TMI Tax Updates - e-Newsletter
June 29, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise Indian Laws

Articles

1. Taxability of Intermediary service

   By: Brijesh Thakar

2. TAXABILITY OF RENTING OF IMMOVABLE PROPERTY SERVICES –ADVANCE RULING MODIFIED ON DIFFERENCE OF OPINION 

   By: Dr. Sanjiv Agarwal

3. NATIONAL RESOURCE ACCOUNTING IN INDIA: PROGRESS SO FAR

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Finance Minister Smt. Nirmala Sitharaman announces relief package of ₹ 6,28,993 crore to support Indian economy in fight against COVID-19 pandemic

2. APEDA facilitated exports of Burmese grapes ‘Leteku’ to Dubai

3. Auction for Sale (Re-Issue) of (i) ‘5.63% GS 2026’, (ii) ‘GoI Floating Rate Bond 2033’, (iii) ‘6.64% GS 2035’, and (iv) ‘6.67% GS 2050’

4. Presentation of stimulus package of ₹ 6,28,993 crore announced by Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman to support Indian economy in fight against COVID-19 pandemic

Notifications

GST - States

1. 28/GST-2 - dated 21-6-2021 - Haryana SGST

Haryana Goods and Services Tax (Fifth Amendment) Rules, 2021

2. 3/2021-State Tax (Rate) - dated 16-6-2021 - Himachal Pradesh SGST

Amendment in Notification No. 06/2019-State Tax (Rate) dated the 6th May, 2019

3. 2/2021-State Tax (Rate) - dated 16-6-2021 - Himachal Pradesh SGST

Amendment in Notification No. 11/2017-State Tax (Rate) dated the 30th June, 2017

4. 1/2021-State Tax (Rate) - dated 16-6-2021 - Himachal Pradesh SGST

Seeks to amend Notification No. 1/2017-State Tax (Rate) dated the 30th June, 2017

5. G.O. Ms. No. 97 - dated 15-6-2021 - Tamil Nadu SGST

Providing the concessional rate of SGST on Covid-19 relief supplies, up to and inclusive of 30th September 2021

6. G.O. Ms. No. 96 - dated 15-6-2021 - Tamil Nadu SGST

Amendment in Notification No. II(2)/CTR/532(d-14)/2017 dated 29th June, 2017

7. G.O. Ms. No. 83 - dated 2-6-2021 - Tamil Nadu SGST

Amendment in Notification No. II(2)/CTR/1099(e-4)/2018, dated 31/12/2018

8. G.O. Ms. No. 82 - dated 2-6-2021 - Tamil Nadu SGST

Amendment in Notification No. II(2)/CTR/532(d-3)/2017, dated 29th June, 2017

9. 9/2021 - VI(1)/152(c-1)/2021. - dated 2-6-2021 - Tamil Nadu SGST

Amendment in notification No. 3/2021, dated the 31st March, 2021

10. 10/2021 - VI(1)/152(c-2)/2021 - dated 2-6-2021 - Tamil Nadu SGST

Amendment in Notification No. 7/2021, dated the 4th May, 2021

Highlights / Catch Notes

GST

• High Court Rules ITC Reversal for Manufacturing Loss u/s 17(5)(h) of GST Act is Incorrect.

  Case-Laws - HC : Reversal of Input Tax Credit - loss arising from manufacturing process - The reversal of ITC involving Section 17(5)(h) by the Revenue, in cases of loss by consumption of input which is inherent to manufacturing loss is misconceived, as such loss is not contemplated or covered by the situations adumbrated u/s 17(5)(h) of the GST Act - HC
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Income Tax

• Taxpayer's Interest Deduction Disallowed: Funds Redirected to Subsidiaries Without Commercial Justification, Upheld by CIT(A) u/s 40A.

  Case-Laws - AT : Disallowance of interest on advances to subsidiaries u/s.40A - AO was of the opinion that the assessee has diverted interest bearing funds to subsidiaries for non-business purposes - the assessee neither produced any detail to prove commercial expediency nor proved that said advances were given out of own funds. Therefore, we are of the considered view that there is no error in the findings recorded by the ld.CIT(A) to confirm disallowance of interest. - AT
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• Section 263: Principal Commissioner's Order Invalidated Due to Void Assessment; No Jurisdictional Change Sought u/ss 124 & 120.

  Case-Laws - AT : Revision u/s 263 - Jurisdiction of AO - There was no change of jurisdiction sought by the Revenue as per Section 124 read with Section 120 of the Income Tax Act, 1961. Thus, on the point of jurisdiction relating to issuance of notice also makes the notice under Section 143(2) void-ab-initio. These aspects were not challenged by the assessee as the Assessing Officer assessed the income of the assessee at Nil and the assessee therefore, never challenged the assessment order at any stage. As the assessment itself becomes bad in law and therefore, the order of the Principal CIT under Section 263 of the Income Tax Act, 1961 itself becomes nullity as there is no assessment order in the eyes of law. - AT
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• Court Finds Rejection of Books Due to Minor Stock Discrepancy Unjustified; Seasonal Factors Explained by Assessee.

  Case-Laws - AT : Rejection of books of accounts - difference in stock - Once the difference is very negligible which can be due to various factors and reasons including the quality of seed, oil contents in the seeds due to climate condition for a particular season which affects the quality of crop itself. Ignoring all these factors as explained by the assessee in the reply to the show cause notice of the A.O., the addition made by the A.O. and sustained by the ld. CIT(A) is not justified. - AT
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• Assessee Must Use Fair Market Value for 2003-04, Apply Reverse Indexation for 1981 in LTCG Share Calculation.

  Case-Laws - AT : LTCG - cost of acquisition of shares - Since the assessee has not submitted Balance Sheet as on 1st April 1981 of the company M/s. Somani & Co. Pvt. Ltd., in our considered view, the assessee intend to adopt ₹ 3,883, on 1st April 1981, and at the same time, the assessee cannot claim the value for the assessment year 2003–04 at ₹ 1,250. Therefore, in our considered view, the best possible option available to the assessee is only to adopt the value of fair market value in assessment year 2003–04 and re–calculate by adopting reverse indexation to determine the value as on 1st April 1981. - AT
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• Condonation of Appeal Delay Hinges on "Sufficient Cause"; Negligence with Mala Fide Intent Likely Unforgivable.

  Case-Laws - AT : Condonation of delay in filing appeal - “sufficient cause or reason” of delay - If the negligence or omission is a by-product of a deliberate attempt with mala fide intention for delaying the process of litigation which could give some benefit to the litigant, then probably the delay would not deserve to be condoned. However, if no mala fide can be attributed to the delay, the delay will be condonable. - AT
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• Taxpayer's Exempt Income Claim Validated u/s 10(38) for LTCG from Penny Stocks; No Extra Brokerage Needed.

  Case-Laws - AT : Bogus LTCG - penny stock purchases - genuineness of claim of exempt income u/s 10(38) of the Act from Long Term Capital Gain - Since we have held the transaction of Long Term Capital Gain as genuine no addition for estimated brokerage expense is thus called for - AT
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• Capital gains on VIP Industries shares classified as short-term due to holding period under 12 months, taxable per Section 111A.

  Case-Laws - AT : Bogus STCG or not - Since the source of purchase has been disputed as the registration of broker was cancelled much before the transaction of purchase made by the assessee, period of holding of equity share is reckoned from the date on which the 9000 equity shares of VIP Industries Limited were credited to the Demat account of the assessee up to the date when the shares were sold and equity shares sold were debited to the Demat account. This period in the instant case is less than 12 months, we therefore hold that the capital gain is "Short Term Capital Gain" liable to be taxed u/s. 111A of the Act. - AT
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Customs

• Customs broker license revocation overturned; no evidence of bias or incorrect valuation under Customs Broker Licensing Regulations 2013.

  Case-Laws - AT : Revocation of Customs Broker License - There are no allegation in the notice nor any finding in this regard on the correctness of the value determined by the Chartered Engineer alleging bias on his part. Nor any second opinion/report obtained by the Revenue reflecting a higher or different value of the imported goods - the observation of the learned Commissioner that charges under regulations 11(d), 11(e) and 11(f) of CBLR, 2013 stands proved against the appellant cannot be sustained. - AT
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Indian Laws

• Court Rules Mere Assertions Insufficient to Rebut Presumption u/s 139 of Negotiable Instruments Act in Cheque Dishonor Case.

  Case-Laws - HC : Dishonor of Cheque - rebuttal of presumption - The mere ipse dixit of the petitioner and the statement in defence under Section 313 Cr.P.C without any material does not rebut the presumption cast on the petitioner under Section 139 of the N.I. Act. Just by contending that the Income Tax Returns have not been filed or by stating that complaints have been filed by the complainant against the accused does not rebut the presumption of the petitioner even on preponderance of probabilities - Offence Section 269SS IT Act at best makes an offence u/s 271D of the IT Act but it does not mean that the loan of ₹ 15,00,000/- has not been given by the complainant to the petitioner herein. - HC
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• High Court Highlights Need for Protective Measures in Cheque Dishonor Case Over Disputed Loan Interest Payments.

  Case-Laws - HC : Dishonor of cheque - The interest payments could not have been made in a vacuum but in connection with the loan given to the respondent by the petitioner. These facts are sufficient to hold that the petitioner has a prima facie case. The complete denial of the loan by the respondent in its reply to the Notice of Demand of the petitioner, sets off alarm-bells calling for a measure of protection to the petitioner - HC
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• Cheque Dishonor Complaint Can Be Dismissed u/s 303 If Key Offense Elements Are Missing or Evidence Is Absurd.

  Case-Laws - HC : Dishonor of Cheque - If a bare perusal of a complaint or the evidence led in support of it shows that the essential ingredients of the offence alleged are absent or that the dispute is only of civil nature or that there are such patent absurdities in evidence produced that it would be a waste of time to proceed that it would be a waste of time to proceed further, the complaint could be properly dismissed under Section 303 of Cr.P.C - HC
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Service Tax

• Court Directs Petitioner to Object to Authority on Expired Show Cause Notice u/s 73(4B) of Finance Act 1994.

