Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 24, 2020
Case Laws in this Newsletter:
GST
Income Tax
Insolvency & Bankruptcy
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Exemption from Service Tax - ‘Inland waterways’ - transportation of goods - the service of transportation of goods in barrages from mother vessel to daughter vessel from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port is neither covered in the definition of ‘national waterways’, nor covered in the definition of ‘other waterway on any inland water’
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Input Tax Credit - LPG Gas sold in Bottle to Domestic Customer - LPG supplied by the applicant to household domestic customers would attract GST of 5% GST with effect from 25.01.2018 - the applicant is eligible to take the entire input cenvat credit @ 18% on purchases of LPG Gas in bulk through Tanker subject to the fulfilment of the conditions/provisions (wherever applicable) for taking input tax credit (ITC)
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Classification of Services - Contract with Railtel Corporation of India ltd. - Excavation of trenches and laying of OFC(Optical Fiber Cable) through ducts, testing, commissioning of OFC. - end use of the Optical Fibre Cable is for the purpose of connecting with the Gram Panchayat for socioeconomic development - Construction Service or Original Work to Government Authority - it cannot be construed that the optical fiber cables laid underground are meant predominantly for use other than for commerce, industry, or any other business or profession as stated by the applicant.
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Manpower Supply Services - pure services or not - Since the applicant, at various stages, enters into different agreements with various authorities for provision of services, it is not practical to examine at this stage, each contract, he has entered into with the recipients of services. Further, during the course of providing services, the applicant would also enter into further agreements with the service recipients. It is not possible to foresee the nature of all these agreements at present. Further, there could also be modifications/ amendments in the existing agreements and the nature of service could be subsequently altered. Therefore, the reply to the query raised by the applicant cannot be answered in plain ‘no’ or ‘yes’.
Income Tax
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Loss incurred by the assessee on F & O (Future and Options) derivative transactions - “speculative loss” or not - disallowing the set off of the said loss against other business income - Loss incurred on derivative transactions is not speculative loss and rather need to be treated as regular business loss.
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Cost of acquisition - CIT(A) not accepting the value of wells, Baories and roads as on 01.04.1981 - The assessee may be a conservative investor and may not have invested in mutual funds, stock market or private equity, however, the same cannot be held against him unless the considerations as stated above are examined in detail.
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Ad hoc additions on account of entertainment expenses and on account of Seminars/conferences - there was no material on record to show that any part of the these expenditures were not for the purpose of business. Therefore, the ad hoc additions on account of entertainment expenses and on account of Seminars/conferences made by ld DRP/AO are directed to be deleted.
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Disallowance of direct expenses materials - there is no doubt of whatsoever with regard to purchases of materials for the purpose of development of land. - When 50% direct expense is genuine, then remaining 50% cannot be non-genuine merely because it was purchased from associate concern.
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Penalty u/s 271(1)(c) - Disallowance of cash received - Merely, holding that confirmation in respect of unsecured loan, receipt of cash and insurance commission clearly fall within the ambit of concealment is not sufficient.
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Gain on the sale of assets - Long Term capital gain OR Short Term Capital Gains - “financial asset” u/s 2(42A) or not? - Since the intangible assets are covered in the definition of “block of asset” eligible for depreciation, the same cannot be again covered under the definition of “financial asset” as per Explanation (1) (i) (d) to section 2(42A) of the I.T.Act.
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Validity of the notice issued u/s 143(2) beyond the prescribed time limit - scrutiny assessment - assessee remain silent on the notices issued - Assessment order passed without acquiring the correct jurisdiction for a scrutiny by way of notice under section 143(2) is void ab initio and thus we quash the same.
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Nature of expenditure - revenue or capital expenditure - One-time lease rental charges paid to Greater Noida Industrial Development Authorities (GNIDA) for a period of 90 years - Liability of lease rent relatable to year under consideration would be 1/90th of the amount paid and balance amount would be pre-paid advance rent only. The assessee is entitled to claim 1/90th of the amount every year till the period of lease of 90 years as revenue expenditure.
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Exemption u/s 11 - expenses incurred and the receipts received by the assessee specifically from the light and sound show and maintenance of museum, etc. - in the absence of any fact, instance or example on record to show that the activities of the trust are commercial ventures, the stand of Revenue cannot be accepted.
Case Laws:
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GST
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2020 (6) TMI 544
Exemption from Service Tax - business of providing services in relation to transportation of goods from Magdalla Port to the General Lighterage Area (Anchoring Point of Mother Vessel) or vice versa - covered under exemption contained at Sr. No. 18 of Notification No. 12/2017Central Tax (Rate) or not - covered in the definition of Inland waterways - HELD THAT:- The applicant is providing service relating to transportation of goods in the water way, i.e. from Magdalla Port to its General Lighterage Area (Anchoring Point of Mother Vessel) or vice versa. This waterway is a part of the Arabian Sea. Whereas, the term Other waterway on any inland water covers any canal, river, lake or other navigable water within a State only. The length of the waterway, between which the service of transport is performed by the applicant, is the part of the Arabian Sea and not a part of any canal, river, lake or other navigable water within a State. Thus, their contention, that the transportation is being done on the River Tapi, appears to be incorrect. As regard the contention that the entire activity is being done by them under territorial water only, it is worthwhile to mention that the Arbian Sea is not a part of the State of Gujarat and, hence, not covered under the term Other waterway on any inland water so as to be eligible for exemption of the Services by way of transportation of goods by inland waterway - the service of transportation of goods in barrages from mother vessel to daughter vessel from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port does not get covered in the definition of other waterway on any inland water , as defined under Clause (b) of Section 2 of the Inland Vessel Act, 1917. Thus, the service of transportation of goods in barrages from mother vessel to daughter vessel from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port is neither covered in the definition of national waterways , as defined in Clause (h) of section 2 of the Inland Water Ways Authority of India Act, 1985 nor covered in the definition of other waterway on any inland water , as defined under Clause (b) of Section 2 of the Inland Vessel Act, 1917. Consequently, the same does not qualify for exemption contained at Sr. No. 18 of the Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017.
