TMI Tax Updates - e-Newsletter
June 25, 2022

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy FEMA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

News

1. Geopolitical Spillovers and the Indian Economy (Keynote Address delivered by Michael Debabrata Patra, Deputy Governor, Reserve Bank of India - June 24, 2022 - Standalone session on ‘Geopolitical Spillovers and the Indian Economy’ organised by the PhD Chamber of Commerce and Industry, New Delhi)

2. Proposal for National tax tribunal by utilizing existing capacities and infrastructure.

3. India’s First Logistics Excellence Awards highlight the contributions of Private Sector driving change and innovation in the Logistics Sector.

4. Commerce Minister Piyush Goyal chairs ONDC Advisory Council Meeting

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/DDHS/DDHS_Div3/P/CIR/2022/085 - dated 24-6-2022

Introduction of Unified Payments Interface (UPI) mechanism for Infrastructure Investment Trusts

2. SEBI/HO/MIRSD/DoP/P/CIR/2022/89 - dated 24-6-2022

Implementation of Circular on ‘Guidelines in pursuance of amendment to SEBI KYC (Know Your client) Registration Agency (KRA) Regulations, 2011’

3. SEBI/HO/DDHS/DDHS_Div3/P/CIR/2022/087 - dated 24-6-2022

Reduction of timelines for listing of units of privately placed Infrastructure Investment Trust (InvIT)

4. SEBI/HO/DDHS/DDHS_Div3/P/CIR/2022/086 - dated 24-6-2022

Introduction of Unified Payments Interface (UPI) mechanism for Real Estate Investment Trusts

5. SEBI/HO/AFD/RAC/CIR/2022/088 - dated 24-6-2022

Guidelines for Large Value Fund for Accredited Investors under SEBI (Alternative Investment Funds) Regulations, 2012 and Requirement of Compliance Officer for Managers of all AIFs

DGFT

6. 16/2015-20 - dated 24-6-2022

Enlistment of PSIA under para 2.55 of HBP 2015-2020

Highlights / Catch Notes

GST

• Court Grants Bail in Input Tax Credit Case; Applicant to Deposit Rs. 70 Lakhs Under Protest with Conditions Imposed.

  Case-Laws - HC : Seeking grant of bail - wrongful availment of Input Tax Credit - this Court after considering all the aspects of the matter, particularly the period of detention and the amount involved finds appropriate that if the applicant deposits Rs.70 lakhs under protest or admission of the disputed amount, which would be adjusted in accordance with law, the applicant can be enlarged on bail with the conditions imposed. - HC
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• Cinema Ticket Price Hike Dispute: Respondent Profiteered Rs. 12,83,999 Despite GST Reduction, Violating Rule 133(1) CGST Rules, 2017.

  Case-Laws - NAPA : Profiteering - supply of Services by way of admission to exhibition of cinematography films - There is no dispute relating to the fact that the Respondent has increased the base prices of the admission tickets in respect of the regular category and continues to charge the cine-goers at the prevailing rates despite a reduction in the GST - the Respondent has realized an additional amount to the tune of Rs. 12,83,999/-from the recipients of 'Regular Category' which included both the profiteered amount and GST on the said profiteered amount. Thus the profiteering amount is determined as Rs. 12,83,999/-as per the provisions of Rule 133 (1) of the CGST Rules, 2017 in respect of 'Regular Category' only. - NAPA
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• Authority Finds Rs. 2.62 Crores Profiteering in Suncity Avenue-102; Orders Price Reduction u/r 133(3)(a) CGST Rules.

  Case-Laws - NAPA : Profiteering - Project Suncity Avenue-102 - The Authority determines that the Respondent has profiteered an amount of Rs. 2,62,56,652/-. Therefore, given the above facts, the Authority under Rule 133 (3) (a) of the CGST Rules orders that the Respondent shall reduce the price to be realized from the buyers of the flats commensurate with the benefit of ITC received by him. - However, the penalty under Section 171 (3A) cannot be imposed on the Respondent retrospectively. - NAPA
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Income Tax

• Income Tax Department can reopen assessments u/s 148 despite Insolvency and Bankruptcy Code proceedings, says High Court.

  Case-Laws - HC : Validity of reopening of assessment u/s 147 - CIRP proceedings - The proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be pressed into service to dilute the rights of the Income Tax Department under the Income Tax Act, 1961 to re-open the assessment under Section 148 of the Income Tax Act, 1961. - Income Tax Department was not precluded from reopening the assessment completed under Section 143(3) of the Income Tax Act,1961. - HC
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• IBC Proceedings Override Income Tax Claims; Resolution Plan Approval by NCLT Nullifies Other Legal Proceedings.

  Case-Laws - AT : Demand against company merged - scope of Proceedings under provisions of IBC - As position of law in this regard is that, the proceeding under provisions of Insolvency and Bankruptcy Code, 2016 overrides the proceedings under the Income Tax Act, 1961. In other words, all the proceedings initiated or pending before different authorities shall stand abated in terms of approval of resolution plan by the NCLT. - AT
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• Assessee seeks resolution for technical default in filing DDT challan u/s 115-O; timely payment undisputed.

  Case-Laws - AT : Credit of Dividend Distribution Tax (DDT) u/s. 115-O - technical default committed at the time of filing of challan - In our view, the assessee has already approached the CPC thrice and also approached Ld. CIT(Appeals) for redressal of its grievance and there is no denial that the assessee has paid and deposited DDT within the due date. It is a fit case where the assessee should be granted necessary credit of DDT paid. - AT
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• Capital Gains on Surat Land Sale to Use Rs. 607/Sq. Meter FMV for Fair Long-Term Gain Computation.

  Case-Laws - AT : Capital gain computation - FMV determination - reference to DVO - indexed cost of acquisition - assessee’s land is situated in New City Light Area of Surat, which is costly area and prices of the land in the said area is very higher side. Therefore, considering the entirety of the facts and taking a holistic view the fair market value @ 607 per square meter should be adopted to meet the end of justice. Accordingly, the AO is directed to apply rate of ₹ 607 per sq. meter for calculation of indexed cost of acquisition for the purpose of computation of long-term capital gain in the hands of the assessee. - AT
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• Ex-parte order by Income Tax Appeals Commissioner violates natural justice; denies right to be heard.

  Case-Laws - AT : Ex-parte order passed by CIT- A - Denial of natural justice - the principle of audi alteram partem is the basic concept of natural justice. The expression "audi alteram partem" implies that a person must be given an opportunity to defend himself. This principle is sine qua non of every civilized society. - AT
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• Interest from Delayed Customer Payments Deductible u/s 80IA; GEB Deposit Interest Not Eligible for Deduction.

  Case-Laws - AT : Deduction u/s 80IA in respect of profits of the eligible undertaking - So far as interest on delayed payment from customers is concerned, such payments were made by various members have direct nexus with the profit and gains derived from undertaking. So far as interest earned on deposits with GEB is concerned, the same is not derived from the business activity of the assessee nor flowing directly from the industrial undertaking therefore, not eligible for deduction under Section 80IA of the Act. Thus, the assessee partly succeeded on this ground of appeal. - AT
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• Investor Qualifies for Tax Benefits on NHAI Bonds u/s 54EC; Timely Investment Ensures Compliance with Tax Law.

  Case-Laws - AT : Benefit of Section 54EC - Amount invested in bonds issued by NHAI - Period of limitation for investment - the investment made by the Appellant in bonds issued by NHAI on 06.03.2013 falls with the period of six calendar months and thus, meets the requirement of Section 54EC of the Act. - the Appellant is entitled to benefit of section 54EC of the Act in respect of amount invested in bonds issued by NHAI. - AT
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• Reassessment u/s 147 invalid; assessee disclosed all material facts, making reopening legally impermissible. Full compliance proven.

  Case-Laws - AT : Validity of Reassessment proceedings u/s 147 - There was no failure to disclose material facts and failure to place a version favourable to the Revenue cannot be a reason to reopen the assessment in the light of the undisputed factual material referred by us extensively it is apparent that the re-opening was fully impermissible in law. The facts which are taken from the Auditor’s report, computation of income and return filed itself would indicate that the assessee had disclosed what was relevant and necessary for the purpose of making assessment. The assessee did not hold back any document nor failed to supply any information. - AT
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• IT/ITES Project Management Fees Considered Capital Cost, Not Revenue Expenditure; Res Judicata Inapplicable in Tax Cases.

  Case-Laws - AT : Nature of expenditure - Allowability of general management fees incurred when the assessee is still in the process of completing the project of IT/ITES project - the revenue expenditure incurred till the business is set-up should only add to the capital cost of the project. - The doctrine res-judicata has no application to the income-tax proceedings merely because the claim came to be in the earlier years, it is does not mean that the Assessing Officer should allow the same when he is conscious of the non-allowability of the claim in view of well settled position of law in this issue. - AT
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Customs

• Dispute Over Classification of Circuit Boards in DWDM Equipment: Are They Complete Machines or Just Parts?

  Case-Laws - AT : Classification of imported goods - Cards (Populated Printed Circuit Boards) OSLM-5-100G-WL3N for DWDM Equipment-Photonic Service Switch (PSS) 1830 - The Department has not drawn any samples and did not obtain technical opinion to support their claim that the impugned goods are complete machines or equipment capable of independent function themselves so as to merit classification under CTH 85176270. On the contrary, the respondents could demonstrate by technical literature; samples that the goods imported by them are Populated Circuit Boards (PCBs) used in PSS 1830 and therefore, the impugned goods are parts of PSS and as such merit classification CTH 85177010. - AT
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Indian Laws

• Appellate Court Cannot Order Compensation on Accused's Appeal for Dishonored Cheque u/s 138, Decision Overturned.

  Case-Laws - HC : Power to enhance the sentence awarded by the trial court - Dishonor of Cheque - insufficiency of funds - hile the Trial Court has consciously imposed fine of Rs. 5,000/- and no compensation ordered, in the appeal by the accused, no power vested on the Appellate Court to enhance the sentence ordering compensation in the absence of appeal by the complainant. The compensation is not an independent component under Section 138 of Negotiable Instruments Act which is a special Act. It should be part of the fine amount and fine is part of sentence. It is a trite principle of law that, in appeal preferred by the accused person sentence cannot be enhanced. Therefore, the order of the Appellate Court perverse, contrary to law, hence liable to be set aside. - HC
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• Petitioners Face Trial Over Dishonored Cheque; Claim It Was Security for Pending Certification, Challenge Vicarious Liability of Director.

  Case-Laws - HC : Dishonor of Cheque - vicarious liability of Director - The petitioners admit that the cheque was drawn by them and handed over to the respondent-complainant. However, they contend that the cheques were issued only as security for the balance amount, which is liable to pay after certification. If that is so, the petitioners ought not to have given those cheques with specific dates and amounts without certification. After presentation of the cheques and institution of the complaint - the petitioners herein are liable to face the trial and prove their innocence - HC
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• Material Alteration in Promissory Note Invalidates Liability: Execution Year Changed from 2001 to 2007 Per Section 87.

  Case-Laws - HC : Validity of suit promissory notes / negotiable instrument - material alteration - The evidence on record clearly points out alteration of numerical '1' as '7', changing the year of execution from 2001 to 2007. Once it is established that there is material alteration to the year in the negotiable instrument, which is crucial to seek enforcement of the liability, Section 87 comes into operation. Therefore, the plaintiff cannot seek enforcement of alleged liability from the defendant. - HC
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Service Tax

• Court Grants Relief Under SVLDRS for Payment Attempt Blocked by NEFT/RTGS Technical Issues, Recognizing System Failure.

  Case-Laws - HC : SVLDRS - rejection of application for non payment of tax in time - difficulty in making payment through NEFT / RTGS - The facts on record indicates that the amount of Rs.41,331.20/- was indeed paid by the petitioner which however was re-credited back due to technical glitches. Therefore, the legitimate the benefit of the above scheme cannot be denied to the petitioner. Mistake is on account of the system evolved which failed to accept the payment. - Relief granted - HC
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• Reverse Charge Mechanism Inapplicable for Foreign Service Tax on Business Auxiliary Services Provided Outside India.

  Case-Laws - AT : Levy of service tax - applicability of Reverse Charge Mechanism - Business Auxiliary Service - he services have been provided by the foreign agents to the foreign site office/branch office of Appellant and thus, the service cannot be said to be received in India when the same is provided outside India, used outside India and paid outside India. - The payment of local tax abroad will be an indicator to decide whether a service is provided and consumed outside India or has been consumed/received in India - the impugned order confirming the service tax liability on the appellant cannot be sustained. - AT
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• Foreign Insurance Services Not Taxable Under Reverse Charge Mechanism; Services Provided, Used, and Paid Outside India.

