Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
July 15, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
FEMA
Service Tax
CST, VAT & Sales Tax
Wealth tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Determination of quantum of GST - used/ second hand gold jewellery - In the case of applicant dealing in second hand goods and invoicing his supplies as “second hand goods”, the valuation of supply of second hand gold jewellery which are purchased from individuals who are not registered under GST and there is no change in the form and nature of such goods, can be made as prescribed under sub-rule (5) of rule 32 of the Central Goods and Service Tax Rules. - AAR
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Classification of services - rate of GST - construction of AAI residential colony - The construction of Airport Authority of India residential colony for self use or their staff/ employees at Devenhalli, near Kempegowda International Airport, Bengaluru by the applicant for Airport Authority of India attracts tax at the rate of 12% - AAR
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Liability of GST - Healthcare services - supply of medicines, implants and other items to patients - the supply of medicines and allied items by the pharmacy run by the hospital can only be treated as an individual supply of medicine and allied items and therefore is liable to GST at the rates applicable for each such item as per the GST Tariff Schedule - the consultation services rendered by the applicant falls within the purview of healthcare services and accordingly is exempted from GST - AAR
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Rate of GST - promotion of villa projects for the villa buyers - The applicant is liable to pay GST at the rate of 1.5% in respect of the services of construction of affordable residential apartments as per entry at Item (i) and at the rate of 7.5% in respect of the services of construction of residential apartments other than affordable residential apartments as per entry at Item No. (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 subject to the conditions prescribed under the respective entries. - AAR
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Rate of GST - unbooked 11 units in the project , which did not get the approval for villa from local authorities before 31.03.2019 - levy of old GST rate or new GST rate - as per provisions of the said notification, the option to pay tax at the old rate can only be exercised project-wise and not for part of project or individual apartments / villas comprised in a project. - AAR
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Classification of goods - rate of tax - classifiable as NAMKEENS or not - jack fruit chips sold without BRAND NAME - Frying and roasting are two popular cooking methods that both use high temperature. It is not necessary that both the conditions are to be cumulatively satisfied for classifying a product under the category of roasted and fried products - Applying the principles of interpretation in Rule 2 of the General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975 the Jackfruit Chips, Tapoica Chips and Potato Chips (Whether salted/ masala or otherwise) are classifiable under Tariff Heading 2008 19 40 of the Customs Tariff Act, 1975. - AAR
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Classification of goods - Mats, Mattings and Floor Covering of Coir, if backed by PVC, Rubber, Latex etc - Mats, Matting and Floor Covering of Coir backed by PVC, Rubber, Latex etc are appropriately classifiable under Tariff Sub- Heading 5703 90 90 of First Schedule of the Customs Tariff Act, 1975 and attracts GST at the rate of 12% - AAR
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Availment and utilisation of input tax credit (ITC) - where common credit on inputs or input services partly used for effecting taxable supplies and partly for effecting exempt supplies are availed the eligible input tax credit shall be calculated as per the formula prescribed in Rule 42 of the CGST Rules, 2017 and the common credit pertaining to exempt supplies calculated as per the said formula shall be reversed. - AAR
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Classification of goods - rate of GST - import as well as supply of “Laboratory reagents for rapid testing of food safety parameters” - the laboratory reagents for rapid testing of foods safety parameters supplied by the applicant is appropriately classifiable under Customs Tariff Heading 3822 00 90 and is liable to GST at the rate of 12% - AAR
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Classification of services - local water transport services of passengers by ferries, cruises and the like - resort providing various other services - providing house boat for cruises - meals were provided as part of package - The services rendered by the applicant as detailed above squarely falls under the Heading 996415 in view of the explanatory note and hence the services are appropriately classifiable under SAC 996415. - AAR
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The supply of goods or services or both during warranty period without consideration in discharge of the warranty obligation is not liable to GST. However, if any additional consideration is received in respect of such supplies of goods or services or both it will be liable to GST at the rate applicable for the goods / services as per the rate schedule. - AAR
Income Tax
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Condonation of delay in filing the return of income - Period of limitation for scrutiny assessment - The prayer made by the learned counsel for the Income Tax department appears to be genuine prayer and therefore, in the present case, for the purpose of scrutiny, if any, and for the purpose of other proceedings also, the limitation shall start from the date the order has been passed by the learned Single Judge. - HC
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Correct head of Income - Interest income earned from deposits kept in banks for availing bank guarantees - AO directed to assess interest income from bank deposits for availing duty benefits under Customs Act as business income of the relevant undertaking. - AT
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Addition u/s 68 - No action appears to have been taken in the preceding assessment year treating the purchase of the shares as bogus. Once such bogus purchase is sold then the entire amount, cannot be added u/s. 68 - AT
