Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
July 12, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Non-compliance with the requirement of holding the mandatory pre-SCN consultation - In effect what appears to have transpired pursuant to the summons issued was a ‘consultation’ where the documents produced by the Petitioner/employees of the Petitioner were examined and questions were posed to the notices to explain many aspects of such documents. - In the considered view of the Court, the requirement of there having to be a ‘consultation’ in terms of paragraph 5.0 of the Master Circular stands satisfied in the present case - HC
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Period of limitation for filing an appeal - exclusion of time during COVID lockdown period - ex-parte order - The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences. - Petition allowed in the stipulated mutually agreeable terms - HC
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Validity of orders that were ex parte in nature - The order are ex facie, bad in law, because (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences. - HC
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Liability of make payment of GST - works contract - payment/reimbursement of the applicable GST on the amount of work executed - Works Contract executed prior to GST implementation i.e. 01.07.2017 and work of which were continued post 01.07.2017 - burden of GST on contractor alone or not? - - Public Works Department, Government of M.P., Bhopal directed to decide the representation of the petitioner - HC
Income Tax
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Nature of receipt - proceeds realized by the assessee on sale of Certified Emission Reduction Credit - assessee had earned it on the Clean Development Mechanisam in its wind energy operations - it is capital receipt and not business income - HC
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Validity of assessment u/s 153A r.w.r.153C - proceedings under Section 148 of the Act admittedly lapsed - the lack of jurisdiction was not established by the petitioners - The date of search for the proceedings under Section 153C of the Act in the present case, is 28.11.2019, on which date, the reopening proceedings under Section 147 of the Act was pending. Thus, the said proceedings stood abated on initiation of assessment / reassessment proceedings under Section 153C of the Act on 16.12.2019. Under these circumstances, it cannot be construed as a lapse. It stood abated pursuant to the Proviso clause to Section 153C of the Act. Thus, the ground of legal malice is not established by the petitioners - HC
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Late filing fee u/s. 234E - intimation u/s 200A - Late filing of TDS returns / statement - when there are conflicting decisions, the view taken in favour of the assessee should be followed, the impugned order passed by the ld. CIT (A) confirming the late fee levied by the AO u/s 200A read with section 234E as the defaults are prior to 01.06.2015, is not sustainable in the eyes of law, hence fee levied u/s 234E is ordered to be deleted - AT
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Validity of 158BD proceedings - prior to 04.09.1997, i.e., the date on which jurisdiction u/s 158BD was assumed, the books of account were not handed over to the assessee. - Since the AO in the instant case has taken recourse to section 158BD before receipt of the seized material, therefore, the 158BD jurisdictional conditions cannot be said to have been met. Therefore, the entire proceedings u/s 158BD/143(3) are vitiated and, therefore, such 158BD proceedings which are not in accordance with the law are quashed - AT
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Reopening of assessment u/s 147 - Reasons are required to be read as they were recorded by the AO. And that the AO himself must also speak through his reasons and should not keep and also seek through his reasons and should not be an assessee guessing for the same. CIT(A) has rightly accepted the assessee's legal arguments challenging validity of the impugned reassessment. - AT
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Addition u/s 56(2)(viib) - excess premium collected on issue of equity shares from resident individuals - assessee is a recognized startup from DPIIT, Ministry of Commerce & Industry, Govt. of India and hence, it is outside scope of the provisions of section 56(2(viib) of the Act, in respect of consideration received for issue of shares at premium. The learned CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer. - AT
Customs
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Validity of adjudication of SCN after a long gap, i.e. 12 years - SCN has been issued on 14.05.2009 and is pending till date with finalization of proceedings as contemplate under Section 28 of the Customs Act, 1962 - The counter filed by the revenue does not reveal any circumstances, which would justify the elapse of time from 2009 till date, of more than twelve years to keep the proceedings pending. The normal defence offered is that the issue has been transferred to the call book. Even this defence has not raised in this case. The explanation offered, to the effect that there was a change in incumbent officer is hardly acceptable. - HC
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Suspension of Customs Broker License - It is true that suspension is required only in cases where the Commissioner feels the need for immediate action. But this assessment of need for immediate action should be based on prima facie view about the role played by the Customs Broker. Had the Commissioner suspended the license of the Customs Broker as soon as the alleged illegal export was suspected, such an action would not have been sustainable because the appellant was not the exporter but had only facilitated filing of export documents. - this is merely an order of suspension of license and the appellant has full opportunity to explain his case and put forth his defence in the proceedings for action under Regulation 14 of CBLR, 2018 which are already in process - AT
Indian Laws
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Dishonor of Cheque - insufficiency of funds - grant of 20% of the amount as interim compensation - Section 143A of the Act, 1881 - From perusal of provisions of the Act, 1881 considering the aims behind object of the Act, 1881, it is concluded that the amendment in Section 143A of the Act, 1881 is mandatory in nature, therefore, the learned Judicial Magistrate First Class has rightly passed the order of interim compensation in favour of the respondent and has not committed any irregularity or illegality in passing such order. - HC
Service Tax
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Refund of service tax - booking of flat cancelled - Time Limitation - There are no doubt the service tax was deposited by the appellant on 4th October, 2016 and 24 October, 2016 and the refund claim has been filed on 7th May, 2018 which is absolutely beyond one year from the date of deposit. - the date of adjustment in the present case is the date when the money received by appellant need to be refunded alongwith the amount of service tax. - The period of one year, in the given facts and circumstances, shall reckon from 15.10.2017 when appellant returned the amount of sale consideration - The refund claim filed on 7th May, 2018 therefore, stands very much within the period of one year - AT
Central Excise
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Refund of excess amount of Duty and interest paid - principles of unjust enrichment - The refund here, in this case, is claimed for a few years only and just by referring to one year’s Books of Account, it cannot be concluded that the expenditure having not been carried forward, the same is not considered as a receivable. In any case, nothing turns in so far as taxation is concerned on a mere accounting treatment. - AT
VAT
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Validity of reassessment order passed u/s 39(2) of the Karnataka Value Added Tax - barred by limitation or not - It is pertinent to note that Section 40(2) of the Act applies to a case of a dealer who is unregistered and who has not paid taxes and has fraudulently failed to pay tax which results in punishment under Section 79 of the Act - the condition precedent for invocation of Section 40(2) of the Act have not been fulfilled in the case of the respondent and hence, the aforesaid provision does not apply to the case of the respondent. - the proceeding has to be held to be barred by limitation in view of the period of limitation prescribed under Section 46(1) of the Act. - HC
Case Laws:
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GST
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2021 (7) TMI 400
Classification of goods - Gomaya Samidha - applicability of S. No. 108 of N/N. 2/2017 Central Tax Rate dated 28th June, 2017 or S.No. 113 of N/N. 2/2017 - Central Tax Rate dated 28th June, 2017 - HELD THAT:- Sub-heading 31010099 may cover organic manure. Manures are plant and animal wastes that are used as sources of plant nutrients. They release nutrients after their decomposition. Manures are the organic materials derived from animal, human and plant residues which contain plant nutrients in complex organic forms. Naturally occurring or synthetic chemicals containing plant nutrients are called fertilizers - cowdung mixed with herbs being organic manure is more suitably covered under sub-heading no. 31010099 meant for 'Others' of the said chapter heading 3101. 11. Whether Gomaya Samidha is exempt from levy of GST in terms of S. No. 108 of N/N. 2/2017 - Central Tax Rate dated 28th June, 2017 or in the alternative in terms of S.No. 113 of N/N. 2/2017 - Central Tax Rate dated 28th June, 2017? - HELD THAT:- The mixture of cowdung herbs is merely not a cowdung but an Organic Manure by its texture. Since it is an organic manure having natural nutrients hence can be used for various purpose and not only as fertilizer. Therefore Gomaya Samidha is not covered under Sl.No.108 of chapter heading 3101 of Exemption Notification no.2/2017-Central Tax(Rate) dated 28.06.2017 being a branded item - The subject product i.e. Gomaya Samidha is made from cowdung herbs which are definitely not a kind of wood, hence also not exempt under si.no.113 of the aforesaid notification. Whether the Subject Goods i.e. Gomaya Samidha is leviable to GST @5% in terms of S. No. 182 of Schedule I to Notification No.1/2017 - Central Tax Rate dated 28th June, 2017? - HELD THAT:- As per description of S.No.182, it is observed that this entry covers all the goods of chapter heading no.3101 i.e. animal or vegetable fertilisers or organic fertilisers put up in unit containers and bearing a brand name - Gomaya Samidha is nothing but organic manure or natural organic fertilizer as it has all the natural nutrients for agriculture. The applicant also intends to supply it in unit containers with brand name Gomaya Samidha - Patanjali Ayurved ka utpad . Therefore, aforesaid entry no. 182 is more suitable to cover the subject goods and accordingly liable to be taxed under this entry. Whether the Subject Goods i.e. 'Gomaya Samidha' is leviable GST @5% in terms of S. No. 263A of Schedule I to N/N. 1/2017-Central Tax Rate dated 28th June, 2017? - HELD THAT:- The applicant is separately supplying their two products viz. Patanjali Astha Hawan Samagri Patanjali Divya Hawan Samagri where no brand name is mentioned as these products are being supplied in the name of Hawan Samagri as is commonly known in the trade which any other manufacturer can supply. But the applicant has not described Gomaya Samidha as Hawan Samagri except that they have printed a picture of two saints like persons performing Yajna just to give the impression that it is for Hawan or Yajna purpose. Further, in common parlance, cowdung is known as organic fertilizer and not Hawan Samgri. Ssince cowdung is a waste of animal and understood as manure in trade by the dealer and consumer as well., hence supplying it in a unit container does not make it Hawan Samgri. Technically cowdung is animal waste and in ordinary meaning it is known as manure in common parlance. If the applicant intends to supply cowdung as Hawan Samagri even then it does not become Hawan Samagri. For the purpose of Hawan or Yajna, public at large will definitely search for only Hawan Samagri and not cowdung - Gomaya Samidha, Patanjali Ayurved ka Utpad is not leviable to GST @5% in terms of S. No. 263 A of Schedule I to Notification No. 1/2017 Central Tax (Rate) dated 28th June, 2017 as the same is not covered under this entry. Thus, Gomaya Samidha - Patanjali Ayurved ka Utpad is leviable to GST @5% in terms of S. No. 182 of Schedule 1 to Notification No. 1/2017 - Central Tax (Rate) dated 28th June, 2017 as the same is covered under this entry.