  Case-Laws - AT : Levy of service tax - applicability of Reverse Charge Mechanism - the services have been provided by the foreign Insurance Company to the foreign site office/branch office of Appellant and thus, the service cannot be said to be received in India when the same is provided outside India, used outside India and paid outside India. In view of the above, it is found that the impugned order is not sustainable with reference to the above-mentioned Service Tax liability confirmed against the appellant. - AT
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Central Excise

• Appellant Entitled to CENVAT Credit Refund for CVD and SAD; No Evidence of Fraud or Intent to Evade Duty.

  Case-Laws - AT : Refund of CENVAT credit of CVD and SAD paid by them - appellant has paid the duties only after issuing SCN - there is no allegation of any fraud, collusion or suppression of facts with intent to evade payment of duty. There is no evidence placed before me to establish that the duties were paid after adjudication and rendering a finding of fraud, collusion or suppression of fact with intent to evade payment of duty. In such circumstances, the credit cannot be denied - the appellant is eligible for credit of CVD and SAD paid by them. - AT
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VAT

• Endorsement by Assistant Commissioner on Nov 21, 2019, deemed appealable u/s 31; Government's objection rejected.

  Case-Laws - HC : Appealable order or not - endorsement on the application made by the petitioner - the argument of the learned Government Pleader that appeal itself may not lie cannot be accepted. The word 'any order' referred to in Section 31 cannot be limited to only assessment orders. If that was the intention of the Legislature, the same would have been incorporated therein. In the absence of the same, the endorsement made by the Assistant Commissioner on 21.11.2019 can be challenged in an appeal. - HC
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Case Laws:

• GST

• 2022 (6) TMI 1082
  Maintainability of petition - availability of alternative remedy of appeal - petitioner submits that there is remedy of filing of an appeal under Section 112 of the UPGST Act before the GST Appellate Tribunal but since GST Appellate Tribunal has still not been constituted, as such, the petitioner has filed instant writ petition before this Court - HELD THAT:- It is prima facie evident from the Annexure No. 8 that M/s Shree Trading Company is registered on the portal of the GST. It is also evident therefrom that SGST and CGST has been paid by the petitioner. Further the petitioner has also not been afforded proper opportunity to rebut/respond to the demand notice as he was bed ridden at that time. Matter requires consideration - List/put up this matter in the week commencing 8th of August 2022.

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• 2022 (6) TMI 1078
  Seeking grant of bail - wrongful availment of Input Tax Credit - by procuring invoices from fake and fictitious firm - supply of goods without payment of tax and without issuing invoices - bailable offence or not - non-cognizable offence or not - HELD THAT:- Considering the fact that the allegation against the present applicant is of wrongfully utilizing Input Tax Credit of Rs.6,95,32,472/- and supplied taxable goods without payment of taxes and without issuing invoices to the tune of Rs.27,70,559/-, totalling Rs.7,23,03,031/-, and that offence under the Act are bailable and non-cognizable except for the offence under Section 132 (5) of the Act, further considering that the applicant can be punished with maximum sentence of 5 years with fine, he is in jail since 27.10.2021, further considering that Proprietor of the firm namely, Rohan Tanna and Abhishek Pandey have already been enlarged on bail by the co-ordinate Bench and also considering that the applicant in the bail application raised a ground that the offence is compoundable in nature and, therefore, this Court after considering all the aspects of the matter, particularly the period of detention and the amount involved finds appropriate that if the applicant deposits Rs.70 lakhs under protest or admission of the disputed amount, which would be adjusted in accordance with law, the applicant can be enlarged on bail with the conditions imposed. Bail application allowed.

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• 2022 (6) TMI 1077
  Maintainability of petition - availability of alternative remedy - Demand of an amount being the difference in the ITC availed in Form GSTR-3B which was auto populated in Form GSTR-2A - HELD THAT:- The GST enactments and the rules made thereunder are a complete code by themselves. The provisions in the GST Rules have been well thought of and have been drafted using the vast experience gained under the erstwhile MODVAT Rules under the erstwhile Central Excise Rules, 1944 and its subsequent avatars under the Cenvat Credit Rules, 2001, 2002 and later under 2004 and under the various VAT enactments and the VAT Rules made thereunder - Most of the difficulties faced in the implementation of GST law was are on account of the technical glitches as returns and forms are system driven and returns are filed electronically. The information contained therein are supposed to get captured and auto populated at the end customer/recipient of goods or services. As far as the supplier of Goods and Services is concerned, the supplier is required to file a monthly return Form GSTR-1 under Rule 59(1) of the State CGST Rule, 2017. This form is to be uploaded electronically by the due date on the common portal by the supplier either directly or through Facilitation Centre notified by the Commissioner - If there is any variance between the information furnished in Form GSTR-2A, Form GSTR-4A or Form GSTR-6A furnished by the supplier and the credit tax availed in Form GSTR-2, the recipient is required to furnish details of inward supplies added, corrected, deleted by the recipient in Form GSTR-2, Form GSTR-4 and Form GSTR-6, in Form GSTR-1A through the common portal. In case, corrections and amendments in Form GSTR-1A of the recipient is not accepted by the supplier in its Form GSTR-1, the question of availing input tax credit on the strength of invoices alone is not enough. In case, the information is not corrected by the supplier in GSTR-1, the input tax credit availed by the recipient is liable to be paid back - Though some of the circulars and clarifications issued in the context of exports have been cited by the learned counsel for the petitioner, they are not relevant in the context of availing input tax credit at the threshold stage. Further, the Court have recognized few exceptions to the rule of alternative remedy, i.e., where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice. None of these exceptions are attracted in the facts of the present case. Admittedly, the petitioner has an alternate remedy by way of an appeal before the Appellate Commissioner under Section 107 of the CGST Act, 2007. Therefore, this writ petition cannot be entertained ignoring the statutory dispensation - Petition dismissed.

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• 2022 (6) TMI 1076
  Profiteering - supply of Services by way of admission to exhibition of cinematography films - allegation is that the benefit of reduction in the GST rate on which was reduced w.e.f. 1.1.2019, vide Notification No. 27/2018- Central Tax (Rate) dated 31.12.2018 by way of commensurate reduction in prices, were not passed on - contravention of Section 171 of the CGST Act, 2017 - penalty - HELD THAT:- The rates of GST on Services by way of admission to exhibition of cinematograph films where the price of admission ticket was above one hundred rupees was reduced from 28% to 18% and Services by way of admission to exhibition of cinematograph films where the price of admission ticket was one hundred rupees or less was reduced from 18% to 12% w.e.f. 01.01.2019, vide Notification No. 27/2018- Central Tax (Rate) dated 31.12.2018. The benefit of reduction in GST rates was required to be passed on to the recipients by the Respondent as per the provisions of Section 171 of the Act. There is no dispute relating to the fact that the Respondent has increased the base prices of the admission tickets in respect of the regular category and continues to charge the cine-goers at the prevailing rates despite a reduction in the GST w.e.f. 1.1.2019 vide Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018. The Respondent in the written submissions as well as during the personal hearing has admitted the above-said liability of excess collection during the period 1.1.2019 to 30.4.2020. The Authority finds that the Respondent has been profiteering by way of increasing the base prices of the tickets (Services) by not reducing the selling price of the tickets (Services) commensurately in the regular category, despite the rate reduction in GST rate on Services by way of admission to exhibition of cinematograph films where the price of admission ticket was one hundred rupees or above, from 28% to 180/0 w.e.f. 01.01.2019. From the Table B above, it is evident that the base prices of the admission tickets were indeed increased, as a result of which the benefit of reduction in GST rate from 28% to 18% and 18% to 12% (w.e.f. 01.01.2019), was not passed on to the recipients by way of commensurate reduction in prices charged (including lower GST @ 18%). The total amount of profiteering covering the period of 01.01.2019 to 30.04.2020 for the Regular Category was 12,83,999/-. This Authority based on the facts discussed above has found that the Respondent has clearly resorted to profiteering in respect of Regular Category by way of either increasing the base prices of the service while maintaining the same selling prices or by way of not reducing the selling prices of the service commensurately, despite a reduction in GST rate on Services by way of admission to an exhibition of cinematograph films where the price of admission ticket is above one hundred rupees from 28% to 18% w.e.f. 01.01.2019 to 30.04.2020. On this account, the Respondent has realized an additional amount to the tune of Rs. 12,83,999/-from the recipients of Regular Category which included both the profiteered amount and GST on the said profiteered amount. Thus the profiteering amount is determined as Rs. 12,83,999/-as per the provisions of Rule 133 (1) of the CGST Rules, 2017 in respect of Regular Category only. The Respondent is therefore directed to reduce the prices of his tickets of regular category as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients. The Respondent is also directed to deposit the profiteered amount of 12,83,999/- along with the interest to be calculated @ 18% from the date when the above amount was collected by him from the recipients till the above amount is deposited. Penalty - HELD THAT:- The Authority finds that the Respondent has denied the benefit of rate reduction to his customers/recipients in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and resorted to profiteering and hence, committed an offence under section 171 (3A) of the CGST Act, 2017. Therefore, he is liable for the imposition of a penalty under the provisions of the above Section. Accordingly, notice be issued to him directing him to explain why the penalty under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him for the profiteered amount collected from 01.01.2020 to 30.04.2020. Application disposed off.

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• 2022 (6) TMI 1075
  Profiteering - Project Suncity Avenue-102 - allegation is that the benefit of reduction in the GST rate by way of commensurate reduction in prices, were not passed on - contravention of Section 171 of CGST Act - penalty - HELD THAT:- This Authority observes that the benefit of additional Input Tax Credit of 3.07% of the turnover has accrued to the Respondent for the project Suncity Avenue 102 . This benefit was required to be passed on to the recipients, however, the same was not done commensurately by the Respondent. Section 171 of the CGST, 2017 has been contravened by the Respondent, in as much as the additional benefit of ITC @3.07% of the base price has not been passed on by the Respondent to 736 recipients. These recipients were identifiable as per the documents provided by the Respondent, giving the names and addresses along with Unit no. allotted to such recipients. Therefore, the total additional amount of Rs. 2,62,56,652/- was required to be returned to the such homebuyers. The Authority determines that the Respondent has profiteered an amount of Rs. 2,62,56,652/-. Therefore, given the above facts, the Authority under Rule 133 (3) (a) of the CGST Rules orders that the Respondent shall reduce the price to be realized from the buyers of the flats commensurate with the benefit of ITC received by him. The details of the recipients and benefit which is required to passed on to each recipient/homebuyer (including Applicant No. 1) alongwith the details of the unit are contained in the Annexure A to this order. The Authority directs that such profiteered amount as determined shall be passed on/returned by the Respondent to the recipients of supply alongwith interest @18% from the date such amount was profiteered by the Respondent uptil the date such amount is passed on/returned to the respective recipient of supply. Penalty - HELD THAT:- The Respondent has committed an offence by violating the provisions of Section 171 (1) during the period from 01.07.2017 to 08.08.2019, and therefore, he is liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. However, perusal of the provisions of the said Section 171 (3A) shows that it has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, 2019 and it was not in operation during the period from 01.07.2017 to 08.08.2019 when the Respondent had committed the above violation. Hence, the said penalty under Section 171 (3A) cannot be imposed on the Respondent retrospectively. Accordingly, notice for the imposition of penalty is not required to be issued to the Respondents. This Order having been passed today falls within the limitation prescribed under Rule 133 (1) of the CGST Rules, 2017. Application disposed off.

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• Income Tax

• 2022 (6) TMI 1081
  Undisclosed business income/profit - Unmatched gross profit figures as per tally software - as in survey proceedings hard disk of the computer containing Tally software details, was taken by the Income Tax Department - assessment proceedings have to be completed through e-proceeding - petitioner submits that the petitioner has clearly explained that the details that were obtained at the time of survey on 06.03.2018 were not audited and they are incomplete records - non providing personal hearing to assessee - HELD THAT:- The undisclosed business profit have been arrived from the net profit in the books of accounts as on the date of survey and the amounts declared in the income tax. This would have definitely required a proper assessment by calling the petitioner for a personal hearing. Therefore, the impugned order seems to indicate that there is a procedural infraction. It has not complied with the requirements of instructions of the board in its clarification dated 11.07.2016 bearing reference F.No.225/162/2016/ITA.II. Though the petitioner has not specifically requested for a personal hearing, the fact remains that where the books of accounts have to be examined for arriving at a proper conclusion, a personal hearing is mandatory. We are inclined to quash the impugned orders and the case is remit back to the respondent to pass an appropriate order preferably within a period of three months from the date of receipt of copy of this order. The impugned order which stands quashed shall now be treated as a show cause notice for the purpose of completing the assessment. WP allowed.