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Disallowance of interest on the advance - Simply because the assessee has secured loan from Standard Chartered Bank that does not mean that same interest bearing fund have been given for interest free loan to other party. If assessee has interest free funds which far exceed the advance given, then there cannot be any presumption that such advance has been given only out of such interest bearing funds. - Additions deleted - AT
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Bogus LTCG - Disallowing exemption u/s 10(38) - penny stock - The said company held as a penny stock company by the authorities below without any corroborative evidence is uncalled for and unjustified. Such action is erroneous arbitrary whimsical and suffers from the principle of surmise and conjecture. Thus, the disallowance of the claim made by the assessee towards the Long Term Capital Gainbeing bogus based only on mere surmise and conjecture.Thus, the disallowance of the claim made by the assessee towards the Long Term Capital Gain is bad in law and liable to be quashed. - AT
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Capital gain on JDA - Transfer u/s 2(47) - There was no transfer of property under this JDA. Also without accrual of construction to the assessee, assessee was not expected to pay capital gain on the JDA entered by the assessee with the developer. The condition laid down in section 2(47)(v) of the Act r.w.s. 53A of the Transfer of Property Act is not complied with as there was no willingness of the developer to perform his part of the duty in terms of the JDA.- AT
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Revision u/s 263 - deduction under section 54B - No doubt the assessee declared capital gain but, whether its exemption can be claimed on purchase of other agriculture land, is not at all examined by the AO - the ld. PCIT validly assumed his jurisdiction for exercising his power u/s 263 by taking view that the order passed by AO is erroneous and in so far as prejudicial to the interest of justice. - Facts remained that the ld. PCIT passed the impugned order without considering various pleas of the assessee raised in its reply. - Matter restored back - AT
Customs
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Abandonment of goods - relinquishment of title to the goods - It is too late a stage for the appellant to raise an issue in so far as the levy of fine and penalty are concerned since, without questioning the same at the appropriate time before making the e-payment, the said plea cannot be urged for the first time now. - AT
Service Tax
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Challenging the order of the settlement application - erroneous demand of interest - This Court is of the opinion that the order passed by the Settlement Commission, pursuant to the admission made by the parties, need not be interfered with. However, if there is any error apparent on record or if there is any factual error regarding the admitted statements, the Settlement Commission is empowered to rectify such mistakes by following the procedures contemplated. - HC
VAT
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Authority to undertake a review contemplated under Section 67(5) of Andhra Pradesh Value Added Tax, 2005 - since the regular Chairman of the Tribunal is not functioning, the petitioner has no other go except filing a review petition before ACAR. - the petitioner shall withdraw the appeal pending before the VAT Tribunal and then only proceed with the review petition - the 2nd respondent is directed to consider the review petition dated 14.12.2020 filed by the petitioner and afford personal hearing to the petitioner and pass appropriate orders - HC
Case Laws:
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GST
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2021 (7) TMI 548
Determination of quantum of GST - used/ second hand gold jewellery - sub-rule (5) of rule 32 of Central Goods and Services Tax Rules, 2017 - quantification of GST on difference between the selling price and purchase price as stipulated under Rule 32(5) of CGST Rules, 2017 - applicant purchases used/ second hand gold jewellery from individuals who are not dealers under the GST and at the time of sale there is no change in the form / nature of goods - HELD THAT:- In the instant case, the supplier, i.e., the applicant is effecting the supply of second-hand jewellery which is taxable under the GST Act as it is covered under entry no.13 of Schedule V to the Notification No.01/2017-Central Tax (Rate) dated 28th June, 2017 which is taxable at 1.5% under the CGST Act and similarly taxable under the KGST Act, 2017 also at 1.5%. Hence, the supplier satisfies the condition that the supply made by him must be a taxable supply. The next condition is the supplier must be a person dealing in buying and selling of second-hand goods. It is seen that the applicant has admitted that he is purchasing used gold jewellery from individuals and selling the same, after cleaning and polishing them. The applicant has also admitted that he is not availing any input tax credit on the purchase of such goods and the goods so purchased are supplied as such - The applicant has stated that he is not melting the jewellery to convert it into bullion and then remaking it to new jewellery but only cleaning the old jewelry and polishing it without changing the nature and form of the jewellery so purchased. These goods are then supplied to other persons. Further, the applicant admits that they are invoicing the goods as used gold ornaments . Hence, the applicant satisfies the second condition also. Thus, the valuation of the supply of second hand jewellery may be made as prescribed in sub-rule (5) of rule 32 of the Central Goods and Services Tax Rules, 2017.
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2021 (7) TMI 547
Scope of Advance Ruling application - Liability of GST - supplies undertaken by M/s. Mysore Stoneware Pipes and potteries Private Limited and not with respect to the supplies undertaken by the applicant - service under Clause 5(b) of Schedule (II) of CGST Act 2017, Schedule (III) of CGST Act 2017 - HELD THAT:- It could be easily inferred from Section 95(a) of the CGST Act, 2017 that any person registered or desirous of obtaining registration under CGST Act 2017 can seek advance ruling only in relation to the supply of goods or services or both being undertaken or proposed to be undertaken. In the instant case, the applicant has sought advance ruling in respect of the supplies undertaken by M/s. Mysore Stoneware Pipes and potteries Private Limited and not with respect to the supplies undertaken by the applicant. Thus the application is not admissible and liable for rejection in terms of Section 98(2) of the CGST Act, 2017. The application is hereby rejected as inadmissible , in terms of Section 98(2) of the CGST Act, 2017.