  Case-Laws - HC : Validity of SCN - challenge on the ground that as per Section 73(4B) of the Finance Act, 1994, the period given for passing the order has expired - it is found appropriate to first relegate the petitioner to the Authority concerned where he can raise the objection in reference to Section 73(4B) of the Act, 1994. - HC
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• Service Tax Exemption for Foreign Commission Agents Under Business Auxiliary Services Limited to 1% of Export Goods Value.

  Case-Laws - AT : Valuation - Business Auxiliary Services - services received from foreign commission agents - It is seen that the notification is very clear. The exemption is granted to “Service Tax” to the extent of the 1% of the free on board value of the export goods. - Demand set aside - AT
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Central Excise

• Excise Duty Refund Dispute: Payment Considered "Under Protest" Due to Lack of Show Cause Notice During Investigation.

  Case-Laws - AT : Refund of Excise Duty - Duty was paid under protest or not - The amount in question was collected by the Department without issue of show cause notice at the investigation stage, and further the appellant have contested the show cause notice, as well as, has been constantly in appeal pursuant to adjudication, and thus the amount in question is held to be deposited ‘under protest’ ipso facto - AT
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Case Laws:

• GST

• 2021 (6) TMI 957
  Reversal of Input Tax Credit - loss arising from manufacturing process - Section 17(5)(h) of the GST Act - HELD THAT:- The impugned assessment orders reject a portion of ITC claimed, invoking the provisions of clause (h). This relates to goods lost, stolen, destroyed, written off or disposed by way of gift or free samples. The loss that is occasioned by the process of manufacture cannot be equated to any of the instances. In the case of M/S. RUPA CO. LIMITED, TIRUPUR VERSUS THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [ 2015 (9) TMI 293 - MADRAS HIGH COURT] , a Division Bench of this Court decided a question of law in regard to the entitlement to Cenvat credit involving the measure of inputs used in the manufacturing process, in terms of the provisions of Section 9A and 2(g) of the CENVAT Credit Rules, 2002 - In that case, a certain amount of input had been utilised by the assessee, whereas the input in the finished product was marginally less. The department proceeded to reverse the cenvat credit on the difference between the original quantity of input and the input in the finished product. The reversal of ITC involving Section 17(5)(h) by the Revenue, in cases of loss by consumption of input which is inherent to manufacturing loss is misconceived, as such loss is not contemplated or covered by the situations adumbrated under Section 17(5)(h)

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• Income Tax

• 2021 (6) TMI 949
  Assessment u/s 153A - bogus LTCG on sale of shares - Whether incriminating material was found at the premises of the assessee? - HELD THAT:- We find no cogent document forthcoming from the Revenue controverting such statement made by Shri Shirish Chandrakant Shah. Therefore, nowhere in the material as referred by the Ld. AO in the assessment proceeding practically proves that there was any relation between the said Shri Shirish C. Shah and the appellant - AO s order that the statement of Mr. Damodar Attal has through been relied upon by him but it is a fact the Shri Damodar Attal has never admitted such transaction of shares of the said company made by the appellant or his group as bogus in nature. Furthermore, neither any incriminating material was found at the premises of the assessee which could prove that the appellant at any stage obtained alleged bogus LTCG on sale of shares of the said company from Shirish Chandra Shah or his group. No such mentioning in any document found during search at the premises of the assessee is available on record which indicates any nexus with transaction carried out by the appellant in such shares of the Chandini Textiles Engineering Ltd. nor does it suggest accommodative entries ever. Therefore, it is a fact that no documents found during the course of search from the premises of the appellant which could be terms as incriminating in nature as prescribed under Section 153A of the Act as already taken care in SMT. SONAL UDAY VORA AND (VICE-VERSA) [ 2020 (12) TMI 350 - ITAT AHMEDABAD] The Revenue before us has failed to draw our attention to any material which is incriminating in nature found during such course of search at the premises of the assessee and therefore, respectfully relying upon the judgment passed by the Co-ordinate Bench and the issue involved in the common search proceeding in our considered opinion the assessment order passed under Section 153A is beyond the ambit, scope and purview of Section 153A. Keeping in view of the different pronouncement made by different judicial forums including the Jurisdictional High Court in the case of CIT vs. Saumya Construction Pvt. Ltd. [ 2016 (7) TMI 911 - GUJARAT HIGH COURT] and the judgment passed by the Hon ble Delhi High Court in the matter of CIT (Central)-III vs. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] as already discussed by the Co-ordinate Bench in IT(SS)A No. 179/Ahd/2018, we find no merit in disallowing the claim of exempt long-term capital gain on the count of undisclosed income. The same is not sustainable in the eye of law in the absence of any incriminating documents found during the search which has properly considered by the Ld. CIT(A). - Decided against revenue.

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• 2021 (6) TMI 946
  Bogus purchases - assessee was not able to produce transport bills as well as stock register for receipt of goods, other than production of bogus bills and claim of cheque payments - search conducted in the premises of the assessee - HELD THAT:- AO has made 100% additions towards alleged purchases on the basis of evidences gathered during the course of search and post-search investigation. The Tribunal has accepted the findings recorded by the AO to treat the purchases as bogus however, restricted additions to the extent of 25% of such bogus purchases. Hon ble Supreme Court in N.K. PROTEINS LTD. [ 2017 (1) TMI 1090 - SC ORDER] came to the conclusion that once the purchases from certain parties are treated as bogus then question of making estimation of profit on those purchases does not arise. In this case, facts borne out from record clearly indicate that during the course of search, bills and invoices of those alleged suppliers were found in the business premises of the assessee and assessee was unable to satisfactorily explain reasons for keeping those bills and invoices. The other facts brought out by the AO were also not controverted by the assessee with any evidences - we are of the considered view that there is no error in the findings recorded by the ld.CIT(A) to confirm additions made by the AO towards alleged bogus purchases from five parties and hence, we are inclined to uphold the findings of the ld.CIT(A) and reject ground taken by the assessee for assessment years 2011-12 to 2013-14. Disallowance of warranty obligation - AO has disallowed provision for warranty on the ground that it is unascertained liability and contingent in nature and hence, cannot be allowed u/s.37 - HELD THAT:- The assessee in the present case is a contractor for power installations. Although, the assessee suppliers several power related equipments but such equipments were sourced from various manufacturers and it is obvious that said manufacturers and suppliers will provide warranty obligation. Since, the assessee is not a manufacturer of any equipment and assessee is only a contractor who executes civil, electrical and mechanical works, requirement for making provision for warranty is very minimal and this fact is strengthened by the fact that although the assessee has made huge provisions year on year but when it comes to utilization, it has utilized a meager amount which is not even 5 to 10% of provisions made in the books of account. We are of the considered view that provision made in the books of account for warranty obligation is unascertained liability and contingent in nature. Once liability is contingent liability and unascertained liability, then same cannot be allowed as deduction u/s.37(1) of the Act. In this case, the assessee has neither manufactured equipments nor made provision on the basis of past experience and hence, we are of the considered view that there is no error in the findings recorded by the ld.CIT(A) to confirm additions made towards disallowance of provision made for warranty obligation and hence, we are inclined to uphold the findings of the ld.CIT(A) and reject ground taken by the assessee. Disallowance of interest on advances to subsidiaries u/s.40A - AO was of the opinion that the assessee has diverted interest bearing funds to subsidiaries for non-business purposes and hence, worked out interest at the rate of 11% pa on outstanding balance of loans and advances and made addition u/s.40A(2)(a) - HELD THAT:- Although assessee claims that it has given advances to subsidiaries out of commercial expediency but failed to provide any evidence to prove that what is commercial advantage derived by the assessee from its subsidiaries. We further noted that out of three advances given to subsidiaries, the assessee has failed to file evidences in any one case to prove that it has derived some commercial benefit. No doubt, advances given to subsidiaries are out of scope of disallowance of interest but it is for the assessee to prove beyond doubt that said advances are given out to commercial expediency. In this case, the assessee neither produced any detail to prove commercial expediency nor proved that said advances were given out of own funds. Therefore, we are of the considered view that there is no error in the findings recorded by the ld.CIT(A) to confirm disallowance of interest. Hence, we are inclined to uphold the findings of the ld.CIT(A) and reject ground taken by the assessee. Bogus purchases made from five parties in the hands of M/s. BGR Energy Systems Ltd . - HELD THAT:- We are of the considered view that once addition was made towards alleged bogus purchases in the hands of M/s. BGR Energy Systems Ltd., no additions can be made to similar amounts in the hands of the assessee because it amounts to double addition. The ld.CIT(A) after considering relevant facts has rightly deleted additions made by the AO and hence, we are inclined to uphold findings of the ld.CIT(A) and reject ground taken by the Revenue for all Assessment years. Addition towards cash found during the course of search - HELD THAT:- CIT(A) after considering the fact that said amount was subjected to tax in the hands of Smt. Sasikala Raghupathy has rejected additions made by the AO in the hands of the assessee. Therefore, we are of the considered view that there is no error in the findings recorded by the ld.CIT(A) to delete additions made towards cash found in the bank locker of Shri Mahadeven and offered to tax in the hands of Smt. Sasikala Raghupathy and hence, we are inclined to uphold findings of ld.CIT(A) and reject ground taken by the Revenue.