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2021 (7) TMI 398
Penalty under Section 129(1)(b) of CGST Act - petitioners submits that at best liability of petitioner to pay tax and penalty would arise under Section 129(1)(a) and that the Authority has erroneously imposed penalty treating it to be a matter under Section 129(1)(b) - HELD THAT:- In view of the fact that GST Tribunal has not yet been constituted, the present writ petition is entertained. Matter requires consideration - respondents are accorded four weeks' time to file response in the matter. The rejoinder affidavit, if any, may be filed within one week thereafter.
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2021 (7) TMI 396
Non-compliance with the requirement of holding the mandatory pre-SCN consultation in terms of the Master Circular dated 10th March 2017 of the Department of Revenue, Central Board of Excise and Customs - numerous summons issued but Department had not yet the issues or the demand to be raised in the SCN - HELD THAT:- The purpose of paragraph 5.0 of the Master Circular is only that there should be trade facilitation and voluntary compliance in order to reduce the necessity of issuing a SCN. At the stage where numerous summons were issued to the Petitioner and to its Director, the Department had not yet the issues or the demand to be raised in the SCN. In effect what appears to have transpired pursuant to the summons issued was a consultation where the documents produced by the Petitioner/employees of the Petitioner were examined and questions were posed to the notices to explain many aspects of such documents. In the considered view of the Court, the requirement of there having to be a consultation in terms of paragraph 5.0 of the Master Circular stands satisfied in the present case - the Court is therefore not inclined to interfere at the present stage of the SCN. Petition disposed off.
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2021 (7) TMI 395
Seizure of goods alongwith vehicle - E-way bill in the State of Uttar Pradesh, not produced - Effect of N/N. 1359 dated 20.09.2017 - HELD THAT:- Reliance placed in the case of M/S. HARLEY FOODS PRODUCTS PVT. LTD. VERSUS STATE OF UP AND 3 OTHERS [ 2018 (11) TMI 704 - ALLAHABAD HIGH COURT] where it was held that after issuance of notification no. 177 dated 06.02.2018, the notification no.138 dated 30.01.2018 was rescinded which made effective notification no.1359 (4th Amendment) to GST Rules, 2017 with effect from 01.02.2018 and the effect and operation of the notification no.1359 dated 20.09.2017 stands rescinded. Learned Standing Counsel prays for and is accorded three weeks time to file response in the matter. Rejoinder affidavit, if any, may be filed within a week. List this matter on 11th August, 2021.
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2021 (7) TMI 391
Period of limitation for filing an appeal - exclusion of time during COVID lockdown period - ex-parte order - opportunity of hearing not provided - violation of principles of natural justice - HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, we form an opinion that the order is bad in law. This is for two reasons- (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences. Petition disposed off.
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2021 (7) TMI 390
Validity of orders that were ex parte in nature - no opportunity of hearing provided - violation of principles of natural justice - HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie , an opinion is formed that the order is bad in law. This is because of two reasons- (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences. Petition disposed off.
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2021 (7) TMI 384
Liability of make payment of GST - works contract - payment/reimbursement of the applicable GST on the amount of work executed - Works Contract executed prior to GST implementation i.e. 01.07.2017 and work of which were continued post 01.07.2017 - burden of GST on contractor alone or not? - HELD THAT:- It is deemed proper to direct the respondent No.1- Principal Secretary, Public Works Department, Government of M.P., Bhopal to decide the said representation which will be filed by the petitioner by a speaking order after providing opportunity of hearing to the representative of the petitioner within a period of three months from the date copy of this order is produced before him. Writ petition disposed off.
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2021 (7) TMI 382
Validity and vires of the Notification dated 1st May, 2021 - Levy of IGST - import of Oxygen Concentrators - import for personal use due to COVID-19 till 30th June, 2021, even when such goods are imported as Gift i.e. free of cost - HELD THAT:- The Learned Advocate appearing for the Petitioner further submits that there are Notifications issued by the State of Haryana as well as Gujarat whereby the IGST refund mechanism is provided for with regard to the Concentrators imported free of cost. The Learned Advocate appearing for the Petitioner therefore seeks to amend the Writ Petition and rely upon the said Notifications issued by the State of Haryana as well as Gujarat, which according to him will support the prayers in the above Writ Petition - The Advocate for the Petitioner is also desirous of impugning the Notification dated 3rd May, 2021 (Exhibit-B to the above Writ Petition). The Learned Advocate appearing for the Petitioner is allowed to amend the above Writ Petition. Amendments to be carried out within a period of one week from today. Reverification is dispensed with. Stand over to 7th June, 2021.
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Income Tax
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2021 (7) TMI 397
Nature of receipt - proceeds realized by the assessee on sale of Certified Emission Reduction Credit - assessee had earned it on the Clean Development Mechanisam in its wind energy operations - revenue or capital receipt - HELD THAT:- As decided in S.P. SPINNING MILLS PVT. LTD. [ 2021 (1) TMI 1081 - MADRAS HIGH COURT] Carbon Credit is not an offshoot of business, but an offshoot of environmental concerns. No asset is generated in the course of business, but it is generated due to environmental concerns. It was also found that the carbon credit is not even directly linked with the power generation and the income is received by sale of the excess carbon credits.Thus it is capital receipt and not business income. - Decided in favour of assessee.