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2021 (7) TMI 546
Classification of services - rate of GST - construction of AAI residential colony at De venhalli, near Kempegowda International Airport, Bengaluru by the applicant for Airport Authority of India - applicability of Sl.No. 3 (vi)(c) of the N/N. 11/2017 - Central Tax dated 28.06.2017 as amended by N/N. 24/2017-CT(R) dated 21.09.2017 - HELD THAT:- As per the letters of Airport authority of India submitted by the applicant, it is clear that the applicant is engaged in construction of residential colony for the staff and employees of Airport authority of India at Devanahalli, Near Kempegowda International Airport, Bengaluru vide awarded contract - Airport authority of India being recipient of service fulfils the parameters as mentioned in the Notification No.31/2017-CT(R) dated 13.10.2017 vide paragraph (iii) item number (ix) as Governmental Authority . The said authority is a statutory body set up by an Act of Parliament vide Airport Authority of India Act, 1994. Section 12 of the said Act provides for functions of the authority. The said activity of the construction of residential colony for the staff and employees of Airport authority of India at Devanahalli, Near Kempegowda International Airport is covered under article 243 W of the Constitution. An explanation has been inserted to the above entry by Notification No.17/2018 - Central Tax (Rate) dated 26-07-2018, after which the activities or transactions undertaken by the Central Government, State Government and a Local Authority, in which they are engaged as public authorities alone are to be excluded from the scope of business for the purposes of this entry. This Explanation does not exclude a Government Entity and hence the situation remains unchanged even by the aforesaid insertion of explanation so far as the activity of the applicant is concerned. Whether these works are meant predominantly for use other than for commerce, industry, or any other business or profession? - HELD THAT:- The said proposed construction of residential colony or residential complex service given by the applicant to Airport Authority of India as a government authority and predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017 as covered under Serial No. 3 (vi) (c) of the Notification No.11/2017-Central Tax dated 28.06.2017 as amended by Notification No. 24/2017-Central Tax (Rate) dated 21.09.2017 liable to tax at 6% each under CGST as well as 6% under KGST Act. The construction of Airport Authority of India residential colony for self use or their staff/ employees at Devenhalli, near Kempegowda International Airport, Bengaluru by the applicant for Airport Authority of India attracts tax at the rate of 12% as per N/N. 11/2017 - Central Tax (Rate) dated 28-06-2017 as amended by N/N. 24/ 2017 - Central Tax (Rate) dated the 21.09.2017.
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2021 (7) TMI 545
Levy of GST - landscaping and gardening work provided to government departments like Nagarasabha Karyalaya Chintamani, Nagarasabha Karyalaya Bhadravathi, Tumakuru Mahanagara Palike, Nagarasabha Raichur, Purasabha Karyalaya Devanahalli, Mahanagara Palike Shivamogga etc. - HELD THAT:- The transaction in question is examined and it is found that the applicant is executing two types of works, wherein in one set of cases the applicant is making supply of pure services without it being a works contract services or composite supply and in the second category of supply, the applicant is providing composite supply of both goods and services. The first set of activities is covered under entry no.3 of the N/N.12/2017 - Central Tax (Rate) dated 28.06.2017 and the same is clarified as exempt in the advance ruling in IN RE: M/S. THE NURSERY MEN CO-OPERATIVE SOCIETY, [ 2018 (9) TMI 1037 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA] . The activity of the applicant in relation to the supplies which are involving goods either as a works contract or as a composite supply involving supplies of goods also, the activity gets exempted as per entry 3A of the N/N.12/2018 -Central Tax (Rate) dated 28.06.2017 as amended by N/N. 02/2018 - Central Tax (Rate) dated 25-01-2018 - Subject to the facts that all the conditions as per entry 3A, are said to be satisfied, the activity of the applicant is exempted under entry 3A of the N/N.12/2017 - Central Tax (Rate) dated 28.06.2017 as amended by Notification No.2/2018 - Central Tax (Rate) dated 25.01.2018. The activity of maintenance of community assets carried out by the applicant is falls under entry no 29 of Schedule eleven of Article 243G of the Constitution; that the provision of urban amenities and facilities such as parks, gardens, playgrounds falls under entry No 12 of Schedule Twelve of Article 243W of the constitution.