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• 2022 (6) TMI 1080
  Assessment of trust - Application of maximum marginal rate of tax on the income which was below the taxable limit - as per AR assessee should be made subject to tax at the rate applicable to an individual after allowing the basic exemption limit and that too at slab rate of tax - HELD THAT:- We have heard the rival contention of both the parties and perused the materials available on record. At the outset we note that this tribunal in the case of Jain Sangh parabdi Khayu Trustee [ 2022 (6) TMI 1027 - ITAT AHMEDABAD] held that the members of the trustees are not entitled to any share in the income of the Association of persons and rate applicable as to an individual for charging the income tax after a lowing the basic exemption limit, shall be applicable to the assessee on hand. Hence the ground of appeal of the assessee is allowed. thus involving the identical facts and circumstances have decided the issue in favour of the assessee.

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• 2022 (6) TMI 1079
  Exemption u/s 11 denied - disallowances being made under section 143(1) - Scope of debatable issue - HELD THAT:- Respectfully following the Co-ordinate Bench decision in the assessee s own case for the Asst.Year 2015- 16 [ 2019 (8) TMI 1822 - ITAT AHMEDABAD] wherein the disallowances were being made under section 143(1) of the Act, and similar disallowance is also made for the present year viz. Asst.Year 2016-17, we hold that debatable issue should not be done in an intimation under section 143(1)(a) of the Act. Therefore, we allow the appeal of the assessee and delete both the disallowances. Assessee appeal allowed.

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• 2022 (6) TMI 1074
  Validity of reopening of assessment u/s 147 - petitioners had voluntarily filed Corporate Insolvency Resolution Process (CIRP) under the provisions of the Insolvency and Bankruptcy Code before the National Company Law Tribunal, Mumbai ( NCLT ) and were admitted on 12.03.2018/19.3.2018 and later ordered - HELD THAT:- Since the proceedings under the Code were initiated by the petitioners few days prior to the initiation of the proceedings under Section 148 it was incumbent for the petitioners to have ensured proper notice to the Income Tax Department and obtained appropriate concession in Corporate Insolvency Resolution Plan. That apart, claims of the Income Tax Department were not considered by the NCLT, Mumbai, while approving the Resolution Plan and therefore the question of abetment of such rights of the Income Tax Department cannot be countenanced.The provisions of Insolvency and Bankruptcy Code, 2016 (IBC) cannot be interpreted in a manner which is inconsistent with any other law in the time being in force. Therefore, Corporate Insolvency Resolution Plan sanctioned and approved cannot impinge on the rights of the Income Tax Department to pass any fresh Assessment Order under Section 148 read with Sections 143(3) and 147 of the Income Tax Act, 1961. The proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be pressed into service to dilute the rights of the Income Tax Department under the Income Tax Act, 1961 to re-open the assessment under Section 148 of the Income Tax Act, 1961. Income Tax Department was not precluded from reopening the assessment completed under Section 143(3) of the Income Tax Act,1961. Therefore, these Writ Petitions filed by these petitioners have to be dismissed. The Assessment Orders which have been passed pursuant to the interim order dated 27.12.2018 are directed to be given to the respective petitioners by the respondent, within a period of thirty days from the date of receipt of a copy of this order - If the petitioners are so aggrieved by such of those Assessment Orders, the petitioners have to work out their Appellate remedy before the Commissioner of Income Tax (Appeals) under Section 246A of the Income Tax Act, 1961.

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• 2022 (6) TMI 1073
  Demand against company merged - scope of Proceedings under provisions of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In the instant case, the assessee-company was merged with M/s.Agaral Mittal Concast P.Ltd., vide NCLT order dated 13.2.2019. Thereafter, Resolution plan submitted by the Mangalam Worldwide Pvt. Ltd. was approved by the Committee of Creditors, and final order to this effect was passed by the NCLT on 13.12.2021. In the present appeal of the assessee, the assessment year involved is 2014-15 and the demand had arisen on 9.12.2016 pursuant to the framing of assessment i.e. prior to the order of the NCLT dated 13.12.2021, and therefore, in view of overriding effect of the IBC proceedings, tax demand shall stand extinguished. As position of law in this regard is that, the proceeding under provisions of Insolvency and Bankruptcy Code, 2016 overrides the proceedings under the Income Tax Act, 1961. In other words, all the proceedings initiated or pending before different authorities shall stand abated in terms of approval of resolution plan by the NCLT. The present appeal pertains to Asst.Year 2014-15 and the demand had arisen on 9.12.2016 pursuant to framing of assessment i.e. prior to the order dated 13.12.2021 passed by the NCLT. Further, as per the Resolution Plan, there is no claim made by the Income Tax Department before the Insolvency Professional. In the Resolution Plan approved by the NLCLT, an exgratia amount of Rs.10 lakhs only approved to the operational creditors being statutory creditors viz. CGST Department made a claim of Rs.11.70 crores and Asstt.Comm. of Sales Tax claimed Rs.1.77 crores. Therefore, we hold that the present appeal pending before the Tribunal is not sustainable in law

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• 2022 (6) TMI 1072
  Addition u/s 69A rws 115BBE - As on the basis of inquiry conducted u/s 131(1)(d) made addition being unexplained cash found from the possession of the assessee - Assessee argued that the learned CIT (A) has passed an ex-parte order and in the interest of justice, the assessee should be given one more opportunity to substantiate the cash so found - HELD THAT:- Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the learned CIT (A) with a direction to grant one last more opportunity to the assessee to substantiate her case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the learned CIT (A) and to substantiate her case without seeking any adjournment under any pretext failing which the learned CIT (A) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

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• 2022 (6) TMI 1071
  Credit of Dividend Distribution Tax (DDT) u/s. 115-O - assessee has been denied credit of DDT deposited within time only on account of a technical default committed at the time of filing of challan, wherein a wrong column was tick marked by the assessee inadvertently - HELD THAT:- The Delhi High Court in the case of Court On Its Own Motion [ 2013 (3) TMI 316 - DELHI HIGH COURT] issued seven mandamus in response to a Public Interest Litigation regarding difficulties faced by assessees after computerisation and central processing of income tax returns. One of the seven mandamus is in relation to credit of TDS to an assessee when tax deducted has been deposited with revenue but incorrect particulars have been uploaded by deductor. As in the instant case, the assessee has deducted and deposited DDT within time, but due to an inadvertent mistake in filing the challan, the assessee has been denied credit of DDT. The assessee has filed several applications under section 154 of the Act with the CPC, but the same have been rejected citing technical reasons. The appeal of the assessee was also dismissed on the ground that the assessee did not take up necessary follow-up action. In our view, the assessee has already approached the CPC thrice and also approached Ld. CIT(Appeals) for redressal of its grievance and there is no denial that the assessee has paid and deposited DDT within the due date. It is a fit case where the assessee should be granted necessary credit of DDT paid. Accordingly, the revenue is directed to grant credit of DDT to the assessee by giving necessary directions to the jurisdictional assessing Officer to correct the data uploaded to the OLTAS database and grant credit of DDT to the assessee. - Decided in favour of assessee.

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• 2022 (6) TMI 1070
  Assessment order passed u/s 143(1) - Disallowance u/s 80P - return was filed beyond the date stipulated under section 139(1) of the Act, the assessee cannot be allowed the benefit of section 80P - HELD THAT:- We note that in the case of Chirakkal Service Co-Operative Bank Ltd. Kannur [ 2016 (4) TMI 826 - KERALA HIGH COURT] held that a return filed by assessee beyond period stipulated under section 139(1) or 139(4) or under section 142(1) or section 148 can also be accepted and acted upon for entertaining claim raised under section 80P provided further proceedings in relation to such assessments are pending in statutory hierarchy of adjudication in terms of provisions of Act. We note that the instant case, there was approximately a two-month delay in filing the return of income by the assessee for the respective assessment years A.Y. 2018-19 A.Y. 2019-20 and therefore looking into the totality of facts, in the interests of justice, we are restoring the case to the file of the Ld. CIT(Appeals) for fresh adjudication on merits of the case after giving due opportunity of hearing to the assessee for both the assessment years. Appeals of the assessee are allowed for statistical purposes.

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• 2022 (6) TMI 1069
  Ex-parte order passed by CIT- A - Denial of natural justice - HELD THAT:- CIT(A) affirmed the action of Assessing Officer ex parte without mentioning any reason for confirming the same on merits. The provisions of Section 250(6) of the Act require the Commissioner (Appeal) to dispose of the appeal in writing with reasoning. But we find from the impugned order of CIT(A), who confirmed the order of AO, that the appeal was dismissed without deciding the same on merit. The assessee appeared/co-operated before the AO and filed the necessary submission during the proceedings before him. Thus, the Ld. CIT-A should have called for the assessment records for considering the submission made by the assessee before the AO before upholding the order of the AO. But the Ld. CIT-A failed to do so. We further find that the principle of audi alteram partem is the basic concept of natural justice. The expression audi alteram partem implies that a person must be given an opportunity to defend himself. This principle is sine qua non of every civilized society. The assessee after filing the appeal should be vigilant enough for pursing it before the authorities but for this, if the assessee fails to pursue the appeal, the assessee cannot be penalized by confirming such huge addition without hearing his points of contentions. The mistake committed by the assessee and punishment given to him (the assessee) by sustaining the addition is not commensurate to each other in the given facts and circumstances. But the negligent/dilly-dally approach of the assessee before the Ld. CIT(A) cannot be neglected/ignored. Therefore, we are inclined to levy a cost of Rs. 5,000/- upon the assessee for adopting the negligent approach in the appeal proceedings before the Ld. CIT(A). Accordingly, we direct the assessee to deposit a sum of Rs. 5,000/- to the Income Tax Department prior to the commencement of hearing before the Ld. CIT(A). We are of the view that the assessee must be given one more opportunity of hearing to represent its case. Therefore, in exercise of power conferred under Rule 28 of Tribunal Rules, we restore this appeal to the file of Ld. CIT(A) for reconsideration all grounds of appeal after allowing proper opportunity of being heard in accordance with law. The assessee is aware of the case set up against him, accordingly it is directed to prepare his submission and cooperate in the appeal proceedings and its failure will entail confirmation of the impugned addition made by the AO. Hence, this ground of assessee s appeal stands allowed for statistical purpose.

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• 2022 (6) TMI 1068
  Penalty u/s 271(1)(c) - Addition u/s 69C - bogus purchases - As per AO most of the purchases made by the assessee were not from genuine parties and were bogus as per the information received from Sales Tax Department - HELD THAT:- As in the present case, the explanation of the assessee has not been accepted by the Revenue and no contradictory evidence to disprove the explanation so offered has been brought on record by the Assessing Officer, we are of the considered view that penalty levied merely on estimated addition cannot be sustained in the absence of anything to prove that there was any concealment of income or furnishing of inaccurate particulars of income by the assessee. Accordingly, the grounds raised in present appeal are allowed and the Assessing Officer is directed to delete the penalty, as affirmed by the learned CIT(A). Appeal of assessee allowed.

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• 2022 (6) TMI 1067
  Capital gain computation - FMV determination - reference to DVO - indexed cost of acquisition - addition u/s. 50C of the Act on account of difference in the value adopted by the DVO and the sale consideration taken by the assessee in his return of income - cost of indexation - HELD THAT:- As decided in in assessee s co-owner case DHARMENDRA B. PATEL VERSUS THE DCIT, CIRCLE-1 (3) , SURAT. [ 2021 (7) TMI 247 - ITAT SURAT] Since the process of sale has been initiated from the date of Sale Agreement, the character of the transaction vis-a-vis Section 50C of the Income tax Act should also be determined on the basis of the conditions that prevailed on the date the transaction was initially entered into. Accordingly, the applicability of the provisions of section 50C should be looked at only on the date of Agreement to Sell. Cost of indexation claimed - Also in the above case of assessee s co-owner we find that the dispute between the assessee and the assessing officer is the rate of Rs. 825/- per square meter, as fair market value as on 01.04.1981, whereas the DVO has estimated the fair market value as on 01.04.1981 at the rate of 114.30 per square meter. We note that the DVO has himself stated in his report that the impugned land was situated at more appropriate location as compared to sale instances considered by him. We also agree with assessee s land is situated in New City Light Area of Surat, which is costly area and prices of the land in the said area is very higher side. Therefore, considering the entirety of the facts and taking a holistic view the fair market value @ 607 per square meter should be adopted to meet the end of justice. Accordingly, the AO is directed to apply rate of Rs. 607 per sq. meter for calculation of indexed cost of acquisition for the purpose of computation of long-term capital gain in the hands of the assessee.