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2021 (7) TMI 393
Validity of assessment u/s 153A r.w.r.153C - proceedings under Section 148 of the Act admittedly lapsed - Addition of Capital gain arising out of a sale of land - HELD THAT:- The recourse u/s 153A and Section 153C is a special procedure that gets triggered upon receipt of incriminating material post any search or requisition. The normal course of assessment and reassessment is fundamentally altered when a search or requisition takes place under Section 132/132A and the moment, the seized materials are received by the Assessing Officers, the special procedure laid out under Section 153A or Section 153C shall come into effect. The use of the non-obstante clause coupled with the abatement mechanism contained in the provisions makes it clear that the legislative intent was for Assessing Officers to proceed only under Section 153A or Section 153C upon receipt of material seized or requisitioned. This special procedure is a derogation from the regular procedure for assessment or reassessment and only some immunity has been carved out for completed assessments. Therefore, the concerned jurisdictional Assessing Officer, upon receipt of material seized or requisitioned, can only proceed under Section 153A or 153C and they cannot proceed with any other pending assessment or proceeding This Court is of an opinion that the scope of Section 147/148 and Section 153A and 153C are not comparable. These two sets of provisions contain different set of procedures as contemplated under the Act. This Court is of an opinion that the scope of Section 147/148 and Section 153A and 153C are not comparable. These two sets of provisions contain different set of procedures as contemplated under the Act. In the present case, the petitioner has raised the point of no jurisdiction and the ground of legal malice. As far as the jurisdiction is concerned, this Court is of an opinion that the lack of jurisdiction was not established by the petitioners. The application and implications of Section 153C of the Act was questioned - this Court is of an opinion that no malafide or lack of jurisdiction is identifiable nor established and thus, the point raised in this regard stands rejected. Thus, the judgments relied upon in this regard are of no avail to the petitioner u/s 147 proceedings were initiated for a particular Assessment Year and only after invoking Section 153C, the Assessing Officer could able to prepare Satisfaction Note and 5 assessment years are reopened. If at all, the petitioner is disputing the actions in this regard, he has to defend his case before the competent authority in the manner known to law. Such an adjudication with reference to the transactions, seizure and impounded materials cannot be undertaken by the High Court under Article 226 of the Constitution of India. It is for the assessee to defend his case before the competent authority by submitting the documents and evidences and establish his case both based on the provisions of the Act and on facts. At the stage of Show Cause Notice, High Court would not enter into the venture of conducting an adjudication of disputed facts. It is the duty of the fact finding authority to adjudicate the facts and arrive a conclusion. Under these circumstances, the ground of legal malice is not established by the petitioners, so as to set aside the impugned Show Cause Notice. This Court has considered the procedures contemplated under the Act. However, the disputed facts are to be adjudicated. In the present case, the petitioner is the such other person . The Satisfaction Note along with the relevant materials from the Assessing Officer of M/s.Agni Estates and Foundations Private Limited was received on 28.11.2019 by the third respondent under Section 153C of the Act as the Assessing Officer of the petitioner assessee / other person. The date of search for the proceedings under Section 153C of the Act in the present case, is 28.11.2019, on which date, the reopening proceedings under Section 147 of the Act was pending. Thus, the said proceedings stood abated on initiation of assessment / reassessment proceedings under Section 153C of the Act on 16.12.2019. Under these circumstances, it cannot be construed as a lapse. It stood abated pursuant to the Proviso clause to Section 153C of the Act. Thus, the ground of legal malice is not established by the petitioners The authority competent must be allowed to scrutinize the searched and impounded materials and provide an opportunity to the assessee to defend their case. Such an adjudicatory process alone would provide justice to the parties to the lis and therefore, this Court is not inclined to interfere at the stage of 'show cause notice' as far as the present writ petitions are concerned. The factual controversies and intricacies involved are to be adjudicated elaborately for the purpose of culling out the truth and such an adjudication is the dictum of law and thus, this Court has opined that interference at this stage would cause prejudice to the due process of law to be undertaken by the authorities. Thus, the respondents are directed to proceed with the assessment / reassessment by following the procedures as contemplated and by affording opportunity to the petitioners and complete the same as expeditiously as possible. WP dismissed.
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2021 (7) TMI 381
Penalty u/s.271(1)(c) - Defective notice u/s 274 - not struck-off the irrelevant portion - HELD THAT:- AO had not specified the specific offence committed by the assessee by stating as to whether the assessee has concealed his particulars of income or had furnished inaccurate particulars of income - As relying on MR. MOHD. FARHAN A. SHAIKH case [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] we hold that the penalty levied by the ld. AO for both the assessment years is hereby directed to be deleted. - Decided in favour of assessee.
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2021 (7) TMI 380
Assessment u/s 153A - Addition u/s 68 on unexplained share capital and premium - search was conducted on another assessee - HELD THAT:- The case before us is there is no material found pertaining to the assessee in search on third party. As no incriminating documents are found during the course of search - we do not agree with the contentions of the revenue that share certificates in the name of Response Overseas Private Limited and Raj Nand Hela along with the transfer forms pertains to the assessee company. The Hon ble Supreme Court in CIT vs Sinhgad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] clearly held that in case of the person other than searched person, concluded assessment can be tinkered with only if incriminating material is found in those assessment years. Therefore, in the present case it is apparent that no incriminating material found during the course of search and therefore, the concluded assessment year i.e. 2009-10 cannot be tinkered with. As already held that share certificates as well as the share transfer forms found during the course of search on AKruti Hotels Ltd does not pertain to the assessee and therefore same can also not be an incriminating material, which has a bearing on the income of the assessee. Thus, there cannot be any addition in the hands of assessee on this count. In view of this, the ground raised by the assessee by invoking Rule 27 of ITAT Rules succeeds. In the result, on this issue the appeal of the department fails. The issue on the merits of the case with respect to the addition u/s 68 of the Act is left open.
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2021 (7) TMI 377
Penalty u/s 271AAA - earning undisclosed income - payment of taxes together with interest, if any, in respect of undisclosed income - HELD THAT:- We are of the considered view that the assessee has paid taxes along with interest in due time in accordance with the provisions contained under section 271AAA(2)(iii) of the Act thus the penalty sustained by the ld. CIT (A) is liable to be deleted. However, payment of due taxes along with interest are subject to verification by the AO. Appeal filed by the assessee is allowed
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2021 (7) TMI 376
Late filing fee u/s. 234E - intimation u/s 200A - Late filing of TDS returns / statement - contention that fee u/s 234E is not leviable before 01.06.2015, i.e., the date when clause (c) was inserted in section 200A(1) for the computation of the said fees at the time of processing - conflicting decisions by different High Courts - HELD THAT:- Identical issue has been examined in the case of Supreme Brahmaputra (JV) [ 2020 (9) TMI 289 - ITAT DELHI ] when there are conflicting decisions, the view taken in favour of the assessee should be followed, the impugned order passed by the ld. CIT (A) confirming the late fee levied by the AO u/s 200A read with section 234E as the defaults are prior to 01.06.2015, is not sustainable in the eyes of law, hence fee levied u/s 234E is ordered to be deleted. Consequently, the appeal filed by the assessee is allowed.
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2021 (7) TMI 375
Penalty u/s 271(1)(c) - defective notice u/s 274 - non recording of valid satisffaction - HELD THAT:- AO has not recorded a valid satisfaction and has also issued invalid notice u/s 271(1)(c) / 274 of the Act, the entire penalty proceedings are vitiated and not sustainable in the eyes of law. Not only this, AO while recording the satisfaction for initiation of penalty proceedings stated that he has furnished inaccurate particulars of income whereas he has levied the penalty for concealment of particulars of income. So, the entire exercise as to initiating the penalty proceedings and levying the penalty are without application of mind, hence not sustainable. Even otherwise, AO by disallowing the prior period expenses has not taken into account the benefit of amnesty scheme taken by the assessee from the Electricity Department. Even AO has not disputed genuineness of expenses claimed by the assessee rather disallowed the same by taking a different view which does not attract the provisions contained u/s 271(1)(c) - We are of the considered view that initiating penalty u/s 271(1)(c) of the Act on the basis of vague and ambiguous notice is not sustainable in the eyes of law - Decided in favour of assessee.
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2021 (7) TMI 373
Deduction u/s 54 - investment in an under construction flat - Admission of additional evidence - HELD THAT:- Additional evidences as submitted by the assessee are in the shape of allotment letter dated 28/03/2014 and agreement dated 30/03/2016. These documents shall have material bearing to ascertain the assessee s claim of deduction u/s 54. Therefore, these evidences ought to have been admitted. Keeping in view the arguments made before us, we direct Ld. CIT(A) to admit the additional evidences and re-adjudicate the issue of deduction u/s 54 in the light of these evidences as well as factual matrix on record. Assessee appeal allowed for statistical purposes.