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2021 (7) TMI 544
Determination of rate of tax - ongoing projects - services provided to the customers who are purchasers of the residential flats involved in the project-Santhi Homes, Pothencode - period 01.07.2017 to 31.03.2019 - N/N. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended - value of services, for services for the period 01.07.2017 onwards for which appropriation towards undivided share of land was already done in pre - GST period - applicable rate of tax for the period after 01.04.2019 where option was already exercised - relevant date for refund where cancellation of residential flats by any customer. HELD THAT:- The Commencement Certificate / Building Permit in respect of the project namely-Shanti Homes, Pothencode was issued before 31.03.2019; further the apartments being constructed under the project was partly booked before 31.03.2019 and the completion certificate has not been issued before 31.03.2019. Therefore , the project satisfies all the conditions of the definition of ongoing project in clause (xx) of Para 4 of the N/N. 11/2017-CT (Rate) dated 28.06.2017 as amended by N/N. 03/2019-CT (Rate) dated 29.03.2019 and accordingly the project qualifies to be eligible for exercise of option by the applicant to pay tax on the construction of the apartments in the project at the rates as specified for item (ie) or (if) of SI No. 3 of the said notification. Rate of tax on the services of construction of different types of residential apartments in the project-Shanti Homes, Pothencode rendered to their customers during the period from 01.07.2017 to 31.03.2019 - HELD THAT:- The project Santhi Homes does not fall under any of the schemes listed in sub-paras (a) to (h) of Para 6.6 above and hence the services of construction of residential apartments in the project rendered by the applicant do not qualify for the concessional rate of tax of 12% under any of the sub-items or items of SI No. 3 of the N/N. 11/2017-Central Tax (Rate) dated 28.06.2017. Therefore, the services of construction of all the 12 different types of residential apartments as mentioned in the question in the project-Santhi Homes is liable to GST at the rate of 18% as per Item (i) of SI No. 3 of N/N. 11/2017-Central Tax (Rate) dated 28.06.2017. Taxable value of services for the period 01.07.2017 onwards for which appropriation towards undivided share of land was already done in pre - GST period - whether the one-third deduction as provided for in Para 2 of Notification No. 11/2017 can again be taken where the value of undivided share already appropriated is lower than one-third of the total amount receivable for project including land value? - HELD THAT:- The value of land or undivided share of land is deemed to be one-third of the total amount charged for the supply irrespective of the actual value of land and accordingly the applicant is eligible to avail deduction of one-third of the total amount charged for the supply in arriving at the taxable value of the supply. Applicable rate of tax for the period after 01.04.2019 where option was already exercised in respect of the 12 different categories of apartments mentioned therein and eligibility for one-third deduction as per Para 2 to the extent consideration for undivided share of land is also included - HELD THAT:- The project-Shanti Homes does not come under any of the schemes specified in item (ie) of the said notification and accordingly the services of construction of the 12 categories of residential apartments in the project- Shanti Homes is liable to GST for the period from 01.04.2019 at the rate of 18% as per item (if) of SI No. 3 of N/N. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by N/N. 03/2019-Central Tax (Rate) dated 29.03.2019 in accordance with the option exercised by the applicant. The item (if) of SI No. 3 of the said notification provides that the provisions of paragraph 2 of the notification shall apply for valuation of the service. Therefore, the applicant is eligible for deduction of one-third of the total amount charged for the supply in determining the taxable value of such supply after 01.04.2019 also. Relevant date for application of refund of taxes already paid in the event of cancellation of residential flats by any customer - HELD THAT:- The provisions governing refund of GST paid on supply of goods and / or services are contained in Section 54 of the CGST Act. Sub-section (1) of Section 54 stipulates that any person claiming refund of any tax may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. Explanation 2 to Section 54 prescribes the relevant date for making the application under different situations - In the instant case the relevant date is the date of payment of tax as prescribed in clause (h) of Explanation 2 of Section 54.