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2020 (6) TMI 543
Exemption from Service Tax - Inland waterways - business of providing services in relation to transportation of goods from Magdalla Port to the General Lighterage Area (Anchoring Point of Mother Vessel) or vice versa - covered under exemption contained at Sr. No. 18 of Notification No. 12/2017Central Tax (Rate) or not - covered in the definition of Inland waterways - HELD THAT:- The applicant is providing service relating to transportation of goods in the water way, i.e. from Magdalla Port to its General Lighterage Area (Anchoring Point of Mother Vessel) or vice versa. This waterway is a part of the Arabian Sea. Whereas, the term Other waterway on any inland water covers any canal, river, lake or other navigable water within a State only. The length of the waterway, between which the service of transport is performed by the applicant, is the part of the Arabian Sea and not a part of any canal, river, lake or other navigable water within a State. Thus, their contention, that the transportation is being done on the River Tapi, appears to be incorrect. As regard the contention that the entire activity is being done by them under territorial water only, it is worthwhile to mention that the Arbian Sea is not a part of the State of Gujarat and, hence, not covered under the term Other waterway on any inland water so as to be eligible for exemption of the Services by way of transportation of goods by inland waterway - the service of transportation of goods in barrages from mother vessel to daughter vessel from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port does not get covered in the definition of other waterway on any inland water , as defined under Clause (b) of Section 2 of the Inland Vessel Act, 1917. Thus, the service of transportation of goods in barrages from mother vessel to daughter vessel from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port is neither covered in the definition of national waterways , as defined in Clause (h) of section 2 of the Inland Water Ways Authority of India Act, 1985 nor covered in the definition of other waterway on any inland water , as defined under Clause (b) of Section 2 of the Inland Vessel Act, 1917. Consequently, the same does not qualify for exemption contained at Sr. No. 18 of the Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017.
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2020 (6) TMI 542
Benefit of reduced rate - houses constructed with a carpet area of 60 square metres per house - Entry Number 3(v)(da) of the Notification No.11/2017-Central Tax (Rate) as amended by Notification No.01/2018-Central Tax (Rate) dated 25.01.2018 - HELD THAT:- The applicant has not fulfilled the condition mentioned at Para-10 above and therefore the benefit of Entry No.3(v)(da) of Notification No:11/2017-Central Tax(Rate) dated 28.06.2017 (as amended by Notification No.01/2018-Central Tax (Rate) dated 25.01.2018)is not applicable to them.
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2020 (6) TMI 541
Determination of the liability to pay Tax - sales of Gas sold in Bottle to Commercial Customer and Gas sold in Bottle to Domestic Customer - eligibility of ITC @ 18% eligible on Purchases of LPG Gas (bulk) through Tanker - HELD THAT:- The applicant would be liable to pay 18% GST (9% SGST + 9% CGST) on the LPG sold by them to their Commercial Customers. They would be liable to pay 18%(9% SGST + 9% CGST) on the LPG sold to their Domestic Customers for the period upto 24.01.2018 and 5% (2.5% SGST + 2.5% CGST) on the LPG sold to their Domestic Customers with effect from 25.01.2018 onwards. Input Tax Credit - HELD THAT:- Input tax determined under sub- rule (1) shall not be required to be calculated finally on completion or first occupation of an RREP which underwent transition of input tax credit consequent to change of rates of tax on 1st April, 2019 in accordance with notification No. 11/2017- Central Tax (Rate), dated the 28th June, 2017, published vide GSR No. 690(E) dated the 28th June, 2017, as amended - the applicant is eligible to take the entire input cenvat credit @ 18% on purchases of LPG Gas in bulk through Tanker subject to the fulfilment of the conditions/provisions (wherever applicable) for taking input tax credit as envisaged in Sections-16, 17 and 18 of the CGST Act, 2017 and Rules-36, 37, 40, 41 and 42 of the CGST Rules, 2017.
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2020 (6) TMI 540
Classification of Services - Contract with Railtel Corporation of India ltd. - whether the service will fall under the Notification 24/2017-Central Tax (Rate) Sr.No.3(iv)-Construction Service or Original Work to Government Authority - rate of tax - whether taxable at 12% or not - Government entity or not - HELD THAT:- The contract is for construction, erection, commission, installation and completion of original work. The contract is a new construction and involves excavation of trenches and laying of Optical Fibre Cables(OFC) through ducts, testing, commissioning of OFC and maintenance in the 03 blocks in Nakhatrana and Abdasa of Kachchh district, thus involves erection, commissioning and installation of equipment or structures and thus the second condition is satisfied. Whether the person to whom the applicant is providing the work/service is covered under the definition of Government Authority or Government Entity ? - HELD THAT:- The applicant is executing the work for M/s. Railtel Corporation of India ltd.(on behalf of Bharat Broadband network ltd.) which is a Government of India undertaking with 90 percent or more participation by way of equity or control. However, in order to fulfil the definition of being a Government Authority , the work carried out by the applicant for M/s. Railtel Corporation of India ltd. should be any function entrusted to a Municipality under Article 243 W of the Constitution or to a Panchayat under Article 243 G of the Constitution. Whether the civil structure that has arisen or come into existence as a result of the work executed/service provided by the applicant for M/s. Railtel Corporation of India ltd. i.e. optical fiber cables laid under the ground is meant predominantly for use other than for commerce, industry, or any other business or profession as envisaged in 3(vi)(a) of Notification No.24/2017-Central Tax(Rate) dated 21.09.2017? - HELD THAT:- The work done by the applicant for M/s. Railtel Corporation of India ltd. involves digging of trenches and laying of optical fiber cables for the purpose of supply of internet connection to the Gram Panchayat. However, it cannot be construed that the optical fiber cables laid underground are meant predominantly for use other than for commerce, industry, or any other business or profession - The said explanation clause is not applicable in the instant case as these are not activities undertaken by the Central government, State Government or a local authority but are undertaken by M/s. Railtel Corporation of India(on behalf of M/s. Bharat Broadband network ltd.) through the applicant. Any activity of trade, commerce, manufacture etc. or any other similar activity is included in the definition of business and it is immaterial whether it is done for a pecuniary benefit, and any activity done in connection with or incidental or ancillary to such activity is also included in the scope of business - the applicant in the course of providing work contract service to M/s. Railtel Corporation of India ltd. (on behalf of M/s. Bharat Broadband Network ltd.) is involved in the laying of trenches and laying optical fiber cables (goods) through which they are providing/supplying internet connectivity to the gram panchayats. However, it cannot be construed that the optical fiber cables laid underground are meant predominantly for use other than for commerce, industry, or any other business or profession as stated by the applicant. The work done by the applicant under the contract with M/s. Railtel Corporation of India ltd. does not fall under the Notification No.24/2017-Central Tax (Rate) Sr. No.3(vi)-Construction Service of Original Work to Government Authority.