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• 2021 (6) TMI 945
  Revision u/s 263 - Jurisdiction of AO - AO failed to verify the genuineness of the exemption of Long Term Capital Gain claim - proceedings u/s. 143(3) the notice u/s. 143(2) dated 16/09/2016 was issued by the ITO, Ward 72(5), Delhi, while assessment proceedings u/s. 143(3) for the preceding Assessment Year 2014-15 were still going on before DCIT, Circle 25(2), New Delhi - HELD THAT:- The first notice under Section 143(2) was issued on 01.08.2016 which by the non-jurisdictional AO and jurisdictional AO issued the notice on 10.03.2017 which is beyond the limitation period as per the statutory provisions of the Act. Thus, the notice is time barred and hence, the assessment itself becomes void-ab-initio. Besides this, the proper jurisdiction of the Assessing Officer in the present case is that of DCIT, Circle 25(2) as the assessment for A.Y. 2014-15 was proceeded before the said Assessing Officer in assessee s case. There was no change of jurisdiction sought by the Revenue as per Section 124 read with Section 120 of the Income Tax Act, 1961. Thus, on the point of jurisdiction relating to issuance of notice also makes the notice under Section 143(2) void-ab-initio. These aspects were not challenged by the assessee as the Assessing Officer assessed the income of the assessee at Nil and the assessee therefore, never challenged the assessment order at any stage. As the assessment itself becomes bad in law and therefore, the order of the Principal CIT under Section 263 of the Income Tax Act, 1961 itself becomes nullity as there is no assessment order in the eyes of law. Therefore, the additional grounds are allowed. Bogus LTCG - The notice which was issued by the Principal CIT stating therein that the Assessing Officer failed to verify the genuineness of the exemption of Long Term Capital Gain claim on the sale of shares of M/s. Channel - Nine and also that of the Assessing Officer failed to enquire about the persons who have purchased the above mentioned shares at a high rate of Rs. 439 per share, appears to be incorrect. The Principal CIT has not at all taken into consideration the reconciliation in respect of Long term capital gain. AO in the instant case has verified all the aspects and therefore, the view taken by the Principal CIT is only a second view which is not permissible under Section 263 of the Act. It is the settled proposition of law that for invoking jurisdiction under Section 263, the twin conditions, namely, the order is erroneous and the order is prejudicial to the interest of the Revenue must be satisfied. In the instant case, since the Assessing Officer has called for various details and after verification of the same has passed the order, therefore, the same cannot be treated as erroneous, as held by Hon ble Supreme Court in the case of Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] Hence, the Assessment order though does not sustain in eyes of law in light of the defective notice under Section 143(2), the proceedings under Section 263 also does not survive on merit. Therefore, the appeal of the assessee is allowed.

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• 2021 (6) TMI 944
  LTCG on sale of property - working of LTCG - AO determined the LTCG on the basis of value determined by DVO and further on the basis of index cost for AY 2000-01 instead of 1997- 98 - whether the holding period is treated from the date of allotment or from the date of occupation of the property - whether the acquisition of property should be taken from the date of allotment order from the date of occupation of the property - assessee booked the flat in Joint names and the name of his wife name is mentioned at first holder. Whereas all payments were made by assessee from his bank account - HELD THAT:- There is no dispute about the date of allotment letter dated 25.09.1997. We find that AO has recorded that at the time of allotment, the assessee paid Rs. 6,52,000/-. The assessee vehemently contended that substantial part of the sale consideration was paid from the date of possession. This fact is not disputed by lower authorities. The date of transfer of asset/flat is also not in dispute. We find that in case MadhuKaul v/s. CIT [ 2014 (2) TMI 1117 - PUNJAB HARYANA HIGH COURT] and CIT v/s. S.R. Jayshankar [ 2014 (12) TMI 264 - MADRAS HIGH COURT] held that the date of allotment letter is to be considered to determine the holding period to ascertain the entitlement of section 54 of the Act. We find that the decision of MadhuKaul v/s. CIT and CIT v/s. S.R. Jayshankar (supra) were followed by co-ordinate bench of Tribunal in NanditaPatodia v/s. ITO [ 2017 (4) TMI 397 - ITAT MUMBAI] and allow the holding period from the date of allotment letter to determine the LTCG. - Decided in favour of assessee.

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• 2021 (6) TMI 943
  Rejection of books of accounts - trading addition - AR submitted that the absence of stock register or low yield cannot be a ground for invoking of section 145(3) - HELD THAT:- As decided in own case [ 2019 (10) TMI 924 - ITAT JAIPUR] low production of oil from the oil seeds in comparison to the earlier years. We find variation in the yield ratio is very meager and in some of the cases it is less than 1%. Once the difference is very negligible which can be due to various factors and reasons including the quality of seed, oil contents in the seeds due to climate condition for a particular season which affects the quality of crop itself. Ignoring all these factors as explained by the assessee in the reply to the show cause notice of the A.O., the addition made by the A.O. and sustained by the ld. CIT(A) is not justified. CIT(A) has also not given any basis for sustaining the addition and therefore, such an ad hoc addition without specifying the basis is not permissible, accordingly, the addition sustained by the ld. CIT(A) is deleted. Disallowance of Telephone Expenses, Travelling Expenses, Building Repair Maintenance Expenses and Office Expenses - HELD THAT:- As relying on own case except 10% of building repair and maintenance expenses, all other disallowances made by the A.O. and sustained by the ld. CIT(A) are hereby deleted and the ground is thus partly allowed. Disallowance being @ 15%, out of the commission paid and claimed by the assessee - HELD THAT:- We find that under identical set of facts and circumstances of the case, the disallowances were made in the earlier A.Y 2012-13 and the same have been partly confirmed by the ld CIT(A) and the assessee has not filed any appeal against the said decision before the Tribunal and the matter has thus attained finality. Therefore, following the earlier decision of his predecessor CIT(A), where the ld CIT(A) for the impugned assessment year has restricted the disallowance to 15%, we don t see any infirmity in the said decision and findings of the ld CIT(A) and are not inclined to interfere in the said findings and the ground of appeal so taken by the assessee is thus dismissed.

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• 2021 (6) TMI 942
  Capital gain computation - addition made on the basis of valuation of DVO - AO accepted the report of DVO and worked out the Long Term Capital Gain (LTCG) on the basis of rate suggested by DVO - assessee claimed deduction under section 54B of the Act of Rs. 13,75,300/-, thus, the AO after granting set off of deduction under section 54B made addition - HELD THAT:- The assessee sold a piece of land on 06.09.2011 along with his co-owner. Thus, the amended provision of section 55A(a) is not applicable for the year under consideration. Further, we find that the AO while making the reference to the DVO has not form an opinion that FMV adopted by assessee is not a fair value. As noted earlier, the amended provision under section 55A(a) is not applicable for the year under consideration, therefore, the reference made by AO was invalid. As relying on GAURANGINIBEN S. SHODHAN INDL. [ 2014 (2) TMI 78 - GUJARAT HIGH COURT] and M/S. PUJA PRINTS [ 2014 (1) TMI 764 - BOMBAY HIGH COURT] the ground raised by assessee is allowed.

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• 2021 (6) TMI 936
  Addition u/s 68 - Bogus share capital and share premium amount received - Addition on no proof to the identity, creditworthiness and genuineness of share capital/ share premium - main plank on which the AO made the addition was because the directors of the share subscribers did not turn up before him - HELD THAT:- Hon ble Apex Court in the case of Orissa Corpn. (P) Ltd. [ 1986 (3) TMI 3 - SUPREME COURT] and Rohini Builders[ 2001 (3) TMI 9 - GUJARAT HIGH COURT] has held that onus of the assessee (in whose books of account credit appears) stands fully discharged if the identity of the creditor is established and actual receipt of money from such creditor is proved. In case, the Assessing Officer is dissatisfied about the source of cash deposited in the bank accounts of the creditors, the proper course would be to assess such credit in the hands of the creditor (after making due enquiries from such creditor). When a question as to the creditworthiness of a creditor is to be adjudicated and if the creditor is an Income Tax assessee, it is now well settled by the decision of the Calcutta High Court in M/S. DATAWARE PRIVATE LIMITED [ 2011 (9) TMI 175 - CALCUTTA HIGH COURT] that the creditworthiness of the creditor cannot be disputed by the AO of the assessee but the AO of the creditor. Section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source shall be assessed as its undisclosed income. In the facts of the present case, both the nature and source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO s record. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO is based on conjectures and surmises, cannot be justified - no addition was warranted under Section 68 of the Act. Therefore, we delete the addition made - Decided in favour of assessee.

