TMI Tax Updates - e-Newsletter
May 9, 2020

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax

Articles

1. Another opportunity to avail transitional credits by 30th June, 2020

   By: Kushal Mishra

2. 7 FAQ’s ON ECR FILING AND PAYMENT OF CONTRIBUTIONS

   By: CSLalit Rajput

3. GST to a Common Man

   By: Ganeshan Kalyani

4. ATTITUDE OF GRATITUDE By Adv: G.Jayaprakash

   By: Jayaprakash Gopinathan

News

1. Sovereign Gold Bond Scheme 2020-21 Series II-Issue Price

2. Revised Issuance Calendar for Marketable Dated Securities for the remaining period of H1 (May 11-September 30, 2020)

3. Government of India & AIIB sign agreement for $500 million COVID-19 support for India

4. SEBI advises Franklin Templeton mutual fund to focus on returning money to investors

5. Smt. Nirmala Sitharaman launches INR - USD Futures and Options contracts in the International Exchanges at GIFT-IFSC

Notifications

GST - States

1. S.O. 122 - dated 6-5-2020 - Bihar SGST

Seeks to amend Notification No. S.O. 212 dated the 08.05.2019

2. S.O. 121 - dated 6-5-2020 - Bihar SGST

Provide relief by conditional waiver of late fee for delay in furnishing returns in FORM GSTR-3B for tax periods of February, 2020 to April, 2020

3. S.O. 120 - dated 6-5-2020 - Bihar SGST

Amendment in Notification No. S.O. 124 dated the 23rd January, 2018

4. S.O. 119 - dated 6-5-2020 - Bihar SGST

Provide relief by conditional lowering of interest rate for tax periods of February, 2020 to April, 2020

5. S.O. 118 - dated 6-5-2020 - Bihar SGST

Bihar Goods and Services Tax (Fourth Amendment) Rules, 2020.

6. S.O. 117 - dated 6-5-2020 - Bihar SGST

Seeks to prescribe return in FORM GSTR-3B of BGST Rules, 2017 alongwith due dates of furnishing the said form for April, 2020 to September, 2020.

7. S.O. 116 - dated 6-5-2020 - Bihar SGST

Seeks to prescribe the due date of GSTR-1 for registered persons with turnover of more than 1.5 crore

8. S.O. 115 - dated 6-5-2020 - Bihar SGST

Seeks to prescribe the due date for furnishing FORM GSTR-1 for the quarters

9. S.O. 114 - dated 6-5-2020 - Bihar SGST

Seeks to specify class of persons, other than individuals who shall undergo authentication, of Aadhaar number in order to be eligible for registration

10. S.O. 113 - dated 6-5-2020 - Bihar SGST

Seeks to notify the date from which an individual shall undergo authentication, of Aadhaar number in order to be eligible for registration

11. 43/GST-2 - dated 7-5-2020 - Haryana SGST

Notification to extend due date of compliance which falls during the period from "20.03.2020 to 29.06.2020" till 30.06.2020 and to extend validity of e-way bills under section 168A under the HGST Act, 2017

12. F A 3-33/2017/1/V (38) - dated 4-5-2020 - Madhya Pradesh SGST

Amendment in Notification No. F-A-3-33-2017-1-V (42), dated the 29th June, 2017

13. F A 3-27/2017/1/V (35) - dated 4-5-2020 - Madhya Pradesh SGST

Provide relief by conditional lowering of interest rate for tax periods of February, 2020 to April, 2020

14. F A 3-12/2020/1/V (37) - dated 4-5-2020 - Madhya Pradesh SGST

Seeks to notify the date from which an individual shall undergo authentication, of Aadhaar number in order to be eligible for registration

15. F A 3-09/2020/1/V (39) - dated 4-5-2020 - Madhya Pradesh SGST

Notification under section 148 to provide special procedure for corporate debtors undergoing the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016

16. F A 3-03/2018/1/V (36) - dated 4-5-2020 - Madhya Pradesh SGST

Amendment in Notification No. F-A 3-03-2018-1-V (4) dated the 23rd January, 2018

17. 14514-FIN-CT I-TAX-0001/2020 - dated 5-5-2020 - Orissa SGST

Notification to give effect to the provisions of Rule 87(13) and FORM GST PMT-09 of the OGST Rules w.e.f. 21.4.2020.

Income Tax

18. 24/2020 - dated 8-5-2020 - IT

Under section 80G(2)(b) the Central Government Notified “SHRI RAM JANMABHOOMI TEERTH KSHETRA” to be place of historic importance and a place of public worship

Highlights / Catch Notes

GST

• Court Remands IGST Refund Case for SEZ Supplies; Authority to Reassess with Petitioner's Input Considered.

  Case-Laws - HC : Refund of IGST - supplies made to SEZ Units - Reply to the notice not considered while rejecting the claim - The matter is remitted back to the to consider the petitioner‘s refund application as well as letter and annexures thereto and then pass a reasoned order.
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Income Tax

• Section 54F Deduction Valid Despite Property Possession Delays; Focus on Timely Investment of Capital Gains.

  Case-Laws - HC : Deduction u/s 54F - delay in delivery of possession of the property - investment of the entire capital gains for construction of a residential house within the stipulated period alone is relevant, and delivery of possession by the builder/promoter of the assessee of the said residential house cannot be a ground to deny the assessee deduction under Section 54F of the Act, for the reason that the assessee has no control over the actions of the builder/promoter and he cannot be punished for the delay on the part of the builder/promoter in delivering possession.
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• Lease Interest Deductible u/s 36(1)(iii), Principal Not Revenue Expenditure u/s 37(1.

  Case-Laws - AT : The assessee is entitled only to claim interest paid as part of the said lease rentals as expenditure u/s 36 (1) (iii) of the Income Tax Act. The assessee, in view of the discussion made above, is not entitled to claim the principal component of alleged lease rent paid as ‘revenue expenditure’ u/s 37(1)
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• Section 263 mandates PCIT to conduct an enquiry to assess if the Assessing Officer's order harms Revenue interests.

  Case-Laws - AT : Revision u/s 263 - The words “as he deems necessary”, in our view, do not mean that the Ld. PCIT was left with a choice either to make or not to make an enquiry. As per the relevant provisions of section 263, it was incumbent upon the Ld. PCIT to make or cause to make an enquiry. So far as the words “as he deems necessary” are concerned, the said words suggest that the enquiries which are necessary to form a view as to whether the order of the AO is erroneous and prejudicial to the interest of Revenue or not?
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• Section 69: Partner Deposits Not Firm Income; Unexplained Sources Affect Partners' Income Only.

  Case-Laws - AT : Addition u/s 69 - deposit made into the partnership firm by partners - Capital contribution by the partners cannot be treated as income of the assessee and if the partners are not able to explain the sources for their investment, the AO can only make the addition in the hands of the partners and not in the hands of the assessee firm.
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• Deduction u/s 80G Allowed for CSR Expenses; Double Disallowance Contradicts Legislative Intent.