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2020 (6) TMI 539
Classification of goods - Change over switch - Emulator - Timing Advance Processor - Pressure Guage - tax rate of SGST and CGST - HSN Code - HELD THAT:- Looking to the use of the parts of vehicles manufactured by the applicant, it can be concluded that the same fall under HSN code: 87089900 only - The same also appears at Sr.No.170 of Schedule-IV of Notification No:1/2017-Central Tax (Rate) dated 28.06.2017 on which GST applicable is 28%.
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2020 (6) TMI 538
Manpower Supply Services - pure services or not - applicant is of the view that exemption mentioned in Notification No.12/2017-Central Tax (Rate) and Notification No.12/2017-State Tax (Rate) shall be available to the services provided by the applicant on the following work order and GST shall be leviable at NIL rate of tax on supply of pure service made to State Government, Governmental Authority, Governmental Entity and Local Authority - HELD THAT:- Since the applicant, at various stages, enters into different agreements with various authorities for provision of services, it is not practical to examine at this stage, each contract, he has entered into with the recipients of services. Further, during the course of providing services, the applicant would also enter into further agreements with the service recipients. It is not possible to foresee the nature of all these agreements at present. Further, there could also be modifications/ amendments in the existing agreements and the nature of service could be subsequently altered. Therefore, the reply to the query raised by the applicant cannot be answered in plain no or yes . The applicant is eligible to claim exemption benefit under Sr.No.3 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 for pure services (supply of manpower, security service) provided to Central Government, State Government, Local Authorities, Governmental Authorities, Government Entities as detailed above subject to the condition that the services provided to these entities mentioned above are provided by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India.
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Income Tax
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2020 (6) TMI 537
Assessment u/s 153A - no incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search - HELD THAT:- Delay condoned. Leave granted.
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2020 (6) TMI 536
Rectification of mistake - petitioner was astonished to notice the intimation u/s 143(1), whereby the adjustment of brought forward losses to the extent was not considered - HELD THAT:- Ext.P9 dated 18th February 2020, which reveals the pendency of the rectification application which stands transferred to the Jurisdictional AO. The grievance of the petitioner can be vindicated by issuing directions to the first respondent to takes a call on the rectification application and to decide the same within a period of 45 days from the date of receipt of the copy of the order. Till then, the demand raised vide notices Exts.P5 and P7 is ordered to be kept in abeyance. However, it is made clear that the petitioner is at liberty to assail the outcome of the decision of the rectification petition, if he so chooses, in accordance with law. The writ petition stands disposed of. Liberty is granted to the Income Tax Authority to move appropriate application in case the averments of the writ petition are found to be false or incorrect.
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2020 (6) TMI 535
Loss incurred by the assessee on F O (Future and Options) derivative transactions - speculative loss or not - disallowing the set off of the said loss against other business income - whether the ld. CIT(A) was justified in observing that the F O transactions carried out by the assessee were not genuine? - HELD THAT:- Assessee had earned profit from F O transactions in A.Y.2010-11 which was duly taxed by the ld. AO as regular business income. During the year, there is no change in the facts or there is no emergence of any fresh development in the case of the assessee company, enabling the ld AO to take a divergent view. Hence, revenue is not justified in taking a divergent view for the year under consideration alone. Following the principle of consistency as decided in the case of Radhasaomi Satsan [ 1991 (11) TMI 2 - SUPREME COURT] the loss incurred by the assessee on derivative transactions deserves to be allowed as regular business loss during the year under consideration and consequently eligible to be set off against other income as per law. Disallowance of apportioning of expenditure on loss from derivatives, we find that the ld. AO had apportioned the employee cost and administration expenses in proportion of the loss of derivatives to the total receipts and arrived at the figure as part of speculation loss. Loss incurred on derivative transactions is not speculative loss and rather need to be treated as regular business loss, we direct the ld. AO to delete the disallowance towards apportionment of expenditure. Accordingly, the ground No. I raised by the assessee is allowed. Disallowance of expenditure u/s.14A - HELD THAT:- From the perusal of the various documentary evidences placed on record, we hold that the interest payment was paid by the assessee company as per the directions of the Maharashtra State Consumer Disputes Reddressal Commission for delayed delivery of flat to one of the buyers and the said payment of interest has got absolutely nothing to do with the investment activity carried out by the assessee. Hence, there cannot be any proportionate disallowance of interest in terms of second limb of Rule 8D(2) of the rules.Disallowance of interest in the sum in Rule 8D(2)(ii) is hereby directed to be deleted. With regard to disallowance of administrative expenses under third limb of Rule 8D(2) of the Rules, the ld. AR was not able to make any substantial argument in support of his claim. We find that assessee had indeed earned exempt income in the form of dividend and had not made any disallowance of expenses incurred for the purpose of earning such income in the return of income. The entire expenditure has been debited for composite business carried out by the assessee. The basic purpose for introduction of provisions of Section 14A in the statute is to address this grievance of the revenue. For want of any plausible evidence, we hereby confirm the disallowance made in the sum under third limb of Rule 8D(2) of the Rules by the lower authorities. Accordingly, the ground No.II raised by the assessee is partly allowed.