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2021 (7) TMI 372
Validity of 158BD proceedings - date on which jurisdiction u/s 158BD was assumed - HELD THAT:- We find from the letter from the AO of the searched person to AO of the assessee dated 26th August, 1997, it was requested to take over the books of account for the purpose of section 158BD. We find, the AO of the searched person, vide letter dated 26th February, 1998 to the ACIT, Inv. Wing, Faridabad, had handed over the books of accounts pertaining to the assessee which otherwise shows that prior to 04.09.1997, i.e., the date on which jurisdiction u/s 158BD was assumed, the books of account were not handed over to the assessee. We find in the case of Manish Maheshwari vs. ACIT Anr. [ 2007 (2) TMI 148 - SUPREME COURT ] has observed that before the provisions of section 158BD of the IT Act, 1961 are invoked against a person other than the person whose premises have been searched u/s 132 or documents and other assets have been requisitioned u/s 132A, the conditions precedent have to be satisfied. One of the conditions is that the books of account or other documents or assets seized or requisitioned have to be handed over to the AO having jurisdiction on such other person and, thereafter only the AO has to proceed u/s 158BD against such person. Similar view has been taken in various other decisions relied on by the ld. Counsel. Since the AO in the instant case has taken recourse to section 158BD before receipt of the seized material, therefore, the 158BD jurisdictional conditions cannot be said to have been met. Therefore, the entire proceedings u/s 158BD/143(3) are vitiated and, therefore, such 158BD proceedings which are not in accordance with the law are quashed. - Appeal filed by the assessee is allowed.
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2021 (7) TMI 369
Depreciation on JCB, Trucks - @15% OR 30% - AO allowed depreciation @15% holding that the assessee does not run the business of vehicles on hire - HELD THAT:- After perusal of 3rd proviso to Section 32(1)(ii) of the Income Tax Act, 1961, it can be seen that the said Section is not applicable in the present case of the assessee as the assessee is not running business of hiring of commercial vehicles - an admitted fact that the assessee is using trucks and JCB etc. for its own business. Besides this the Annexure I has also given the categories under which the 30% of depreciation is allowed. But assessee's case does not fall in that category as well, as the present assessment year before us is 2014-15. CIT(A) as well as the Assessing Officer has rightly restricted the claim of depreciation to that of 15%. - Decided against assessee.
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2021 (7) TMI 368
Penalty u/s 271(1)(c) - Assessment was completed under section 143(3) read with section 153A by making addition on account of Short Term Capital Gain (STCG), addition as Long Term Capital Gain (LTCG) and addition on account of Income from Other Sources - HELD THAT:- There is no dispute that a search action was carried out on the assessee group on 05.03.2013. The assessee disclosed additional income during the search. The assessee while filing return of income in response to the notice under section 153A disclosed the capital gain on 31.03.2014. The last date for filing return of income under section 139(4). The additional income declared by the assessee was offered and accepted by the assessing officer without any variation. The assessing officer levied penalty by invoking the Explaination-5 of section 271(1)(c) and levied penalty @ of 100% of tax sought to be evaded. The ld. CIT(A) deleted the entire penalty by taking view that the assessee the impugned income has been declared in the return of income filed in response to the notice under section 153A or under section 139(4). We affirm the order passed by ld CIT(A) - Appeal filed by the revenue is dismissed.
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2021 (7) TMI 367
Penalty u/s 271(1)(c) - application of funds for charitable purposes exceeded the total receipts - depreciation claim of assessee trust - difference in the opinion on the part of the Ld.AO regarding the nature of receipt in the hands of assessee - HELD THAT:- From the facts of this case it is clear that the assessee disclosed all the particulars of his income. AO has disallowed claim without holding it to be bogus or false. Thus, the genuineness of the claim is not in question here. Hon ble Supreme Court while elaborating the scope of section 271(1)(c) in CIT vs Reliance Petroproducts Pvt Ltd[ 2010 (3) TMI 80 - SUPREME COURT] as held that by any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars - Decided in favour of assessee.
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2021 (7) TMI 366
Ex-parte appeal dismissed by CIT-A - AO completed the assessment u/s. 144 r.w.s. 147 - AO computed the Long Term Capital Gains by reducing the index cost of acquisition and brought the LTCG - claim of exemption u/s. 54 of the Act was denied for want of proof - HELD THAT:- Having regard to the fact that both the assessment as well as first appeal are decided ex parte, we deem it proper to remand the assessment to the file of the Assessing Officer for de novo consideration in accordance with law. However, the validity of the notice u/s. 148 which has already been decided by the Assessing Officer shall not be reconsidered. Assessee's appeal is partly allowed.
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2021 (7) TMI 365
Assessment u/s 153A - absence of incriminating material found or seized during the course of survey - HELD THAT:- We are dealing with an unabated assessment as on the date of search 20.10.2005 since regular assessment hereunder had already been framed on 18.11.2003. DR fails to dispute this assessment in issue as well as twin additions are nowhere based on any incriminating material found or seized during the course of search/survey. And also that the assessee had already recorded the same in its regular books of accounts which has resulted in latter disallowance. We thus quote CIT Vs. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] ; CIT Vs. Continental Warehousing Corporation [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] and CIT Vs. Salasar Stock Broking Ltd. [ 2016 (8) TMI 1131 - CALCUTTA HIGH COURT] holding that an assessment u/s. 153A framed in absence of any incriminating material found or seized during the course of survey is not valid. We adopt the very reason mutatis mutandis herein to quash the impugned assessment - Decided in favour of assessee.
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2021 (7) TMI 364
Reopening of assessment u/s 147 - Whether any fresh material or any information which gives the impression that the income of the assessee has escaped assessment? - HELD THAT:- Departmental representative fails to dispute that the AO had issued 148 notice dt. 30.3.2017 i.e. well beyond the specified period of four years from the end of the relevant assessment year of filing of the return without even indicating as to whether the assessee had not disclosed the corresponding shortfall pertaining to its turnover; fully and truly , as per 147 section first proviso. This factual backdrop the CIT(A) has rightly termed the impugned reassessment as a mere change of opinion as per hon'ble apex court land mark decision in CIT Vs. Kelvinator of India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT] . Bombay High Court decision in Hindustan Lever Ltd. Vs. ACIT [ 2004 (2) TMI 41 - BOMBAY HIGH COURT] that the reasons recorded by the Assessing Officer must state that there was failure on the part of the assessee to disclose fully and truly all material facts. Reasons are required to be read as they were recorded by the AO. And that the AO himself must also speak through his reasons and should not keep and also seek through his reasons and should not be an assessee guessing for the same. CIT(A) has rightly accepted the assessee's legal arguments challenging validity of the impugned reassessment. - Decided against revenue.
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2021 (7) TMI 362
Assessment u/s 144 - Unexplained source u/s. 69A - HELD THAT:- Assessee has closing cash balance as on 8.11.2016 at ₹ 6,42,406/-, therefore, the assessee has more cash in hand than the cash disputed by the AO at ₹ 6,31,000/-. It is not disputed that the assessment was made u/s. 144 of the Act by the AO and assessee was prevented by sufficient cause to present his case. AO has also considered the return filed by the assessee in September, 2019. Even before the Ld. CIT(A), the assessee uploaded the written submissions through online but could not upload the cash book, therefore, same could not be considered. In view of above, to meet the ends of justice, the matter requires to be restored to the file of the AO for fresh consideration on the basis of cash book and bank statement of the assessee. AO is directed to admit the cash book to be furnished by the assessee and pass denovo assessment. With these directions, the matter is restored to the file of the AO. Appeal of the assessee is allowed for statistical purposes.
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2021 (7) TMI 361
Unexplained cash credit u/s 68 - addition on account of share capital share premium - HELD THAT:- We note that assessee company has discharged its onus to prove three ingredients of section 68, namely, the identity, creditworthiness and genuineness of the share capital and share premium received by it from share subscribers companies. 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. Without doing so, the addition made by the AO is based on conjectures and surmises cannot be justified. In the facts and circumstances of the case as discussed above, no addition was warranted under Section 68 - CIT(A) has rightly deleted the addition. - Decided against revenue.