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• 2021 (6) TMI 935
  LTCG - cost of acquisition of 925 shares of Somani Company - Adoption of FMV - assessee has re valued the fair market value as on 1st April 1981 - HELD THAT:- We are in agreement with the assessee that the assessee has an option to replace the value of market value as on 1st April 1981 as per section 55(2)(b)(i) of the Act and also the judicial precedence suggest that wealth tax valuation cannot be adopted for Income Tax purpose.Assessing Officer cannot fully rely upon the value declared for wealth tax purpose in Income Tax assessment. Even the learned CIT(A) accepted provisions of rule 1D of the Wealth Tax rules. We are in agreement that the assessee can adopt fair market value based on the re valuation of the assets held by the company as on 1st April 1981. Further, we note that the learned CIT(A) observed that even under rule 11UA of the I.T. Rules, the fair market value of the un quoted equity shares shall be calculated based on the net assets as per the Balance Sheet and re valuation in the Balance Sheet is not permitted. We notice that no doubt the assessee has re valued the fair market value as on 1st April 1981, at Rs. 3,833 per share and we also notice that the assessee has purchased 2,000 shares @ Rs. 1,250 per share in assessment year 2003 04 and we notice that the assessee has claimed indexed cost based on this valuation only. Therefore, it is impractical to calculate the value of un quoted equity shares @ Rs. 3,833, as on 1st April 1981 and the same shares valued and purchased at Rs. 1,250 per share in the assessment year 2003 04. Since the assessee has not submitted Balance Sheet as on 1st April 1981 of the company M/s. Somani Co. Pvt. Ltd., in our considered view, the assessee intend to adopt Rs. 3,883, on 1st April 1981, and at the same time, the assessee cannot claim the value for the assessment year 2003 04 at Rs. 1,250. Therefore, in our considered view, the best possible option available to the assessee is only to adopt the value of fair market value in assessment year 2003 04 and re calculate by adopting reverse indexation to determine the value as on 1st April 1981. Therefore, the value of each share will be @ Rs. 1,250 x Rs. 100 463 = Rs. 270 per share. Since the Assessing Officer cannot adopt the value as per wealth tax valuation considering the judicial precedent, we deem it fit to direct the Assessing Officer to adopt the fair market value as on 1st April 1981 @ Rs. 270 per share. As assessee prayed to restore this issue to the file of the Assessing Officer to refer this matter to the valuation officer. In view of our above observations, we do not see any reason to refer this issue to the valuation officer at this stage. Accordingly, ground no.2, is partly allowed. Reference to DVO - Deemed sale consideration (being the market value on which stamp duty is paid) as against agreement value and the amount actually received - HELD THAT:- We notice that even in case of Mahalaxmi Rope Works Ltd [ 2019 (3) TMI 1889 - ITAT MUMBAI] stamp duty authorities have applied TDR @ 140% and upon agitation the issue was referred to the DVO and the DVO has valued the property without applying the TDR. Since the issue under consideration is similar to the issue in Mahalaxmi Rope Works Ltd. (supra) case, therefore, in our considered view, for the sake of justice, we restore this issue also to the file of the Assessing Officer and also direct him to refer this case to the DVO and adopt the value based on the report of the DVO to determine the actual capital gains as per law. Accordingly, ground no.3 raised by the assessee is allowed for statistical purposes. Disallowance of deduction u/s 54F - assessee failed to provide any documentary proof that he had invested / purchased a new property - HELD THAT:- Assessee had entered into escrow arrangement with a clear purpose of purchasing the above said flat and accordingly and based on the agreement with the buyer of the land, the assessee has left a portion of the sale consideration in escrow arrangement. When the taxing authorities intend to tax the whole sale consideration as taxable consideration which includes the portion of the cost of flat then the assessee has deemed to have paid for the flat as purchase consideration. We notice that the Assessing Officer has taken a stand that in order to claim deduction under section 54F of the Act, the assessee has to demonstrate documentary evidences of the new property and the assessee should have invested / purchased new residential property within the prescribed time. We notice that in this situation the assessee has already kept the agreed settlement amount for purchase of flat with buyer of the land and accepted to receive the promised allotted flat within the prescribed time. Since there was a dispute between the assessee and the builder the flat was not allotted to the assessee within the prescribed time. We notice that the Courts have held that when the assessee performs his part of the duty before the prescribed time and incase there is a reasonable delay or default on the part of builder and failed to comply the agreement within the prescribed time and when the assessee demonstrated the reasonableness of the time frame of investment then the Courts have taken liberal view in giving deduction under section 54F - in the given case the assessee has not received sale consideration to the extent of value of flat and there is no mistake on the part of the assessee, therefore the assessee had paid full purchase consideration for flat, therefore, the assessee is eligible for the claim under section 54F.

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• 2021 (6) TMI 934
  Penalty proceedings u/s 271(1)(c) - invalid notice u/s 274 - HELD THAT:- Penalty cannot be imposed merely on the ground that additions made in the income of the assessee have been confirmed. Rather, to proceed with the imposition of penalty u/s 271(1)(c), the AO has to prove that there was concealment of particulars of income or that the assessee has furnished inaccurate particulars of such income. A bare perusal of the notice issued to the assessee u/s 274 read with section 271(1)(c) of the Act goes to prove that assessee has not been called upon to explain if she has concealed the particulars of income or furnished inaccurate particulars of such income. See M/S MANJUNATHA COTTON AND GINNING FACTORY OTHS., M/S. V.S. LAD SONS, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] We are of the considered view that since the assessee has not been specifically made aware of the charges leveled against her as to whether there is a concealment of income or furnishing of inaccurate particulars of income on her part, the penalty u/s 271(1)(c) of the Act is not sustainable.See Sahara s case [ 2019 (8) TMI 409 - DELHI HIGH COURT] - Accordingly, we set aside the order of the Ld.First Appellate Authority and direct the AO delete the penalty. Appeal filed by the assessee is allowed.

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• 2021 (6) TMI 933
  Validity of assessment u/s 153A(1)(b) - no valid approval granted u/s 153D - HELD THAT:- The approval granted u/s 153D of the Act suffers from various infirmities and same is not in accordance with the letter and spirit of the law and is liable to be quashed. As we have negated the approval u/s 153D, the assessment order passed u/s 153A r.w.s 143(3) of the act stands vitiated for want of approval u/s 153D of the Income Tax Act, 1961 and is hereby quashed. Accordingly, the additional grounds are allowed.

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• 2021 (6) TMI 932
  Levy of penalty u/s 271(1)(c) - Defective notice u/s 274 - assessee has challenged the impugned order contending that the show-cause notice issued by the AO is not a valid notice to initiate the penalty proceedings as the assessee has not been made aware as to whether he has concealed the particulars of income or has furnished inaccurate particulars of such income - HELD THAT:- A bare perusal of the notice issued to the assessee u/s 274 read with section 271(1)(c) goes to prove that assessee has not been called upon to explain if it has concealed the particulars of income or furnished inaccurate particulars of such income. We are of the considered view that when the assessee has not been specifically made aware of the charges leveled against it as to whether there is a concealment of income or furnishing of inaccurate particulars of income on its part, the penalty u/s 271(1)(c) of the Act is not sustainable. Recently, the Hon ble Delhi High Court M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT] has approved the order of the Hon ble Karnataka High Court in the case of Sahara India Life Insurance [ 2019 (8) TMI 409 - DELHI HIGH COURT] . Respectfully following the judicial precedents as aforementioned, we set aside the order of the Ld. First Appellate Authority and direct the AO delete the penalty. - Decided in favour of assessee.

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• 2021 (6) TMI 931
  Condonation of delay - sufficient cause or reason of delay - HELD THAT:- The assessee has been vigilant in his approach and has not neglected the Income Tax proceedings. The Hon ble Apex Court in the case of N. Balakrishnan 1998 (9) TMI 602 - SUPREME COURT] has observed that the length of delay is immaterial. The acceptability of the explanation is the only criteria for condoning the delay. In a given case, delay of the shortest period of time may be un-condonable due to unacceptable explanation, whereas in certain other cases, delay of a long period can be condoned if the explanation is satisfactory. In every case of delay, there might be some omissions or negligence on the part of the assessee but to our mind such omission/negligence has to be weighed in light of facts and circumstances of each case. If the negligence or omission is a by-product of a deliberate attempt with mala fide intention for delaying the process of litigation which could give some benefit to the litigant, then probably the delay would not deserve to be condoned. However, if no mala fide can be attributed to the delay, the delay will be condonable. Therefore, on the facts of the present case, we are of the considered opinion that the assessee has been able to demonstrate sufficient reasons, in the shape of approaching wrong remedy, for filing an appeal before the Tribunal. Levy of penalty u/s 271(1) (c) - defective notice u/s 274 - HELD THAT:- A bare perusal of the notice issued to the assessee u/s 274 read with section 271(1)(c) of the Act goes to prove that assessee has not been called upon to explain if he has concealed the particulars of income or furnished inaccurate particulars of such income. we are of the considered view that when the assessee has not been specifically made aware of the charges leveled against him as to whether there is a concealment of income or furnishing of inaccurate particulars of income on his part, the penalty u/s 271(1)(c) of the Act is not sustainable - See M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT] . Appeal filed by the assessee is allowed.

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• 2021 (6) TMI 930
  Deduction u/s 80IA (4) (iii) - interest income shown by the assessee was the part of profit attributable to the business of the assessee and it was not derived from the business activities - HELD THAT:- CIT(A) has returned a categorical finding after duly considering all the facts of the case. The Ld. CIT(A) has referred to a letter dated 13th February, 2013 emanating from the Office of Principal Secretary, Industrial Development, wherein it has been specifically stated that the allotment of plots and collection for the same is to done by the assessee as part of the management of the Industrial Park and therefore, all the money collected for such allotment has to be considered as being derived from the business of running of industrial park. As been noted by the Ld. CIT(A) that the amounts which were specifically due for payment to the Government were shown as liabilities in its account and the balance was taken as receipts for the purposes of computation of eligible income. CIT(A) has also referred to the notification issued by the CBDT in respect of deduction u/s 80IA for industrial park and has, thereafter, come to the conclusion that the assessee was eligible for deduction u/s 80IA even on the amount disallowed by the AO. DR has, although, vehemently argued against the finding returned by the CIT(A), he could not controvert the findings of fact as recorded by the Ld. CIT(A) in the impugned order. DR also could not point out any error in law in the impugned order. CIT(A) has also referred and relied on the judgment passed in the case of CIT vs. Govinda Choudhary Sons, [ 1992 (4) TMI 8 - SUPREME COURT] wherein it was held that the interest receipt on delayed payment cannot be separated from the other amounts granted to the assessee under the awards and, hence, cannot be treated as income from other sources. As laid down by the Hon ble Apex Court in this case that amount awarded to the Contractor assessee as interest for delay in payment of his dues took the same character as the receipts for payment of which he was otherwise entitled under the contract and, therefore, the same was taxable as business income and not as income from other sources. We find no error on such reliance by the Ld. CIT(A). Similarly, ITAT Chandigarh Bench in the case of ACIT vs. Jaiparkash Hydro Power Ltd. [ 2013 (6) TMI 478 - ITAT CHANDIGARH] has held that when interest is received on account of delayed payment from customers, it would definitely constitute income from eligible business income because such interest had direct nexus with receipt from eligible business and, therefore, deduction u/s 80IA of the Act would be admissible. In the case of CIT vs. Suzlon Energy Ltd . [ 2013 (7) TMI 697 - GUJARAT HIGH COURT] , while considering the allowability of deduction u/s 80 IB of the Act, held that interest income on late recovery of sale proceeds from debtors was eligible for deduction u/s 80IB - Interest receipt on delayed payments has been held to be business income. It is our considered opinion that the Ld. CIT(A) has rightly allowed the assessee s claim of deduction u/s 80IA and we have no reason to interfere with the same. We uphold the findings of the Ld. CIT(A) and dismiss the appeal filed by the Department.