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• 2022 (6) TMI 1066
  Nature of subsidy receipts - capital or revenue receipts - subsidy received on account of excise duty refund (excise roll back) - Subsidy receipt in pursuance of the incentives announced and sanctioned vide Government of India, Ministry of Commerce and Industry and Central Excise Notification - HELD THAT:- Giving thoughtful consideration to the matter on record it can be observed that in assessee s own case for assessment year 2013-14 a Coordinate bench decision in M/s. Crystal Crop Protection Pvt. Ltd. [ 2019 (12) TMI 980 - ITAT DELHI] as relied which in turn had further relied the judgment of Hon ble Jammu and Kashmir High Court in CIT vs. Shree Balaji Alloys [ 2011 (1) TMI 394 - JAMMU AND KASHMIR HIGH COURT] which has been further sustained with Hon ble Apex Court [ 2011 (11) TMI 712 - SC ORDER] - The cumulative effect of same is that excise duty subsidy and interest subsidies given in pursuant of new industrial policy were held to be capital receipts. No distinction, as attempted by Ld. AO, can be drawn on the basis that as earlier income was subject to benefit of weighed deduction @ 100% of the profits derived from undertaking which no more was available, that would change the nature of receipt to revenue instead of Capital. - Decided against revenue.

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• 2022 (6) TMI 1065
  Exemption u/s 11 - grants were received by the assessee-trust from the Government of Gujarat - Claim denied as assessee is clearly falling under the first proviso of section 2(15) - as argued activities of the assessee are charitable in nature and therefore the benefit of corpus fund will be eligible - HELD THAT:- As decided in own case [ 2022 (3) TMI 1192 - ITAT AHMEDABAD] in the case of CIT Vs. Gujarat Safai Kamdar Vikas Nigam ( 2011 (5) TMI 815 - GUJARAT HIGH COURT ), citied by the learned Counsel for the assessee, the grants were received by the assessee-trust from the Government of Gujarat under a similar scheme envisaged for implementation of certain Government programs and although it was not expressly made clear that the grants were being made available to form the corpus of the Trust and to be applied for such purpose, it was held by the Hon ble jurisdictional High Court after considering the entire purport of the scheme that the grants made available to the assessee-trust for implementing the scheme in a particular manner cannot be treated as income of the assessee-trust. In our opinion, the ratio of this decision of Hon ble Gujarat High Court is squarely applicable to the facts of the present case and respectfully following the same, we uphold the impugned order of the learned CIT(A) a lowing the claim of the assessee that the government grant of Rs. 6,18,22,000/- received by the assessee-trust towards specific projects to achieve objects of the Trust constituted its Corpus Fund which was not chargeable to tax. - Appeal of revenue dismissed. Treating the capital expenditure as application of income - HELD THAT:- As decided in own case [ 2022 (3) TMI 1192 - ITAT AHMEDABAD] assessee is entitled to depreciation under Section 32 of the Act on assets whose cost has been allowed as application of income for charitable purpose under Section 11(1)(a) of the Act - Since the Assessment Year involved in the present year is AY 2014-15, we respectfully follow the decision of the Hon ble Supreme Court in the case of CIT Vs. Rajasthan Gujarati Charitable Foundation Poona.[ 2017 (12) TMI 1067 - SUPREME COURT] and direct the Assessing Officer to allow the claim of the assessee for deduction on depreciation. - Decided in favour of assessee.

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• 2022 (6) TMI 1064
  Disallowance one tenth of total car expenses on ad-hoc basis - HELD THAT:- We are of the view, that the disallowance out of car expenses has been made by the Assessing Officer and has been confirmed by the Ld.CIT(A) without proper reasoning or justification and without supporting materials. We also find from the perusal of record that the issue regarding disallowance of car expenses had travelled to ITAT in assesee s own case in Assessment Year 2007-08 [ 2011 (12) TMI 771 - ITAT DELHI ] wherein the disallowance out of car expenses was deleted by Coordinate Bench of ITAT, Delhi. TDS credit denied - HELD THAT:- CIT(A) did not adjudicate this ground of appeal in the impugned appellate order dated 19/03/2019. On perusal of records in ITAT, we find that neither side has provided the relevant material on the basis of which this issue can be finally decided by us. Therefore, this issue is set aside to the file of the Ld.CIT(A) with the direction to adjudicate the ground of appeal pertaining to credit for TDS, taken by the assessee in this regard, in the Appeal filed before the Ld.CIT(A) The Ld.CIT(A) is further directed to give reasonable opportunity to the assessee before passing fresh order. Ground No. 3 of present Appeal before us is disposed of in accordance with the aforesaid directions and is treated as partly allowed for statistical purpose.

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• 2022 (6) TMI 1063
  Revision u/s 263 by CIT - assessee was selected for scrutiny for the reason that the ash deposits in savings bank account(s) is more than the turnover and issued notice under section 143(2) - HELD THAT:- AO noted that there was cash deposits in various bank for which, the assessee has explained that all the cash deposits at various banks are fee receipts collected from students towards uniforms fee, note book fee, school van fee and building fee. AO has verified all the details with reference to the receipts, registers, etc. It is an admitted fact that nowhere in the assessment order it is mentioned that the regular school term-fees/tuition fees collected were deposited in assessee s personal account. After examining and verifying all the details and registers, etc., during the financial year, the Assessing Officer has determined 8% of total cash deposits as assessee s income and brought to tax. Moreover, after further verification of bank statements, the Assessing Officer has noted that the assessee has interest receipts of Rs. .8,55,736/- and the same was also treated as income of the assessee and brought to tax. Thus, we find error in the assessment order passed by the Assessing Officer. In view of the above, the revision order passed by the ld. PCIT/CIT under section 263 - Appeal of assessee allowed.

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• 2022 (6) TMI 1062
  Deduction u/s 80IA in respect of profits of the eligible undertaking - Claim denied on the ground that the appellant had not fulfilled the conditions specified in section 80IA(4) - HELD THAT:- once, the assessee has fulfilled all the conditions as laid down in section 80IA (4) of the Act and was allowed deduction in the earlier assessment years in respect of undertaking in AY 2006-07 that is in the initial year, therefore, deduction under section 80-IA in respect of the infrastructure facility should have been allowed to the assessee. We noted that the Ld. CIT(A) in his finding recorded that assessment for A.Y. 2006-07 was reopened under section 147 is factually wrong. There is no reopening notice under section 147 for A.Y. 2006-07. So far as the objection of the Ld. Sr DR for the revenue is concerned that the assessee has made agreement with GIDC and no new infrastructure facilities was set up by the assessee. We find that the submissions of the Ld. DR for the revenue is based on the finding of Ld. CIT(A). The assessee has entered into agreement dated 15.12.2006 with GIDC and started deduction under section 80-IA of the Act from AY 2006-07. On this objection, we are also in agreement with the submissions of learned Senior Counsel for the assessee that pursuant to insertion of sub-clause (c) in Explanation to section 80IA(4)(i) with effect from 01.04.2001, by new sub-clause so as to include Solid Waste Management System within the meaning of infrastructure facility, the assessee-company is covered under the amended definition of Infrastructure Facility and fulfills all the conditions as specified in subclause (a) to (c) of section 80IA(4) (i). Accordingly the assessee is eligible for claim of deduction under section 80IA - Decided in favour of assessee. Computation of deduction u/s 80IA - excluding the interest earned on delayed payment received from customer, interest earned from GEB deposits and interest on other deposits - HELD THAT:- Considering the decision of Tribunal in assessee s group case [ 2017 (2) TMI 1493 - ITAT AHMEDABAD] wherein interest income from fixed deposit in bank was allowed for deduction under Section 80IA, thus, the interest on deposits are allowed. So far as interest on delayed payment from customers is concerned, such payments were made by various members have direct nexus with the profit and gains derived from undertaking. So far as interest earned on deposits with GEB is concerned, the same is not derived from the business activity of the assessee nor flowing directly from the industrial undertaking therefore, not eligible for deduction under Section 80IA of the Act. Thus, the assessee partly succeeded on this ground of appeal. Granting less credit of advance tax/prepaid tax - HELD THAT:- Considering the fact that assessee has claimed that full credit of advance tax is not made therefore, Assessing Officer is directed to verify the advance tax paid by or on behalf of assessee and grant credit thereon. Needless to order that before passing the order, the Assessing Officer shall grant adequate opportunity to the assessee. In the result, this ground of appeal is allowed for statistical purposes. Interest under Section 234D - HELD THAT:- As considering the decision of Hon ble Madras High Court supra, the Assessing Officer is directed to calculate the interest on refund by following the decision in the case of CIT Vs United Insurance Co. Ltd. [ 2021 (9) TMI 556 - MADRAS HIGH COURT] - In the result, this ground of appeal is allowed for statistical purpose. Levy of interest on profit distributed - assessee submits that during the year, the assessee paid dividend distribution tax of Rs. 392820/- on 01/11/2010 and in the assessment order, the interest on distributed profit amounting to Rs. 392820/- has been levied - The assessee made application under Section 154 - HELD THAT:- We find that before the Ld. CIT(A), the assessee specifically contended that dividend distribution tax was paid on 01/11/2010, copy of challan of tax was also furnished. The Ld. CIT(A), held that the assessee failed to comply with the time limit. Considering the fact that the assessee moved appropriate application under Section 154 on 18/08/2014 for rectification of mistake and furnished the necessary challan of dividend distribution tax. Therefore, we direct the Assessing Officer to pass order on application of assessee under Section 154 in accordance with law after giving opportunity of hearing to the assessee. In this result, this ground of appeal is allowed for statistical purpose. Adjustment of refund - assessee submits that as per assessee s record, no demands were outstanding for this relevant year, thus adjustment of refund was erroneous - HELD THAT:- As considering the fact that assessee claimed that no demands were outstanding, therefore, adjustment of refund is not correct. Therefore, the Assessing Officer is directed to verify the facts and pass the order if any adjustment of refund for relevant years were pending. In the result, this ground of appeal is allowed for statistical purpose. Penalty u/s 271(1)(c) - HELD THAT:- Considering the fact that we have deleted the entire disallowance in quantum assessment therefore, the penalty levied by Assessing Officer under Section 271(1)(c) will not survive. In the result, appeal of the assessee is allowed.

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• 2022 (6) TMI 1061
  Addition u/s 68 - unexplained cash deposits - calculation of peak deposits - Cash deposits and withdrawals either through bearer cheques or cross bearer cheques - HELD THAT:- Cash deposits were being made and the same were withdrawn by issuing cheques to various parties, whereas cash withdrawal of Rs.1000/- made on 27.4.2011 vide cheque no.579072 and few more cash withdrawal by way of cheque withdrawal only. The assessee also gave peak calculation at page no.67 68 of the paper book filed by the assessee. There is a considerable force in the submission of the assessee that entire cash deposits in the bank account cannot be added as income of the assessee. Cash sales made by the assessee do not have any bills or other record. However, the same is deposited in the bank accounts, and the purchases are made through bearer cheques to various parties. We deem it fit that the matter to be remanded to the AO only to the extent of considering the peak calculation and determine the income of the assessee in accordance with law. We order accordingly. Needless to say the assessee should cooperate with the AO for furnishing all the details for determining peak calculation of the above OBC Bank transactions. Thus, the appeal filed by the assessee is allowed to the extent indicated above. Appeal of the assessee is allowed for statistical purpose.

