/s 143(1) to the assessee, the question of charging of interest u/s 234D doesn t arise for consideration. We also agree with the contention of the ld AR that such interest can be charged for the period from the date of grant of refund to the date of such regular assessment i.e, 27.12.2006 in the present case. Matter is accordingly set-aside to the file of the AO for purposes of verifying whether any refund has been granted pursuant to intimation u/s 143(1) and only in a scenario where such refund has been granted, the interest u/s 234D shall be levied from the date of grant of refund to the date of regular assessment order passed u/s 143(3) - Where it is found that no refund has been granted pursuant to intimation u/s 143(1), the assessee shall be granted relief from such levy of interest u/s 234D and consequentially, levy of interest u/s 220(2) will also undergo a change and the Assessing officer is directed to recompute the interest u/s 220(2) after granting credit for amount paid towards the outstanding taxes instead of interest u/s 234D as done correctly.
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2020 (5) TMI 479
Condonation of delay - delay of 583 days - Tribunal admission of appeal filed beyond the period of limitation where it is satisfied that there was sufficient cause for not presenting the appeal within the prescribed time - Department has decided to launch the prosecution proceedings u/s 276C(1) r/w section 277 before the Economic Offences Court, Jaipur - HELD THAT:- Assessee in his averments has made out a clear case that there was sufficient cause which being beyond the control of the assessee, prevented him from filing the appeals in time before the Tribunal. The assessee was diligent and has sought advice from his counsel from time to time and was not guilty of negligence on his part and it cannot be said that the delay was due to the negligence and inaction on the part of the assessee, which could have been avoided by the assessee if he had exercised due care and attention. Due to subsequent developments wherein the assessee runs a serious risk of prosecution where the penalty is confirmed, he was advised to file the present appeals, we find that there is no culpable negligence or malafide on the part of the assessee in delayed filing of the present appeals and he does not stand to benefit by resorting to such delay - there exists sufficient and reasonable cause for condoning the delay of 583 days in filing the present appeals where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. In exercise of powers under section 253(5) of the Act, we hereby condone the delay of 583 days in filing the present appeals as we are satisfied that there was sufficient cause for not presenting the appeals within the prescribed time. Penalty proceedings u/s 271(1)(c) - additional income admitted during the course of search - HELD THAT:- The fact that the AO while passing the assessment order has taken note of said disclosure of the additional income by the assessee in his statement recorded u/s 132(4) during the course of search which has been subsequently been reported to tax in the return filed u/s 153A is therefore clear enough reflection of the mind of the AO and which clearly demonstrates that the Assessing Officer at the time of passing the assessment order was satisfied that the assessee is liable for penalty u/s 271(1)(c) of the Act qua the additional income. As far as recording of satisfaction at the time of passing of the assessment order is concerned, we find that the same is clearly discernable from the reading of the assessment order and there is a direction to this effect by the Assessing officer. Whether specific limb/charge for levy of penalty not discernible from the show-cause notice issued u/s 271 r/w 275 ? - In the instant case, we find that uncertain charge at the time of initiation of penalty proceedings is followed by uncertain charge even at the time of passing the penalty proceedings as the Assessing officer has not specified as to how the assessee is found guilty of both concealment of income as well as furnishing inaccurate particulars of income. Further, the decision of Sheveta Construction[ 2016 (12) TMI 1603 - RAJASTHAN HIGH COURT] wherein held that the AO, has to give a notice as to whether he proposes to levy penalty for concealment of income or furnishing inaccurate particulars. He cannot have both the conditions and if it is so he has to say so in the notice and record a finding in the penalty order also supports the case of the assessee. Therefore, the penalty order so passed by the Assessing officer cannot be sustained and deserved to be set-aside on this ground itself. There is no finding recorded by the Assessing officer that the assessee is found to be the owner of income based on any entry in books of accounts or other documents or transactions found during the course of search. Therefore, in absence of any finding in the penalty order to the effect that the assessee is found to be the owner of income based on any entry in books of accounts or other documents or transactions found during the course of search and also the fact that the assessee has no where claimed that such narration on a piece of