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2020 (6) TMI 534
Computation of long term capital gains - transfer of land - case of the assessee is that there being a breach of contract in terms of non-discharge of the sale consideration and thus, no valid contract and no transfer of impugned land - where the full value of consideration has not been discharged by the purchaser of the impugned land as per the sale deed and there is violation of terms of the sale deed? - whether the impugned transaction would still qualify as transfer and liable for capital gains tax given that the same is evidenced by the registered sale deed? - HELD THAT:- In the instant case, as we have noted above, the ld CIT(A) has returned a finding that possession of the said land was never handed over land is still in the possession of appellant himself - transferee, Shri Rajeev Singh has not taken possession of the property. Secondly, he has not discharged the sale consideration nor there is any willingness on his part to discharge the sale consideration as can be gauged by the fact that he himself has ordered and instructed his bank for stop-payment of cheques issued earlier by him towards the sale consideration in respect of both the sale deeds. Therefore, in the instant case, the transferee has not taken possession of the land and also, he has neither performed nor there is any willingness to perform his part of the sale deed and thus, the provisions of section 55A of the Transfer of the Property Act cannot be attracted and there is no transfer even in terms of section 2(47)(v) - Decided in favour of assessee. Proportionate expenses claim out of total expenses towards brokerage and other expenses while computing the long term capital gains in respect of third transaction of sale of land - HELD THAT:- DVO has acknowledged the existence of roads, wells, Baories and boundary walls on the impugned land and therefore, the factual position is that the land has been transferred along with these constructed structures. The claim of the assessee is towards the development expenses in relation to these structures as well as leveling of land which has been examined by the ld CIT(A) and we donot see any infirmity in the said findings of the ld CIT(A) where he has allowed these expenses towards cost of improvement. In the result, the ground of appeal is dismissed. Addition of various expenses claimed by the assessee against the interest and remuneration received from various firms wherein the assessee is a partner - HELD THAT:- As decided in own case [ 2016 (8) TMI 1037 - ITAT JAIPUR] whether the AO erred in allowing the expenditure against the interest and remuneration earned by the assessee and relying on the decision of Hon ble Jurisdictional High Court in the case of CIT vs. Jabarmal Dugar [ 1971 (7) TMI 17 - RAJASTHAN HIGH COURT] and CIT vs. S.B. Ghose [ 1980 (6) TMI 27 - CALCUTTA HIGH COURT] held that the expenses are duly allowable. Addition of expenses claimed by the assessee u/s 57 of the Act for earning interest income - HELD THAT:- Mere passive nature of income can t be a sole criteria for disallowance of expenses and before arriving at such a conclusion, there are certain matters which need appropriate consideration such as pool of funds which have been invested in multiple savings and fixed deposits accounts maintained by the assessee with banks in Delhi and Kota, the periodicity of transactions and period of holding such deposits, current occupation and availability of the assessee to personally manage such funds and his desire and need to appoint a person with appropriate skill and functional knowledge of banking and allied areas who can handle and monitor the deployment of such funds on his behalf. A parallel may be drawn to family offices set up by HNI individuals where these individuals appoint a group of finance and accountancy professionals who are entrusted with managing the funds of these individuals. The assessee may be a conservative investor and may not have invested in mutual funds, stock market or private equity, however, the same cannot be held against him unless the considerations as stated above are examined in detail. Given that these considerations have not been taken into consideration and examined by the lower authorities, we deem it appropriate to remand the matter back to the file of the Assessing officer to examine the same afresh. Cost of acquisition - CIT(A) not accepting the value of wells, Baories and roads as on 01.04.1981 and thereby not allowing the cost and corresponding indexed cost while computing the capital gains in respect of third transaction of sale of land - AO referred the matter for valuation to the DVO u/s 55A - HELD THAT:- The DVO has acknowledged the existence of roads, wells, Baories and boundary walls on the impugned land. Being an old construction, one may question the utility of such structures during current times and consequentially, the value to these structures which the purchaser of the property may have determined, however, the factual position is that the land has been transferred along with these constructed structures, howsoever; the insignificant value may have been attached to these structures. The assessee has also submitted an affidavit that these structures have been transferred along with sale of land as part of the sale deed and the land area so reflected in the sale deed includes the area occupied by these structures, therefore, we find that the title and possession over the said structures along with underlying land is no more with the assessee and has been transferred to the purchaser, Shri Neeraj Sawalka. In absence of anything contrary on record, we allow the proportionate cost of these structures (after indexation) against the full value of consideration in terms of sale deed executed with Shri Neeraj Sawalka. In the result, the ground of appeal is allowed. Disallowance of legal and other expenses - claim by the assessee as expenses incurred in connection with transfer of the impugned land - HELD THAT:-We find that the assessee has claimed stamp duty, court fee and other charges in respect of two court cases namely Case No. 1./12-13 dated 10.12.2013 and Case No. 2/12-13 dated 10.12.2013. Further, consultancy charges have been paid to Sr. Advocate and advocates for filing of suits and other related legal and miscellaneous expenses. These court cases are apparently in respect of two sale deeds entered into with Shri Rajeev Singh which the assessee claimed to be invalid sale deeds. Given our aforesaid findings in context of these two sale deeds that these transactions are not subject to capital gains tax, the corresponding expenses cannot be allowed while computing capital gains in respect of other sale transaction which has been brought to tax. In the result, the ground of appeal is dismissed.