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• 2022 (6) TMI 1060
  Disallowance on account of bad debts - contention of ld. AR of assessee is that neither the party supplied the material nor returned the amount of advance - assessee has shown the profit @ about 32% on its sales and the amount of bad debits is comparatively a very meagre amount. The advance was made in the year 2008 - HELD THAT:- We find that the Assessing Officer disallowed the claim of bad debts by taking a view that it cannot be considered as debtor as the name of party is not in the name of debtors. Before the ld. CIT(A), the assessee also raised alternative plea to allow the same u/s 28 as the advance could not be recovered for more than three years - CIT(A) upheld the order of AO on the ground that there is no sales to the party and its name is not in the list of debtors. On alternative plea, CIT(A) held that the assessee has not made any effort to recover the advance. We find that the Hon ble Jurisdictional High Court in PCIT Vs Shreno Ltd. [ 2021 (2) TMI 188 - GUJARAT HIGH COURT ] while relying upon the decision of Hon ble Supreme Court in the case of T.R.F. Ltd. [ 2010 (2) TMI 211 - SUPREME COURT ] held that where the assessee company write off outstanding interest on the advances paid to its subsidiary as a irrevocable when net worth of subsidiary eroded, the assessee s claim of bad debt was to be allowed without expecting the assessee to prove the bad debts has actually become bad. Considering the binding decision of Hon ble Jurisdictional High Court on similar ratio, we direct the AO to delete the disallowance of bad debt. Considering the fact that we have accepted the primary submission assessee and allowed the write off of advances, therefore, adjudication on the alternative plea of business loss and allowance under Section 28 of the Act have become academic.- Decided in favour of assessee.

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• 2022 (6) TMI 1059
  Benefit of Section 54EC - Amount invested in bonds issued by NHAI - AO denied the benefit of Section 54EC holding that the investment in the bonds issued by NHAI was made after a period of 11 months taking the date of execution of unregistered Cancellation Deed - HELD THAT:- PA, a registered document whereby the developer has agreed to sale the flat to the Appellant which created rights/interest in the Flat being immovable property, was a registered document and therefore, the extinguishment such rights/interest could only be achieved only by way of a registered document. Thus, we find merit in the contention of the Appellant that date of registered Cancellation Deed (i.e. 11.09.2012) should be taken as the date of transfer of capital asset. In order to claim benefit of Section 54EC, investment must be made within six month from the transfer of the capital asset. In the case of Kartick Chandra Mondal [ 2020 (2) TMI 773 - ITAT KOLKATA] it has been held that term month means calendar months (and not a period of 30 days), which should be applied for the purpose of Section 54EC of the Act. Same view has been taken by Mumbai Bench of the Tribunal in the case of Mr. Yahya E. Dhariwala [ 2011 (11) TMI 381 - ITAT MUMBAI] . Respectfully, following the aforesaid decisions of the Tribunal we hold that the investment made by the Appellant in bonds issued by NHAI on 06.03.2013 falls with the period of six calendar months and thus, meets the requirement of Section 54EC of the Act. Accordingly, we are of the view that the Appellant is entitled to benefit of section 54EC of the Act in respect of amount invested in bonds issued by NHAI. - Decided in favour of assessee.

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• 2022 (6) TMI 1058
  Revision u/s 263 - Understatement of interest income - CIT on perusal of records found that the interest income is under-reported by the assessee to the above extent as detected from the corresponding AIR information available to the Department - HELD THAT:- TDS amount was deducted on the higher figure and also claimed by the assessee in the return of income the assessee has reported interest income lower to above extent. In these facts, the Pr.CIT has invoked the jurisdiction under Section 263 of the Act and has set aside the matter to the file of the Assessing Officer. In our view, the action of the Pr.CIT cannot be condemned as without jurisdiction. Pr.CIT has sufficient basis to presume error in the assessment order in the absence of any inquiry in this regard by the Assessing Officer. While the assessee has attempted to justify its case that the impugned interest income has not accrued to it at all and is not in existence, this aspect requires objective verification which was not done by the Assessing Officer. While the assessee may possibly explain its stance with factual corroboration in the proceedings before the Assessing Officer arising from revisional proceedings, the action of the Pr. CIT cannot be faulted per se. We thus are not inclined to interfere with the order of the Pr.CIT. Hence, this ground in the assessee s appeal is dismissed. Initiation of penalty proceedings from Section 271AAB to Section 271(1)(c) - Hon ble Delhi High Court in case of Addl. CIT vs. JK D Costa [ 1981 (4) TMI 68 - DELHI HIGH COURT] has observed that failure of the Assessing Officer in recording satisfaction for initiation of penalty proceedings cannot be said to be a factor for vitiating the assessment order or making it erroneous or prejudicial to the interest of the Revenue. The revisional Commissioner is thus not vested with power to rectify/modify such alleged errors in the revisional jurisdiction. Similar view has been expressed in Sunila Asasthi [ 2021 (7) TMI 299 - ITAT DELHI] and Amarjeet Dhall [ 2014 (4) TMI 1170 - ITAT CHANDIGARH] by placing reliance on series of decisions rendered in this regard. The plea of the assessee is thus found to be consistent with binding judicial precedents. In view of the Jurisdictional High Court expressing its view in favour of the assessee, we do not deem it necessary to refer to the judgment delivered in the case of Surendra Prasad Agrawal ( 2004 (9) TMI 45 - ALLAHABAD HIGH COURT ) relied upon by Revenue. Action of the Pr. CIT directing the Assessing Officer to modify the initiation of penalty proceedings under Section 271(1)(c) instead of 271AAB(1)(c) of the Act is set aside. The ground pertaining to the aforesaid issue is thus allowed.

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• 2022 (6) TMI 1057
  Validity of Reassessment proceedings u/s 147 - proceedings initiated after four years from the end of relevant assessment year - disallowance in respect of expenditure incurred on long term incentive plan under section 40A(9) as well as under section 37(1) as against the Appellant s contention that the said amount is deductible under section 37(1) - HELD THAT:- Since all the materials/facts were available on record with regard to the expenses claimed in the return of income filed for the captioned AY, a presumption can be raised that such an order based on return filed with true and full disclosure of the facts has been passed on application of mind by the concerned AO - AO has no power to review his own order; he has the power to re-assess only. But re-assessment has to be based on fulfilment of certain preconditions. Change of opinion or borrowed belief is not permissible as in this case, re-opening has been done based on audit query. The reasons for the notice under section 148 of the Act nowhere mentioned that the Revenue came up with any other fresh material, not disclosed by the assessee warranting re-opening of assessment. The primary function of audit in relation to assessments and refunds is the consideration whether the internal procedures are adequate and sufficient, it is not intended that the purpose of audit should go any further. Audit party performs essentially administrative or executives functions and cannot be attributed the powers of judicial supervision over the quasi judicial acts of the Income tax Authorities i.e. AO. The Income Tax Act does not contemplate such powers in any internal audit party of the Income Tax Department but only in those authorities who are specifically authorize to exercise adjudicatory functions. There was no failure to disclose material facts and failure to place a version favourable to the Revenue cannot be a reason to reopen the assessment in the light of the undisputed factual material referred by us extensively it is apparent that the re-opening was fully impermissible in law. The facts which are taken from the Auditor s report, computation of income and return filed itself would indicate that the assessee had disclosed what was relevant and necessary for the purpose of making assessment. The assessee did not hold back any document nor failed to supply any information. In the circumstances, this is a clear case of change of opinion and based on which the reassessment is proposed which is impermissible in law. - Decided in favour of assessee.

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• 2022 (6) TMI 1056
  Nature of expenditure - Allowability of general management fees incurred when the assessee is still in the process of completing the project of IT/ITES project - Assessing Officer as well as the ld. CIT(A) took a stand that since the appellant is a process of setting up a SEZ project, the revenue expenditure incurred till the completion of the projects are required to be capitalized - whether the assessee can be said to have commenced/setup business in the facts of the present case or not? - HELD THAT:- In the present case, except making a bald statement before us that the assessee is engaged in real estate business, no evidence was filed before us. The material on record clearly shows the assessee is into process of setting up SEZ project, wherein, SEZ provider creates assets in the form of building and let out/the building. This activity cannot said to be in relation to the real estate business. Therefore, it is a case where the assessee in the process of SEZ project and all the project expenditures have been directly related to the project, the decision of the Hon ble Supreme Court in the case of Challapalli Sugars Ltd.[ 1974 (10) TMI 3 - SUPREME COURT] is squarely applicable to the present case. In the said decision, the Hon ble Supreme Court held that the revenue expenditure incurred till the business is set-up should only add to the capital cost of the project. Thus we uphold the action of the lower authorities in disallowing claim for allowance of expenditure. Thus, we do not find any merit in the present appeal filed by the assessee company on merits of the issue in appeal. Application of principle of consistency - As in the previous year the claim of the assessee came to be allowed by the Assessing Officer. However, the action of the Assessing Officer in the present year taking different view following the decision of the Hon ble Supreme Court in the case of Challapalli Sugars Ltd. (supra), cannot be faulted with. The doctrine res-judicata has no application to the income-tax proceedings merely because the claim came to be in the earlier years, it is does not mean that the Assessing Officer should allow the same when he is conscious of the non-allowability of the claim in view of well settled position of law in this issue. Thus, we are of the considered opinion that claim of appellant cannot be allowed invoking the principle of consistency. Accordingly, the same is dismissed.

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• 2022 (6) TMI 1053
  Penalty imposed u/s 271(1)(c) - defective notice - non specification of clear charge - ambiguity in the satisfaction recorded as well as the reasons on which the Assessing Officer imposed penalty - HELD THAT:- As in satisfaction recorded by the Assessing Officer in the Assessment Order, it is observed that Assessing Officer has stated that assessee has furnished inaccurate particulars of his income by concealing the true particulars of his income. Whereas, in the show-cause-notice issued under Section 274 read with Section 271(1)(c) of the Act on 31.12.2010, the Assessing Officer has not specified the charge for which he intended to impose penalty under Section 271(1)(c) of the Act by striking off the inappropriate words. On a reading of satisfaction recorded in the assessment order of the Assessing Officer and the observations in the penalty order passed under Section 271(1)(c) it is evident that the AO himself was not sure what is the exact offence committed by the assessee. Thus ambiguity in the satisfaction recorded as well as the reasons on which the Assessing Officer imposed penalty coupled with the fact that the show-cause-notice issued in the printed format does not specify the exact charge for which penalty under Section 271(1)(c) of the Act was imposed, it has to be held that the order imposing penalty is not valid. Appeal of assessee allowed.

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• 2022 (6) TMI 1052
  Disallowance of late payment of employee contribution to Provident Fund (PF) - payment after the due date as mentioned in relevant statute but before due date of filing return of income - assessee s claim disallowed in proceedings under section 143(1) - HELD THAT:- The assessee in response to the notice issued under section 143(1)(a) had intimated the CPC, Bangalore that the issue is squarely covered in favour of the assessee by the decision of Hon ble Apex Court in the case of CIT Vs. Alom Extrusions Ltd. [ 2009 (11) TMI 27 - SUPREME COURT] and the decision in the case of CIT Vs. Ghatge Patil Transport [ 2014 (10) TMI 402 - BOMBAY HIGH COURT] . Despite that CPC disallowed assessee s claim under section 36(1)(va) of the Act. In First Appellate Proceedings, the CIT(A) upheld the order of CPC by placing reliance on the decision of non-jurisdictional High Court and referring to the provisions of section 36(1)(va) as amended by the Finance Act, 2021. It is relevant to mention here that the CIT(A) in the impugned order has mentioned the fact that there are judgments in favour of the assessee and the Revenue. Though, the issue has been settled by the Hon ble Apex Court, still some of the High Courts have taken a contrary view, this make the issue debatable. It is a well settled legal position that no disallowance can be made under section 143(1) of the Act, where the issue is debatable. Thus assessee would be eligible for claiming deduction in respect of delayed payment (as per respective Act) of PF of employees contribution, if paid before due date of filing return of income. Therefore,, the reason given by CIT(A) to disallow the claim of assessee is unsustainable. In so far as applicability of Explanation (2) to section 36(1)(va) inserted by the Finance Act, 2021, the same is effect from 01.04.2021. The Memorandum Explaining the provisions in Finance Bill, 2021 has in an unambiguous manner has expressed that the amendment will take effect from 01.04.2021 and will apply to the AY 2021-22 and subsequent AYs. Thus, in light of above, we hold that the CIT(A) has erred in applying amended provisions of section 36(1)(va) to disallow assessee s claim of deduction of PF. - Decided in favour of assessee.