paper represent his income wholly or in part for any previous year which has ended before the date of search, the second condition is not satisfied in the instant case and consequentially, all the three conditions specified explanation 5A to section 271(1)(c) cannot be said to be satisfied individually as well as cumulatively and the impugned penalty proceedings deserve to be set-aside. Penalty u/s 271AAB - undisclosed income for the specified previous year found during the course of search in the case of assessee - HELD THAT:- In the instant case, the notice initiating the penalty proceedings talks about initiation of penalty proceedings u/s 271AAB of the Act in respect of undisclosed income of the specified previous year. While passing the penalty order, the Assessing officer has given a clear finding as reflected in para 7 to 9 of the penalty order that the assessee is liable for penalty U/s 271AAB(1)(a) which provides for levy of penalty @ 10% of the undisclosed income. As held by the Coordinate Bench HPCL MITTAL ENERGY LTD. [ 2018 (8) TMI 507 - ITAT AMRITSAR] an uncertain charge at the time of initiation of penalty has been made good and substituted with a conclusive default at the time of passing the penalty order and that in such a case, no fault can be found in the penalty order. In such a case, we donot see any legal infirmity in the initiation of penalty proceedings and consequent penalty order so passed by the Assessing officer and the contentions so raised by the ld AR in this regard cannot be accepted. As per sub-section (3) of Section 271AAB, the provisions of section 274 and section 275 as far as may be applied in relation to penalty under this section which means that before levying the penalty, the Assessing officer has to issue a show-cause granting an opportunity to the assessee. Thus, we find that the levy of penalty is not automatic but the Assessing officer has to decide based on facts and circumstances of the each case. It is a consistent view which has been taken by the various Co-ordinate Benches of the Tribunal and a useful reference can be drawn to the decision of the Co-ordinate Bench in case of ACIT vs Marvel Associates [ 2018 (3) TMI 946 - ITAT VISAKHAPATNAM] - Levy of penalty under section 271AAB is not mandatory and it depends upon specific facts and circumstances of each case as to whether the same warrant the levy of penalty. In the instant case, it therefore needs to be examined the basis and findings of the Assessing officer for levy of penalty. For the purposes of levy of penalty u/s 271AAB, what has to be examined is whether the charge of undisclosed income for the specified previous year found during the course of search in the case of the assessee is satisfied or not. On perusal of the penalty order, we however find that the only finding which has been recorded by the Assessing officer is that the assessee has made a surrender of undisclosed income of ₹ 2,15,40,344 under various heads and all essential requirements/conditions prescribed under section 271AAB are satisfied and it is a fit case for levy of penalty and the AO accordingly levied penalty @ 10% of income so surrendered during the course of search. The question is whether the penalty is to be levied solely basis the surrender during the course of search, what was the necessity of bringing a specific definition of undisclosed income by the legislature while enacting the provisions of section 271AAB of the Act. In our view, once a specific definition of undisclosed income has been provided in section 271AAB, being a penal provision, the same must be strictly construed and the Assessing officer has to record a clear and specific finding to this effect and cannot be solely guided by the surrender made by the assessee during the course of search. Admittedly and undisputedly, in the instant case, there is no finding in the penalty order to this effect that undisclosed income so found and surrendered during the course of search falls under the definition of undisclosed income as so defined in section 271AAB and in absence thereof, on this ground itself, the impugned penalty proceedings deserve to be set-aside. When it comes to penalty proceedings, it is a settled legal proposition that the quantum and penalty proceedings are independent proceedings and while levying penalty, the provisions have to be read strictly and only where the charge against the assessee is clearly established and the conditions specified therein are satisfied, the penalty can be levied. In the instant case, we therefore find that the charge that the assessee is found to be owner of income based on entries in certain loose papers not disclosed before the date of search not been satisfied, the levy of penalty cannot be held justified and deserve to be set-aside. Regarding levy of penalty on remaining surrendered during the course of search, the said surrender may be the basis for assessment but can t form the basis for levy of penalty which are separate and distinct proceedings in absence of a specific finding as to how the same qualify as an undisclosed income as so defined u/s 271AAB of the Act. Hence, penalty levied thereon is also liable to be set-aside. - Assessee appeal allowed.