  Case-Laws - AT : Deduction u/s 80G - assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing ‘Total Taxable Income”. If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature.
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• Court Rules Land as Business Asset Based on Assessee's Intent for Flat Construction, Despite Opposing Arguments.

  Case-Laws - AT : Capital asset or Business asset - assessee had purchased the land for the purpose of constructing flats on it - Various reasons given by CIT(A) to treat the land as capital asset would fail. Uncontroverted fact is that the intention of the assessee, at the time of purchase of the land, was to hold the same as business asset only, which is evident from the purpose for which the land was purchased.
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• Section 43B: Expenses Allowable Only When Paid in Same Financial Year as Incurred Liability.

  Case-Laws - AT : The provisions of section 43B are not in the nature of enabling provisions but are in the nature of disabiling provisions in the sense that firstly, it needs to be determined that the expense should pertain to the relevant financial year in respect of which the assessee has incurred the liability and thereafter, unless such liability is discharged by actual payment, such liability cannot be allowed but will not be allowed in the year of actual payment.
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• Dispute Over "Place" Definition in Section 36(1)(viia) for Rural Branch Deductions in Income Tax Act.

  Case-Laws - AT : Doubtful debts - Deduction u/s 36(1)(viia) in respect of rural branches based on population of ward - "place" referred to in the above definition clause is the ward of a panchayat or municipality, the AO took the view that "place" contained in the definition clause should mean a revenue village. No doubt, "place" as such is not defined in the definition clauses and so much so, we have to find out the scope and meaning of "place" referred to in the section.
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• Gallonage Fee for Wholesale Trade Disallowance Upheld; Licence Fee, Shop Rental, and Surcharge Disallowances Overturned u/s 40(a)(iib.

  Case-Laws - HC : Disallowance u/s 40 (a) (iib) - payment of Gallonage Fee, Licence fee, Shop rental (Kist) and Surcharge on Sales Tax - the levy of Gallonage Fee with respect to the wholesale trade under the FL-9 licence will squarely fall within the scope of the disallowances - Disallowance made with respect to the licence fee and shop rental (kist) paid with respect to the FL-1 licences granted to the appellant for retail trade in foreign liquor, cannot be sustained. - disallowance of surcharge on sales tax and turnover tax cannot be sustained.
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Customs

• Court Rules Co-Developer Status in SEZ Redundant After Auction; No Action Needed Under SEZ Act Sections 10, 13, 51.

  Case-Laws - HC : Establishment of Special Economic Zone (SEZ) - Cancellation of Co-developer status of the petitioner - Auction of plot by the bank after the default in payment of the loan taken from SIDBI by the petitioner - no action is required to be taken under the provisions of the SEZ Act for suspension or transfer or cancellation of letter of Approval in favour of the petitioner which has become redundant and extinguished in view of auction sale by the SIDBI, analyzing and/or applying the provisions of Section 10, 13 and 51 of the Act would be an academic exercise.
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IBC

• Tribunal Initiates Corporate Insolvency Resolution Process Under IBC 2016 After Debtor's Late, Unfounded Dispute on Debt Repayment.

  Case-Laws - Tri : Initiation of CIRP - Corporate Debtor failed to make repayment of its debt - the belatedly raised dispute without establishing nexus and relevance cannot be termed as genuine dispute - this Tribunal is inclined to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor as envisaged under the provisions of IBC, 2016.
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• CIRP Initiated Due to Non-Payment; Petition u/s 9 Confirms Claim Not Barred by Limitation.

  Case-Laws - AT : Initiation of CIRP - the amount having not paid the demand notice in Form 3 under section 8(1) was issued on February 15, 2017 followed by filing of petition under section 9. The facts as noted and detailed makes it clear that the claim of the first respondent is not barred by limitation.
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Case Laws:

• GST

• 2020 (5) TMI 194
  Refund of IGST - supplies made to SEZ Units - rejection on the ground that there were certain deficiencies in the claim made for the refund and advising the petitioner to rectify his refund application - Deficiency Memo in RFD-03 dated 05.01.2019 issued or not - HELD THAT:- Sri M. Govind Reddy, the Special Counsel for Commercial Taxes, does not deny that in the impugned order passed by the respondent No.1 there is no reference to the petitioner s letter dated 09.02.2019 given to the Deficiency Memo dated 05.01.2019 issued by the respondent No.1. The matter is remitted back to the respondent No.1 to consider the petitioner s refund application dated 06.10.2018 as well as letter dated 09.02.2019 and annexures thereto and then pass a reasoned order within four (4) weeks from the date of receipt of a copy of this order. - Petition allowed by way of remand.

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• 2020 (5) TMI 193
  Seizure of accounts - Supply of seized certified copies of documents - HELD THAT:- This petition is disposed off with a direction that the attachment would be limited to the amounts which were lying to the credit of the petitioner in CC A/c, at the time of freezing and any further credit which may come would not be under attachment.

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• Income Tax

• 2020 (5) TMI 192
  Recovery proceedings - attachment of pension accounts - petitioner seeks withdrawal of the amounts deposited as pension in the State Bank of India and HDFC Bank accounts and further seeks quashing of blanket attachment order dated 11.02.2020, whereby the pension accounts have been attached - HELD THAT:- As petitioner submits that two representations have already been give. However, a detailed representation shall be filed with the Income Tax Department within one week. On petitioner filing a representation, the competent authority shall consider the same and dispose it off, in accordance with law, by passing a speaking order, preferably, within a period of one week. List before the concerned Roster Bench for directions on 15.07.2020.

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• 2020 (5) TMI 191
  Income from other sources - addition as interest - enhanced sale consideration received by the assessee due to delay in the completion of the sale transaction on account of the default of the buyer of the property - HELD THAT:- The finding of the Tribunal that the amount received by the assessee from his purchaser cannot be termed as interest because there is no finding of the Commissioner of Income Tax as to the rate of interest, is a finding of fact. Also the value of the said item is far less than the value for which the appeals can be filed before this Court by the Department. Deduction u/s 54F - delay in delivery of possession of the property , which the assessee intends to purchase, beyond the time line fixed under the provisions of the Act - HELD THAT:- We agree with the view of the Tribunal that the Assessing Officer rightly granted deduction to the assessee taking into account the settled legal position that investment of the entire capital gains for construction of a residential house within the stipulated period alone is relevant, and delivery of possession by the builder/promoter of the assessee of the said residential house cannot be a ground to deny the assessee deduction under Section 54F of the Act, for the reason that the assessee has no control over the actions of the builder/promoter and he cannot be punished for the delay on the part of the builder/promoter in delivering possession.