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2021 (7) TMI 543
Liability of GST - Healthcare services - supply of medicines, implants and other items to patients undergoing treatment as inpatients and outpatients in different situations - exemption as per Entry at SI No. 74 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017. Offering a package to the inpatients covering the treatment including all required medicines and other supplies for a consolidated amount that is pre-fixed - HELD THAT:- The combination of goods and /or services included in the supply are naturally bundled in the ordinary course of business and hence it is a composite supply of which the principal supply is healthcare services and the other supplies are only incidental or ancillary to the supply of healthcare services. Therefore, the supply of medicines, implants, and other items to the inpatients admitted to the hospital for treatment as per the package offered by the applicant is a composite supply where the principal supply is healthcare services falling under SAC 999311 which is exempted as per entry at SI No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Offering a package to the inpatients covering the treatment for a consolidated amount that is pre-fixed - package does not include medicines, implants and other supplies which will be separately billed according to the type, brand and quantity of the items as chosen by the inpatient as per the choice made available to them - HELD THAT:- The combination of the goods and / or services included in the supply are not bundled by the applicant and they are supplied as distinct and clearly identifiable individual supplies and the value of such individual supplies are separately determined according to the choice exercised by the inpatient. Hence it cannot be considered as a composite supply and the supply of each of the individual goods and / or services shall be individually liable to GST at the rates as applicable on the basis of the classification of such supplies under the GST Tariff. This view is supported by the clarification of the CBIC in Issue SI No.2 of Circular No. 47/21/2018 - GST dated 08.06.2018 that the taxability of supply would have to be determined on a case to case basis looking at the facts and circumstances of each case and where a supply involves supply of both goods and services and the value of such goods and services supplied are shown separately, the goods and services would be liable to tax at the rates as applicable to such goods and services separately - the healthcare services supplied by the applicant as per the package is exempted as per entry at SI No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and the supply of medicines, implants and other items that are not included in the package and which are separately billed shall attract GST at the rate applicable to such items. Package is not applicable and the treatment, medicines and other supplies are charged separately according to the type, brand and quantity of items as per choice of the patient - HELD THAT:- The combination of the goods and / or services included in the supply are not bundled by the applicant and they are supplied as distinct and clearly identifiable individual supplies and the value of such individual supplies are separately determined according to the choice exercised by the inpatient as made available. Hence it cannot be considered as a composite supply and the supply of each of the individual goods and / or services shall be individually liable to GST at the rates as applicable on the basis of the classification of such supplies - the treatment provided by the applicant falls under the scope of healthcare services and is exempt from GST as per entry at SI No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Situation where the percentage of value of medicines and other supplies represents major portion of the total expenditure billed to a patient - HELD THAT:- The question is general and vague in nature in as much it does not disclose whether the different combinations of the goods and services involved in the supply are bundled and supplied together or they are supplied as clearly distinguishable and identifiable supplies and the value of such supplies are separately determined or not. Hence the question cannot be answered for want of sufficient information. Liability of GST - supply of medicines, implants and other items to patients undergoing treatment as outpatients - patients are not being admitted in hospital but the hospital is providing treatment to those patients at the hospital as an outpatient - HELD THAT:- In such cases the services provided or the combination of services provided in the course of the treatment of the patients as described above clearly fall within the scope of healthcare services as defined in Para 2 (zg) of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and is exempted from GST as per entry at SI No. 74 of the said notification - example includes Dialysis, dressing, chemotherapy, minor surgeries, other treatments and procedures that require no admission and preadmission services like causality. Medicines and other supplies are issued to outpatients based on the prescription of their Doctors for consumption at home and follow-up - HELD THAT:- In such cases the patients are consulting the doctors of the applicant and the patients are given advice and prescription of medicines and allied items by the Doctor. The patients have the freedom to procure the medicines and allied items either from the pharmacy run by the hospital or from other independent medicine dispensing outlets. There is no difference whether it is procured from the pharmacy run by the hospital or from independent medicine dispensing outlets, as in both cases the medicines and allied items are dispensed on the basis of prescription. Therefore, the supply of medicines and allied items by the pharmacy run by the hospital can only be treated as an individual supply of medicine and allied items and therefore is liable to GST at the rates applicable for each such item as per the GST Tariff Schedule - the consultation services rendered by the applicant falls within the purview of healthcare services and accordingly is exempted from GST as per entry at SI No. 74 of N/N. 12/2017-Central Tax (Rate) dated 28.06.2017.
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2021 (7) TMI 542
Rate of GST with effect from 01.04.2019 - quantification of taxable value - Benefit of ITC not availed - promotion of villa projects for the villa buyers - tax rate of redeveloped projects undertaken after 01.04.2019 which were uncompleted and already started by developers before 31.03.2019 - calculation of taxable value of construction of villa on the projects developed and promoted by DLPL on the arrangement of agreement with landlord, landlord selling the plots directly to various villa buyers identified by DLPL. HELD THAT:- A new tax structure for real estate sector was introduced with effect from 01.04.2019 onwards by amendment of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 by Notification No. 03/2019 - Central Tax (Rate) dated 29.03.2019. Admittedly, the services of construction of villas are being rendered by the applicant after 01.04.2019 and hence the rate as notified under the new tax structure is applicable in respect of the construction services rendered by the applicant. From the definition of the term apartment ; residential apartment real estate project and promoter as above it is clear that the residential villas being constructed by the applicant fall within the definition of residential apartment and the projects undertaken by the applicant including the redevelopment projects fall within the definition of real estate project and the applicant fall within the definition of promoter . Further, on a conjoint reading of the above provisions of law, the facts as stated in the application and the terms and conditions in the agreements produced as Annexure A and C it is seen that the services of construction of villas provided by the applicant squarely fall within the description of services specified in Item (i) and (ia) of SI No. 3 of the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 03/2019 Central Tax (Rate) dated 29.03.2019 and accordingly the tax rates as prescribed in the said entries shall be applicable to the said services supplied by the applicant - The applicant is liable to pay GST at the rate of 1.5% in respect of the services of construction of affordable residential apartments as per entry at Item (i) and at the rate of 7.5% in respect of the services of construction of residential apartments other than affordable residential apartments as per entry at Item No. (ia) of SI No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 subject to the conditions prescribed under the respective entries. Taxable value of the services of construction of residential villas rendered - HELD THAT:- The value of land or undivided share of land is deemed to be one-third of the total amount charged for the supply irrespective of the actual value of land and accordingly the applicant is eligible to avail deduction of one-third of the total amount charged for the supply in arriving at the taxable value of the supply. Whether the activity of purchase of land, development of the same in to plots and sale of the same to various customers without collecting any advance from the customers for undertaking the development activities attract GST? - HELD THAT:- In the instant case it is stated by the applicant that they are not receiving any advance from their customers for undertaking development activities in the plot and the plot is sold after development. Hence the transaction is in respect of sale of developed plots / land and is covered by Paragraph 5 of Schedule III of the CGST Act which stipulates that sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building shall be treated neither as a supply of goods nor a supply of service. Therefore, the transaction is not liable to GST.