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2020 (5) TMI 478
Disallowance of contract benevolent fund (CBF) expenses expenditure allowable u/s 37(1) - Whether CBF is mandatory deduction by State Government and not voluntary in nature - CIT(A) confirmed the order of AO holding that the contribution made by the assessee was purely out of benevolence and not for the purpose of business of the assessee - HELD THAT:- ITAT, Bangalore Bench in the case of Shri S.Basavaraja Vs ACIT in [ 2018 (7) TMI 2115 - ITAT BENGALURU] was dealing with a case of individual who was also a Civil Contractor and whose case also contribution to CBF was disallowed by the revenue authorities. Tribunal held that the contribution to CBF was for the purpose of business of the assessee and was of revenue in nature and had to be allowed as deduction subject to verification whether the contribution was made in accordance with notification issued by the Government of Karnataka whereby several contractors were obligated to contribute CBF. We are of the view that the deduction claimed has to be allowed subject to verification as mentioned in the order of the Tribunal referred to above. The relevant ground is treated as allowed. Disallowance of Reserve for NOC was purely on business expenditure allowable u/s 37(1) - HELD THAT:- With reference to a specific query as to under what provision in the Contract or any other statutory provision, the assessee is obliged to contribute towards Reserve for NOC , the ld. Cousel for the assessee submitted that such obligations are part of the Contract entered into with the State Government. Another query was raised by the Bench as to whether the sum contributed towards Reserve for NOC will be refunded to the assessee in the event of third party certification of execution of good work being given. Assessee expressed his inability to give an answer to this query. In the circumstance, we are of the view that this issue should be remanded to the AO for fresh consideration and the assessee should demonstrate before the AO that the contribution towards Reserve for NOC is based on contract between parties or is a contribution which is payable under statute or is a matter of practice while executing the Civil work for State Government. The assessee shall also establish that the sum so contributed will not be refunded to the assessee at any point of time or as to how the sum so refunded would be offered to tax as income as and when the same is received. Penalties paid for non-performance of contract in time was in the nature of compensatory damages and was purely business expenditure u/s 37(1) - HELD THAT:- It is not possible to link the penalties levied under various bills by the PWD as a payment made by way of damages for dealy in execution of contract. The assessee was not able to link the penalty reflected in the bills as penalty for delayed implementation or delayed execution of the contract. This aspect needs detailed verification and the assessee is directed to establish this fact before the AO and for this purpose the issue is remanded to the AO for consideration fresh after due opportunity to the assessee. If the payment is established as for payment for breach of contract and then the same cannot be said to be a payment falling within the ambit of Explanation to Sec.37(1). In this regard, assessee has placed reliance on the decision in the case of Prakash Cotton Mills (P)Ltd. Vs CIT [ 1993 (4) TMI 3 - SUPREME COURT] and the aforesaid decision clearly lays down the proposition that when a payment by way of impost or by way of penalty or interest is purely compensatory and not penal in nature, the same should be allowed as expenditure u/s 37(1) - A payment of compensation for breach of contract can by no stretch of imagination be termed as penalty for infraction of law
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Benami Property
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2020 (5) TMI 477
Attachment of the property under the provisions of the Prohibition of Benami Property Transactions Act, 1988 - Since the amended provisions of Section 3 and the Chapter IV of said 1988 Act, including Section 24 therein are prospective in nature, i.e., w.e.f. 01.11.2016, Mr. Choudhury, learned Senior counsel, submits that the property of the petitioner, being the wife of said Durlav Chamua, transacted in the year 2011, cannot be attached by the impugned orders - HELD THAT:- Submission of Mr. Choudhury, learned Senior counsel, has force. Mr. Sarma, learned Standing Counsel, Income Tax, also admits that the amendments of said 1988 Act, brought into force on 01.11.2016, are prospective in nature. Issue notice, returnable by 19.06.2020 . As Mr. Sanjay Sarma, learned Standing Counsel, Income Tax and Mr. G. Pegu, learned Government Advocate, Assam, have accepted notice on behalf of the respondent Nos. 1 2 and 3 respectively, no formal notices need be issued to those respondents. However, the petitioner shall serve requisite extra copies of this petition including the Annexures appended thereto to Mr. Sarma and Mr. Pegu on or before 22.05.2020.