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2020 (6) TMI 533
Addition being provision for bad debts and doubtful debts written back - computation of income on account of 'reversal of provision for bad doubtful debts of earlier years' - HELD THAT:- We note ld DRP is higher authority, therefore AO ought to follow the direction of ld DRP. We note that AO had neither follow the directions of ld DRP nor he had examined the submissions, documents and details filed by the assessee in right perspective, as noted above. Therefore, we direct the AO to examine the assessee`s claim in respect of provisions for bad and doubtful debts and adjudicate the issue in accordance to law. Disallowance under section 14A read with Rule 8D(2)(iii) - HELD THAT:- Assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld DRP/AO and other materials brought on record. We note that issue raised by the assessee is no linger res integra. The Coordinate Bench of Kolkata ITAT in the case of REI Agro Ltd. vs. DCIT [ 2013 (9) TMI 156 - ITAT KOLKATA ] has held that only dividend bearing securities should be considered for the purpose of disallowance under rule 8D(2) (iii) of the Income Tax Rules. Only dividend bearing securities should be considered for disallowance under rule 8D(2)(iii) of the I.T. Rules. Therefore, we direct the assessing officer to compute the disallowance under Rule 8D(2)(iii) of the Rules by taking into account dividend bearing securities only. For statistical purposes, the grounds raised by the assessee are allowed. Ad hoc additions on account of entertainment expenses and on account of Seminars/conferences made by ld DRP/AO are directed to be deleted - HELD THAT:- There is no material on record to show that any part of these expenses were incurred for non-business purposes.We note that assessee`s books of accounts are audited by Chartered Accountant. The reports of the auditors could be said to be material on which reliance could be placed by the IT authorities. The IT authorities not only to accept the auditors' report, but also to draw the proper inference from the same. Here in assessee`s case, the DRP/ AO has not passed any order u/s 144 of the Act. The DRP/ AO thus without rejecting the books of account of the assessee has gone for estimation on suspicion and conjectures that the assessee may be inflating its expenses. It may be pertinent to mention here that there was no material on record to show that any part of the these expenditures were not for the purpose of business. Therefore, the ad hoc additions on account of entertainment expenses and on account of Seminars/conferences made by ld DRP/AO are directed to be deleted. Disallowance incurred towards purchase of software by wrongfully holding that the said expense related to preceding assessment year - HELD THAT:- We direct the AO to examine the submission of the assessee and documents /invoices involved in these submissions, as noted above, and adjudicate the issue in accordance to law. For statistical purposes, the ground raised by the assessee is allowed. Foreign tax credit (FTC) - foreign tax credit for the taxes paid in United states of America (USA) on the doubly taxed income in accordance with the provisions of section 90/91 - said claim could not be made at the time of filing of the Return of income as the payment of taxes in USA was not made till that time - HELD THAT:- Revenue also fairly agreed that foreign tax credit (FTC) may be allowed to the assessee in accordance to law. Therefore, we direct the assessing officer to examine the correctness of the assessee`s claim for foreign tax credit (FTC), as per India USA-Treaty, and allow the claim of the assessee in accordance to law. For statistical purposes, the ground raised by the assessee is allowed. Credit of TDS - HELD THAT:- We direct the assessing officer to give TDS credit as claimed in the revised return of income filed by the assessee on 31st March 2016 in accordance to law.
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2020 (6) TMI 532
Bogus contractual expenditure - Addition for direct expenses material only on estimation and without any basis - HELD THAT:- It is very clear that payment made to M/s Metcon India is a bogus expenditure which was routed through own associated company in order to reduce profit from sale of land at Nagpur. The AO had also obtained external information and conducted field enquiry which clearly proves the fact of not carrying out any development work at Nagpur Land. In fact the position of land was unchanged when compared to date of purchase and date of inspection and this fact was further strengthened by the letter of Jt. MD, MSHCL. The ld. CIT(A) has ignored all these facts while allowing relief to the assessee. Disallowance of direct expenses materials - HELD THAT:- There is no bar under any law for purchases from associate/ sister concern and when there is no bar under law, the AO cannot disallow entire expenditure for the simple reason that it has been purchased from associate concern. But, what is to be seen is whether such purchase is at arm s length and it was made for the purpose of business of the assessee or not. In this case, there is no doubt of whatsoever with regard to purchases of materials for the purpose of development of land. In fact, the assessee has established nexus between materials purchase and land development at Nagpur. The ld. CIT(A), having accepted the fact that development work has been executed, has disallowed 50% adhac expense without assigning any reasons. When 50% direct expense is genuine, then remaining 50% cannot be non-genuine merely because it was purchased from associate concern. Therefore, we are of the considered view that the AO as well as the ld. CIT(A) were erred in disallowing direct expenses materials purchase. Hence, we direct the AO to delete additions made towards direct expenses materials. Additions made towards contract charges - HELD THAT:- Order passed u/s 245D(4) in the case of the assessee firm has clearly recorded categorical findings that accommodation bills taken by M/s Metcon India is in connection with works undertaken for contract with assessee firm for development work at Nagpur land. Therefore, once addition on total expenditure was having been made in the name M/s Metcon India, the Revenue recommending making additions of similar amount in the case of the assessee was out rightly rejected by the ITSC. M/s Metcon India has already offered expenses related to Nagpur land as its income and the nexus of the same having been accepted by the Income Tax Settlement Commission and the Commissioner of Income Tax in his rule 9 report. We are of the considered view that on this count also, the addition made by the AO cannot be sustained. The ld. CIT(A) after considering relevant facts, has rightly deleted additions made by the AO towards contract charges paid to M/s Metcon India. We do not find any error or infirmity in the findings of the ld. CIT(A) and hence, we are inclined to uphold findings of the ld. CIT(A) and direct the ld. AO to delete additions made towards contract charge. Disallowances of compensation to ex-partners and salary and wage expenses - HELD THAT:- The fact that claims was allowed in earlier year does not ipso facto lead to a conclusion that the same shall be allowed in subsequent years. No reasons to interfere with findings of the ld. AO as well as the ld. CIT(A) and hence, we confirm addition made towards compensation to ex-partners. In so far as salary and wages is concerned, the ld. CIT(A) has recorded a clear findings that the assessee did not furnished any cogent evidences to prove payment of salary to huge number of employees, when there is no business activity after sale of land at Nagpur. Mere submitting PAN and other details of employees and deduction of TDS alone would not sufficient enough to prove payment of salary. Facts remain unchanged - assessee did not controvert findings recorded by the ld. AO as well as the ld. CIT(A) with any cogent evidences. Therefore, we are of the considered view that there is no error in the findings of the ld. CIT(A) and hence, we are inclined to uphold order of the ld. CIT(A) and confirmed additions made by the AO towards salary and wages.