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2021 (7) TMI 359
Additions towards cash unexplained - search proceedings u/s 132 - HELD THAT:- As assessee has explained that the impugned sum was accounted and on due satisfaction only the authorised officer did not seize such sum. Therefore, the impugned addition is uncalled for. In view of the above, the addition made by the A O and sustained by the Ld. CIT(A) , without properly appreciating the facts and circumstances , is directed to be deleted and the corresponding grounds of the assessee are allowed . Undisclosed investment in jewellery found in premises of the assessee - Settlement Commission Order - HELD THAT:- When the assessee furnished a copy of the order of the Settlement Commission before the CIT(A) and pleaded that the assessee has disowned the ownership of the impugned assets and on the other hand his father, Shri. Ravi Kumar Gupta, owned them up before the Settlement Commission, which has duly considered and settled the issue, therefore, the impugned additions in the hands of assessee was opposed to law and the impugned additions are liable to be deleted and relied on relevant case law etc , the impugned direction issued to the A O by the Ld. CIT(A) without appreciating the facts and circumstances properly is not sustainable in law. We find merit in the assessee s submissions. Since Shri. Ravi Kumar Gupta owned up the assets found in various premises referred to in the order of settlement commission which included the impugned assets found in the assessee s premises and the settlement commission on due appreciation of the relevant material has accepted and settled the same in the order referred, supra, no part of the said assets could be considered for addition in the hands of the assessee - A O is directed to delete the impugned addition. Assessee s appeal is allowed.
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2021 (7) TMI 358
Addition u/s 56(2)(viib) - excess premium collected on issue of equity shares from resident individuals - HELD THAT:- We find that the CBDT, after considering hardships faced by startup companies with regard to application of section 56(2(viib) of the Act, as per Gazette Notification dated 19.02.2019, has issued clarificatory notification dated 9th August, 2019 and clarified that said notification will be applicable to startup companies also where addition u/s. 56(2(viib) of the Act has been made in an assessment order before 19.02.2019, provided the assessee has subsequently submitted declaration in Form No.2 that it has satisfied conditions mentioned. In this case, the assessee has filed Form No.2 in pursuance of para 5 of Notification dated 19.02.2019 on 23rd August, 2019 and in response, the CBDT vide its notification dated 28th August, 2019 has clarified that assessee is a recognized startup from DPIIT and further, the provisions of section 56(2(viib) of the Act shall not apply to the assessee on the amounts received as consideration for issue of shares. We are of the considered view that there is no merit in arguments of the DR that the assessee is outside scope of Gazette Notification dated 19.02.2019 and hence, share premium issued on issue of shares is covered u/s. 56(2(viib). In this view of the matter and considering facts and circumstances of the case, we are of the considered view that assessee is a recognized startup from DPIIT, Ministry of Commerce Industry, Govt. of India and hence, it is outside scope of the provisions of section 56(2(viib) of the Act, in respect of consideration received for issue of shares at premium. The learned CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer. Hence, we are inclined to uphold findings of the learned CIT(A) and dismiss appeal filed by the Revenue.
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Customs
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2021 (7) TMI 388
Validity of adjudication of SCN after a long gap - SCN has been issued on 14.05.2009 and is pending till date with finalization of proceedings as contemplate under Section 28 of the Customs Act, 1962 - HELD THAT:- It is an admitted position that the show cause notice has been issued in terms of Section 28 of the Act. Section 28(9)(a) calls for a determination of the duty of the interest under the show cause notice within a period of six months from the date of notice. This date has long passed - Section 28(9)(b) imposes a time limit of one year and Mr.Chopda argues that the aforesaid time limit was not operative at the time when the show cause notice was issued. Section 28(9)(a) however, grants time of only six months for determination of the duty and interest where it is possible for the revenue to do so. The counter filed by the revenue does not reveal any circumstances, which would justify the elapse of time from 2009 till date, of more than twelve years to keep the proceedings pending. The normal defence offered is that the issue has been transferred to the call book. Even this defence has not raised in this case. The explanation offered, to the effect that there was a change in incumbent officer is hardly acceptable. Petition allowed.
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2021 (7) TMI 378
Suspension of Customs Broker License - Regulation 16(2) of Customs Broker Licensing Regulation, 2018 - prohibition on export of fabric used to make masks - N/N. 52 (2015-20) dated 19.3.2020 - Case of Smuggling - HELD THAT:- Regulation 10 of CBLR, 2018 places various obligations upon the Customs Broker which, if not complied with, can attract revocation of license and/or imposition of penalty under Regulation 14. This is not an issue to be decided at this stage, that as the matter is in process sub-judice, before the lower authorities. Pending decision on the action under Regulation 14, the Commissioner by the impugned order has suspended the license of the Customs Broker under Regulation 16. It is the case of the appellant that this suspension can be done only when immediate action is required. It is the case of the Revenue that even before suspending the license, the Customs Officers have to investigate the alleged offence and the role, if any, played by the Customs Broker. After completion of the investigation, a Show Cause Notice was issued in the main case of attempted illegal export. In the Show Cause Notice the appellant was also a co-noticee and penalties were proposed to be imposed. This is the point at which there was sufficient material to proceed against the Customs Broker and within a week the license of the Customs Broker was suspended and the suspension was confirmed within another eight days. Therefore, there is absolutely no delay in the matter. It is true that suspension is required only in cases where the Commissioner feels the need for immediate action. But this assessment of need for immediate action should be based on prima facie view about the role played by the Customs Broker. Had the Commissioner suspended the license of the Customs Broker as soon as the alleged illegal export was suspected, such an action would not have been sustainable because the appellant was not the exporter but had only facilitated filing of export documents. There are no infirmity in the impugned order confirming suspension of the license or violation of the provisions of Regulation 16 of the CBLR, 2018 - this is merely an order of suspension of license and the appellant has full opportunity to explain his case and put forth his defence in the proceedings for action under Regulation 14 of CBLR, 2018 which are already in process - the impugned order confirming the suspension of the license of the appellant is fair and reasonable and needs no inference. The appeal is dismissed and the impugned order is upheld.
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Corporate Laws
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2021 (7) TMI 356
Scheme of Arrangement in the nature of Amalgamation - Seeking dispensation/convening of the meetings of the Unsecured Creditors, Secured Creditors and Equity Shareholders of the Applicant Companies - HELD THAT:- It appears that the present application has complied with under section 230-232 of the companies Act, 2013 and rules framed thereunder. Various directions regarding dispensation/convening of the meetings of the Unsecured Creditors, Secured Creditors and Equity Shareholders of the Applicant Companies is issued - various directions regarding issuance of various notices issued - application allowed.
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Insolvency & Bankruptcy
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2021 (7) TMI 371
Application for seeking liquidation order of the Corporate Debtor - Section 61 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- There is a difference of CoC where they are Banks and Institutional lenders as members, while the CoC in the Homebuyers are not so expert in finance and related valuations. Hence, CoC in case of the commercial organisations will have a different perspective and expertise while in case of Real Estate projects where the CoC are totally comprising of homebuyers may not have the same expertise and perspective. Although, in case of Homebuyers provisions exists for Authorised Representatives but even he cannot be equated with the expertise with the banking professional will have. We are not passing any comments on specific Authorised Representatives. While the Resolution Plan will generally provide a higher value than the liquidation value but in case of Real Estate Project may not be always feasible and homebuyers are in dire need of getting their homes at the earliest. However, in this case certain reconciliation are required that what is the actual realisable value which the homebuyers are getting whether it is below liquidation value or above liquidation value. There is a need for impleading Yamuna Expressway Industrial Development Authority (YEIDA) to ascertain status of dispute with farmers and its consequential impact, if any, on this projects - matter remanded to the Adjudicating Authority and liquidation order is set aside with a direction to review the programme in full alongwith the relevant provisions of the code and Regulations and then the Adjudicating Authority is free to pass appropriate order as they think fit and proper in accordance with law. Appeal allowed by way of remand.