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Customs
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2020 (5) TMI 476
Waiver / remission from payment of demurrage charges,Transshipment and other charges - storage of containers by the custodian of the goods - Rejection of issue of Detention Certificate - delay in transshipment - It is the case of the petitioner that since it has wide-bodied cargo aircrafts and since there is no facility for landing of such aircrafts in Trivandrum, the petitioner brought the cargo in these aircrafts to the Chennai International Airport for being transshipped to Trivandrum/Calicut by road - petitioner requested to issue of Detention Certificate to claim waiver / remission from payment of demurrage charges from the 3rd/4th respondent at the earliest - HELD THAT:- The procedure for issue of Detention Certificate was contained in Public Notice No. 111 of 1985 dated 29.07.1985 of the Bombay Custom House. Issue of Detention Certificate was an innovation by the Customs Authorities. This was introduced much prior to Handling of Cargo in Custom Areas Regulations, 2009. Regulation 6(1)(l)of the Handling of Cargo in Customs Area Regulations, 2009 mandates that the Customs Cargo Service provider shall subject to any other law for the time being in force, shall not charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be - As per Regulation 6(1)(l) of the Handling of Cargo in Customs Area Regulations, 2009, a Customs Cargo Service Provider which includes the Air Port Authority of India cannot charge any rent or demurrage on the seized or detained or confiscated goods by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be. This was perhaps framed in line with Public Notice No.111 of 1985 dated 29.07.1985 of Bombay Customs House. The Superintendent of Customs or the Appraiser or the Inspector of Customs or the preventive officer or examining officer as the case may be can exercise the power to recommend waiver of demurrage and other charges that are chargeable by the custodian of the goods in whose place/premises the goods are stored before being transshipped. In Trustees of the Port of Madras Vs. M/s. Aminchand Pyarelal, [ 1975 (9) TMI 170 - SUPREME COURT ], the Hon ble Supreme Court has held that the Port Trusts were under a statutory obligation to render services of various kinds in the larger public and national interest - The Hon ble Supreme Court also observed that the demurrage charges are levied in order to ensure quick clearance of the cargo from the harbour and the rates are fixed in such a way that they would make it unprofitable for the importer to use the port premises as a warehouse. In case there is congestion in the port it would affect the free movement of ships and of essential goods. Therefore, the scale of rates had to be framed in such a manner that it worked both as an incentive to the importers to remove the goods as expeditiously as possible from the transit areas and also acted as a disincentive to keep the goods in the premises of the Board for a long time, thereby increasing the demurrage charges substantially with passage of time - The Court thus held that it was the duty of the Board to recover rates; the Board had a lien on the goods and the right to seize and detain the goods, until the rates were fully paid and to sell the goods if the rates were not paid and recover the same. It was held that certain concessions may be given taking into account the hardship of the importers, but the legality of the rates cannot be questioned. The authorities under the Airport Authority Act, 1994 require certificate from the Customs for granting waiver from payment of demurrage under the policy framed under Regulation 6 of the Airport Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003 - In fact, such certificate need not be confined to the circumstances specified in Public Notice No.111 of 1985 dated 29.07.1985 of the Bombay Custom House alone. It can be issued in appropriate case to cover the circumstances specified in the Policy of the Airport Authority as per Regulation 6 of the Airport Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003. Though, it is not the case of the abuse by the officers of the Customs, there are sufficient indications to show that there was a complete disruption of service at the Air Cargo Complex during the relevant period due to alleged arrest of the officers. In absence of the officers to receive the transshipment application, there could have been total disruption and no application was received which perhaps may have led to the delay - If there were no proper officers or there were only few officers to handle the workload due to alleged arrest and the delay in receiving the transshipment application for being processed by the 1st respondent should not be at the cost of the petitioner. If indeed there was a complete breakdown due to alleged arrest and resulted in disruption of the operations at the Air Cargo Complex, the petitioner should be compensated as such delay cannot be attributed by the petitioner. This would require proper facts being established by the petitioner. This aspect would require proper verification - Issue is therefore left open for the petitioner to establish that Customs Department is liable to compensate the petitioner - Petition allowed by way of remand.
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2020 (5) TMI 475
Jurisdiction - power of DRI Officials to issue SCN - HELD THAT:- The issue relating to jurisdiction of DRI Officials to issue show cause notice to the Assessee in such cases is said to be pending before the Hon'ble Supreme Court in the case of Mangli Impex vs. Union of India [ 2016 (5) TMI 225 - DELHI HIGH COURT ], in which the Hon'ble Supreme Court has granted stay order - in view of the fact that the learned Tribunal has clearly protected the interest of both the Revenue as well as the Assessee by directing the Assessing Authority to keep the matter pending and maintain status quo till the Hon'ble Supreme Court decides the appeal of the Revenue in the case of Mangli Impex, filed against the decision of the Delhi High Court, we do not find any reason to interfere with the decision of the Tribunal, as in our opinion, no question of law arises for consideration in this appeal. Appeal disposed off.