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• 2021 (6) TMI 929
  Validity of Reopening of assessment u/s 147 - eligibility to claim exemption u/s 10(26BBB) - notice u/s 148 issued after expiry of four years from the end of the assessment year - HELD THAT:- It is apparent that action u/s 147 was solely for the purpose of enhancing the disallowance of claim of exemption u/s 10(26BBB) already made in the original assessment u/s 143(3) of the Income tax Act, 1961, which in our view, is impermissible and not in accordance with spirit of section 147 of the Act. The reasons recorded fail to satisfy the dual jurisdictional requirements as per law. We find to difficult to concur with reasoning given by the Ld. CIT (A) while upholding the validity of notice u/s 148 which is not in consonance with established legal principles as discussed above. In view of the above discussion, we are of considered view that notice u/s 148 dated 22/01/2015 is vitiated on dual count of change of opinion as well as first proviso to section 147 of the Income Tax Act, 1961 and same is hereby quashed. Resultantly, the re-assessment order passed u/s 143(3)/147 and addition made therein also gets annulled.

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• 2021 (6) TMI 928
  Capital gain computation - land was under the ULC Act - section 50C application - HELD THAT:- As per date of sale, the land was under the ULC Act and the state legislature repealed on 27.3.2008 and thereafter division of Hon ble jurisdictional High Court, the state government issued a Memo on 11.7.2012 declaring that the property does not attract the provisions of ULC Act and thereafter the Tahsildar vide letter dt. 24.5.2014 allowed the construction on the land. There is no infirmity in the order of CIT(Appeals). Therefore we dismiss the appeal of the Revenue.

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• 2021 (6) TMI 927
  Rectification of mistake - apparent error in the order of the Tribunal as the issue of the addition made on account of unaccounted transactions with M/s Fortune Group was adjudicated - HELD THAT:- From contents of Miscellaneous Application filed at the instance of Revenue stating that there is an apparent error in the order of the Tribunal as the issue of the addition made on account of unaccounted transactions with M/s Fortune Group was adjudicated without considering the fact that M/s Fortune Builders in its application to Income Tax Settlement Commission has taken a plea that addition on the basis of alleged diary BS-1 have been made in the case of M/s Soumya Homes Pvt. Ltd and therefore no addition of income was offered before Income Tax Settlement Commission. We however on perusal of the records placed before us find that during the course of hearing of appeal sufficient opportunity was granted to the revenue to file its documents. However revenue failed to file any such detail before this Tribunal of the application of M/s Fortune Builders made before the Income Tax Settlement Commission. Since the Tribunal has dealt with all the relevant facts and settled judicial precedents to adjudicate the issue in question before us, we find no mistake apparent on record in the impugned order and thus no rectification is called for. We therefore, in the given facts and circumstances of the case find no merit in the Miscellaneous Application filed by the Revenue and the same deserves to be dismissed.

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• 2021 (6) TMI 926
  Addition u/s 68 - bogus LTCG to claim exemption u/s 10(38) - HELD THAT:- No documentary evidence to prove that the assessee was indulged in managing the affair of providing accommodation entry - Appeals deserves to be allowed on merits of the case, conditions for claiming exempt u/s 10(38) of the Act were fulfilled with regard to the sale transaction and the evidence so produced in support thereof has not been controverted by the revenue authorities. Thus the common grounds raised on merits by both assessee are allowed.

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• 2021 (6) TMI 925
  Bogus LTCG - penny stock purchases - genuineness of claim of exempt income u/s 10(38) of the Act from Long Term Capital Gain ( In short LTCG) arising from sale of equity shares - HELD THAT:- We note that the original purchase of equity share of Conart Traders Limited was made on 17.9.2011 and this company was subsequently merged to M/s Sunrise Asian Limited by the order of Hon ble Bombay High Court and assessee received the converted equity shares of M/s Sunrise Asian Limited in their Demat account. Thereafter during the year under appeal the shares were sold through recognized stock exchange at the price appearing on the portal of the exchange. The shares were transferred from Demat account and consideration was received. All the evidences in support of above stated transactions have been filed before the lower authorities and their genuineness are not in doubt. As relying on Dipesh Ramesh Vardhan [ 2020 (8) TMI 405 - ITAT MUMBAI ] Sunrise Asian Limited is neither a penny stock nor a paper company, are of the considered view that as all the five assessee(s) namely Kumari Ayushi Nyati ,Smt. Vijay Nyati, Shri Vijay Kumar Radheshyam Nyati (HUF), Shri Manish Kumar Radheshyam Nyati (HUF), Smt. Mamta Nyati have discharged necessary onus casted upon them in terms of claim of exemption of Long Term Capital Gain u/s 10(38) of the Act by establishing the genuineness of transaction of purchase and sale of shares and satisfying the requisite conditions specified therein and the Long Term Capital Gain so arisen has been rightly claimed as exempt u/s 10(38) of the Act. Since we have held the transaction of Long Term Capital Gain as genuine no addition for estimated brokerage expense is thus called for in the case of Miss. Ayushi Nyati. We therefore allow the common issues raised in all the instant appeals in favour of the assessee(s) and set aside the order of Ld. CIT(A) and allow the claim of LTCG exemption u/s 10(38) of the Act from sale of equity shares of SAL and delete the addition. - Decided in favour of assessee.

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• 2021 (6) TMI 924
  Addition u/s 68 and 69C - transactions in penny stock income of which was claimed as exempt u/s 10(38) - CIT(A) in his ex parte order, upheld the additions made by the AO - submission of the assessee that no proper opportunity was granted by the CIT(A) and in the interest of justice the assessee should be given an opportunity to substantiate his case - HELD THAT:- Although letter for adjournment was filed by the assessee on dak counter of CIT(A) on 22.11.2018, however, there is no mention of any acceptance or rejection of the same by the ld. CIT(A). In the interest of justice, we deem it proper to restore the issue to the file of the CIT(A) with a direction to grant one final opportunity to the assessee to substantiate his case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the CIT(A) and substantiate his case without seeking any adjournment under any pretext failing which the ld.CIT(A) is at liberty to pass appropriate order as per law. Grounds raised by the assessee are accordingly allowed for statistical purposes.

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• 2021 (6) TMI 923
  Bogus STCG - Disallowance of taxable as Short Term Capital Gain from sale of equity shares chargeable to tax U/s. 111A of the Act And benefit u/s. 10(38) - HELD THAT:- Contract note of Eden Financial Services are issued in April, 2009 and the payments have been made almost after 21 months and that too at the time when the share have been sold by the assessee. Surprisingly payment for the purchase has been made after completing 3 transactions of sale of the equity shares of VIP Industries Limited. So one cannot deny that there is some flow in this transaction. However the fact remains that the VIP Industries Limited is a listed company and as on date also it is regularly traded and as submitted by the Ld. Counsel for the assessee the current price are almost four times of the price the assessee received at the time of sale. So sale transaction is far from any dispute as it has been entered through the registered broker on recognized stock exchange and consideration received. As far as purchase is concerned there is a purchase on record and 9000 equity shares have come into the Demat account of the assessee and consideration has been paid. So one cannot doubt the transaction of purchase and sales but doubt can be raised about the period of holding of the equity shares.. So in this case the seller of the shares i.e. Eden Financial Services is itself in dispute having no authority to trade but the moment the share are transferred to the Demat account then from that moment there is hardly any possibility to question the genuineness of purchase unless until anything contrary had been unearthed by the revenue authorities. Since the genuineness of sale is not doubted, the company of which the equity shares are sold i.e. VIP Industries Limited is not a penny stock company and sale effected through registered broker, we are satisfied with the genuineness of sale transactions. As regards purchase which is made by the payment through account payee cheque, there is a corresponding receipt of 9000 equity shares of VIP Industries Limited in the Demat account of the assessee. Had the identity of the broker has not been in doubt then this transaction of earning LTCG would be covered under the provision of Section 10(38) of the Act but since the identity of broker is in dispute the alleged transaction needs to be examined with the period of holding of equity shares in the Demat account of the assessee. As the identity of seller is in doubt and 9000 equity shares are held in the Demat account for less than 12 months, the net gain deserves to be taxed as Short Term Capital Gain. We find that similar type of issue came up before this Tribunal in the case of Smt. Annapurna Maheshwari V/s. ACIT [ 2018 (11) TMI 131 - ITAT INDORE] Thus issue of instant appeal hold that the assessee had earned capital gain after making a genuine sales and claiming cost of acquisition of shares by payment through banking channel and transaction of purchase and sale effected through Demat account. Since the source of purchase has been disputed as the registration of broker was cancelled much before the transaction of purchase made by the assessee, period of holding of equity share is reckoned from the date on which the 9000 equity shares of VIP Industries Limited were credited to the Demat account of the assessee up to the date when the shares were sold and equity shares sold were debited to the Demat account. This period in the instant case is less than 12 months, we therefore hold that the capital gain is Short Term Capital Gain liable to be taxed u/s. 111A of the Act.

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• 2021 (6) TMI 922
  Revised claim made by the assessee in course of assessment proceedings - Disallowance of deduction claimed u/s 80P(2)(d) - HELD THAT:- The issue is no more res integra. Now it is fairly well settled that assessee can make a fresh/revised claim not only before the assessing officer, but even before the appellate authorities. In fact, in the decision of the Hon ble Apex Court relied upon by the assessing officer and learned Commissioner of Income Tax (Appeals), it has been made clear that there is no fetter on the appellate authority to consider a revised/fresh claim of the assessee. In case of CIT vs Prithvi Brokers Shareholders [ 2012 (7) TMI 158 - BOMBAY HIGH COURT] the Hon ble jurisdictional High Court has held that the assessee can make a revised/fresh claim in course of proceedings before the assessing officer and appellate authorities. Denial of assessee s claim of deduction under section 80P(2)(d) is interest was earned from a co-operative bank - In our view, the aforesaid reasoning of the assessing officer would not hold water as in various case laws cited by the learned counsel for the assessee, the Tribunal has taken a consistent view that co-operative banks are primarily co-operative societies; hence, any interest/dividend earned from such co-operative banks would be eligible for deduction under section 80P(2)(d) of the Act. - Decided in favour of assessee.