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• 2020 (5) TMI 190
  Addition on account of interest paid to M/S CISCO Capital System holding the same to have been claimed twice by the assessee - deduction of expenditure u/s 37 - HELD THAT:- Issue whether double deduction has been claimed by the assessee of the interest expenditure should be restored to the Assessing Officer for verification. Treatment of lease agreement entered - finance lease agreement or operating lease - whether the principal component of lease rental claimed by the assessee is a Revenue expenditure falling u/s 37 of the Act or a capital expenditure incurred for the purpose of capital assets? - HELD THAT:- When the Income Tax Act does not distinguishes between various type of leases, we find no justifiable reason to firstly describe and categorise a particular type of transaction/agreement as a form of lease named finance lease and then to say that the provisions of section 37 of the Income Tax Act for claim of expenditure on lease rental will not be applicable on such type of lease; this, in our view, will be against the provisions of the Income Tax Act. On the one hand, terming and placing a transaction / agreement under the genre of Lease and then to say that such particular species of that genre will not be entitled to the deductions as prescribed for the lease transactions under the Income Tax Act, in our view, serves no purpose other than confusion and conflict of opinion giving rise to the dispute and litigation on the issue. As per the provisions of the Income Tax Act what is to be determined as to whether the agreement / transactions in question is of a lease or a loan or of a hire / purchase. Whether the agreement with CISCO is of a lease as claimed by the assessee or the same is mere loan / finance agreement? - The impugned order is to be read as a whole, and a single line or word can not be chosen to interpret a different meaning. What the Ld. CIT(A) has conveyed is that though the execution of the lease deed is not doubted but the real intention behind the deed is to be gathered from the various clauses of the deed and facts and circumstances of the case. Thus, we have no hesitation in holding that the arrangement in the present case was a loan / finance arrangement in the guise of a lease agreement. The assessee is entitled only to claim interest paid as part of the said lease rentals as expenditure u/s 36 (1) (iii) of the Income Tax Act. The assessee, in view of the discussion made above, is not entitled to claim the principal component of alleged lease rent paid as revenue expenditure u/s 37(1) of the Act. However, the assessee is also entitled to claim depreciation on the said assets purchased from borrowed capital. Rate depreciation allowable to the assessee on the equipment so purchased after obtaining finance from the CISCO ?- whether the STBs [Set top boxes] will be eligible for depreciation as applicable to the computers or not? - @ 60% OR 15% - HELD THAT:- The entire cost incurred by the assessee on the equipment is required to be squared off at the time of sale of equipment. Hence, under the circumstances, the assessee will be entitled either to the deduction of the cost of the equipment either as revenue expenditure and if the same is to be treated as capital asset, then depreciation cannot be postponed beyond the actual life / ownership of the equipment and the assessee will be entitled to the deduction of the written down value of the equipment at the end of 3 years from the sale price received. However, the peculiar facts and circumstances of the case are that it is the own case of the department that the life of the equipment is 3 years and that the asset in the hands of the assesssee is a capital asset, then we cannot understand, how can the department press an argument for the grant of depreciation at a lower rate which may be extended beyond the life of the asset. Under these circumstances also, the assessee, in our view, is entitled to the higher rate of depreciation which is commensurate with the life of the asset. It is held that the assessee is entitled to deprecation @ 60% as applicable to the computers for the year under consideration. This ground is accordingly stands allowed. Disallowance of deduction claimed u/s 35D of 1/5th of the preliminary expenses - HELD THAT:- assessee contended that may be the expenses incurred for acquiring lease rights of fibre links did not fall within the definition and scope of preliminary expenses under the provisions of section 35D, however the same were allowable either as business expenses or as depreciation on the leased asset acquired by virtue of this IRU agreement. This contention has been raised before us for the first time. Even the CIT(A) has not gone into this aspect having denied the claim of deduction u/s 35D of the Act only. We, therefore, restore this issue to the CIT(A) to examine all the facts of the case on this issue and thereafter decide the claim in accordance with law. Disallowance of interest expenditure u/s 36(1)(iii) - HELD THAT:- Tribunal in the case of ACIT Vs. Janak Global Resources Pvt Ltd [ 2018 (12) TMI 902 - ITAT CHANDIGARH]3 holding that that if the assessee is possessed of sufficient own interest free funds to meet the investments / interest free advances, then, under the circumstances, presumption will be that interest free advances / investments have been made by the assessee out of own funds / interest free funds. Reliance in this respect can also be placed on the decision of the Hon ble Supreme Court in the case of Hero Cycles (P) Ltd Vs. CIT [ 2015 (11) TMI 1314 - SUPREME COURT] and also CIT (LTU) Vs. Reliance Industries Ltd. [ 2019 (1) TMI 757 - SUPREME COURT] . Thus, as per the settled law no disallowance u/s 36(1)(iii) of the Act is warranted on this issue. This ground is accordingly allowed in favour of the assessee. Higher rate of depreciation claim in response to section 148 - as per AO assessee has claimed depreciation at a higher rate i.e. @ 35% as against its entitlement of 15% whereas the assessee in the return filed in response to notice u/s 148 of the Act has claimed the depreciation @ 60% - HELD THAT:- We hold that the Assessing Officer as well as the Ld. CIT(A) were legally duty bound to consider and entertain the issue raised by the assessee of admissibility of statutory deduction of depreciation at a higher rate as prescribed and adjudicate upon it. Even there is no bar on the Tribunal in this respect to entertain and adjudicate upon the issue of rate of depreciation despite the fact that the claim relating to admissibility of higher rate of depreciation was made for the first time in the return filed in response to section 148 of the Act. So far the issue on merits is concerned, in view of our detailed discussion as above on the issue while adjudicating upon the additional ground taken in assessee s own appeal and in view of our decision rendered therein and the facts being similar in this appeal, the issue is accordingly decided in favour of the assessee and it is accordingly held that the assessee is entitled to depreciation on the assets in question @ 60%. Deprecation claimed on the STBs which were not put to use during the year - HELD THAT:- Transaction of acquiring of STBs by the assessee was a loan/financial transaction meaning thereby the STBs were purchased by the assessee to put to use in its business. STBs are further given to the consumers on hire purchase agreement which are deemed to be sold to the consumers after three years from the date of delivery/installation - assessee had put the STBs in its business from the date it acquired/purchased the same. In view of this, the assessee is entitled to deprecation irrespective of the date of installation of STBs in the premises of the consumers. This issue is accordingly allowed in favour of the assessee. Disallowance of the interest component u/s 40(a)(ia) for less deduction of TDS - interest component paid by the assessee to the CISCO along with lease rental, the assessee had deducted TDS @ 1% instead of 2% as was required under the provisions of section 194A r.w.s. 194-I - HELD THAT:- As the said lease rentals in fact were repayment of the loan amount. The assessee, therefore, was not required to deduct the TDS on the principal component of the loan amount. The assessee, however, has deducted TDS on the said component also, which under the circumstances, is to be considered as deduction of TDS towards interest component. The issued is accordingly restored to the file of the Assessing Officer for decision a fresh as per our observations made above. Disallowance u/s 14A - expenditure incurred for earning of tax exempt income - HELD THAT:- No disallowance is attracted u/s 14A of the Act in case the assessee has not earned any income not forming part of the total income. This issue is accordingly decided in favour of the assessee. The disallowance made by the lower authorities on the above issue is ordered to be deleted.