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2021 (7) TMI 363
Seeking to postpone the voting on proposed Resolution Plan/CoC meeting till the time the claims of the applicants are considered by the RP - HELD THAT:- As the Members of the CoC have already voted on resolution plan, the prayer has become infructuous at this stage of the matter. Seeking direction to RP to amend the admitted amount of claim and include pre-EMI interest paid by the applicants - HELD THAT:- It is evident from the material based before us that the applicants have been provided opportunity to meet Prospective Resolution Applicants (PRAs) and place their demands. It is the purely commercial decision of the PRAs to suitably address the issue of applicants. As the Resolution Plan already approved by the CoC is yet to be filed with this Authority, the prayer made against this item is premature at this juncture. Seeking direction to RP to correct the Information Memorandum and roll out to RA's for the affected claims/Units resolution Plan and to create a separate class of Subvention Buyers - Seeking to represent the subvention buyers' agenda in CoC meetings in view of complexities and limited/lesser time for IP appointment as AR for subvention buyers - HELD THAT:- These cannot be granted for the reason that the Insolvency Bankruptcy Code does not envisage/recognize a sub-class of homebuyers within the Class of Homebuyers as Financial Creditors as prayed for by the Applicants against these points. Hence, these prayers are rejected. Seeking to direct RP to consider the claim of the buyers who had submitted an affidavit for cancellation but neither refund was made nor tripartite agreement was cancelled - HELD THAT:- The Resolution Professional are directed to consider the claim of the buyers who had submitted an affidavit for cancellation but to whom no refund was made, nor the tripartite agreement was cancelled, in respect of such buyers, the unit cancellation shall be revoked and they shall rank pari passu in relation to all other Homebuyers in class in relation to all their claims, rights and obligations etc. Application disposed off.
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2021 (7) TMI 357
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - corporate debtor has opposed the admission of this petition and prayed for its dismissal on the ground that it is ready and willing to settle this matter with the petitioner - HELD THAT:- The principal amount as claimed by the petitioner has been acknowledged by the respondent before us and has shown readiness to pay the same. Regarding the interest as claimed by the petitioner, the respondent has raised objection that there was no clause for interest in the agreement entered into between the parties. It is clear from the facts of the case that in July, 2019 the petitioner has been handed over with a cheque for the principal amount of his claim but the petitioner had rejected the same. Further, he has also refused to accept settlement offered by the respondent. The respondent has time and again acknowledged his liability and is willing to pay the entire principal amount. Hence, it is evident that the petitioner is not interested in resolving the dispute or entering into any form of a settlement agreement in the present scenario. This conduct of the petitioner puts question on the bonafides of this petition. Even though there is a debt and default on the part of the respondent, we believe that it is not the respondent who is responsible for filing or the pendency of this petition. The respondent has time and again stated that he is willing to pay the principal amount only as the amount of interest has not been mentioned in the agreement - Neither the respondent nor this Bench can deny the fact that there has been debt and default on the part of the respondent in making payment to the petitioner, but it is believed that initiating CIRP against a solvent company, as in this case is the respondent, will prejudice the company and the people associated with it and this is clearly not the objective of the Code to put a solvent company under CIRP. It will be prejudiced to the respondent if this matter is admitted and CIRP is initiated against the respondent - this petition stands dismissed.
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2021 (7) TMI 355
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - affidavit under section 9 (3) (b) of IBC 2016 filed or not - Service of demand notice - HELD THAT:- It appears that the objection raised by the corporate debtor that the operational creditor has not filed the affidavit under section 9 (3) (b) of IBC 2016 is a technical ground that is curable. The said affidavit is not mandatory unless affects the case or causes prejudice to the corporate debtor. Moreover, the reply made by the corporate debtor to the demand notice has been considered in the present application on merit, hence, such a plea of the corporate debtor has got no relevance. On perusal of the affidavit in support of the instant application, it reveals that the contents of said affidavits are clear and consist of contents required for verifying the present application. No format as such has been prescribed by the aforesaid rules for verification affidavit. More so, said affidavit does not affect the merit of the present application. Issuance of demand notice - HELD THAT:- The contention of the operational creditor in respect to the demand notice issued by the advocate on behalf of the operational creditor is without any authorization is not valid. This issue has already been settled by the supreme court in the matter of MACQUARIE BANK LIMITED VERSUS SHILPI CABLE TECHNOLOGIES LTD. [ 2017 (12) TMI 850 - SUPREME COURT] that the demand notice issued by the advocate is valid even without authorization - The invoice has been raised by the operational creditor on 09.03.2018 after statement between the operational creditor and the corporate debtor vide communicated dated 16.02.2018 issued by the operational creditor and the same was acknowledged by the director of the corporate debtor. Thus, this application has been filed within the limitation. The amount claimed as well as acknowledged by the corporate debtor also meets the threshold limit as prescribed under section 4 of IBC 2016. The plea as regards to pre-existing dispute raised by the corporate debtor has not been substantiated by bringing any cogent evidence on record. The present application is defect-free and complies with all the relevant provisions of the IB Code. The operational creditor has not proposed the name of Resolution Professionals, the same is not mandatory terms - Application admitted - moratorium declared.
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Service Tax
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2021 (7) TMI 385
Seeking direction to Revenue to accept payment pursuant to issuance of Form 3 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 towards full and final settlement of tax dues - HELD THAT:- There are no reason to keep this writ petition pending any more in the light of the position that the petitioner has, according to it, remitted the balance of the amount under its declaration. The petitioner is permitted to make a representation for acceptance of its application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 within a period of one week from today, accompanied by a copy of this order to the Board and the Board is directed to consider the same and pass appropriate orders within a period of four (4) weeks from receipt thereafter. Petition disposed off.
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2021 (7) TMI 379
Refund of service tax - export of goods made under Bills of Export - denial on the ground that the conditions as prescribed in Clause (i) of Paragraph 3 of the Notification No.41/2012-ST dated 29.06.2012 has not been complied with - non-submission of certificate of the Chartered Accountant as prescribed in sub-clauses (A) (B) - HELD THAT:- The learned Deputy Commissioner of Service Tax has passed a detailed order incorporating the shipping Bill number, date, name of the service provider, invoice number, date etc.etc.. In short he has gone through all the documents and has discussed the conditions of the Notification or eligibility of the refund claim and after making a point-wise observation, has finally sanctioned the refund - The learned Commissioner(Appeals) could have called for the copy of the Cross Objection filed by the assessee as well as copy of the Chartered Accountant s Certificate. This cannot be the ground to reject the assessee s claim of refund. It can be seen that there is no dispute as to the fact that the goods were exported by the appellant assessee. Once it is not in dispute that the services are specified for refund purpose, and since Service Tax was actually paid on specified services pertaining to export activity, in terms of the broad scheme of refund under Notification No. 41/2012-ST as amended with clarifications, refund must be granted to the exporter. It is my considered view that the order passed by the learned Commissioner(Appeals) cannot be sustained as substantive benefit should not be denied to an assessee if conditions are fulfilled. The impugned order is set aside and the order passed by the learned Adjudicating authority is upheld - Appeal allowed - decided in favor of appellant.
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2021 (7) TMI 374
Refund of service tax paid - claim hit on the ground of time limitation - allegation also that appellant did not produce documentary evidence to prove that the burden of service tax paid by him had not been passed on to their customers - principles of unjust enrichment - HELD THAT:- There is no dispute regarding the taxability of the impugned activity. Further, even before the issuance of the said Circular by the Board, the Tribunal Chennai in the case of Indian Hume Pipe Company Limited vs. CST, Trichy [ 2008 (7) TMI 71 - CESTAT, CHENNAI ] has held that the impugned activity is not taxable under the category of Erection, Commissioning and Installation Service . Unjust enrichment - HELD THAT:- The appellant has placed on record the letters issued by both the service recipient i.e., BSNL and TATA Teleservices in Annexure - D and E which makes it abundantly clear that no service tax has been charged and collected in respect of work orders during the relevant period. Further, on perusal of the work orders in Annexure - F issued by BSNL for the relevant period, it clearly suggests that no service tax was neither charged nor collected by the appellant. Appeal allowed - decided in favor of appellant.