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• 2022 (6) TMI 1028
  Revision u/s 263 - addition made u/s 41(1) on account of cessation of liability - HELD THAT:- The excess amount as received by the assessee over and above WDV of the asset has been offered as well as accepted as Short-Term Capital Gain. Thought the Bank Liabilities were crystalized at Rs.43 Crores, however, SPV was obligated to repay any amount received by it over and above Rs.43 Crores. It would not be correct to say that the bank liabilities were ultimately settled at Rs.43 Crores and the balance amount was waived-off. Therefore, the provisions of Sec.41(1) could not be held to be applicable in such a case in the hands of the assessee. As it was held by Hon ble Supreme Court [ 2018 (5) TMI 358 - SUPREME COURT] that waiver of loan by the creditor is neither taxable as perquisite u/s 28(iv) nor taxable as remission / cessation of liability u/s 41(1) of the Act. Further, Sec.28(iv) would not apply to waiver of loan since the waiver could not be termed as income u/s 2(24). The decision in CIT V/s Ramaniyam Homes (P) Ltd. ( 2016 (4) TMI 954 - MADRAS HIGH COURT ] as referred to by ld. CIT-DR, has already been reversed by Hon ble Supreme Court in the case of CIT V/s Mahindra Mahindra Ltd. (supra). The last aspect of the matter is that the receivables of Rs.93.45 Crores have been liquidated at Rs.46.59 Crores (Rs.43 Crores of Bank Liability + Rs.3.59 Crores receivable by the assessee) and therefore, the balance amount of Rs.46.86 Crores was to be treated as bad-debts or business loss which would clearly be allowable as deduction to the assessee. We are of the considered opinion that Ld. CIT(A) has capture the issue in correct perspective. The conclusion drawn in the impugned order are based on binding judicial precedents. Therefore, finding no reason to interfere in the same, we dismiss the appeal of the revenue.

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• 2022 (6) TMI 1027
  Assessment of trust - Intimation of the CPC by applying the maximum marginal rate of tax on the income which was below the taxable limit - Whether CIT-A erred in directing to tax income at maximum marginal rate through the trust is registered under public charitable trust Act therefore tax should be charged at normal rate of tax - whether the rate of an individual should be applied or the maximum marginal rate of tax in the manner as provided under the provisions of section 164? - HELD THAT:- Admittedly, the person has filed the return of income in the representative capacity in the manner as provided under clause (iv) of section 160 of the Act. To this proposition, there is no dispute. It is also not under challenge that the trust on hand is a non-discretionary trust meaning thereby the beneficiaries of the trust are not known. In other words the trust being public trust was formed to carry out the charitable activities. This fact was not controverted by the learned CIT-A. Indeed learned CIT-A accepted that the assessee as public charitable trust It is the admitted position that the members of the trustees are not entitled to any share in the income of the Association of persons. Accordingly, we are of the view that the circular issued by the CBDT as discussed above is squarely applicable in the given facts and circumstances. Thus we hold that the rate applicable as to an individual for charging the income tax after allowing the basic exemption limit, shall be applicable to the assessee on hand. Hence the ground of appeal of the assessee is allowed.

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• Customs

• 2022 (6) TMI 1051
  Classification of imported goods - Cards (Populated Printed Circuit Boards) OSLM-5-100G-WL3N for DWDM Equipment-Photonic Service Switch (PSS) 1830 - classified under Customs Tariff Sub-heading 8517 7010 or under CTH 8517 62 90? - HELD THAT:- On going through the relevant HSN notes, it is found that the apparatus or equipments referred in the notes are complete apparatus and not Populated Printed Circuit Boards of such apparatus. As submitted by the respondent the Network Interface Cards referred to in the notes are not PCB of any transmission or reception apparatus of heading 8517. Network Interface Cards connect the computers to the internet and therefore can be considered to have independent function. Going by the product literature and our discussions as above, it is found that the impugned cards are incorporated in and or parts of DWDM equipments. The Department could not support their contention. No technical literature was submitted; in spite of the fact that the imports have been taking place over a period of time. Learned Commissioner (Appeals) has been upholding the contention of the appellants. In one instance Revenue has accepted the order of Commissioner (Appeals). The Department has not drawn any samples and did not obtain technical opinion to support their claim that the impugned goods are complete machines or equipment capable of independent function themselves so as to merit classification under CTH 85176270. On the contrary, the respondents could demonstrate by technical literature; samples that the goods imported by them are Populated Circuit Boards (PCBs) used in PSS 1830 and therefore, the impugned goods are parts of PSS and as such merit classification CTH 85177010. Appeal dismissed - decided against Revenue.

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• Corporate Laws

• 2022 (6) TMI 1050
  Seeking winding up of the Respondent Company - Section 271(e) 272 of Companies Act, 2013 - HELD THAT:- On perusing documents submitted, submissions made and pursuant to the approval granted by the Management Committee of IL FS IIDC Fund in the capacity of shareholder of the Respondent Company along with the Board Resolution dated 22nd June, 2021 passed by IL FS Financial Services Limited in the capacity of the unit holder of IIDC Fund and the Board resolution dated 25th June, 2021 of the new Board of IL FS, as the parent company of IFIN and the approval of Hon ble Justice (Retd.) D.K Jain for initiation of the winding up proceedings vide letter dated 7th July, 2021 it is deemed just and equitable that the company be wound up as prayed by the Petitioner. The order is hereby passed for winding up of the Company, Infrastructure Development Company of Nagaland Pvt. Ltd., under the provisions of Section 271 (e) of the Companies Act, 2013; with stipulated directions - application allowed.

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• 2022 (6) TMI 1049
  Seeking directions to the Respondent No. 2 for handing over the minutes books, statutory registers, and car - illegally retention by Respondent No. 2 or not - HELD THAT:- No consent from any of the shareholders has been submitted by the Petitioner to take cognizance as to the eligibility for the Petitioner to file a petition under Sections 241(1). Sine no consent has been produced by the Petitioner, it is clear that the requirements of Section 244(2) of the Act are not satisfied in this case. A vague submission that all the shareholders expect Respondent No. 2 and one other shareholder namely viz. Mohamed Ibrahim Faizal holding 1 (one) equity share have consented by words to file this Petition cannot be taken as a consent to file a Petition under Section 241(1) of the Companies Act. Therefore, the Company Petition filed by the petitioners is liable to be dismissed as not maintainable. Petition dismissed.

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• Securities / SEBI

• 2022 (6) TMI 1048
  Investment Adviser entitled to charge fee for providing investment advice from a client in the manner as specified by the Board - fixation of a maximum cap of fee which may be charged by Investment Advisor violates any fundamental rights of the petitioners - HELD THAT:- In Ehsan Khalid Vs. Union of India [ 2013 (10) TMI 851 - SUPREME COURT] the Supreme Court had held that where there is a challenge to a Government policy, particularly economic policy, Court would not interfere in such policy matters in exercise of its power of judicial review unless such policy is found to be grossly arbitrary or unfair or unreasonable or irrational or violative of Constitutional provisions or contrary to statutory provision. We are of the opinion that it is not the function of this Court to sit in judgment over a matter of economic policy such as that contained in the Regulation 15A and the Circular dt.23.09.2020 though, this Court might feel that a different policy would have been fairer or wiser or more scientific or more logical when such policy is not patently arbitrary, discriminatory or mala fide. SEBI is an expert body constituted to deal with the securities market and is empowered to regulate activities of various entities including Investment Advisors while protecting the interest of investors. From a reading of Circular dt.23.9.2020, it is clear that the parties i.e. the client and the Investment Advisors are given a choice to choose between either a fixed fee mode or fee fixed on the basis of AUA. In the later mode, the fee is chargeable on the basis of AUA per annum. We do not find anything arbitrary or illogical in this arrangement which would prevent Investment Advisors from giving proper advice to clients or dis-incentivising them.

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• Insolvency & Bankruptcy

• 2022 (6) TMI 1047
  Seeking extinguishment of all the claims made against the Applicant - period prior to the effective date i.e. 20th September, 2018 - requesting the Respondents to file fresh claims and dues payable to the Transport Department Commissioner of Transport, Guwahati, Assam - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Since the outstanding liabilities of Road tax/ MV tax etc. prior to 20.09.2018 in respect of vehicles of the gardens under Assam Company India Limited registered in the offices of the District Transport Officer of Dibrugarh, Sivsagar, Tinsukia and Nagaon have been exempted by the Government of Assam vide notification dated 30/05/2022, the Petition has now become infructuous. The Respondents are directed to issue fresh claims on the Applicant for the dues post the effective date i.e. 21st September, 2018 and onwards within 15 days from today - The Applicant is directed to pay the dues of the Respondents from 21/09/2018 onwards within fifteen days from the date of the receipt of the demand notice /letter from the Respondents. Application disposed off.

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• 2022 (6) TMI 1046
  Seeking dissolution of the Corporate Person through voluntary liquidation - Section 59 of the Insolvency Bankruptcy Code, 2016 - HELD THAT:- On verification of the documents produced, it is noticed that the affairs of the Corporate Person have been completely wound up and its assets were liquidated following the relevant provisions in the IBBI (Voluntary Liquidation Process), 2017. Hence, the Corporate Person may be voluntarily liquidated so as to get it dissolved. This Tribunal approves the voluntary liquidation and dissolution of the Corporate Person and order that the Corporate Person shall stand dissolved from the date of this order - Petition allowed.

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• 2022 (6) TMI 1045
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- It is a well settled law that the limitation period begins from the date when the cause of action arises. Hence, the cause of action arises on 16.12.2016, which is the date of default. Thus, the present petition is within limitation. It is observed from the records that CD has been given multiple opportunities to appear before this tribunal and plead his case including vide order dated 22-03-2022. In compliance of the order of this Tribunal dated 22-03-2022, FC had issued a notice to CD intimating the next date of hearing that is 02-05-2022 annexed as Exhibit B to Affidavit of Service (Pg 5). However, The CD chose not to appear and plead the case though the CD had filed his reply on record on 15-02-2020. Hence, the matter is taken on merits as is to be decided ex-parte. It is observed that there was debt, there was default and the petition has been filed within the period of limitation - the petition deserves admission. Petition admitted - moratorium declared.

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• 2022 (6) TMI 1044
  Refund of amount towards the I.R.P to meet out the initial expenses - non-speaking order - Section 53(1) (a) of the Insolvency and Bankruptcy code, 2016 - seeking modification in the list of stakeholders and to include the unpaid CIRP cost in the stakeholders list of Goodwin Packpet Private Limited - HELD THAT:- A reading of the receipt dated 12/01/2022 issued by the Former IRP Shri. Satiq Buhari, makes it clear that the Operational Creditor Shri. Amrjeeth Singh, Proprietor of Vinneeth Enterprises has deposited an amount of Rs. 2,00,000/- with the IRP to meet the initial expenses of CIRP and it was resolved in the 1st CoC meeting convened on 18/11/2020 to refund the said amount to the Appellant. The contention raised by the 2nd respondent that he has not received the receipt of voucher from the Former IRP Shri. Satiq Buhari is not a ground to reject the request of the Appellant to return the amount of Rs. 2,00,000/- paid by him being the initial expenses of CIRP. There is considerable delay on the part of the former IRP Shri. Satiq Buhari to communicate the relevant papers to the Liquidator. However, the amount of Rs. 2,00,000/- is to be paid back to the Operational Creditor by the Liquidator, as the said amount is rightfully payable to him when the CIRP proceeds are finalized. The former IRP who appeared through VC stated that there is a delay on his part to reply the communication of the Liquidation and that the same may be excused. The 2nd respondent Liquidator stated that he is ready to accept the claim of Rs. 2,00,000/- if this Tribunal gives a direction to that affect. Since we find that the amount of Rs. 2,00,000/- is legally entitled to the Operational Creditor Shri. Amrjeeth Singh, we allow this Application and direct the 2nd respondent to refund the amount of Rs. 2,00,000/- to Shri. Amrjeeth Singh, the Operational Creditor/Appellant towards the initial expenses of CIRP during the time of distribution of assets from the proceeds from the sale of liquidation assets, with due priority as mandated under Section 53(1)(a) of the Insolvency and Bankruptcy Code, 2016. The 2nd respondent is also directed to modify the list of Stakeholders and to include the unpaid CIRP costs of Rs. 2,00,000/- in the stakeholders list of Goodwin Packpet Private Limited. Application disposed off.