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2020 (5) TMI 474
Permission to amend the shipping bill - HELD THAT:- Respondent No.2 states that though the power exist to correct a shipping bill under Section 149 of the Customs Act, a proper application needs to be made by the Petitioner, to be considered as per law. The learned Counsel for the Petitioner states that an application will be made within a period of one week from today - If such application is made within a period of one week from today, the learned Counsel for Respondent No.2 on instructions states that it would be decided as per law within a period of four weeks. Statement is accepted. Petition disposed off.
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Service Tax
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2020 (5) TMI 473
100% EOU - Refund of service tax paid - refund claim was rejected by the department on the ground that consequent to allegation of illicit mining of beach sand, the Government of Tamil Nadu vide GO dated 8.8.2013 and 17.9.2013 had banned mining of beach sand miners and also formed District level committee to verify the allegation - HELD THAT:- The ground for rejection is on an allegation that the appellant has done unlawful mining of raw sand and other minerals in excess of the permission granted to them. This aspect has to be looked into by the Govt. of Tamil Nadu as well as the committee formed for this purpose. The provisions of Mines and Minerals Act of the State has to look into the legal consequences of unlawful mining. When the appellant has exported the goods paying service tax on the services availed for exporting the goods, the department cannot deny the refund stating reasons beyond the Customs Act as well as Finance Act - Since the department does not have a case that the appellants have violated provisions of the Finance Act or the notification, the rejection of refund claim cannot sustain. Appeal allowed.
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Central Excise
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2020 (5) TMI 472
Refund of CENVAT Credit - while entertaining the refund claim of the appellant, various adjustments were required to be done against various demand and rebate claim filed by the appellant - HELD THAT:- While entertaining the refund claim, the adjudicating authority has observed that refund claim of ₹ 4,97,809/- has been withdrawn by the appellant being inadmissible. But, no finding has been given by the adjudicating authority, how this calculation has been arrived at. In view of this, the adjudicating authority is required to provide the details of admissible refund claim sought by the appellant of ₹ 4,97,809/-. Therefore, the impugned order qua rejecting the refund claim of ₹ 4,97,809/- on the ground that the same is not admissible and withdrawn is set aside and the matter is remanded back to the Adjudicating Authority. The adjudicating authority is required to give details of the admissible and not admissible refund alongwith co-relation sheet. The appellant is directed to produce the order of this Tribunal before the concerned Assistant Commissioner who within a period of seven days of receipt of this order shall quantify the actual amount of refund - appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2020 (5) TMI 471
Principles of Natural Justice - Validity of assessment order - main grievance of the petitioner before this Court is that before passing the orders of assessment, the petitioner was not served with any notice of proposal - HELD THAT:- Going by the facts and circumstances and considering that one of the issues before the Assessing Officer is mismatch issue and that the same has to be dealt with in accordance with the guidelines/directions issued in JKM Graphics [ 2017 (3) TMI 536 - MADRAS HIGH COURT ] , further considering the fact that the petitioner was not heard before passing the orders of assessment and that the orders of assessment themselves were served on the petitioner only recently, this Court is of the view that interest of both parties will be protected if the matter is remitted back to the Assessing Officer to redo the assessment afresh on all issues by giving due opportunity of hearing to the petitioner. The matter is remitted back to the Assessing Officer to redo the assessment on all issues after giving due opportunity of hearing to the petitione - Petition allowed by way of remand.
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2020 (5) TMI 470
Imposition of compounding/composition fees under Section 72 of the Tamil Nadu Value Added Tax Act, 2006 - allegation is that the goods transport accompanied defective an therefore, there was contravention of 71(5) of the Act - revision petition was dismissed by the 2nd respondent holding that the goods moved and the details in invoice No.0415 did not match - HELD THAT:- Though the petitioner claims that 7 logs were purchased by the petitioner on 06.08.2010 from M/s.New Patel Saw Mills, Shengottah, it is noticed that the petitioner has produced yet another commercial invoice dated 31.08.2010, wherein also, a transaction in respect of 7 logs has been shown for a total value of ₹ 13,50,318/- (₹ 12,00,283/- + ₹ 15,00,035/-). The petitioner has also enclosed the copy of another delivery Form JJ dated 03.09.2010 to show that the balance of 3 logs valuing ₹ 6,30,000/0 approximately were being sent back to the petitioner - It is not clear how invoice dated 31.08.2010 can be relied in support of the purchase of 7 logs on 06.08.2010. The petitioner has also not stated these facts before the 2nd respondent. The petitioner had earlier purchased 7 logs from the said M/s.New Patel Saw Mill, Shengottah on 06.08.2010 and had purportedly delivered the same to Sri Swastik Saw Mill, Erode for cutting and sawing. However, a new invoice dated 31.08.2010 has been filed to substantiate the same transaction. This raises doubt. Two transactions cannot be one and the same. Since there was several disputed questions of facts, which were not placed before the 2nd respondent by the petitioner, a fair chance may be given to the petitioner to place the same before the 2nd respondent for the latter to pass an appropriate order in accordance with law after hearing the petitioner - Petition disposed off by way of remand.