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2020 (6) TMI 531
Exemption u/s 11 - addition made towards refund of excess made to M/s. SIC - as per AO Assessee ought not to have refunded to M/s. SICL and he was of the opinion that the refund is hit by the provisions of section 13(1)(c) 13(2)(g) r.w.s. 13(3) - HELD THAT:- As decided in own case [ 2016 (7) TMI 1578 - ITAT VISAKHAPATNAM] excess amount refunded to M/s. South India Corporation Ltd. does not amount to diversion of funds as defined u/s 13(2)(g) of the Act. The assessee has refunded excess amount collected from the party by way of anonymous decision of the Board of Directors of the Trust further supported by proof of payment. Therefore, we are of the view that the A.O. was not correct in holding that the assessee has violated the provisions of section 13(1)(c) 13(2)(g) r.w.s 13(3) of the Act. Hence, we direct the A.O. to allow the exemption as claimed by the assessee and delete the additions made towards refund of excess amount. Payment of income-tax as an allowable deduction while computing income of trust - HELD THAT:- Income-tax payment made by the assessee is an application of income, hence, addition cannot be made - See assessee's own case [ 2016 (7) TMI 1577 - ITAT VISAKHAPATNAM] relying on TRUSTEE OF H. EH THE NIZAM S SUPPLEMENTAL RELIGIOUS ENDOWMENT TRUST [ 1978 (2) TMI 7 - ANDHRA PRADESH HIGH COURT] Disallowance of various expenses in absence of registration u/sec. 12A - HELD THAT:- We find that when the Assessing Officer passed the assessment order the assessee was not having 12A registration. Subsequently, on [ 2015 (5) TMI 1210 - ITAT VISAKHAPATNAM] has restored 12A registration to the assessee. Therefore, the ld. CIT(A) by considering the same is of the opinion that these are the expenditure incurred by the assessee are in the nature of application of income, hence, allowed. We find no infirmity in the order passed by the ld.CIT(A). Rejection of books of account and estimation of income - AO estimated the income at 12% - CIT(A) deleted the addition on the ground that assessee is following consistently cash system of accounting - HELD THAT:- As decided in own case [ 2016 (7) TMI 1578 - ITAT VISAKHAPATNAM] we are of the view that the assessee is following Cash System of accounting for determination of income for the purpose of application of income for charitable purpose. Therefore, we direct the A.O. to compute the income as per the method of accounting followed by the assessee.
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2020 (6) TMI 530
Penalty u/s 271(1)(c) - Disallowance of cash received - cash received from two of customers, who could not be produced before the A. O. for recording of their statement due to practical hardship of being their out of station for a long time - HELD THAT:- No detail finding given by the CIT(A) as regards to how the concealment of particular of income relating to the confirmation in respect of unsecured loan/receipt of cash and insurance commission comes within the purview of Section 271(1)(c). Merely, holding that confirmation in respect of unsecured loan, receipt of cash and insurance commission clearly fall within the ambit of concealment is not sufficient. CIT(A) also not considered the submissions of the Assessee during the appellate proceedings. Therefore, it will be appropriate to remand back this issue of unsecured loan, receipt of cash and insurance commission to the file of the CIT(A) for deciding it with the reasoned order. - Appeal of the assessee is partly allowed for statistical purpose.
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2020 (6) TMI 529
Rejection of books of account u/s 145(3) - GP estimation - CIT(A) estimated the income @ 11% by considering the original financial statements and percentage of GP declared by the assessee - HELD THAT:- Assessee is a milk supplier and earns only commission income based on the sales achieved by the assessee. As far as business models are concerned, there is no change from earlier assessment year to this assessment year and we notice that assessee has declared 5.93% of GP in AY 2011-12 and 6.3% in AY 2012-13. Assessee can be assessed to tax only on real income and not on any estimation or surmises. Therefore, we are of the view that assessee has declared 11.08% as GP without substantiating the result declared by it, the reasons best known to him. Assessee should be charged to tax @ 7% (considering the gross profit declared by the assessee in AY 2011-12 and 2012-13, where there is 6% increase in GP and we expect that assessee must have increased its GP by 10%.) Accordingly, we direct the AO to estimate the income @ 7%. Therefore, the ground raised by the assessee is partly allowed.
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2020 (6) TMI 528
Gain on the sale of assets - Long Term capital gain OR Short Term Capital Gains - financial asset u/s 2(42A ) or not? - period of holding - assessee s case was a scheme of amalgamation - transfer of intangible assets with right to carry on business - AO held that the period of holding of the assets transferred is less than 36 months and same being financial assets, the sale proceeds are to be treated as Short Term Capital Gain (STCG) - CIT-A held that period of holding of the said asset will include also the period held by the transferor company and treated the sale of asset as LTCG - whether the assets transferred by the assessee to M/s.Masonite Holdings Private Limited is a financial asset coming within the Explanation 1(i)(e) to section 2(42A)? HELD THAT:- Financial asset has been described in the Act as share or security and the assets transferred by the assessee does not fall in the category of financial asset . This view is further affirmed by section 2(11) of the I.T.Act, which defines the term block of asset for the purpose of depreciation. The definition u/s 2(11) of the I.T.Act includes intangible assets. Since the intangible assets are covered in the definition of block of asset eligible for depreciation, the same cannot be again covered under the definition of financial asset as per Explanation (1) (i) (d) to section 2(42A) of the I.T.Act. Therefore, the assets transferred by the assessee, the period of holding cannot be determined as per Explanation 1(i)(e) to section 2(42A) of the I.T.Act, as contended by the Assessing Officer. In the facts and circumstances of the case, we are of the view that the holding period should be determined as per Explanation 1(i) (b) to section 2(42A) of the I.T.Act to determine whether or not an asset is a short term capital asset. The assessee s case was a scheme of amalgamation and assessee is an Indian company. Therefore, it is not correct for the Assessing Officer to consider 01.04.2008 as the date on which the assets were acquired, because the brand name was already there with Feroke Boards Limited (one of the companies that got merged with Feroke Boards Doors (P) and later renamed Feroke Boards Limited). The brand name was registered with Trade Marks Registry (Trade Mark No.1432867 dated 14.03.2006). The term amalgamation is defined in section 2(IB) and the assessee s case fall under the said definition. Therefore, there is no transfer taking place on 01.04.2008. The period of holding is much more than 36 months when the relinquishment / sale took place (on 18.05.2010). Therefore, the A.O. ought not to have taxed such receipts as STCG but should have taxed it as LTCG. Explanation to section 49(1) of the I.T.Act is a benevolent provision to extend applicability of the term previous owner to cover cases like assessee. Here the previous owner is the amalgamating company and this company did not acquire it in a mode referred to in clause (i) or clause (ii) or clause (iii) or clause (iv) of section 49(1) of the I.T.Act. However, as no purchase price was paid by the amalgamating company, the cost of acquisition was taken as `NIL as required u/s 55(2)(a)(ii) of the I.T.Act. The Hon ble Delhi High Court in the case of CIT v. Mediward Publication (P) Ltd [ 2011 (4) TMI 503 - DELHI HIGH COURT] had held that transfer of intangible assets with right to carry on business was taxable as LTCG. - Decided against revenue.