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• FEMA

• 2022 (6) TMI 1043
  Foreign Exchange Regulatory Appellate Board confirming the order passed by the Assistant Director imposing penalty and confiscating as per section 63 of the Foreign Exchange Regulation Act, 1973 - HELD THAT:- Though the Appellant may be right in insisting on compliance of the order of this Court as it is and it is because of the pendency of the litigation that the Appellant is agreeable for receipt of the amount in Indian rupees, the Appellant cannot be penalized but must be compensated in fair manner. Accordingly, we direct that the order passed by this Court be complied with by the Enforcement Directorate within a period of eight weeks, with a clarification that the amount of US$ 1,300 should be converted in Indian rupees as per the rate prevailing as on today i.e. 14 June 2022 and be paid to the Appellant within a period of eight weeks along with interest. We place the responsibility of compliance with this order on the Assistant Director, Enforcement Directorate, the Respondent No.2 and if the order is not complied within a period of eight weeks as above, the Court may take serious view of non-compliance. As regards the claim of interest is concerned, it is the contention of the Enforcement Directorate that since the Department had offered to return the amount immediately in Indian rupees, interest need not be imposed. The order dated 30 September 2010 stipulates 10% interest. Department has not followed the procedure under section 42(4) of the Act and has taken unilateral steps. The approach of the Enforcement Directorate is to keep the application pending. In the circumstances, we do not propose to deviate from the rate of interest specified in the order dated 30 September 2010.

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• Service Tax

• 2022 (6) TMI 1055
  Rejection of application of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - requirement to make payment electronically through Internet banking - petitioner made an attempt to pay through the bank by utilising the banks RTGS (Real Time Gross Settlement) facility which is impermissible under the aforesaid scheme - HELD THAT:- The petitioner had attempted to pay the amount through the 5th respondent bank s RTGS (Real Time Gross Settlement) facility. The amount which was paid through RTGS (Real Time Gross Settlement) facility of the 5th respondent bank was however re-credited into the petitioner s bank account. The facts on record indicates that the amount of Rs.41,331.20/- was indeed paid by the petitioner which however was re-credited back due to technical glitches. Therefore, the legitimate the benefit of the above scheme cannot be denied to the petitioner. Mistake is on account of the system evolved which failed to accept the payment. The impugned orders passed and the communication stands quashed by permitting the petitioner to pay the amounts in respect of which attempt was made by the petitioner to pay through the 5th respondent RTGS (Real Time Gross Settlement) facility on 29.03.2020 within 30 days from the date of receipt of a copy of this Order - If the petitioner pays the aforesaid amount within a period of 30 days from the date of receipt of a copy of this order, the respondent shall bring a closure to the case of the petitioner by accepting the payment subject to the petitioner fulfilling other conditions of the scheme. Petition disposed off.

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• 2022 (6) TMI 1042
  Levy of service tax - applicability of Reverse Charge Mechanism - Banking and Other Financial Services - Business Auxiliary Service - Legal Consultancy Service - Supply of Tangible Goods Service - Technical Testing and Analysis Service - Cargo Handling Service - General Insurance Service - Information Technology Software Service - services are provided by the service providers who are not having fixed establishment in India under the provisions of Section 66A of the Finance Act, 1944 and the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. Banking and Other Financial Services - HELD THAT:- The facts as narrated in the impugned order clearly indicate that it is the Indian Banks who had paid the charges to the foreign banks. It is found that the Appellant solely deal with the Indian Bank and appellant do not have any kind of interaction with foreign banks. Clearly, in this matter service if any has been received it is by the Indian Bank and not by the appellant. Hence, amount charged by foreign banks to Indian banksprima facie cannot be considered as service received by the appellant - the appellant cannot be treated as service recipient and no service tax can be charged from them under Section 66A of the Finance Act. Business Auxiliary Service - HELD THAT:- A comprehensive reading of Section 66A of the Finance Act, 1994, make it clear that a person carrying on a business through a branch or agency in any country shall be treated as having a business establishment in that country and such establishment situated abroad as a separate person , will be understood to have been prescribed only to determine the provision of service whether in India or out of India. In the present matter we find that department has not disputed the facts that the payment to overseas consultant/ agents/ service providers was made from the overseas projects site branch/ office of the Appellant and said Foreign Service providers have charged local VAT/GST/Service tax as applicable in the respective foreign countries in invoices issued by them to foreign site /project office /Branch office of Appellant. The said facts clearly established that the services have been provided by the foreign agents to the foreign site office/branch office of Appellant and thus, the service cannot be said to be received in India when the same is provided outside India, used outside India and paid outside India. Therefore, demand of service tax in the impugned matter legally not correct on this ground also. The payment of local tax abroad will be an indicator to decide whether a service is provided and consumed outside India or has been consumed/received in India - the impugned order confirming the service tax liability on the appellant cannot be sustained. Legal Consultancy Service - HELD THAT:- The services in relation to advice, consultancy or assistance in any branch of law and representational services before the court and authority are taxable under this category. However without verifying the vital facts related to above services only on the basis of expenses booked under the accounting head Legal and Professional Expenses demand of service tax from the Appellant not sustainable. Moreover, Appellant also provided the reasons for which their overseas office /branch office paid the amount to services providers. For example fees for documents certification for submission to customers, local registration fees paid in Ukraine, Local municipal tax paid in Saudi Arabia, Fees for land for Brazil, paid to Saudi Chambers of Commerce for office maintenance and electricity charges, consultancy for CIS market for country Armenia etc. The said expenses cannot be concluded that the same was paid for the Legal Consultancy Service as defined in the Act. Hence the demand of service tax under wrong classification of service is not sustainable in law. Supply of Tangible Goods Services - HELD THAT:- During the lease period appellant has full right to use equipment in India as per their wish and in India for their required purpose, further we also observed that department nowhere disputed the facts that Appellant operated the machineries through their own operators and lessor had no control over the use of the machinery leased to the Appellant. Thus, it is clear that under the lease rental agreement exclusive right to use along with effective control and possession of the equipment has been transferred to the Appellant during the lease period - the appellant s transactions are not covered under the entry supply of tangible goods Service . Accordingly, we set aside the demand on this service. Since the service of survey and technical consultancy is in relation to erection, commissioning and installation of transmission line, prima facie demand of service tax under the category of supply of tangible goods services is wrong. Further, the said service was provided and consumed outside India, therefore, demand of service tax is not sustainable. Technical Testing and Analysis Service - HELD THAT:- It can be seen from Rule 7(1) of the Service Tax (Determination of Value) Rules, 2006, as this rule is specifically applicable for reverse mechanism under Section 66A and for the purpose of discharge of Service Tax for the service provided from outside India, the value is equal to the actual consideration charged for the services provided or to be provided. In the impugned matter it is on records that in case of fees/ remunerations paid to overseas technicians Appellant have paid the service tax. Since the alleged amount was not paid for services but paid for travelling expense, accommodation charges etc. clearly said expenses cannot be considered as value of taxable service. Hence, demand of service tax not sustainable on said expenses. Cargo Handling Service - HELD THAT:- There is no dispute that Appellant manufactured the goods at their factories located in India and then taken the goods from India to overseas site location of customers and carry-on erection, commissioning and installation work. In this process they take the services of companies for handling goods at ports - there is no merit in the impugned order on the issue with regard to the demand of service tax on Cargo Handling Service. Consequently, the demand on this service is set aside. General Insurance Service - HELD THAT:- In the present matter, the department has not disputed the facts that the payment to overseas insurance company was made from the overseas projects site branch/ office of the Appellant and said service was used only for the transportation of goods from overseas custom port to site of overseas customer. Moreover the overseas insurance company directly raised invoice on the foreign site office of the Appellant along with applicable taxed in respective foreign countries. The said facts clearly established that the services have been provided by the foreign Insurance Company to the foreign site office/branch office of Appellant and thus, the service cannot be said to be received in India when the same is provided outside India, used outside India and paid outside India. In view of the above, it is found that the impugned order is not sustainable with reference to the above-mentioned Service Tax liability confirmed against the appellant. Information Technology Software Service - HELD THAT:- Ld. Commissioner confirmed the demand of Service tax under the service category Information Technology Software Service pertains to the expenses shown in foreign currency under the head Computer Expense . The said expenses related to the maintenance of computer, replacement of part, internet charges, etc in the foreign site offices of the appellant. The services provided by the overseas service provider to the overseas site offices of the appellant cannot be said to be received in India when the same is provided outside India, used outside India and paid outside India, consequently demand is not sustainable. Since the demand of service tax itself not sustainable in the present case on merit, the other issues such as jurisdiction, revenue neutral, limitation etc., addressed and raised by the Appellant in appeal memo/ submissions and during the course of arguments, are not dealt with. Appeal allowed - decided in favor of appellant.

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• 2022 (6) TMI 1041
  CENVAT Credit - no documentary evidence were available with the appellant as was required under Rule 9(1) of Cenvat Credit Rules, 2004 - HELD THAT:- In view of the submissions and perusing the record, it is observed that the Original Adjudicating Authority has confirmed the entire demand / reversal of Cenvat Credit of Rs.18,09,098/- for the sole reason that the appellant has failed to produce any documentary evidence by which it can be established that the service have been received before 1.7.2017. Commissioner (Appeals) also while confirming the demand of Rs. 5,26,497/- has held the non-availability of the requisite documents as the reason for the same. However, keeping in view that the documents are impressed upon to have been annexed on record and to have been provided to both the Original Adjudicating Authorities. The typographic error in challan number and correlation of the compiled record of the appellant is impressed upon by the learned Counsel. Keeping in view the same, the request of remanding the matter is hereby accepted. The matter is remanded back to the Commissioner (Appeals) to appreciate both the challans and to look into the documents produced by the appellant and to appreciate as to whether there is any typographic error - Appeal is allowed by way of remand.

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• Central Excise

• 2022 (6) TMI 1054
  Invocation of extended period of limitation - CENVAT Credit - installation of pre-fabricated structures - period September, 2009 to December, 2010 - HELD THAT:- As the transactions in question is before 1.7.2012, when Exclusion Clause was introduced in Rule 2 (l), thus, the transaction in question does not fall within the mandate of Exclusion Clause. Accordingly, the show cause notice is wholly misconceived. Further, there are no case for invocation of extended period of limitation. Appeal allowed - decided in favor of appellant.

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• 2022 (6) TMI 1040
  Refund of CENVAT credit of CVD and SAD paid by them - rejection of claim invoking Rule 9 (1) (b) of Cenvat Credit Rules, 2004 - Department is of the view that credit is not eligible as appellant has paid the duties only after issuing a demand notice - HELD THAT:- On perusal of the alleged demand notice, it is merely in the nature of an intimation letter and has not been issued invoking any provisions of Customs law or Excise law. Further, in such intimation also, there is no allegation of any fraud, collusion or suppression of facts with intent to evade payment of duty. There is no evidence placed before me to establish that the duties were paid after adjudication and rendering a finding of fraud, collusion or suppression of fact with intent to evade payment of duty. In such circumstances, the credit cannot be denied - the appellant is eligible for credit of CVD and SAD paid by them. The Tribunal in the case of M/S. CIRCOR FLOW TECHNOLOGIES INDIA PRIVATE LTD. VERSUS PRINCIPAL COMMISSIONER OF GST CENTRAL EXCISE, COIMBATORE [ 2021 (12) TMI 675 - CESTAT CHENNAI] and M/S MITHILA DRUGS PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX, UDAIPUR (RAJASTHAN) [ 2022 (3) TMI 58 - CESTAT NEW DELHI] had analysed a similar issue. In M/s.Mithila Drugs Pvt. Ltd., the facts are identical to that of the instant case, where it was held that the Court below have erred in observing in the impugned order, that without producing proper records of duty paid invoices etc. in manufacture of dutiable final product, refund cannot be given. I further find that refund of CVD and SAD in question is allowable, as credit is no longer available under the GST regime, which was however available under the erstwhile regime of Central Excise prior to 30.06.2017. The rejection of refund claims cannot be justified - Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2022 (6) TMI 1039
  Appealable order or not - endorsement on the application made by the petitioner requested for reopening the assessment for consideration of form H - non deposit of 12.5% of the disputed tax in terms of third proviso to Section 21(1) of the APVAT Act, 2005 - Section 31(1), 31(2) and 31(3)(a) of A.P. VAT Act - HELD THAT:- From a reading of the provisions of Section 31(1), 31(2) and 31(3)(a) of A.P. VAT Act, it is clear that any VAT dealer objecting to any order passed or proceeding recorded by any authority under the provisions of the Act other than an order passed by Additional Commissioner or Joint Commissioner or Deputy Commissioner, may within 30 days from the date on which the order or proceeding was served on him, appeal to such authority as may be prescribed. It is to be noted here that the word used is any order passed and not order of assessment . Hence, the argument of the learned Government Pleader that appeal itself may not lie cannot be accepted. The word any order referred to in Section 31 cannot be limited to only assessment orders. If that was the intention of the Legislature, the same would have been incorporated therein. In the absence of the same, the endorsement made by the Assistant Commissioner on 21.11.2019 can be challenged in an appeal. Payment of 12.5% of the difference of tax assessed by the authority prescribed - HELD THAT:- A reading of material placed before the Court does not show that the dispute or the lis between the parties was with regard to payment of any tax or collection of difference of tax or the penalty imposed therein. In fact, the Counsel for the petitioner submits that he is not disputing, at this stage, any tax liability or interest or penalty, but, his request before the authority, at this stage, is only to consider Form-H, which he has received at a belated stage. It is no doubt true that there is a delay in making an application before the authority concerned for accepting the Form-H, but, the request before the authority was only to receive Form-H, which he has received at a belated stage, but the same was rejected. The same does not relate to collection of tax or payment of tax as the assessment was complete and the same was not challenged - Further, the proviso categorically states that an appeal shall not be admitted by the appellate authority unless the dealer produced proof of payment of tax admitted to be due and proof of payment of 12.5% of difference of tax assessed by the authority prescribed and the tax admitted by the appellant for the relevant tax period in respect of which appeal is preferred. Here the appeal does not relate to imposing tax for the relevant tax period, but for a different purpose i.e., refusing to accept H Form. Therefore, we are of the view that insisting on payment of 12.5% of difference of tax may not be proper. The impugned order is set aside, directing the 2nd respondent-Appellate Deputy Commissioner (CT), Tirupati, to entertain the appeal of the petitioner against the endorsement of the respondent No.1 Commercial Tax Officer, Lalapet Circle, Guntur, dated 28.9.2020, and deal with the appeal without insisting on payment of 12.5% of disputed tax, in accordance with the law - Petition allowed.