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• Customs

• 2021 (6) TMI 919
  Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - enhancement of the value of the said second hand vessel - failure to intimate the relation between Shri Anil Vohra, Chartered Engineer and the Customs Broker - contravention of Regulations 11(d), 11(e) and 11(f) of CBLR, 2013 - neutral party - Circular No. 25/2015-Cus dated 15.10.2015 - HELD THAT:- It seems that the adjudicating authority in the impugned order merely carried away by the use of the expression neutral party mentioned in para 9 of the said Circular but not examined its contextual use by reading the circular as a whole. A plain reading of para 9 of the Circular dated 15.10.2015, makes it crystal clear that the procedure for computing the value of second hand machinery should reflect the commercial reality resulting into a fair value and needs to be arrived through uniform practice by all custom houses. To achieve such uniformity, it has been emphasized that inspection/ appraisement report should be from a qualified neutral party. Further reading it along with subsequent paras 10 and 11, it would be more clear that the certificate issued by the Chartered Engineer, shall in all circumstances whether given by Port of Loading or in India be accepted and no Customs house should insist that inspection/ appraisement report should be obtained from a particular Chartered Engineer. Keeping in mind the guidelines and applying the same to present case, it was found that Shri Anil Vohra is an empanelled Chartered Engineer by the customs authorities to determine the value of second hand imported machinery in the Mumbai Custom House. Neutral party - HELD THAT:- The adjudicating authority confirmed the charges against the appellant-Customs Broker observing that since Chartered Engineer Shri Anil Vohra is also a consultant to one of their related company, therefore, not a neutral party to the transaction of import. The said interpretation is fallacious. The inspection/appraisement of the second hand machinery to ascertain its value by a neutral party definitely refers to a person, who is not connected with the importer or the seller of the imported goods, precisely with the transaction of the imported goods whose value he is asked to determine. It cannot be read to mean a person employed and remotely connected to the Customs Broker, who appoints the Chartered Engineer on behalf of the importer to assess the value, in absence of appraisal report at the load port, be said to be not a neutral person for the said job. There are no allegation in the notice nor any finding in this regard on the correctness of the value determined by the Chartered Engineer alleging bias on his part. Nor any second opinion/report obtained by the Revenue reflecting a higher or different value of the imported goods than determined by shri Anil Vohra. In these circumstances, in our view the observation of the learned Commissioner that charges under regulations 11(d), 11(e) and 11(f) of CBLR, 2013 stands proved against the appellant cannot be sustained. Appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2021 (6) TMI 950
  Oppression and mismanagement - Sections 241, 242 and 243 of the Companies Act, 2013 - Appellant s allegation is that Suraj Mani (Respondent No. 2) incorporated a new company (Respondent No. 4) and did not disclose to her that Respondent No. 2, Respondent No. 3 and Respondent No. 5 were shareholders in the new company, thereby contributing to mismanagement of Respondent No. 1 Company - HELD THAT:- Respondent No. 1 Company has performed consistently well and there has been an increase in revenue and turnover of the company over the years (as shown by table at page 5 of the Respondent No. 2 s counter affidavit. This point has been mentioned in NCLT s impugned order dated August 1, 2019 (page 67 of the appeal) and not disputed by the Appellant. The reference made by the Respondents to the applications filed and representations made by the Appellant including those for interim relief sought before NCLT, mainly requesting for a residence to be provided to the Appellant and also for payment of credit card bills of the Appellant go to show the personal nature of allegations calling the same oppression of the Appellant and mismanagement of company s affairs. In the circumstances of the case, the provision of residence and basic remuneration and perquisites, as ordered by the NCLT is a reasonable relief granted to the Appellant. The Respondents have cited the judgment of Hon ble Supreme Court in the case NEEDLE INDUSTRIES (INDIA) LTD. VERSUS NEEDLE INDUSTRIES NEWEY (INDIA) HOLDING LTD. [ 1981 (5) TMI 89 - SUPREME COURT] wherein it was held that a conduct which lacks in probity, conduct which is unfair to and which causes prejudice to the petitioner in the exercise of legal or proprietary rights as a shareholder must be shown to exist. - In the instant case the Appellant has not been able to prove through her claims and allegations that her rights as a shareholder have been treated harshly or unfairly, and therefore her case of her oppression and mismanagement of the affairs of the company is unfounded. The Impugned Order has recorded the position of the Respondents as well as the Appellant on each of the cited issues in a very fair and clear manner. Despite a case of oppression and mismanagement not being successfully established by the Appellant, in an act to provide succor to the Appellant, the NCLT, Bengaluru s has provided her relief by passing an order giving her a monthly pay as well as benefit of a three BHK flat, a car, and certain other perquisites, which has been complied by the Respondents. The appeal being devoid of any substance is disallowed.

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• 2021 (6) TMI 941
  Impleadment in the application - fraud - HELD THAT:- Certain banks have initiated proceedings against the Corporate Debtor under the RBI Circular based on the Forensic Audit Report obtained by the Resolution Professional - Applicant who is the SRA of the Corporate Debtor may be concerned with the developments and interested in knowing the contents of the Forensic Audit Report and complaint to CBI relating to the happenings in the Corporate Debtor. It would be between the Financial Creditors and the SRA. Application rejected.

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• 2021 (6) TMI 939
  Sanction of Scheme of Amalgamation - Sections 230-232 of the Companies Act, 2013 - Seeking dispensation and convening with various meetings - HELD THAT:- There are no objections to the Scheme and hence there is no impediment in the sanction of the Scheme. Therefore, the Scheme (Annexure A.1) is hereby approved. While approving the Scheme, it is clarified that this order should not be construed as an order in any way granting exemption from payment of any stamp duty, taxes, or any other charges, if any, and payment in accordance with law or granting permission in respect of any compliance with any other requirement which may be specifically required under any law. With the sanction of the Scheme, the Transferor Companies No. 1 to 9, shall stand transferred to and vested in the Transferee Company. The scheme is approved - application allowed.

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• 2021 (6) TMI 938
  Approval of Scheme of Amalgamation - seeking directions for dispensing with the meetings of the Equity Shareholders, Secured Creditors and Unsecured Creditors of the Petitioner Companies - Sections 230 232 of the Companies Act, 2013 - HELD THAT:- Considering the approval accorded by the members and creditors of the Petitioner Companies to the proposed Scheme and the affidavits/no objection filed by the respective regulatory authorities there appears to be no impediment in sanctioning the present Scheme Consequently, sanction is hereby granted to the Scheme under Section 230-232 of the Companies Act, 2013. The Petitioners shall however remain bound to comply with the statutory requirements in accordance with law including, but not limited to, Section 232 (3) (a) and Accounting Standard 14 as pointed by the Regional Director. The scheme is approved - application allowed.

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• Insolvency & Bankruptcy

• 2021 (6) TMI 951
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Principle of Waiver - Estoppel by Election - Estoppel by Record - Aspect of NPA - HELD THAT:- It is to be remembered that the Code was enacted to consolidate and amend the laws related to reorganisation and Insolvency Resolution of Corporate Persons, Partnership firms, Individuals in a time bound fashion. (a) for maximisation of value of assets of such individuals (b) to promote entrepreneurship (c) for availability of credit and balance the interests of all stakeholders etc. Speed is gist of I B Code. The Resolution Plan is not a sale/an auction/not recovery/not liquidation. No one is selling or buying the Corporate Debtor through Resolution Plan. It is resolution of the Corporate Debtor as going concern. The Code permits liquidation only on failure of CIRP. Indeed, the I B Code, does not permit Liquidation of a Corporate Debtor . Undoubtedly, the recovery bleeds the Corporate Debtor to Death . But the Resolution endeavours to keep the Corporate Debtor alive. Significantly, Satisfaction of the Adjudicating Authority is a condition precedent for the approval of a Resolution Plan. Section 12 of the Code provides that the CIRP shall be completed within the period of 180 days etc, from the date of admission of application and further that process is to be completed within 330 days provided in the statute. Initiation of CIRP - HELD THAT:- A Financial Creditor may initiate the CIRP under section 7 of the Code by filing application before the Adjudicating Authority as per the procedure prescribed, when the default had occurred. The occurrence of default is the pivotal point of commencement of CIRP. An application will be admitted when the Adjudicating Authority is satisfied that among other things the default had occurred and the application was complete. Admission Acknowledgement - HELD THAT:- As matter of fact, in the instant case when once the Company has/had defaulted and after the initiation of legal proceedings as available to the Lender on that date (Before the Debt Recovery Tribunal) and when the Financial Creditor/Lender had obtained the order(s) in the Original Applications and later recovery certificates were issued, and when the Original Applications filed before the Debt Recovery Tribunal(s) had attained finality, thereafter it is for the Lender/Financial Creditor/Decree Holder as matter of Election to pursue the recovery mechanism for his/its personal benefits before a competent forum or to initiate Insolvency Proceedings for the benefit of stakeholders and one and all . In the event of the Decree Holder/Lender/Financial Creditor has/had resorted to the initiation of Insolvency Proceedings under relevant section of the I B Code (after coming into force of the Code) he/it cannot be found fault with, since there is no fetter in Law , in this regard. The instant case there is a Financial Debt which is due and payable by the Corporate Debtor . Moreover, as against the Corporate Debtor/Totem Infrastructure Limited, orders were passed by the Debt Recovery Tribunal(s) and the three Recovery Certificates dated 17.10.2017, 04.08.2017 and 08.09.2015 clearly establish the factum of Financial Debt, due and payable, and that default being committed by the Corporate Debtor . To put precisely, the onus of proving the debt and default on the part of the First Respondent/Bank in the instant case, has been duly discharged. Application dismissed.