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• 2020 (5) TMI 189
  Revision u/s 263 - cash deposits in his bank account -whether the Ld. PCIT was justified u/s 263 in setting aside the assessment order and directing the A.O. to make more/further enquiries? - HELD THAT:- Notices issued by the A.O. and replies thereto furnished by the assessee reveal that all the queries raised by the A.O. including about the source of deposits were duly answered by the assessee supported with the documentary evidence. PCIT was of the view that the A.O. had not made the requisite enquiries. However, in reply to the show cause notice, when the assessee had shown from the record that the necessary enquiries were made by the AO and the AO had applied his mind and the view adopted by him was one of the possible views, then without considering the reply of the assessee and without recording his reasoned disagreement/dissatisfaction there to, it was not open to the Ld. PCIT to brand the order of the A.O. as erroneous. Admittedly, the AO asked the assessee to furnish the necessary details from time to time which were duly furnished by the assessee and after considering the same the AO passed the assessment order. Second step for the Ld. PCIT, as per the provisions of section 263 before passing an order of modifying, enhancing or cancelling the assessment, he was supposed either to himself make or cause to make such an enquiry as he deems necessary. The words as he deems necessary , in our view, do not mean that the Ld. PCIT was left with a choice either to make or not to make an enquiry. As per the relevant provisions of section 263, it was incumbent upon the Ld. PCIT to make or cause to make an enquiry. So far as the words as he deems necessary are concerned, the said words suggest that the enquiries which are necessary to form a view as to whether the order of the AO is erroneous and prejudicial to the interest of Revenue or not? Admittedly, in this case also, the Ld. PCIT had asked the assessee to furnish the necessary details and explanations, to which the assessee had given a pointwise detailed reply. We agree with the submissions of assessee as to when there was no such issue or fact on the file regarding the source of any investment made by the assessee, where was the question of examining the issue on purely and imaginary suspicions. Opening cash in hand was carried/ brought forward from the closing cash in hand of the previous assessment year. DR could not convince us as to how the Ld. PCIT was justified to direct the A.O. to make enquiries regarding the source of cash in hand of the previous assessment year in the assessment proceedings for the subsequent year i.e. in the assessment year under consideration - regarding the source of the amount received from Smt. Gulshan Gupta and Ranjan Gupta, the assessee duly explained that the same were the repayments of the amounts earlier received by them from the assessee. Then the Ld. PCIT observed that no interest has been charged by the assessee from Smt. Gulshan Gupta and Mr. Ranjan Gupta. We fail to understand how this fact was relevant, when there was neither any observation made by the A.O. nor by the Ld. PCIT that assessee had used interest bearing funds to give advances to Smt. Gulshan Gupta and Mr. Ranjan Gupta. PCIT did not even bother to consider reply and details furnished by the assessee what to say of calling for any enquiry etc. PCIT has directed the A.O. to make further fishing and roving enquiries which even do not germane from the facts and issues involved. Even we find that the Ld. PCIT has directed the A.O. to make further fishing and roving enquiries which even do not germane from the facts and issues involved. In the case of CIT vs. G.M. Mittal Stainless Steel (P) Ltd. [ 2002 (12) TMI 13 - SUPREME COURT] has observed that the satisfaction by the Commissioner must be one objectively justifiable and based on material either legal or factual when available, it cannot be mere ipse dixit of the Commissioner. Order of the Commissioner exercising jurisdiction u/s 263 cannot held to be sustainable in law and the same is accordingly set aside. - Decided in favour of assessee.

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• 2020 (5) TMI 188
  Addition u/s 69 - deposit made into the partnership firm by partners - business had not commenced or just commenced - HELD THAT:- As decided in SMT. PK NOORJAHAN [ 1997 (1) TMI 6 - SUPREME COURT] where any assessee had not carried on any business activity, it cannot be presumed to have earned any income Assessee has not carried on any business activity and earned any income. In such circumstances, it could only have received capital contribution from the partners. Capital contribution by the partners cannot be treated as income of the assessee and if the partners are not able to explain the sources for their investment, the AO can only make the addition in the hands of the partners and not in the hands of the assessee firm. Further in the dissolution deed of the assessee firm dated 10/04/2000 also, there is a mention of the return of the capital and this deed is not disputed by the AO. Addition made in the hands of the assessee firm is not justified and, therefore, the said addition is deleted. - Decided in favour of assessee.

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• 2020 (5) TMI 187
  Deduction u/s 80G - Assessee company engaged in the business of BPO operations, software services and developing, designing and selling of IT infrastructure - HELD THAT:- For claiming benefit under section 80G, deductions are considered at the stage of computing Total taxable income . Even if any payments under section 80G forms part of CSR payments( keeping in mind ineligible deduction expressly provided u/s.80G), the same would already stand excluded while computing, Income under the head, Income form Business and Profession . The effect of such disallowance would lead to increase in Business income. Thereafter benefit accruing to assessee under Chapter VIA for computing Total Taxable Income cannot be denied to assessee, subject to fulfillment of necessary conditions therein. AR submitted that all payments forming part of CSR does not form part of profit and loss account for computing Income under the head, Income from Business and Profession . It has been submitted that some payments forming part of CSR were claimed as deduction under section 80G of the Act, for computing Total taxable income , which has been disallowed by authorities below. In our view, assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing Total Taxable Income . If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature. Authorities below have erred in denying claim of assessee under section 80G of the Act. We also note that authorities below have not verified nature of payments qualifying exemption under section 80G of the Act and quantum of eligibility as per section 80G(1). We are remitting the issue back to Ld.AO for verifying conditions necessary to claim deduction under section 80G - Assessee appeal allowed for statistical purposes.

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• 2020 (5) TMI 186
  Rejection of books of accounts - GP Estimation - HELD THAT:- After rejection of book results, the rate of gross profit could be determined by considering the gross profit level declared by comparable cases. While we agree with the view of the CIT(A) that the profit should have been estimated at Gross profit level , we notice that the CIT(A) has not brought any comparable cases to determine the Gross profit rate at 4.50% in both the years. There is fallacy in the approach of the CIT(A) which cannot be upheld. We also notice that there was no occasion for the assessing officer to examine various expenses claimed by the assessee, since he had estimated the net profit. We are of the view that matters relating to estimation of gross profit rate by considering comparable cases and examination of various expenses claimed by the assessee require fresh examination at the end of the assessing officer. Accordingly, we set aside the orders passed by CIT(A) in both the years and restore the issues relating to estimation of gross profit rate and examination of various expenses claimed by the assessee in both the years to the file of the assessing officer, who shall examine them in accordance with law after affording adequate opportunity of being heard to the assessee.