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2020 (6) TMI 527
Validity of the notice issued u/s 143(2) - validity of the notice issued u/s 143(2) mainly on the ground that the assessee remain silent on the notices issued under section 143(2) and 142(1) of the Act till 31/03/2012 and thereafter, only raised the issue of the validity of notice under section 143(2) - HELD THAT:- Notice under section 143(2) dated 1/09/2011 issued by the DCIT, Circle -37(1) was not valid being issued by AO not having jurisdiction over the assessee. The notice under section 143(2) by the correct jurisdiction AO has been issued on 30/08/2012, whereas the limitation for issue of the notice under section 143(2) of the Act expired on 30/09/2011 and therefore, this notice being beyond the period of limitation, it is not a valid notice. In the instant case, as per the proviso to section 143(2) of the Act, no notice could have been served on the assessee after the expiry of the six month from the end of the financial year in which return is filed. Respectfully following the finding of SUN WORLD INFRASTRUCTURE PVT LTD VERSUS ITO, WARD-24(3), NEW DELHI [ 2015 (3) TMI 572 - DELHI HIGH COURT] we hold that the notice dated 01/09/2011 issued by the CIT, Circle -37(1) was without jurisdiction and, thus, it was invalid and the notice dated 30/08/2012 issued by the ITO, Ward 38(2), New Delhi issued by the correct Jurisdiction Officer, was beyond the period of limitation and therefore, this was also invalid. Assessment order passed without acquiring the correct jurisdiction for a scrutiny by way of notice under section 143(2) is void ab initio and thus we quash the same. As we have already quashed, the assessment order we are not adjudicating on the issue raised on merit of the addition. - Decided in favour of assessee.
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2020 (6) TMI 526
Disallowance u/s 35DD - Amortisation of expenditure in case of amalgamation or demerger - 1/5 of demerger expenses incurred by the appellant - as per CIT in terms of section 35DD demerger expenses are allowable only in the hands of the demerged company and not in the hands of the resultant company - HELD THAT:- In our opinion the language of the section is clear and there is no ambiguity, as who is entitled to claim the said deduction. In case of demerger, where the undertaking(s) which get demerged, may result in new entity and in said circumstances, the resultant company cannot incur expenditure before its birth. It is the parent entity, who initiates demerger of the undertaking(s) and incur expenditure for legal and professional expenses in relation to such demerger. The resultant company, come into existence as a result of demerger only, the word assessee in section 35DD of the Act cannot mean to include the resultant company. The decision relied upon by the assessee in the case of CIT Vs Bombay dyeing and manufacturing company limited [ 1996 (2) TMI 8 - SUPREME COURT] relates to period prior to insertion of section 35DD of the Act, wherein the expenses related to amalgamation were allowed to the assessee as incurred wholly and exclusively for the purpose of the business of the assessee.. In the said case the issue was of whether the legal and professional expenses incurred in relation to the amalgamation were revenue or capital in nature. The ratio of the said decision cannot be applicable over the facts of the instant case in view of the specific provision of section 35DD of the Act introduced. As far plea of rule of consistency is concerned, we may like to refer to the decision of the Hon ble Supreme Court in the case of Distributors (Baroda) P. Ltd. Vs. Union Of India Ors. [ 1985 (7) TMI 1 - SUPREME COURT] where it is observed if any wrong has been committed, same should not be perpetuated. We reject the contention of the assessee to allow the deduction under section 35DD of the Act, following rule of the consistency. - Decided against assessee Disallowance u/s 14A - disallowance towards indirect interest expenditure and towards administrative expenses - AO has expressed dissatisfaction on the claim of the assessee that no expenses were incurred for earning the exempt income - HELD THAT:- In view of above decision of Indiabull Financial Services Ltd. [ 2016 (11) TMI 1369 - DELHI HIGH COURT] we reject the contention of the assessee that no dissatisfaction was recorded by the Assessing Officer while invoking section 14A of the Act for computing disallowance towards earning the exempt income. Whether no disallowance should be made for interest expenditure in view of sufficient own funds available with the assessee? - As relying on RELIANCE UTILITIES POWER LTD. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] there are sufficient interest-free funds in the form of share capital and reserves available to explain the investment in mutual funds. In view of no interest expenditure relatable to investment in assets yielding exempt income, the disallowance sustained by the Ld. CIT(A) is deleted. Regarding the administrative expenses for earning the exempt income respectfully, following the decision of the Hon ble Delhi High Court in the case of ACB India Ltd [ 2015 (4) TMI 224 - DELHI HIGH COURT] and special bench Tribunal in the case of Vireet Private Limited [ 2017 (6) TMI 1124 - ITAT DELHI] we direct the Assessing Officer to restrict the disallowance at 0.5 % of the value of assets which has yielded exempt income during the year under consideration. The ground of the appeal of the assessee is accordingly partly allowed. Bad debt claim in respect of the amount due from Government Agencies and other parties - HELD THAT:- The finding of the Assessing Officer of requirement of establishing whether the debt become bad has already been rejected by the Ld. CIT(A) and Revenue is not an appeal on that issue. The Ld. CIT(A) has sustained the disallowance in absence of the information provided by the assessee regarding existence of the debt in respect of the parties as on 31/03/2006. Now, the assessee has given undertaking to provide all the details in respect of the existence of the debt as on 31/03/2006. In the interest of justice, we feel it appropriate to restore this issue to the file of the Ld. CIT(A) for deciding a fresh. Disallowance of deduction under 10B - As per first the profit of the business has to be computed under the head profit and gains of the business or profession and in then profit is to be apportioned between the export turnover and the local turnover - HELD THAT:- As relying on assessee's own case [ 2019 (3) TMI 378 - ITAT DELHI] wherein held deduction u/s 1OA was to be allowed at the source itself. - Decided against revenue Nature of expenditure - revenue or capital expenditure - One-time lease rental charges paid by the assessee to Greater Noida Industrial Development Authorities (GNIDA) for taking plot of land on lease for development of IT Park for a period of 90 years - HELD THAT:- Expenditure incurred by the assessee is not capital expenditure. The expenditure was to be incurred on year to year basis for the period of lease of 90 years. The lesser gave the assessee two option. The first option was to pay on year to year basis and claim the same as revenue expenditure. The second option was provided by the lessor was to pay a composite amount for the period of lease as onetime payment. The lessor provided some benefit for making onetime payment. The assessee has chosen the second option and paid the entire lease rent of 90 years as composite onetime payment. Thus liability of 90 years has been paid in one year only. Liability of lease rent relatable to year under consideration would be 1/90th of the amount paid and balance amount would be pre-paid advance rent only. The assessee is entitled to claim 1/90th of the amount every year till the period of lease of 90 years as revenue expenditure. Even according to the matching principles of income and expenditure the entire expenditure is not justified for allowance in one year (i.e. the year under consideration) when the income corresponding to expenditure of subsequent years will be reflected in relevant year only. The expenditure not being relatable to the year under consideration cannot be allowed as revenue expenditure in the instant year. For the year under consideration, only 1/90th of the amount of ₹ 77,98,042/- has been incurred wholly and exclusively for the purposes of the business for the year under consideration. Accordingly, we allow 1/90th as revenue expenditure in the year and balance be characterized as advance rent in the financial statement as on 31.03.2007. Addition u/s 14A r.w.r. 8D - HELD THAT:- Indirect interest expenses under Rule 8d(2)(ii) are deleted and disallowance under Rule 8D(2)(iii) are restricted to 0.5 % of the assets which has yielded exempted income during the year under consideration.