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2021 (7) TMI 360
Refund of service tax - booking of flat cancelled - principles of unjust enrichment - Department formed an opinion that appellant will gain unjust enrichment, as the service tax has already been collected from the customer - time limitation - reckoning of time limit of one year from the relevant date. Principles of Unjust enrichment - HELD THAT:- It is apparent that Shri K.K. Agarwal had agreed to purchase the residential unit from the appellant and accordingly, had paid the sale consideration of ₹ 8,50,000/- alongwith the amount of ₹ 38,250/- towards Service Tax liability of the appellant. Apparently and admittedly, said amount of service tax has been paid by the appellant to the Department. The another apparent fact is that the deal for sale of the said residential unit stands cancelled and the appellant has returned the amount of sale consideration i.e. ₹ 8,50,000/- to the buyer of the flats Shri K.K. Agarwal. ₹ 38,250 were also supposed to be refunded to him in the given circumstances, though the same has not yet been paid by the appellant. From that perspective it appears to be a case of unjust enrichment to the appellant - But there is enough acknowledgment on part of appellant that the said amount has to be returned to the customer, once it is refunded. As the said amount stands already paid to the Department, the Department is liable to refund the same. Hence it is held the Commissioner (Appeals) has erred while refusing the refund on ground of unjust enrichment. Time Limitation - HELD THAT:- There are no doubt the service tax was deposited by the appellant on 4th October, 2016 and 24 October, 2016 and the refund claim has been filed on 7th May, 2018 which is absolutely beyond one year from the date of deposit. But admittedly post the said deposit the circumstances arose due to which the transaction value against which the aforesaid service tax was paid, was got returned to the customer due to sale of the flat being not finalized - the date of adjustment in the present case is the date when the money received by appellant need to be refunded alongwith the amount of service tax. The period of one year, in the given facts and circumstances, shall reckon from 15.10.2017 when appellant returned the amount of sale consideration to Shri K.K. Agarwal instead of 04.10.2016. The refund claim filed on 7th May, 2018 therefore, stands very much within the period of one year. Thus, both the grounds taken by the Commissioner (Appeals) for rejecting the refund claim are held to be against the appreciation of the relevant facts of the present case. The order, accordingly, is hereby set aside - the appellant is directed to return the amount to Shri K.K. Agarwal within 15 days of receiving the said amount from the Department against the intimation thereof to the Department. Appeal allowed - decided in favor of appellant.
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Central Excise
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2021 (7) TMI 399
Stay on recovery - Excisability of Signages which are erected at various petrol bunks of IOC - Circular No.58/1/02-CX dated 15.1.2002 - plea raised by the learned counsel for the petitioner is that similar matters are pending in M/S. VIRGO INDUSTRIES (ENGINEERS) PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE CHENNAI II COMMISSIONRATE [ 2018 (7) TMI 1509 - SUPREME COURT] - HELD THAT:- Merely because similar matters are pending is not a ground to grant leave and take the matter when the authorities have been negligent in filing the appeal. It is repeatedly emphasized that unless the case is brought within the parameters of OFFICE OF THE CHIEF POST MASTER GENERAL VERSUS LIVING MEDIA INDIA LTD. [ 2012 (4) TMI 341 - SUPREME COURT] , we would not be inclined to condone the delay and have in fact dismissed the special leave petitions with cost categorizing them as certificate cases only brought before the Court to complete a formality and save the skin of the officers concerned. The learned Additional Solicitor General requests for three months time to complete the process - List on 03-09-2021.
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2021 (7) TMI 370
Refund of excess amount of Duty and interest paid - principles of unjust enrichment - direction to credit to Consumer Welfare Fund on the ground that the appellant had not proved that the incidence of Duty had not been passed on to the customers - HELD THAT:- The minimum/initial burden of proof stands discharged by the appellant upon production of documents in their support and its own undertaking. In the absence of any findings to the contrary, the onus shifts to the Revenue and the Revenue has miserably failed to discharge its onus. Therefore, the presumption as to the preponderance of probabilities is heavily stacked against the Revenue. Law has prescribed Accounting Standards that is required to be followed consistently. Books of Accounts are therefore to be maintained accordingly and, of course, following a consistent method of accounting. The refund here, in this case, is claimed for a few years only and just by referring to one year s Books of Account, it cannot be concluded that the expenditure having not been carried forward, the same is not considered as a receivable. In any case, nothing turns in so far as taxation is concerned on a mere accounting treatment. Moreover, this is not the basic doubt in the mind of the Adjudicating Authority who perhaps had the privilege of looking into the Books of Accounts during the course of adjudication proceedings and therefore, the view expressed by the First Appellate Authority is without any basis and the same cannot be sustained. The impugned Orders cannot be sustained as being opposed to the principles of natural justice and consequently, the matter requires re-adjudication - appeals are allowed by way of remand.
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CST, VAT & Sales Tax
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2021 (7) TMI 392
Levy of purchase tax - transactions corresponding to the sale of colour monitors by M/s. BPL Ltd. to the petitioner were purchases by the petitioner within the State of Karnataka - Applicability of Section 6 of the K.S.T. Act, 1957 - HELD THAT:- The nature of transaction in question is required to be ascertained by the authorities under the Act in order to determine whether Section 6 of the Act could be invoked to levy purchase tax on the petitioner. The tribunal was also required to determined whether the transactions were transactions in the course of inter state sale. Section 6 cannot be invoked to levy purchase tax in case of goods sold or purchased in course of an inter-state trade or commerce. Thus, before invoking Section 6 of the Act, the authorities under the Act were required to ascertain the nature of transaction. It is found from the order of the tribunal that no finding has been recorded with regard to the nature of transaction and with reference to the material available on record and a general observation has been made that branch transfers are nothing but dispatches by the petitioner to outside the branches as a consequence of purchase. Before upholding the levy of tax, the nature of transaction was required to be looked into, which has not been done. Matter remitted to the tribunal for decision afresh - petition allowed by way of remand.
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2021 (7) TMI 389
Validity of reassessment order passed u/s 39(2) of the Karnataka Value Added Tax - barred by limitation or not - HELD THAT:- In the instant case, during the Assessment Year 2005-06, the respondent who is a registered dealer under the Act, had sold arecanut to M/s. M.K.Traders, Allahabad and had received 'C' Form. However, subsequently, on an enquiry made by the U.P. Trade Tax Authority, registration of the aforesaid M.K.Traders was cancelled w.e.f. 25.04.2006. Thereafter, a communication was sent on 30.07.2014 by the Joint Commissioner of Commercial Taxes, Faizabad, U.P., by which the Assessing Authority was informed that 'C' Form produced by the purchasing dealer namely M/s.M.K.Traders have been found to be invalid and accordingly, a request was made to reject 'C' Form. Thereupon, after a period of eight years, a proposition notice dated 20.10.2014 was issued to the respondent. The respondent filed objection to the same on 29.12.2014 and eventually an order of re-assessment was passed on 31.01.2015 - The initiation of proceeding of re assessment is clearly barred by limitation as the case of respondent is governed by Section 46(1) of the Act and since the initiation of proceeding of re-assessment itself was beyond a period of eight years, the proceeding has to be held to be barred by limitation in view of the period of limitation prescribed under Section 46(1) of the Act. It is pertinent to note that Section 40(2) of the Act applies to a case of a dealer who is unregistered and who has not paid taxes and has fraudulently failed to pay tax which results in punishment under Section 79 of the Act - the condition precedent for invocation of Section 40(2) of the Act have not been fulfilled in the case of the respondent and hence, the aforesaid provision does not apply to the case of the respondent. Whether Section 39(2) of the Act has to be read independently? - HELD THAT:- In Section 39(2) of the Act, the expression re assessment has been used and Section 40(1) of the Act refers to Section 39 of the Act. Therefore, Sections 39 and 40 of the Act have to be read in conjunction with each other and cannot be read in isolation. The substantial question of law is answered against the petitioner and in favour of the respondent - Petition dismissed.