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• 2020 (5) TMI 185
  Profit arising on sale of Kadri Kamble land - Capital asset or Business asset - assessee had purchased the land for the purpose of constructing flats on it - HELD THAT:- Amount paid to tenants has been capitalized and not claimed as deduction - In case of execution of project of construction of multistoried apartment, it is the trade practice to bear the rent paid by tenants who are going to be allotted flats in the proposed building and further, those expenses are usually claimed against the revenue generated from the said project only. Hence the question of claiming the rent so paid as deduction against other income of the assessee does not arise, since they are project specific expenses.Various reasons given by CIT(A) to treat the land as capital asset would fail. Uncontroverted fact is that the intention of the assessee, at the time of purchase of the land, was to hold the same as business asset only, which is evident from the purpose for which the land was purchased. There is no material to show that the assessee has really converted the business asset into capital asset. Character of the impugned land is to be considered as business asset only and consequently, the profit arising on its sale is required to be assessed as business income only. Accordingly, we set aside the order passed by CIT(A) on this point. Indexation benefit - CIT(A) has given reduction of Rs. 45.00 lakhs from the sale consideration, since the buyer of the land Smt Latha, has confirmed that she has not honoured the cheques given for Rs. 45.00 lakhs - HELD THAT:- CIT(A) was justified in giving reduction of Rs. 45.00 lakhs. Since there is no dispute that the assessee has taken cash of Rs. 11.00 lakhs, CIT(A) has added the same. Accordingly, we are of the view that the CIT(A) was justified in adopting the sale consideration as Rs. 3.21 crores. The parties are not also disputing the decision of CIT(A) in allowing deduction of cost of purchase of land. We notice that the first appellate authority has allowed indexed cost of acquisition, since he has held that the profit is assessable under the head Capital Gains. The indexation benefit will not be available to the assessee, since we have held that the land is a business asset and consequently, the profit is assessable under the head Income from Business. The order of Ld CIT(A) is modified accordingly. Deduction allowable u/s 54F - HELD THAT:- Since we have held that the profit arising on sale of land is assessable as Business income of the assessee, the question of allowing deduction u/s 54F of the Act does not arise. Accordingly, the order passed by Ld CIT(A) on this issue is reversed. Unaccounted investment in purchase of flat in West wind project - HELD THAT:- There is no dispute with regard to the fact that the group concerns of the assessee has surrendered a sum of Rs. 4.00 crores and accordingly their Balance Sheets have been revised, apparently, for incorporating the amount so surrendered. The investment in West wind flats is disclosed by the assessee in his proprietary concern named M/s Classic Promoters Developers. In the revised Balance Sheet of the above said concern, the investment made in the above said project was shown at Rs. 61,83,225/-. Hence the different works out to Rs. 7,02,775/- only. After referring to seized material and noticing certain discrepancies, CIT(A) has confirmed addition to the extent of Rs. 7,16,275/-. We notice that the first appellate authority has considered the available materials and has reached a reasonable conclusion on this issue. Accordingly we do not find any reason to interfere with his decision taken on this issue. Accordingly, we confirm the order passed by CIT(A) on this issue. Appeal of the assessee is dismissed

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• 2020 (5) TMI 184
  Maintainability of appeal - low tax effect - Reopening of assessment - addition based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI) - HELD THAT:- Both administratively and functionally, there cannot be any dispute that the Investigation Wing of Income Tax Department is part of Income Tax Department and is therefore clearly not an external law enforcement agency and that too, as specified in the aforesaid exception. Therefore, in the instant case, where the matter has been reopened based on information received from Investigation Wing and the assessment has been completed by the Assessing officer where the matter under appeal has tax effect less than the prescribed limit, it will continue to be governed by low tax effect circular issued by the CBDT which is binding on the Revenue. Present appeal filed by the Department is dismissed on account of low tax effect given the matter not covered by any exceptions so specified.

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• 2020 (5) TMI 183
  Deduction u/s 54F - time frame of depositing in capital gains account scheme - assessee has filed her return of income on 14.12.2011 within time limit prescribed under section 139(4) - HELD THAT:- In the instant case, where the amount was deposited in capital gain accounts scheme before filing of return U/s 139(4) of the Act, respectfully following the decision of SHRI SHANKAR LAL SAINI [ 2018 (1) TMI 1000 - RAJASTHAN HIGH COURT] the same be eligible for deduction u/s 54F of the Act. In the result, the matter is decided in favour of the assessee and against the Revenue and the sole ground of appeal is allowed.

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• 2020 (5) TMI 182
  Return revised u/s 139(5) - belated return filed - original return not filed in time prescribed u/s 139(1) - HELD THAT:- Assessee has filed his return of income originally on 28.03.2013 which was subsequently revised on 29.06.2013. The original return was therefore, not filed in time prescribed u/s 139(1) and filed belatedly well before the end of the assessment year on 28.03.2013 and therefore, it is a return filed u/s 139(4) - Under Section 139(5) any person having furnished a return u/s 139(1) or not 139(2) may furnish a revised return at any time before the assessment is made. Therefore, no revised return can be filed u/s 139(5) in a case where the return was originally filed belatedly u/s 139(4) - In the instant case, given that the return was originally filed u/s 139(4) of the Act, the same cannot be revised u/s 139(5) of the Act. Revised return filed by the assessee on 29.06.2013 has rightly not been considered by the Assessing Officer. Addition of salary - assessee has given Form No. 16 that how much he received the salary during the year, but the learned A.O. narrated so many things in the assessment order - HELD THAT:- There is fluctuation in the salary income so reported by the assessee from year to year and the said salary income is also claimed to have been received from different institutions - it is important to determine which all institutions, the assessee worked for during the year under consideration and how much salary he has been earned during the year. In absence of sufficient facts on record, we deem it appropriate to remand the matter to the file of the AO who shall examine the same afresh after calling from information from the respective institutions as well as after providing reasonable opportunity to the assessee. In the result, the Ground of the assessee s appeal is allowed for statistical purposes. Determination of rental income derived by the assessee from its various properties - HELD THAT:- where the only property which has been let out is House No. 756, Pratap Nagar, Kota, the annual rental value of Rs. 1.2 lakhs which is consistent with earlier year reporting of rental income from the said property should therefore be considered in absence of anything contrary on record. In respect of second property, it has been submitted that the same was not rented out during the year and therefore, in view of the provisions of section 23(1)(a) r/w 23(1)(c), the explanation of the assessee that no rental value can be estimated is found to be reasonable in absence of anything contrary on record. In respect of third property, it has been submitted that the same was sold and capital gains offered to tax during AY 2011-12, the same can be verified by the AO and where the same is found to be correct, there cannot be any rental value which can be brought to tax for the impugned assessment year. Disallowance @ 25% of expenses - Expenses incurred by the assessee as part of its running of Hostel premises which have been rented to the students in absence of books of accounts - assessee has returned a profit of 35% which is quite high as compared to profit shown by other similar situated assessees providing hostel premises to students in the city of Kota - HELD THAT:- We find that 35% profit rate is a reasonable profit rate so disclosed by the assessee and even though the assessee has not submitted the books of accounts, estimation of profits needs to be reasonable, therefore, taking into consideration the profitability so shown by the assessee @ 35%, the addition sustained by the ld. CIT(A) is hereby deleted. In the result, the ground of appeal is allowed. Deduction U/s 80C - repayment schedule payment proof during the year - HELD THAT:- Assessee has produced the LIC certificate during the course of hearing, basis the same, the AO is directed to allow deduction after carrying out the necessary verification. In the result of the assessee s appeal is allowed.