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2020 (6) TMI 525
Exemption u/s 11 - receipts of the assessee like interest, rent receipt and lease receipt of commercial land are not charitable in nature - HELD THAT:- We find in the facts of the present case the Assessing Officer has misdirected himself in understanding the word development as akin to activities of development boards, etc. We find that no specific instance of establishing identical facts has been brought on record by the Assessing Officer and even in the present appeal, no fact or instance supporting the claim of near similarity of facts with either Jammu Development Board, etc., or HUDA, PUDA, etc., has been brought to our notice by the Revenue. On the contrary, we find that there was no similarity of activity with M/s. Jammu Development Authority, namely, developmental activities like that of a real estate builder, etc. Thus, the reliance placed thereon by the Revenue has to be discarded. Whether the expenses incurred and the receipts received by the assessee specifically from the light and sound show and maintenance of museum, etc., can be said to arise from the activities of the assessee which can be said to be covered under section 2(15)? - HELD THAT:- International Conventions to which Indian is a signatory in the context of the activities found discussed in the respective orders along with the contextual background wherein the assessee functions, we hold that the assessee has been formed for the objects falling within the four corners of the main clause of section 2(15) of the Act. We have seen that the activities undertaken by the assessee were unlike those undertaken by M/s. Jammu Development Authority. This issue, we have addressed at length in the earlier part of this order. The activities undertaken by the present assessee like light and sound show, present security service charges for preserving and maintaining/upgradation and maintenance of Krishna Museum expenditure of celebration of Geeta Jayanti, etc., are all relatable activities commensurate with its aims and objects involving no activity in the nature of trade, commerce or business. Thus, for the detailed reasons set out hereinabove, we are of the view that in the absence of any fact, instance or example on record to show that the activities of the trust are commercial ventures, we find no good reason to vary the conclusion drawn. - Decided against revenue.
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Insolvency & Bankruptcy
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2020 (6) TMI 524
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - Jurisdiction - HELD THAT:- The corporate debtor has tried to create and raise a pre-existing dispute by asserting the sub-standard services were rendered by the applicant and was raised only after application filed under section 9 - The corporate debtor has not placed on record any document which exhibits the plausible dispute between the parties. It can be thus inferred that there is no merit in the so-called dispute raised by the corporate debtor in reply to the application. On the contrary there is an admission by the corporate debtor to do the payment upon receiving the payment from TATA projects, Ahmedabad Metro vide reply to section 8 notice through its email dated 25-5-2019. This leaves no doubt that the default has occurred with respect to the payment of the operational debt of the applicant. Time limitation - HELD THAT:- The date of default occurred from 16-4-2018 and hence the debt is not time barred and the application is filed within the period of limitation. Jurisdiction - HELD THAT:- The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. The present application is complete and perusing the documents on records it goes beyond doubt that the Applicant is entitled to claim its dues, which is admitted by the Corporate Debtor vide its letter dated 25-5-2019, establishing the default in payment of the operational debt. The application is complete as per the requirements of section 9 of the code and in the light of above facts and records the present application is admitted - Application admitted - moratorium declared.
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2020 (6) TMI 523
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT:- The Application is filed on the basis of Order dated 22.10.2016 passed by the Ld. DRT, Jabalpur in O.A No. 225/2013. It is pertinent to mention that the order passed is a final order and the same concludes that the Corporate Debtor is liable to pay a sum of ₹ 85,94,62,955/- together with interest pendente lite and future interest at 12% per annum from the date of filing the OA. i.e 30.09.2013 till its realisation. The said order is passed after considering the documents in relation to the Credit facilities availed by the Corporate Debtor - This Application being filed on the basis of order dated 22.10.2016 is well within the period of limitation. The Application under Section 7 of I B Code, 2016 filed by the financial creditor for initiation of CIRP in prescribed Form No.1, as per the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 is complete. The existence of financial debt of more than Rupees One Lakh against the Corporate Debtor and its default is also proved. Accordingly, the petition filed under section 7 of the Insolvency and Bankruptcy Code for initiation of corporate insolvency resolution process against the corporate debtor deserves to be admitted. Application admitted - moratorium declared.
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CST, VAT & Sales Tax
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2020 (6) TMI 522
Adjustment of amount to be refunded with the dues under CST for arrears of tax for the assessment years - HELD THAT:- The present writ petition is pending for last 7 years before this court. During the interregnum the petitioner has fallen in arrears of tax for the above mentioned assessment years under the Central Sales Tax Act, 1956. Therefore, there are no reasons to grant relief to the petitioner at the stage as these appeals itself can be directed to be disposed by the Sales Tax Appellae Tribunal, Coimbatore within a period of 6 months from date of this order. The respondent shall refund the amount forthwith after due adjustments of any tax if any that may be due from the petitioner - Petition disposed off.
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