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2021 (7) TMI 541
Rate of GST - unbooked 11 units in the project , which did not get the approval for villa from local authorities before 31.03.2019 - levy of old GST rate or new GST rate - Whether the new tax rate of 7.5% (effective rate of 5% after excluding land portion), with no ITC, is applicable to the 11 unbooked units in the said VRINDHAVAN project? - applicability of answer given for the first question to 'VRINDHAVAN project to other similar projects in similar situations. HELD THAT:- On a conjoint reading of the definitions of the terms and the clarification of CBIC by FAQs under F.No. 354/32/2019 - TRU dated 07.05.2019, it is evident that the option envisaged under Item (if) of Sl No. 3 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019 is in respect of the entire ongoing project and not in respect of part of the project. Further, as is clarified by CBIC, even if the commencement certificate issued is only for part of the project, the same shall be treated as an ongoing project - Hence, as per provisions of the said notification, the option to pay tax at the old rate can only be exercised project-wise and not for part of project or individual apartments / villas comprised in a project. Therefore, the option exercised by the applicant for paying tax at the rate as specified in Item (if) of S1 No. 3 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019 in respect of the ongoing project VRINDHAVAN is applicable for the entire 20 villas comprised in the project and not for the 9 villas as claimed by the applicant. Whether the answer given for the first question to VRINDHAVAN project is also applicable to the other similar projects in similar situations? - HELD THAT:- The advance ruling is binding only on the applicant and the jurisdictional officer of the applicant. Hence the answer to the first question is applicable only to similar projects of the applicant in similar situations.
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2021 (7) TMI 540
Classification of goods - rate of tax - classifiable as NAMKEENS or not - jack fruit chips sold without BRAND NAME - covered by HSN code 2106.90.99 and taxable under Entry 101A of Schedule of Central Tax (Rate) N/N.1/2017 or not? - classifiable under HSN code 1903 - roasted and salted / salted / roasted preparations such as of ground nuts, cashew nut and other seeds when sold without a brand name - to be classified under HSN 2106.90.99 and taxed under Entry 101A of Schedule 1 of Central Tax (Rate) N/N. 1/2017 - salted and masala chips of Potato and Tapioca when sold without a brand name - to be classified under HSN 2106.90.99 and taxed under Entry 101A of Schedule 1 of Central Tax (Rate) Notification No.1 of 2017. HELD THAT:- Chapter 20 of Customs Tariff specifically covers 'Preparations of vegetables, fruits, nuts or other parts of plants. As per Chapter Note 1 (a) to Chapter 20, the Chapter does not cover vegetables, fruits or nuts prepared or preserved by the processes specified in Chapter 7, 8 or 11. Therefore, all the vegetable, fruit or nut products or preparations made other than by the processes specified in Chapters 7, 8 or 11 are included in the Chapter 20. The processes specified in Chapters 7, 8 or 11 mainly include freezing, steaming, boiling, drying, provisionally preserving and milling. Therefore, any vegetable, fruit, nut or edible parts of plant which is prepared or preserved by any other process than these are liable to be classified under Chapter 20. Chapter Heading 2008 of the Customs Tariff covers all roasted and fried vegetable products. Frying and roasting are two popular cooking methods that both use high temperature. It is not necessary that both the conditions are to be cumulatively satisfied for classifying a product under the category of roasted and fried products - Applying the principles of interpretation in Rule 2 of the General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975 the Jackfruit Chips, Tapoica Chips and Potato Chips (Whether salted/ masala or otherwise) are classifiable under Tariff Heading 2008 19 40 of the Customs Tariff Act, 1975. Roasted /salted / roasted and salted Cashew nuts - Ground nuts - other nuts - HELD THAT:- There are specific headings under Chapter 20 that covers the products. Accordingly, roasted /salted / roasted and salted Cashew nuts are classifiable under Tariff Heading 2008 19 10, and roasted / salted / roasted and salted Ground nuts and other nuts are classifiable under Customs Tariff Heading 2008.19.20 of the Customs Tariff Act, 1975. Rate of tax - HELD THAT:- On a plain reading of entry at SI No. 40 of Schedule II of N/N. 01/2017 Central Tax (Rate) dated 28.06.2017, it is evident that all the products that fall under Chapter Heading 2008 of the Customs Tariff Act, 1975 attract GST @ of 12 %.