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• 2020 (5) TMI 181
  Reopening of assessment u/s 147 - whether issuance of notice u/s 148 merely on the basis of doubt and suspicion and without having reason to believe? - HELD THAT:- There was no original assessment u/s 143(3) of the Act but the return filed by the assessee was processed u/s 143(1) of the Act. Subsequently, the AO received information as well as statement recorded by the Investigation Wing, Mumbai during search and seizure operation in case of Shri Rajendra Jain, Shri Sanjay Choudhary group and Shri Dharmichand Jain group of Mumbai on 03-10-2013. The assessee claimed to have purchased Diamond from the concerns of Shri Rajendra Jain, Group, therefore, based on the information received from Investigation Wing, Mumbai, there was a prima facie material to form the belief that income assessable to tax has escaped assessment. No error or illegality in the impugned order of the ld. CIT(A) qua this issue. Thus Ground No. 1 of the assessee is dismissed. Rejection of books of account u/s 145(3) - GP estimation - addition of 25% of alleged bogus purchases - CIT(A) has given the details of the average g.p. and arrived to the conclusion that if the income is estimated based on the average g.p. on the turnover of the assessee then it would be more than the addition made by the AO - HELD THAT:- If the income of the assessee is estimated as per well settled proposition of law being the past history of the g.p. declared by the assessee and average of past history as the basis of the estimation then the addition on account of low g.p. for the year under consideration would have been more than the addition made by the AO. Accordingly, we do not find any error or illegality in the impugned order of the ld. CIT(A). - Decided against assessee.

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• 2020 (5) TMI 180
  Penalty u/s.271AAA - statement recorded in the proceedings u/s.132(4) - whether any specific loose paper or investment made by the assessee? - Return filed response to the office notice issued u/s.153A - HELD THAT:- Seized Loose Paper pertains to the assessment year 2012-13 and therefore, it cannot be linked to the income disclosed for the assessment year 2011-12. That further, no query or question were put forth by the Revenue Authorities to the assessee in the entire proceedings u/s.132(4) of the Act with regard to seized Loose Paper No.7 and as the Co-ordinate Bench of the Tribunal, Delhi in the case of Neeraj Singhal [ 2015 (3) TMI 680 - ITAT DELHI] has taken a view that in such scenario, penalty u/s.271AAA cannot be levied and the same is being upheld in SHRI BANARASIDAS R. JINDAL AND OTHERS [ 2015 (7) TMI 159 - ITAT PUNE] we are of considered view therefore that the findings arrived at by the Ld. CIT(Appeals) is not correct in law as well as in facts. We set aside the order of the Ld. CIT(Appeals) and direct the Assessing Officer to delete the penalty u/s.271AAA of the Act from the hands of the assessee.- Decided in favour of assessee.

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• 2020 (5) TMI 179
  Penalty u/s. 271(1)(c) - filing inaccurate particulars of income OR concealment of income - HELD THAT:- As initiated penalty proceedings by issuing show caused notice u/s. 271(1)(c) of the Act for filing inaccurate particulars of income which is evident in the last page of assessment order. We note that the AO imposed penalty u/s. 271(1)(c) for concealment of income which is evident from para 5 of penalty order. Therefore, the imposition of penalty is contrary to the findings of AO in assessment proceedings and in view of the decision of Samson Perinchery [ 2017 (1) TMI 1292 - BOMBAY HIGH COURT] as rightly pointed by Shri S.N. Puranik, the ld. AR and the penalty imposed and as confirmed by the CIT(A), in our opinion, is not justified. - Decided in favour of assessee. Bogus Hawala purchases - purchases from grey market - CIT(A) held that the assessee is not able to substantiate the genuineness of alleged purchases restricted the said addition to 10% to arrive at such conclusion - HELD THAT:- We find this Tribunal on similar issues by placing reliance in the case of M/s. Chhabi Electricals Pvt. Ltd. [ 2017 (6) TMI 514 - ITAT PUNE] confirming the addition at 10% on the bogus Hawala purchases. Therefore, considering the same, we find no infirmity in the order of CIT(A) and it is justified. Thus, grounds raised by the assessee fails and are dismissed.

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• 2020 (5) TMI 178
  Capital grant so received from the Central and State Government - absence of proper reconciliation of utilized grant and when utilized grant was more than 70% of capital cost - HELD THAT:- Capital grant is utilized for purchase of buses and other fixed assets for which it has been granted, the same would be in nature of capital grant and not chargeable to tax. Where the capital grant is utilised for meeting the operational expenditure of the assessee company, the AO is well within his right and jurisdiction to examine the taxability thereof as to why the same should not be treated as revenue receipt and brought to tax. In the present case, as we have noted above, the adequate information is not available on record and we therefore deem it appropriate to remand the matter back to the file of the AO to examine the same afresh after providing reasonable opportunity to the assessee company. Further, the Assessing Officer shall be at liberty to examine the claim of the depreciation on the assets so purchased out of the capital grant after considering the provisions of explanation 10 to section 43(1) of the Act. In the result, the ground of the appeal is allowed for statistical purposes. Disallowance u/s 40A(3) in respect of expenses being set off by RSRTC - HELD THAT:- Where there is a violation of terms of agreement entered into between RSRTC and the assessee company, the same is a subject matter of contractual dispute which has been highlighted by the auditors in their audit report and it is for the parties to the dispute and the appropriate authorities to take note of the same. How the same has effected the reporting of revenues in the financial statements and offering the same to tax in the return of income has not been stated at all by the AO. Therefore, where there is no finding by the Assessing officer that the revenue so collected has not been offered to tax, there cannot be any basis for making addition in this regard. As it is emerging from the records, RSRTC incurs the expenditure on behalf of the assessee company out of such revenue collection in cash and then, remits the balance amount to the assessee company. On the expenditure so incurred by RSRTC on behalf of the assessee company, the latter has submitted the details of TDS deducted and deposited. CIT(A) has returned a finding that No cash payment in contravention of Section 40A(3) by the appellant has been brought on record by the AO. During the course of hearing, the ld DR has not brought on record anything which controverts such findings. Therefore, where no finding has been given by the Assessing officer in terms of any specific violation of provisions of section 40A(3) read with Rule 6DD, we donot see any infirmity in the action of the ld CIT(A) is deleting the said disallowance. Disallowance u/s 43B - Interest liability had not crystallized in the previous year relevant to A.Y. 2012-13 - HELD THAT:- What needs to be seen is whether the interest liability has crystallized during the year or not. Only where it is held that the interest liability has crystallized during the year, the interest expense can be claimed and thereafter, the question of applicability of section 43B arises for consideration. The provisions of section 43B are not in the nature of enabling provisions but are in the nature of disabiling provisions in the sense that firstly, it needs to be determined that the expense should pertain to the relevant financial year in respect of which the assessee has incurred the liability and thereafter, unless such liability is discharged by actual payment, such liability cannot be allowed but will not be allowed in the year of actual payment. In the instant case, the assessee company has not established that the liability towards the interest has crystallized during the year, hence, we donot see any infirmity in the findings of the ld CIT(A) and the same is hereby confirmed.