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• 2021 (6) TMI 940
  Revival of company - working of the Company as a going concern - adverse effect on release from the liquidation - Regulation 32 of the Liquidation Process Regulations - HELD THAT:- Since the Liquidator has already accepted the bid for Rs. 15.30 Crores and the auction sale of the Corporate Debtor as a going concern is completed on 18.03.2021, no specific order or ratification of the sale is required. The action of the Liquidator is in accordance with the relevant provisions of the Code and consequences thereof would follow according to law. Reiteration by the Tribunal is neither contemplated nor necessary - The promoters are permitted to restructure the Capital account as prayed for. The Liquidator shall distribute the sale proceeds as per Section 53 of the Code - since already the purchase consideration is paid by the Applicants, the Applicants shall not have any more liability as far as the debts of the Corporate Debtor are concerned. The existing share capital of the Corporate Debtor shall stand extinguished - the Applicants are required to approach the Authorities concerned for exemptions, if any, and the said Authorities will decide the issue in accordance with the law.

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• 2021 (6) TMI 937
  Maintainability of application filed u/s 333 of the Companies Act, 2013 - Applicant claiming tenancy of a shop room at the ground floor of the premises - disclaimer of the premises at No. 15, Lindsay Street, Police Station-New Market, Kolkata 700087 in favour of the applicant - HELD THAT:- This is ostensibly on the ground that onerous covenants supposedly are attached to the property. We are not required to go into the veracity of the commission agreement dated 13.11.2014. However, even from a bare reading of the commission agreement of 13.11.2014, which is the basis of such claim, there is nothing that can be attributed to the property itself, even if the commission agreement is taken at face value. It only casts a burden on the corporate debtor to make payments- that too if the commission agreement is otherwise sustainable in law - the prayer of the applicant for disclaimer of onerous covenants is hereby rejected. Seeking order declaring that the premises at No. 15, Lindsay Street, Police Station-New Market, Kolkata 700087, is outside the scope of moratorium of the corporate debtor - HELD THAT:- While section 14 of the Insolvency Bankruptcy Code, 2016, is a broad-spectrum moratorium prohibiting all kinds of action against the corporate debtor, section 33(5) confines itself only to initiation of legal proceedings by or against the corporate debtor. The proviso to section 33(5) makes it clear that the liquidator may institute a suit or legal proceeding for and on behalf of the corporate debtor, after obtaining the prior approval of the Adjudicating Authority. There is no bar engrafted into section 33(5) which prohibits continuation of any pending suits or legal proceedings - In the present case, since the applicant has also instituted civil proceedings for various reliefs both in the Hon ble Calcutta High Court as well as in the city civil court, there is no need for this Adjudicating Authority - this point was rejected. Disbursement of claim admitted by the liquidator - HELD THAT:- This is not permissible until the liquidator process itself comes to an end. Therefore, this prayer is rejected. Seeking direction to respondents to refund the amount collected from Vidhan Fashions on each and every month - HELD THAT:- This prayer cannot be granted without determining the issue of ownership and possession of the property. Since that issue is sub judice before the Hon ble Calcutta High Court and the city civil court, this prayer is rejected. Seeking direction to respondents to pay commission fee to the applicant - HELD THAT:- Since the claim of the applicant has already been adjudicated and admitted in full, all that is required to be done at this stage is to sit back and wait for the liquidation process to be completed, at the end of which disbursement will take place in accordance with law. Therefore, this prayer is rejected as premature at this stage. Seeking order directing the respondents to give back vacant peaceful and actual khas possession of the said premises - HELD THAT:- This Adjudicating Authority had considered application bearing IA No. 138/2021, in which an order dated 12.04.2021 was passed. It was directed that in view of contesting claims made regarding ownership and possession, the liquidator shall hand over physical possession of the premises to the person from whom the corporate debtor took possession, since the corporate debtor was not the owner of the premises. Accordingly, the liquidator has since handed over possession to Mr. Anil Arora, the applicant herein - Prayer has become infructuous. Seeking direction to the liquidator for service of a copy of the application filed by the liquidator, and for an opportunity to be given to the applicant to file appropriate reply therein - HELD THAT:- The liquidator is the applicant in that application, and therefore, the dominus litus - This prayer in the present application is, therefore, refused. Application disposed off.

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• Service Tax

• 2021 (6) TMI 956
  Validity of SCN - challenge on the ground that as per Section 73(4B) of the Finance Act, 1994, the period given for passing the order has expired - Section 73(4B) of the Finance Act, 1994 - HELD THAT:- The learned counsel for the respondents tried to justify the delay. The issue has yet not been raised before the Authority and otherwise could have been after a notice for hearing. Accordingly, it is found appropriate to first relegate the petitioner to the Authority concerned where he can raise the objection in reference to Section 73(4B) of the Act, 1994. On raising such objection within one month, the Authority concerned is directed to first decide the issue in reference to Section 73(4B) of the Act. 1994. The decision of the issue would be by a speaking order and without bias. Petition disposed off.

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• 2021 (6) TMI 953
  Valuation - Business Auxiliary Services - services received from foreign commission agents - CBEC circular no. 11/2009-ST dated 23/11/2009 - benefit of N/N. 18/2009-ST dated 07.07.2009 - HELD THAT:- The appellant was engaged in receiving services of documentation and registration from a foreign entity. The said services do not make the foreign entity a Commission Agent in terms of the above definition. Therefore, the very foundation of the allegation that service provider is Commission Agent is misplaced in far as the first issue is concerned. It is seen that even Order in appeal in para 6.3 practically reiterates the findings of the Order in original. The argument that the activity undertaken by an entity abroad for the purpose of documents and registration before Foreign Regulatory Authority can be terms as activity of Commission Agent is misplaced. Consequently, demand under 4 ST/12282/2018 the heading of Business Auxiliary Services cannot be sustained and the same is set aside. The impugned notice instead of granting the benefit of exemption of service tax to the extent of 1% of the free on board value of export goods, grants the exemption to service tax on the 1% of free on board value of export goods to the Commission. It is seen that the notification is very clear. The exemption is granted to Service Tax to the extent of the 1% of the free on board value of the export goods. The same has been amply clarified by the CBEC circular no. 11/2009-ST dated 23/11/2009 in para 3. Demand set aside - appeal allowed - decided in favor of appellant.

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• 2021 (6) TMI 947
  Refund of service tax paid - effect of subsequent exemption - denial on the ground that since the output services are exempted in terms of Rule 6, the appellant is not entitled for refund on the Service Tax paid by utilizing Cenvat Credit on input services - principles of natural justice - HELD THAT:- In the exactly identical issue, this Tribunal has considered the case of SHANTI CONSTRUCTION CO VERSUS C.C.E. S.T. -RAJKOT [ 2021 (6) TMI 673 - CESTAT AHMEDABAD] where it was held that in the present case there is no dispute in availment of Cenvat credit at the time of receipt of input service. Therefore, subsequent exemption by virtue of section 102 of Finance Act, 1994 will not make disentitle the appellant from the said Cenvat credit. Principles of unjust enrichment - HELD THAT:- It is established that the appellant themselves have discharged the liability of Service Tax and the same has not been passed on to any other person. Therefore, the refund has passed through the test of unjust enrichment. Appeal allowed - decided in favor of appellant.

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• 2021 (6) TMI 921
  Levy of Service Tax - construction of residential complex services for the period October, 2010 to March, 2014 - advance maintenance charges - club membership charges - amount received on account of cancellation of booking for the period October, 2010 to March, 2012. Construction of residential complex services for the period October, 2010 to March, 2014 - HELD THAT:- It is not in dispute that the constitutional validity of Service Tax on construction of residential complex service has been challenged before the Hon ble Bombay High Court and the Hon ble Bombay High Court vide its judgment reported as MAHARASHTRA CHAMBER OF HOUSING INDUSTRY AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [ 2012 (1) TMI 98 - BOMBAY HIGH COURT] upheld its validity. Now the issue is pending before the Nine Member Bench of the Hon ble Supreme Court - the issue is remanded to the adjudicating authority for decision on merit on the basis of outcome of the judgment to be delivered by Nine Member Bench of the Hon ble Apex Court. Advance maintenance charges - Club membership charges - HELD THAT:- It is categorically stated that they can establish before the adjudicating authority about the utilization of the said charges collected for the purpose mentioned in the respective agreement entered with the purchasers as per Maharashtra Ownership of Flats Act, 1963. Prima facie, we find force in the contention of the learned C.A. for the appellant. Therefore, to examine the evidences claimed to have been placed earlier and that would be placed as and when asked by the adjudicating authority to establish the fact of utilization of other charges as per the Act, the matter needs to be remanded to the adjudicating authority for scrutiny of the evidences. Amount received on account of cancellation of booking - period October, 2010 to March, 2012 - HELD THAT:- The learned Commissioner has travelled beyond the scope of allegations labeled in the show-cause notice. There is merit in the contention of the learned AR for the Revenue. The point raised by the appellant in their reply to the show-cause notice that the amended definition of 66E(e) is not applicable to the facts of the present case, since the demand pertains to the period prior to 01.07.2012 was not considered as no specific observation in this regard has been made in the impugned order - this issue is also remanded for consideration. Appeal allowed by way of remand.