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2021 (7) TMI 539
Classification of goods - rate of tax - PVC Tufted Coir Mats and Matting - whether the product will attract GST at the rate of 5 % as per SI No. 219 of Schedule I or GST at the rate of 12 % as per SI No. 144 of Schedule II of N/N. 01/2017 Central Tax (Rate) dated 28.06.2017? - HELD THAT:- The Heading 5702 covers carpets and other textile floor coverings, woven, not tufted or flocked, whether or not made up including Kelem , Schumacks , Karamanie and similar hand-woven rugs and the sub-heading 5702 20 covers floor coverings of coconut fibres (coir) which includes coir mats, carpets and other rugs. However, the product manufactured by the applicant cannot be classified under 5702 20 as it does not include coir mattings / carpets with PVC backing. The Heading 5703 covers carpet and other textile floor coverings, tufted whether or not made up and sub-heading 5703 90 covers carpets and floor coverings of other textile material; tariff item 5703 90 20 covers carpets and other floor covering of coir and tariff item 5703 90 90 covers other carpets and floor coverings. The Heading 5705 covers other carpets and other textile floor coverings whether or not made up and hence the product of the applicant does not fall under 5705. On the basis of the descriptions of the headings and the relevant chapter notes the product of the applicant is appropriately classifiable under Tariff Sub-Heading 5703 90 90 of the Customs Tariff Act. Rate of tax - HELD THAT:- The entry at SI No. 219 of Schedule I of the notification refers to the coir mats, mattings, floor coverings etc that are exclusively made up of coir fibres. In the instant case though the exposed surface of the mats / mattings / floor coverings manufactured and supplied by the applicant are of coir, it is backed by PVC and the manufacturing process involves use of technologically advanced machines for providing the backing using PVC and the PVC and the chemicals used for the backing has equal importance as that of coir and the PVC and the chemicals influence the value of the mats and mattings more than coir - Hence the products cannot be considered to fall, under the description of Coir mats, matting, floor covering mentioned in SI No. 219 of Schedule 1 but appropriately falls within the description of Carpets and other textile floor coverings, tufted, whether or not made up mentioned in SI No. 144 of Schedule II of the Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. SI No. 219 of Schedule I of Notification No. 01/2017 CT (Rate) dated 28.06.2017 as amended by Notification No. 34/2017 CT (Rate) dated 13.10.2017 does not cover PVC Tufted Coir mats and matting - PVC Tufted Coir Mats and Matting do not attract low band of tax rate - PVC tufted Coir mats and matting are appropriately classifiable under Customs Tariff Item 5703.90.90 and attracts GST at the rate of 12% as per entry at SI. No. 144 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017.
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2021 (7) TMI 538
Classification of goods - Mats, Mattings and Floor Covering of Coir, if backed by PVC, Rubber, Latex etc - would would fall under Tariff Headings 5702, 5703 and 5705 at SI. No.219 of Schedule - I of N/N. 1/2017-CGST (Rate) dated 28.06.2017? - HELD THAT:- It is an undisputed fact that the exposed surface when in use of the Mats, Mattings and Floor coverings of coir backed by PVC, Rubber, Latex etc manufactured by the applicant is coir a textile material. Therefore, the product is appropriately classifiable under Chapter 57 of the Customs Tariff Act. Heading and the sub-heading of Chapter 57 under which the product falls - HELD THAT:- The Heading 5702 covers carpets and other textile floor coverings, woven, not tufted or flocked, whether or not made up including Kelem , Schumacks , Karamanie and similar hand-woven rugs and the sub-heading 5702 20 covers floor coverings of coconut fibres (coir) which includes coir mats, carpets and other rugs. However, the product manufactured by the applicant cannot be classified under 5702 20 as it does not include coir mattings / carpets with PVC or rubber backing - The Heading 5705 covers other carpets and other textile floor coverings whether or not made up and hence the product of the applicant does not fall under 5705 - On the basis of the descriptions of the headings and the relevant chapter notes the product of the applicant is appropriately classifiable under Tariff Sub-Heading 5703 90 90 of the Customs Tariff Act. Whether the product will attract GST at the rate of 5 % as per SI No. 219 of Schedule I or GST at the rate of 12 % as per SI No. 144 of Schedule II of N/N. 01/2017 Central Tax (Rate) dated 28.06.2017? - HELD THAT:- The entry at SI No. 219 of Schedule I of the notification refers to the coir mats, mattings, floor coverings etc that are exclusively made up of coir fibres. In the instant case though the exposed surface of the mats / mattings I floor coverings manufactured and supplied by the applicant are of coir it is backed by PVC I Rubber etc and the manufacturing process involves use of technologically advanced machines for providing the backing using PVC, Rubber Compound, Chemicals etc and the PVC / Rubber Compound and chemicals have equal importance as that of coir - the products cannot be considered to fall, under the description of Coir mats, matting, floor covering mentioned in SI No. 219 of Schedule 1 but appropriately falls within the description of Carpets and other textile floor coverings, tufted, whether or not made up mentioned in SI No. 144 of Schedule II of the N/N. 01/2017 Central Tax (Rate) dated 28.06.2017. Thus, Mats, Matting and Floor Covering of Coir backed by PVC, Rubber, Latex etc are appropriately classifiable under Tariff Sub- Heading 5703 90 90 of First Schedule of the Customs Tariff Act, 1975 and attracts GST at the rate of 12% as per entry at SI No. 144 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017.