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• 2020 (5) TMI 177
  Bad debits - Disallowance of eligible deduction u/s 36(1)(viii) - long term loans given to individuals on the ground that they do not constitute loans for development of housing in India - HELD THAT:- In view of own case [ 2019 (3) TMI 1261 - ITAT COCHIN] we do not find any infirmity in the order of the CIT(A) in granting relief to the assessee u/s. 36(1)(viii) with regard to providing long term finance for industrial or agricultural development or development of infrastructure facility in India and the same is confirmed. Thus, this ground of appeals of both the assessee as well as the Revenue are dismissed. Doubtful debts - Deduction u/s 36(1)(viia) in respect of rural branches based on population of ward - confirming the order of the A.O. allowing the same based on population of village - HELD THAT:- We find that similar issue came up for consideration before the Hon ble jurisdictional High Court in the case of CIT v. Lord Krishna Bank Limited [ 2010 (10) TMI 860 - KERALA HIGH COURT] assessee s case that found acceptance with the Tribunal is that place referred to in the above definition clause is the ward of a panchayat or municipality, the AO took the view that place contained in the definition clause should mean a revenue village. No doubt, place as such is not defined in the definition clauses and so much so, we have to find out the scope and meaning of place referred to in the section. Standing counsel for the Department produced before us last published Census Report of 2001. Even though the previous Census Report may be the relevant one, we feel the scope of place as referred to in the Census Report produced could be adopted for the purpose of this case - we are inclined to reject the above ground of appeal raised by the assessee. Allowability of claims made during the course of assessment - HELD THAT:- Tribunal relied on the judgment of the Hon ble Supreme Court in the case of Goetze (India) Ltd. v. CIT [ 2006 (3) TMI 75 - SUPREME COURT] and remanded the issue to the file of CIT(A) for fresh consideration. In view of the above decision of the Tribunal cited supra, we are inclined to remit all the above grounds to the CIT(A) to consider afresh and decide the same in accordance with law. Addition u/s 14A - HELD THAT:- As long as the exempt income was earned, the expenditure incurred as attributable to earning such exempt income had to be disallowed u/s 14A and also irrespective of the objective of investment in shares when the shares are held as stock-in-trade with a view to earn trading profits or as investment representing controlling interest and in the course if the assessee earned any exempt income, section 14A was applicable and expenses to be disallowed in respect of exempt income by apportioning the total expenditure incurred by the assessee between taxable and non-taxable income. However, the A.O. has to record the satisfaction before invoking all these provisions. Thus, it is wrong to say that in the case of Maxopp Investment Ltd. v. CIT [ 2018 (3) TMI 805 - SUPREME COURT] the principle of apportionment is not applicable. Hon ble Supreme Court held that applying the principle of apportionment applicable in such cases and it has to be depend upon the facts of each years, the expenditure incurred to earn exempt income to be apportioned. We are of the opinion that there is decision in favour of the Revenue in assessee s own case for the preceding assessment year, which has to be applied for the present assessment year also. Accordingly, this ground of appeal by the Revenue is allowed.

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• 2020 (5) TMI 176
  Disallowance u/s 40 (a) (iib) - payment of Gallonage Fee, Licence fee, Shop rental (Kist) and Surcharge on Sales Tax - HELD THAT:- Gallonage Fee - The Gallonage Fee paid by the assessee under Rule 15A of the Foreign Liquor Rules with respect to the wholesale trade in foreign liquor for human consumption, cannot be equated or in any way identical to the Gallonage Fee paid by any industrial or research undertaking, in respect of the rectified spirit / industrial spirit dealt with them, which are governed by provisions of the Kerala Rectified Spirit Rules. Both the levies cannot be considered as similar, because the levies are on different trades for different products, charged under separate statutes. Merely because the same nomenclature of Gallonage Fee is used, it cannot be contended that there is no exclusivity with respect to the levy of Gallonage Fee from the assessee, is the argument. Accept the view taken by the Tribunal, which confirmed the view of the authorities below. As supported by the learned Assistant Solicitor General of India, as long as it is not in dispute that the wholesale trade in foreign liquor under FL-9 licence is an exclusive trade in the state permitted to the assessee herein alone, the Gallonage Fee levied under the Foreign Liquor Rules becomes an exclusive levy on the assessee. Therefore we are of the considered opinion that the levy of Gallonage Fee with respect to the wholesale trade under the FL-9 licence will squarely fall within the scope of the disallowances provided under Section 40 (a) (iib). Hence the finding of the Tribunal in this regard need to be upheld. Licence Fee and Shop Rental (Kist) - Question is whether the exclusivity will be lost if it is levied from more than one State Government undertaking. Sub-clause (iib) of Clause (a) of Section 40 provides that, any amount paid by way of royalty, licence fee, service fee, privilege fee, service charge, or any other fee or charge which is levied exclusively on a state government undertaking by the State Government (emphasis supplied) alone will satisfy the ingredients for disallowance. The statute has not used the word; levied exclusively on the state government undertakings by the State Government. Instead, the word used is exclusively on a state government undertaking . Therefore, inorder to bring the disallowance within the ambit and scope of Section 40 (a) (iib), it should be an exclusive levy on the assessee, which should be a state government undertaking. Since the licence fee and shop rental (kist) are also levied from the Consumer Federation with respect to the FL-1 licence granted, it becomes out of the purview of the term levied exclusively on a state government undertaking, contained in 40 (a) (iib). Disallowance made with respect to the licence fee and shop rental (kist) paid with respect to the FL-1 licences granted to the appellant for retail trade in foreign liquor, cannot be sustained. Surcharge on Sales Tax and Turnover tax - Surcharge on sales tax was introduced only as an increase in the tax payable. Merely because the statute imposed a prohibition with respect to passing on such liability to others, the basic characteristics of the levy is not changed. As settled through various legal precedents, a tax cannot by equated with a fee or charge . When the provisions contained in Section 40 (a) (iib) is clear in its terms that it will take in only fee or charges enumerated therein or any fee or charge by whatever name called, it is clear that any levy of tax is outside the ambit and scope of the said provision. In order to include surcharge on sales tax or turnover tax within the sweep of Section 40 (a) (iib), it becomes necessary to read something into the provision. Therefore we are inclined to accept the view as contended by the appellant, that the disallowance of surcharge on sales tax and turnover tax cannot be sustained. While summing up the conclusions, we are persuaded to answer the question of law raised, partly in favour of the revenue and partly in favour of the assessee.