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• 2021 (6) TMI 920
  Rectification of mistake - typographical error - mistake apparent on the face of record or not - valuation of supply of consumables - HELD THAT:-This Tribunal in the appellant s own case for the earlier period 2007-08 to March, 2013 in LARSEN TOUBRO LTD. VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX NAGPUR [ 2020 (4) TMI 103 - CESTAT MUMBAI] , considering the submissions at length formulated the issue at para 4 of the order after analyzing the principles of law settled by the Hon ble Supreme Court in various judgments, held that it is very clear that the supply of consumables by the recipient does not constitute consideration to which value was required to be assigned for enhancing the gross amount charged in section 67 of Finance Act, 1994. Neither the circulars of Central Board of Excise Customs, advising the inclusion of all expenditure incurred for rendering services, nor the expansion of consideration to encompass consumables , that does not add to the assets of the provider of service, have sanction of law. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2021 (6) TMI 952
  Refund of Excise Duty - Duty was paid during investigation is amount to paid under protest or not - excess stock - S.S. Ingots - rebuttal of presumption - proof of delivery of notice - HELD THAT:- The impugned order has been passed on the presumption by the Commissioner (Appeals) that the order-in-appeal dated 28.05.2012 was served on the appellant, on the basis of evidence of despatch and the contention of the Department that such despatch was not returned back by the Post Office. It is found that the learned Commissioner have erred in making the presumption in absence of proof of delivery produced by the Department. During the relevant time as per the provisions of Section 37C(1)(a), any order passed under the Act was to be served through registered post or speed post to the person for whom it was entitled or his authorised agent with acknowledgement due or proof of delivery. Thus it was incumbent upon the Revenue to produce evidence of delivery or service which is the mandate as per Section 37C(1)(a) of the Act. In absence of proof of delivery, order dated 28.05.2012 cannot be deemed as served on the appellant, as has been held by the Hon ble Rajasthan High Court in the case of M/S RP CASTING PVT LTD VERSUS THE CUSTOM, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI AND ANR [ 2016 (6) TMI 996 - RAJASTHAN HIGH COURT] . The amount in question was collected by the Department without issue of show cause notice at the investigation stage, and further the appellant have contested the show cause notice, as well as, has been constantly in appeal pursuant to adjudication, and thus the amount in question is held to be deposited under protest ipso facto - Hon ble Madras High Court in the case of CCE, Coimbatore vs. Pricol Ltd. [ 2015 (3) TMI 735 - MADRAS HIGH COURT] has held that any amount deposited by pre-deposit or during the course of investigation, is definitely in the nature of deposit under protest . It is directed that the Adjudicating Authority to grant interest @ 12% per annum from the date of deposit till the date of refund - appeal allowed - decided in favor of appellant.

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• 2021 (6) TMI 948
  Service Tax Credit - supplementary challan issued in a case involving suppression, mis-declaration, etc. - reverse charge mechanism - Rule 9(1)(c) of the Cenvat Credit Rules, 2004 - HELD THAT:- The issue is squarely covered by the decision of Tribunal in the case of NISSAN MOTOR INDIA PRIVATE LTD. VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI [ 2019 (2) TMI 1299 - CESTAT CHENNAI] where it was held that When additional duty is paid under reassessment or on being pointed out by the Revenue then the credit of such duty paid will be admissible as Cenvat credit to the appellant under Rule 9(1)(c) of the Cenvat Credit Rules, 2004. The credit was rightly availed by the appellant and accordingly the appeal filed by the appellant is required to be allowed. Appeal allowed - decided in favor of appellant.

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• Indian Laws

• 2021 (6) TMI 958
  Dishonor of Cheque - rebuttal of presumption - preponderance of probabilities - initial burden casted against the petitioner, discharged or not - HELD THAT: -The scope of the revision petition under Sections 397/401 Cr.P.C. read with Section 482 Cr.P.C. is extremely narrow. The revisional Court is not a court of appeal and revisional Court does not substitute its own conclusion to the one arrived at by the courts below just because another view is possible unless the view taken by the courts below is perverse and contrary to law. There is no material to show that the complainant gave any order to the petitioner for supplying computers and accessories. The mere ipse dixit of the petitioner alone will not rebut the presumption. The stand of the Courts below, in disbelieving the statement of the accused/petitioner herein, does not require any interference because it cannot be said that they are perverse. The second contention raised by the petitioner that only two cheques were given for an amount of Rs. 14,50,00/- does not correspond to the receipt of Rs. 15,00,000/- and the contention that there is no receipt for Rs. 50,000/- also does not take away the initial burden on the petitioner. Two cheques for Rs. 6,50,000/- and Rs. 8,00,000/- dated 15.12.2010 and 20.12.2010 respectively have been presented and money has been withdrawn. A receipt for Rs. 15,00,000/- has been given. In the absence of any explanation at all as to why the receipt for Rs. 15,00,000/- was given it cannot be said that the petitioner has rebutted the initial presumption which is raised against him under Section 139 of the N.I. Act. The case of the petitioner that bearer cheques were given to him and that he withdrew the money and gave it back to the complainant also cannot be accepted. The petitioner has not been able to rebut the presumption under Section 139 of the N.I. Act. He has not denied his signatures in the cheque. He does not deny the fact that the receipt dated 18.12.2010 was given by him which acknowledges a sum of Rs. 15,00,000/- taken as loan. As stated above, the fact that the receipt does not show as to from whom the loan of Rs. 15,00,000/- was taken is immaterial and inconsequential for the reason that it is the complainant who has filed the receipt (CW-1/A) and cheque (CW-1/A1) which is in the name of the complainant and duly signed by the petitioner. The mere ipse dixit of the petitioner and the statement in defence under Section 313 Cr.P.C without any material does not rebut the presumption cast on the petitioner under Section 139 of the N.I. Act. Just by contending that the Income Tax Returns have not been filed or by stating that complaints have been filed by the complainant against the accused does not rebut the presumption of the petitioner even on preponderance of probabilities - Offence Section 269 SS IT Act at best makes an offence under Section 271 D of the IT Act but it does not mean that the loan of Rs. 15,00,000/- has not been given by the complainant to the petitioner herein. Two courts below have after analyzing the facts come to the conclusion that the initial burden casted against the petitioner has not been discharged - Revision petition dismissed.

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• 2021 (6) TMI 955
  Dishonor of cheque - seeking an order of injunction against the respondent in respect of money lent and advanced by the petitioner - Section 13 of The Bengal Money-Lenders Act, 1940 - HELD THAT:- Section 13 of The Bengal Money-Lenders Act, 1940, prohibits a court from passing a decree or order in favour of a money-lender in a suit filed by a money-lender for the recovery of a loan advanced, unless the court is satisfied that the moneylender held an effective licence at the time of granting the loan or advancing any part thereof. The other parts of Section 13 are not relevant for the purposes of this application. Section 2(12) of the said Act defines a loan as an advance, whether on any monetary terms or in kind, made on condition of repayment with interest and includes any transaction which is in substance a loan but does not include an advance made on the basis of a negotiable instrument as defined in the Negotiable Instruments Act, 1881, other than a promissory note as provided under sub-clause (12)(e). While both sections intend to give a protective cover to the petitioner at the time of institution of and during pendency of the suit in terms of preserving the property which would afford relief to the petitioner in real terms, there is an important distinction in the nature of the property contemplated under the provisions. Under Order XXXIX Rule 1, the property sought to be preserved is property in dispute in a suit , whereas, it is the respondent s property under Order XXXVIII Rule 5-the words used are his property following specific reference to the respondent, with intent to obstruct or delay . The distinction reinforces the need to preserve the suit property till final orders are passed in the former and to secure the petitioner for facilitating execution of a decree in the latter - The rigours of Order XXXVIII Rule 5 are not applicable in the present case, at least at this stage, simply because the petitioner is not seeking attachment of any of the properties of the respondent. All that the petitioner seeks is protection, until the matter is heard on affidavits, from its monetary claim against the respondent being rendered infructuous. There is no basis therefore to expand the contours of what the petitioner prays for and factor in attachment when a restraint, simpliciter, would do. The petitioner has established the first of the troika of a prima facie case by establishing the fact of money being lent and advanced to the respondent and the respondent acknowledging receipt of the same by making payment of the interest component to the petitioner after deducting tax at source on the said payments. The interest payments could not have been made in a vacuum but in connection with the loan given to the respondent by the petitioner. These facts are sufficient to hold that the petitioner has a prima facie case. The complete denial of the loan by the respondent in its reply dated 23rd July 2019 to the Notice of Demand of the petitioner, sets off alarm-bells calling for a measure of protection to the petitioner - The respondent s total denial supports the second and third tests of balance of convenience and irreparable injury warranting passing of a temporary injunction in favour of the petitioner. The respondent will not suffer any injury since the petitioner does not seek an order of attachment of the assets of the respondent. Having found that the petitioner has made out a satisfactory case under Order XXXIX Rule 1 of The Code of Civil Procedure, there shall be an order restraining the respondent from dealing with or disposing of, alienating or encumbering any of his immovable assets and properties without leave of the Court until the matter is finally heard out on affidavits or until further orders are passed at the instance of any of the parties before the Court - Affidavit-in-opposition to be filed within 3 weeks from date, reply within 2 weeks thereafter. List the matter after 5 weeks.

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• 2021 (6) TMI 954
  Dishonor of Cheque - no averments in the sale agreement regarding the cheque - no notice given nor take any action to get back the cheque - Section 138 of Negotiable Instruments Act - HELD THAT:- The learned Judicial Magistrate has dismissed the petition after analysing the merits of the case. It is only the duty of the buyer to check the condition of the vehicle before he purchase the car. Admittedly, the vehicle is with the petitioner till now sale agreement for the car also filed. But, there is no averments in the sale agreement regarding the cheque as stated in the petition. The petitioner neither send any notice nor take any action to get back the cheque, before the 2nd respondent had initiated action against this petitioner - Only after getting notice in the proceedings under Section 138 of Negotiable Instruments Act, he gave the complaint to police. He can very well contest the case which is pending under Section 138 of Negotiable Instruments Act, with all the above averments in the petition. He cannot prefer a private complaint against the respondents in the reasons stated in the petition. If a bare perusal of a complaint or the evidence led in support of it shows that the essential ingredients of the offence alleged are absent or that the dispute is only of civil nature or that there are such patent absurdities in evidence produced that it would be a waste of time to proceed that it would be a waste of time to proceed further, the complaint could be properly dismissed under Section 303 of Cr.P.C. In the case on hand, there is no essential ingredients of the offence alleged in the petition under Sections 406, 417, 420 r/w 109 of IPC are absent - this Court has not find any reasons to interfere with the findings of the impugned order passed by the learned Judicial Magistrate, Aabasamuthiram, Tirunelveli District. This Criminal Revision Case stands dismissed.

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