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Indian Laws
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2020 (5) TMI 469
Maintainability of application - Dishonor of Cheque - non-payment of 20% of compensation amount as per Section 148 of N.I. Act - petitioner has not challenged any specific order of the Courts below - HELD THAT:- On careful reading of the Section 482 of Cr.P.C. it appears that it gives inherent power to the High Court to make such orders as may be necessary to prevent abuse of process of any Court or otherwise to secure the ends of justice. Under Section 482 of Cr.P.C., there is no necessity to challenge any specific order of any Court, if the aggrieved person feels that the act of anyone is amount to abuse of process of law, he can pray to the High Court to exercise its inherent jurisdiction and pass appropriate direction to secure the ends of justice. Herein, in petition memo, the petitioner prays for specific direction with regard to hearing of appeal and cancellation of order of suspension of sentence and bail granted to the respondent, therefore, there are no force in the ground raised by the respondent s counsel and it is hereby discarded. The appeal is a legal right of the accused and cancellation of bail is not an indefeasible right of the complainant to get the appellants bail canceled but herein, it is pertinent to mention that though appeal is a legal statutory right of the appellant accused but the same cannot be used to abuse the process of law, it is not disputed that bail which was granted to the respondent was conditional in character, i.e. depositing of 20% of the compensation amount and same has been affirmed by this Court in earlier round of litigation. Since, condition stipulated therein has been violated by the respondent, he cannot longer take benefit of the same and plead at this stage that these are his legal right - The respondent cannot be allowed to abuse the process of law and pertinently this aspect has not considered by the learned trial Court. In view of the specific provision of Section 148 N.I. Act with regard to power of Appellate Court ordering of payment in pending appeal against conviction under the N.I. Act, there is no condition to the complainant to approach the Appellate Court for cancellation of bail - Petition allowed.
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2020 (5) TMI 468
Conversion of Consumer Welfare Fund Bill, 2010 into the Consumer Welfare Fund Rules, 2010 - transfer of the unclaimed or unpaid amounts of unidentifiable consumers lying with respondents to Consumer Welfare Fund or a Suspense Account as well as for refund of the same - HELD THAT:- This Court is of the firm view that present writ petition is untenable in law inasmuch as the petitioner has failed to appreciate that there is a system of separation of powers under the Indian Constitution and it is not for the courts to either legislate or convert bills/acts into rules or to disburse amounts to certain hospitals or for certain causes, howsoever genuine they may be. The petitioner would like the unutilized and unclaimed amounts lying with Cooperative Banks, Insurance Companies etc being given a similar treatment. Petitioner has adverted to the Consumer Protection Act 1986 and Consumer Protection Rule, 1987 and the Guidelines provisioning for Consumer Protection Councils. It is urged that with the said Councils should be given the complete control over the unutilized and unclaimed funds. This, according to him, can be achieved by amending the Consumer protection Act with a view to re-constitute and re-construct the Councils under the Act so as to enable them with wider powers and control - We do not see how Petitioner s viewpoint should be all-pervading and such institutions and departments should be forced to be compliant with his suggestions and ideas. The Petitioner has collated certain facts and figures to impress upon us that enormous amounts of Funds are lying in credit with several departments and wings of the Government. But, all these contentions remain Petitioner s ipse dixit and nothing actionable is there in law. The preferential treatment sought for the Safdarjung Hospital may not be founded on any bias, as indisputably the said Institution is presently doing great service to the nation, but we have no criteria to make a distinction for any one hospital. Significantly, the utilization of the funds is not a function that the courts are equipped to decide - the said petition was also half-baked, lacking content and structure, prompting the court to turn down the same. Petition dismissed.
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