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• Customs

• 2020 (5) TMI 174
  Establishment of Special Economic Zone (SEZ) - Cancellation of Co-developer status of the petitioner - Challenge to approval granted by the respondent No.1-Board to the proposal to grant co-developer status to the respondent No.4 in the SEZ at Dahej - Auction of plot by the bank after the default in payment of the loan taken from SIDBI by the petitioner - HELD THAT:- Though the petitioner was granted approval of co-developer and a co-developer agreement was executed between the petitioner and the respondent No.3, who is a developer.the petitioner did not pay the due outstanding service charges from 2013 onwards. Moreover, thereafter plot allotted to the petitioner was sold in auction and sale certificate was issued in favour of the four persons, who are directors of the respondent No.4-Company. The Board of Approval- respondent No.1 was justified in taking the decision to approve the status of co-developer to the respondent No.4 who was handed over the possession by the SIDBI after the auction sale. Therefore, as per Section 2(f) of the SEZ Act, which defines Co-developer means a person who, or a State Government which, has been granted a letter of Approval under sub-section (12) of section 3 by the Central Government. The contentions raised by the petitioner that provision of Section 10 would be applicable for the suspension and transfer of letter of Approval as a co-developer would not be applicable in the facts of the case as the petitioner has lost the status of codeveloper pursuant to the transfer of plot in question to the respondent No.4 in the auction held by the SIDBI under the provisions of the Securitisation Act - it would be necessary to refer to the provisions of Section 35 of the Act, which provides for finality of the actions taken under the Securitisation Act. Moreover, reference to Rule 2(s) of the Rules which prescribes the procedure for the purpose of suspension and transfer of letter of approval as provided in Section 10 of SEZ Act would also be of no assistance to the petitioner as no action is required to be taken under the provisions of Section 10 of the SEZ Act as the same would not be applicable. The contentions raised on behalf of the petitioner, relying upon Section 10 of the SEZ Act read with Section 2(s) is without any basis - As the petitioner had challenged the action under Securitisation Act before the Debt Recovery Tribunal, and having failed in such action of challenge to get any interim order or final order, the petitioner cannot now challenge the action of the respondent No.1 granting request of approval status of co-developer in favour of the respondent No.4. The contentions raised on behalf of the petitioner are therefore required to be rejected as it was only last attempt to see that the auction sale effected in favour of the respondent No.4 is not being given effect to by the respondent Nos.1 and 3. Though prima facie arguments canvassed on behalf of the petitioner look attractive but considering the facts of the case as well as the provisions of the Securitisation Act and SEZ Act, the same are required to be rejected - As no action is required to be taken under the provisions of the SEZ Act for suspension or transfer or cancellation of letter of Approval in favour of the petitioner which has become redundant and extinguished in view of auction sale by the SIDBI, analyzing and/or applying the provisions of Section 10, 13 and 51 of the Act would be an academic exercise. It emerges from the materials on record, the respondent Nos. 1 and 3 have only given effect to the actions taken by the SIDBI under the Securitisation Act to grant the request for approval of co-developer status to respondent No.4 subject to the conditions specified in the decision dated 04.04.2018 of the respondent No.1 - petition dismissed.

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• Insolvency & Bankruptcy

• 2020 (5) TMI 175
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Applicant had issued demand notice under section 8 of the Insolvency Bankruptcy Code, 2016 on the Corporate Debtor, to which no reply was given by the Corporate Debtor - debt due and payable - Existence of debt and dispute or not - time limitation. Whether dispute as raised by the Corporate Debtor is genuine or can be categorised as moonshine? - HELD THAT:- The email conversation raising dispute is with respect to transactions between the Corporate Debtor and V. Together. The registration certificate filed by the Applicant vide dairy no. 2559/2019 reveals that V. Together is a HUF, different from M/s. V. One. The Corporate Debtor has nowhere stated, or objected to, or disputed, the invoices or its contents - Also, despite issuance of section 8 notice by the Applicant, the Corporate Debtor had neither raised any dispute nor made payment. There has been no initiative for setting dues after issuance of notice on the case filed before this Adjudicating Authority, which is the underlying rationale for prior issuance of demand notice under section 8 of the Insolvency Bankruptcy Code, 2016 - Defences of the Corporate Debtor are thus tenuous and vacillating. The Corporate Debtor can t hold ground on loose and shifting sands. Hence, the defence of dispute raised by the Respondent/Corporate Debtor is lame and without any forceful and pivotal foundation; which in the contextual backdrop can at best be categorised as moonshine defence. Thus, the belatedly raised dispute without establishing nexus and relevance cannot be termed as genuine dispute - this Tribunal is inclined to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor as envisaged under the provisions of IBC, 2016. Time limitation - HELD THAT:- This Tribunal perused all the relevant papers and found them to be in order. The Registered Office of the Corporate Debtor is situated in Jaipur and therefore this Tribunal has jurisdiction to entertain and try this Application. The matter is also within the purview of Law of Limitation. Application admitted - moratorium declared.

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• 2020 (5) TMI 173
  Maintainability of application - initiation of CIRP - Period of limitation - case of appellant is that the impugned judgment dated February 18, 2019 and order dated February 22, 2019 have been passed by the Adjudicating Authority ex parte without giving adequate notice and without hearing the corporate debtor - existence of dispute or not - time limitation - HELD THAT:- The first respondent raised Invoice No. 550, dated October 11, 2011 for Rs. 9,60,841 ; Invoice No. 785, dated December 21, 2011 for Rs. 8,43,795 and Invoice No. 885, dated January 20, 2011 for Rs. 4,50,024 (total Rs. 22,54,660). According to the first respondent out of the said amount a sum of Rs. 16,95,000 had been paid by the corporate debtor and the last amount paid in March, 2014. According to the first respondent with a view to recover the balance amount of Rs. 5,59,660 a Summary Suit No. 217 of 2014 was filed in the Court of Senior Civil Judge, Ahmedabad (Rural), A. Mirzapur, Ahmedabad-I wherein ex parte decree was passed against the corporate debtor on October 19, 2016 for Rs. 5,59,660 with simple interest at 8 per cent. per annum from the date of filing of the suit till the date of its realization - Thereafter, the amount having not paid the demand notice in Form 3 under section 8(1) was issued on February 15, 2017 followed by filing of petition under section 9. The facts as noted and detailed makes it clear that the claim of the first respondent is not barred by limitation. The case should not be remitted which will be otherwise futile exercise, as there is a debt payable by corporate debtor , who defaulted and the claim being not barred by limitation, the application has been rightly admitted - appeal dismissed.

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• Service Tax

• 2020 (5) TMI 172
  Commercial or Industrial Construction Service - wrong availment of benefit of Notification No. 1/2006-ST dated 01.03.2006 - recovery of short paid duty alongwith interest and penalty - period from April 2006 to March 2008 - HELD THAT:- The Commissioner has not discussed the individual contracts, the copies of which now submitted by the Ld. Advocate, in confirming the demand against the appellant. Therefore, in the interest of justice, it is prudent to remand the matter to the adjudicating authority to analyse each and every contract under which Commercial or Industrial Construction Service has been rendered during the relevant period and the admissibility of the quantum of abatement under Notification No. 1/2006-ST dated 01.03.2006. Appeal allowed by way of remand.

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