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• 2022 (6) TMI 1038
  Levy of Compounding fee - Detention of goods alongwith the vehicle - certain documents which otherwise should have accompanied with the goods at the time of movement, were not available - petitioner had already paid the tax levied as one time tax, of course pursuant to the orders passed by this Court - HELD THAT:- Whether the petitioner is liable to pay the compounding fee within the meaning of Section 72(1)(a) of the Act or not, has to be gone into only on the basis of the factual matrix and since the revisional authority under Section 54 of the Act is the final fact finding authority in this kind of cases, before whom the petitioner can very well lay his revision petition by putting forth his case both on facts as well as on law and therefore, without exhausting such an alternative remedy, the petitioner cannot come before this Court to file the present writ petition, as there has been no reason to interfere at this juncture by this Court on the impugned order on the said three grounds as stated by the learned Additional Government Pleader viz., (i) violation of principles of natural justice, (ii) want of jurisdiction and (iii) alleged violation of the Statute. In the absence of these three reasons, normally the parties would be relegated to approach the authority concerned by way of alternative remedy provided under the Statute and this is one such case, where the petitioner can be driven to go before the revisional authority under Section 54 of the Act. The limitation prescribed under the Act for filing such revision is 30 days and further 30 days is provided for condoning the delay. These 60 days is over by 19.01.2022 as of now, and if the petitioner files the revision, this limitation point may arise. However, in view of the afore stated facts and circumstances and also since the petitioner has taken some time to file this writ petition, this Court feels that a direction can be given to the revisional authority to entertain the revision petition if it is filed by the petitioner within a period of two weeks from the date of receipt of a copy of this order, without raising the point of limitation. Petition disposed off.

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• Indian Laws

• 2022 (6) TMI 1037
  Attempt to commit suicide - offence under Section 55(a) of the Abkari Act and Section 309 IPC - HELD THAT:- There are no reason to deviate from the finding of conviction returned by the learned trial Court and confirmed by the High Court under the impugned judgment. At the same time, taking into consideration the overall aspect of the matter and the fact that 23 years have been rolled by this time from the date of incident and also noticing that there are no criminal antecedents against the appellant as indicated in Para 20 of the impugned judgment, while upholding conviction under Section 55(a), consider it appropriate to modify the sentence to simple imprisonment of one year and to pay a fine of Rs. 1,00,000/( Rupees One Lakh only), in default of payment of fine, to further undergo simple imprisonment of six months. Appeal disposed off.

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• 2022 (6) TMI 1036
  Manufacture of arrack - offence under Section 8(1) read with 8(2) and 55(g) of the Abkari Act - HELD THAT:- Though both PW1 and PW3 have been extensively cross-examined, but nothing could be elicited out of their evidence and there are no reason to deviate from the view which has been expressed by the High Court so far as the conviction of appellant for the aforestated offences is concerned. At the same time, taking into consideration the overall aspect of the matter and the fact that 15 years have been rolled by this time from the date of incident which may due to institution lapses(the matter could have been finalized earlier) and noticing that there are no such criminal antecedents against the appellant as indicated by the respondent in para 9 of the counter affidavit and the fact that the appellant has crossed 63 years of age, consider it appropriate to modify the sentence to simple imprisonment of one year under Section 55(g) of the Abkari Act and he shall also be liable to pay a fine of Rs. 1,00,000/- on both the counts, in default, he shall suffer simple imprisonment for six months. Appeal disposed off.

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• 2022 (6) TMI 1035
  Dishonor of Cheque - amicable settlement of disputes between the parties - compounding of the offence - Section 147 of the Negotiable Instruments Act - HELD THAT:- Taking into consideration the fact that the matter, which led to filing of the criminal case under Section 138 of the Negotiable Instruments Act, now stands settled between the parties and as per directions of the Court, 5% of the cheque amount has already been deposited by the petitioner as compounding fee with HP State Legal Services Authority, Shimla, this Court orders the compounding of the offence in question. The petition as well as application filed for compounding of the offence stand disposed of.

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• 2022 (6) TMI 1034
  Dishonor of Cheque - insufficient funds - proclaimed offender - Section 31(2) of the Partnership Act - HELD THAT:- This Court is of the view that when a complaint is filed under Section 138 of Negotiable Instruments Act, primarily the cause of action arises from the issuance and dishonour of the cheque which may be issued by one party to the other party to discharge the liability which it owes to the other party. The issue of the liability if any existing, in lieu whereof the cheque has been issued, is a triable issue which the learned Trial Court decides during the course of the trial. In the present case, though there is no dispute that the petitioners were inducted as partners of the firm on 10th February, 2011, but fact of the matter remains that the cheque, dishonour of which has led to filing of the complaint under Section 138 of the Negotiable Instruments Act bears the date 15th March, 2013, i.e. after the induction of the petitioners as partners of the partnership firm. This Court is of the considered view that the provisions of Section 31(2) of the Partnership Act which provide that a person who is introduced as a partner into a firm does not thereby become liable for any act of the firm done before he became a partner do not come to the rescue of the petitioners for the purpose of quashing of the complaint under Section 482 of the Code of Criminal Procedure because herein the act which led to the filing of complaint under Section 138 of the Negotiable Instruments Act is issuance and dishonour of the cheque which bears the date 15th March, 2013, i.e. post the date on induction of the present petitioners as partners of the partnership firm - This Court is refraining from making any observation with regard to contention of the petitioner that liability for which the cheque was issued was relatable to the period prior to the induction of the petitioners as partners of the firm because this is an issue which has to be decided by the learned Trial Court. This petition is dismissed.

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• 2022 (6) TMI 1033
  Dishonor of Cheque - insufficiency of funds - Whether in the appeal preferred by the accused the Appellate Court can enhance the punishment by awarding compensation which the trial Court has conspicuously omitted to award and the complainant had not preferred any appeal seeking compensation? - HELD THAT:- Sub Section (1) of Section 357 of Cr.P.C. which empowers the Court to order part or whole of the fine amount pay to the person who sustained loss and Sub-Section (4) of Section 357 of Cr.P.C., specifically say thus power may be exercised also by the Appellate Court and Court of revision, such exercise of power by the Appellate Court subject to Section 386(b)(iii) of Cr.P.C. only. Examine the wordings of Section 138 of Negotiable Instrument Act, no doubt fine can be imposed twice the amount of the cheque. In exercise of power under Section 357 of Cr.P.C. from the fine amount, Courts can order to pay compensation. In this case, while the Trial Court has consciously imposed fine of Rs. 5,000/- and no compensation ordered, in the appeal by the accused, no power vested on the Appellate Court to enhance the sentence ordering compensation in the absence of appeal by the complainant. The compensation is not an independent component under Section 138 of Negotiable Instruments Act which is a special Act. It should be part of the fine amount and fine is part of sentence. It is a trite principle of law that, in appeal preferred by the accused person sentence cannot be enhanced. Therefore, the order of the Appellate Court perverse, contrary to law, hence liable to be set aside. The Bail bond stands cancelled. The petitioner is directed to surrender before the trial Court to undergo the remaining period of sentence as modified - the Criminal Revision is partly allowed.

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• 2022 (6) TMI 1032
  Dishonor of Cheque - vicarious liability of Director - Section 141 of the Negotiable Instruments Act, 1881 - HELD THAT:- On perusing the complaint, this Court finds that the complainant has made specific averment that the Directors participated in the meeting to negotiate the terms of contract and at every stage, they enquired about the project and insisted to complete it within the scheduled time. The petitioners admit that the cheque was drawn by them and handed over to the respondent-complainant. However, they contend that the cheques were issued only as security for the balance amount, which is liable to pay after certification. If that is so, the petitioners ought not to have given those cheques with specific dates and amounts without certification. After presentation of the cheques and institution of the complaint, the petitioners herein by rely upon the report of auditor dated 16.05.2018 who was apparently appointed by the petitioners herein try to make out the defence - From the dates and events, admittedly the cheques were drawn and handed over to the respondent much prior to the appointment of the so called independent Auditor and receipt of his report. After issuing the cheque for specific amount with date, the petitioners are attempt to make out a case that the cheques were not issued for the liability but only as a security and the liability are facts to be tested in trial much less than the cheque amount and not summarily by exercising Section 482 of Cr.P.C. This Court is of the view that the petitioners herein are liable to face the trial and prove their innocence. The power of the High Court under Section 482 of Cr.P.C., to quash the complaint cannot be exercised, in the case, where the complaint speaks about the participation of the accused persons and issuance of cheques for enforceable debt - Petition dismissed.

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• 2022 (6) TMI 1031
  Dishonor of Cheque - insufficiency of funds - Section 138 of NI Act - HELD THAT:- It is seen that both the courts below have rightly held that the second respondent/complainant has established the guilt of the revision petitioners/accused under Section 138 of the Act. The reasoning assigned by the courts below in support of its findings in favour of the second respondent/ complainant and against the revision petitioners/accused, is fully justified and there is no perversity or illegality. The courts below have rightly appreciated the evidence and materials and applied the legal aspects in proper perspective and in accordance with the settled legal position. There are no reason to interfere with the concurrent findings of the Courts below with regard to the conviction and sentence. No interference is warranted in this regard. There is no merit in the revision and the same is liable to be dismissed. The criminal revision case is dismissed.

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• 2022 (6) TMI 1030
  Validity of suit promissory notes - material alteration with reference to the year material alteration with reference to the year mentioned in Exs. A1 to A4 - HELD THAT:- Material alteration literally means an alteration made to an instrument that adds or deletes any provision or changes the rights and obligations of any party under it. Material alteration in negotiable instrument means, any change in written instrument which makes it to speak different legal language from that of the original, that includes altering the date of instrument. The trial Court observed that nothing incriminating evidence was extracted from CW. 1 by the plaintiff to discredit her assertions on material alteration to year of execution of promissory notes marked as Exs. A1 to A4. Having regard to the evidence brought on record, the trial Court rightly observed that there is material alteration to the numerical 7 in the year mentioned in Exs. A1 to A4 showing the execution of promissory notes as if in the year 2007, whereas they were actually executed in the year 2001. The evidence on record clearly points out alteration of numerical 1 as 7 , changing the year of execution from 2001 to 2007. Once it is established that there is material alteration to the year in the negotiable instrument, which is crucial to seek enforcement of the liability, Section 87 comes into operation. Therefore, the plaintiff cannot seek enforcement of alleged liability from the defendant. Appeal dismissed.

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• 2022 (6) TMI 1029
  Compounding of offences - HELD THAT:- The case is ordered to be listed after four weeks, and in the meanwhile, the petitioner, as prayed for, may file an application praying for compounding of the offence, subject to deposition of 5% of the cheque amount with State Legal Services Authority within the same period. List on 06.07.2022.

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