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2021 (7) TMI 383
Input Tax Credit - certain purchases made from M/s Ashapura Metal Corporation and JAS Modular Systems - Financial Year 2014-15 - VAT short paid by selling dealer - HELD THAT:- The claim of the revenue that the goods purchased by the appellant could not have been transported by the vehicle is of no consequence, since the transaction is completed and a postmortem cannot now be resorted to verify whether the items were in fact transported by the conveyance or not? In that view of the matter, having regard to the various provisions under the Act which permits the revenue to pursue the selling dealers through various mode to recover the VAT collected including and not limited to initiating criminal proceedings against the selling dealers. There are no justification in the revisional authority exercising jurisdiction to upset the findings of the First Appellate Authority. The appellant is entitled to ITC for the purchases made by it from M/s Ashapura Metal Corporation and JAS Modular Systems during the Financial Year 2014-15 - Appeal allowed.
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Indian Laws
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2021 (7) TMI 394
Entertainment Tax - Validity of Government Order passed in G.O.Ms.No.89, Commercial Tax - validity of Registration Department dated 21.07.2011 and the consequential guidelines issued by the second respondent in proceedings dated 09.01.2012 - seeking exemption to the Petitioner's Movie under the Tamil Nadu Entertainment Tax Act - validity of Government Order passed in G.O.(D).No.90 dated 26.02.2014 - date of grant of exemption under Tamil Nadu Entertainment Tax Act from 26.02.2014 - validity of Government Order passed in G.O.No.002 dated 03.01.2012 - direction to constitute a new committee to view and recommend films for grant of exemption to entertainment tax - seeking appointment the Committees, grant of exemptions for movies and formulate a policy decision, which can work free from Favouritism, Nepotism and corrupt activities. HELD THAT:- This Court is of the humble opinion that the Governmental institutions have no heart and life of its own. It remains as a building with infrastructures. It is the women and men of integrity, who injects heart and soul to these institutions for the welfare and benefit of the common people - the institutional integrity includes the engagement of authorities possessing the virtue of integrity and honesty. Once the individual's character is lost, the institutional values are lost, the credibility is lost and therefore, the governmental approach in these aspects must be cautious and in consonance with the constitutional perspectives. The mechanism of control must be far more transparent than that of the system prevailing now. Unless effective steps are taken, the constitutional mandate of effective public administration cannot be provided to the citizen of this great Nation. Thus, this Court has no contrary opinion regarding judicial restraint to be exercised in administrative policies. However, the Courts are bound to express its anguish regarding the happenings in the public Administrations. That exactly is the reason why there is a clash between judicial restraint and judicial activism. Undoubtedly, the Court cannot run the Government. However, the High Court has got a constitutional duty to protect the constitutional principles and the values - While exercising the constitutional powers, Courts cannot close its eyes in respect of such happenings in the public administration. The Government of the day irrespective of the political parties, must think about all these aspects. As far as the present writ petitions are concerned, this Court could easily visualize the possibilities of Favouritism and discrimination - However, for want of evidences and in view of the fact that there is no specific malafide allegations against the persons, this Court is unable to consider the relief as such prayed for. However, the Committees overall exercise was improper as the members of the Committee have certain personal affinity with the Government or the Political leaders, who were ruling the State. The Government of the day is expected to consider the following aspects and appoint Committees and authorities in Government organizations and institutions. (1) The women and men of integrity having merit must be selected and appointed in Expert Committees, Governmental organizations and institutions etc., (2) Integrity and honesty must be the criteria, which is to be assessed at the first instance and the merits are to be considered. When the merits are being equal priority, should be given to the integrity and honesty. (3) All such selections and appointments are to be made in a transparent manner and by providing equal opportunity to all the eligible women and men, who all are eligible for such appointments. All such selection and appointments are to be made beyond the Political affinities, aspirations and ideologies, keeping in mind that it is public appointments. (4) If each Political party appointing their own men in such Expert Committees, if allowed to be continued, then there is no scope for revival of social justice, equality in opportunities, merit and integrity. The Government is expected to revisit the entire process and appointment the Committees, grant of exemptions for movies and formulate a policy decision, which can work free from Favouritism, Nepotism and corrupt activities, enabling the people of this great Nation to get social justice from the Government of the day - Petition disposed off.
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2021 (7) TMI 387
Condonation of delay of 226 days in filing revision petition - sufficient explanation provided for condonation of delay or not - Dishonor of Cheque - HELD THAT:- It is well settled by the Supreme Court that there cannot be any rigid ground to be held with sufficient cause for condoning the delay. The basic parameter for treating the reasons as sufficient cause is whether by not filing the case within the stipulated time framed right of any party is adversely affected. The Supreme Court in catena of decisions has held that the Courts should adopt a liberal and justice-oriented approach for condoning the delay. Ordinarily a litigant does not stand to benefit by lodging an appeal late. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties - Similarly, it is also well settled by the Supreme Court that the condonation of delay must be on bonafide reason without any ulterior motive or any deliberately manner on the part of the litigant then only the delay in filing the application before the Court should be entertained. In the case in hand, it is apparent that the petitioner was willing to prosecute his case with most sincerity and on the advise of his counsel, he filed criminal revision before this Court directly and after dismissal of the same, there was no communication by his counsel, as such, mistake on part of the counsel, litigant should not be suffered. Moreover, the complaint of the petitioner has been dismissed by learned Chief Judicial Magistrate without deciding on merits, as such, sufficient bonafide reasons have been assigned by the petitioner to condone the delay. The delay in filing the revision petition is hereby condoned - petition allowed.
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2021 (7) TMI 386
Dishonor of Cheque - insufficiency of funds - case of complainant is that the charges have already been framed wherein he has denied the charges levelled against him - seeking grant of 20% of the amount as interim compensation - Section 143A of the Act, 1881 - interpretation of statute - the word may be treated as shall , is discretionary or directory? - HELD THAT:- From perusal of the Act, 1881 as well as amended Section 143A of the Act, 1881, it is clear that the Act, 1881 has played a substantial role in the Indian commercial landscape and has given rightful sanction against defaulters of the due process of trade who engage in disingenuous activities that causes unlawful losses to rightful recipients through cheque dishonour. Thereafter, the legislature has amended Act, 1881, which came into force on 01.09.2018 with the aim to secure the interest of the complainant along with increasing the efficacy and expediency of proceedings under Section 138 of the Act, 1881 - From perusal of Section 143A of the Act, 1881, it is quite evident that the act has been amended by granting interim measures ensuring that interest of complainant is upheld in the interim period before the charges are proven against the drawer. The intent behind this provision is to provide aid to the complainant during the pendency of proceedings under Section 138 of the Act, where he is already suffering doubleedged sword of loss of receivables by dishonor of the cheque and the subsequent legal costs in pursuing claim and offence. These amendments would reduce pendency in courts because of the deterrent effect on the masses along ensuring certainty of process that was very much lacking in the past, especially enforced at key stages of the proceedings under the Act. From perusal of the amended provision of Section 143A of the Act, 1881, it is clear that the word 'may' used is beneficial for the complainant because the complainant has already suffered for mass deed committed by the accused by not paying the amount, therefore, it is in the interest of the complainant as well the accused if the 20% of the cheque amount is to be paid by the accused, he may be able to utilize the same for his own purpose, whereas the accused will be in safer side as the amount is already deposited in pursuance of the order passed under Section 143A of the Act, 1881 - The Hon'ble Supreme Court, while examining 'may' used 'shall' and have effect of directory in nature in case of SMT. BACHAHAN DEVI ANR VERSUS NAGAR NIGAM, GORAKHPUR ANR [ 2008 (2) TMI 869 - SUPREME COURT] where it was held that ultimate rule in construing auxiliary verbs like may and shall is to discover the legislative intent; and the use of words `may' and 'shall' is not decisive of its discretion or mandates. The use of the words may and `shall' may help the courts in ascertaining the legislative intent without giving to either a controlling or a determinating effect. The courts have further to consider the subject matter, the purpose of the provisions, the object intended to be secured by the statute which is of prime importance, as also the actual words employed. Therefore, the word may be treated as shall and is not discretionary, but of directory in nature, therefore, the learned Judicial Magistrate First Class has rightly passed the interim compensation in favour of the complainant. From perusal of provisions of the Act, 1881 considering the aims behind object of the Act, 1881, it is concluded that the amendment in Section 143A of the Act, 1881 is mandatory in nature, therefore, the learned Judicial Magistrate First Class has rightly passed the order of interim compensation in favour of the respondent and has not committed any irregularity or illegality in passing such order. Petition dismissed.
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