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2021 (7) TMI 537
Classification of supply - composite supply or bundled supply - healthcare services - supply of medicines, surgical items, implants, stents and other consumables used in the course of providing health care services to inpatients admitted to the hospital - supply of food to all the inpatients - eligibility of exemption under N/N. 12/2017 read with Section 8(a) of GST - avallment of ITC - common purchase of medicines and surgical items which are ultimately supplied on actual basis to inpatients and outpatients. HELD THAT:- Inpatient services falling under SAC 999311 means services provided by hospitals to inpatients under the direction of medical doctors aimed at curing, restoring and / or maintaining the health of a patient and the service comprises of medical, pharmaceutical and paramedical services, rehabilitation services, nursing services and laboratory and technical services - The primary purpose of the hospital is to provide treatment to the patients approaching them. The basic intention of the patients visiting the hospital is to get treatment for their ailment. Depending upon the severity of the illness the patient may require immediate medical attention, continuous monitoring etc. Therefore, according to their health condition they will be treated as out-patient or admitted as inpatient. The patients admitted to a hospital for treatment expect that proper diagnosis of the disease is made and treatment including appropriate medicines, surgical procedures if necessary, consumables and implants required along with proper diet is administered to them in the most efficient manner so that they can regain their health within the shortest possible time and resume their activities. Therefore, the medicines, implants, consumables and foods supplied in the course of providing treatment to the patients admitted in the hospital is an integral part of the health care service extended to the patients. The CBIC has in Para 5 (3) of Circular No.32/06/2018-GST dated 12.02.2018 clarified that food supplied to the inpatients as advised by the doctor / nutritionist is a part of composite supply of healthcare and not separately taxable. Thus, the applicant is a clinical establishment as defined in Para 2 (s) of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 and the supply of medicines, surgical items, implants, stents, food and other consumables to inpatients admitted to the hospital for diagnosis, or medical treatment or procedures is a composite supply where the principal supply is healthcare services falling under SAC 999311 which is exempted as per entry at SI No. 74 of N/N. 12/2017 Central Tax (Rate) dated 28.06.2017. Availment and utilisation of input tax credit - common purchase of medicines and surgical items which are ultimately supplied on actual basis to inpatients and outpatients - HELD THAT:- The eligibility of credit of tax paid on the inputs and input services used for taxable as well as exempted supplies are governed by the provisions of Section 17 (2) of the CGST Act and Rule 42 of the CGST Rules, 2017. Rule 42 of the CGST Rules, 2017 prescribes the manner of determination of input tax credit in respect of inputs or input services and reversal thereof - Hence, where common credit on inputs or input services partly used for effecting taxable supplies and partly for effecting exempt supplies are availed the eligible input tax credit shall be calculated as per the formula prescribed in Rule 42 of the CGST Rules, 2017 and the common credit pertaining to exempt supplies calculated as per the said formula shall be reversed.
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2021 (7) TMI 536
Classification of goods - rate of GST - import as well as supply of Laboratory reagents for rapid testing of food safety parameters - applicability of Entry No. 80 in Schedule II to the N/N. 01/2017-Integrated Tax (Rate) dated 28-06-2017 (as amended) - Taxable at the rate of 12% or under Entry No. 453 to Schedule III, attracting a levy of integrated tax at the rate of 18%? - HELD THAT:- The reagents referred to in Heading 3822 of the Customs Tariff includes both diagnostic and laboratory reagents. The Tariff Heading 3002 pertains to human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera, other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products and the Tariff Heading 3006 pertains to pharmaceutical goods specified in note 4 of chapter 30. Admittedly, the products supplied by the applicant are laboratory reagents which are predominantly used in food testing lab or in the field for testing of processed and unprocessed food. Hence, they do not fall under any of the sub - headings / tariff items under Heading 3002 or 3006 and therefore, they are appropriately classifiable under Customs Tariff Heading 3822 00 90. The description in the entry at SI No. 80 of Schedule II of Notification No. 01/2017-Integrated Tax (Rate) dated 28.06.2017, is All diagnostic kits and reagents . Hence, it is evident that all reagents falling under Customs Tariff Heading 3822 are covered under the entry at SI No. 80 of Notification No. 01/2017 Integrated Tax (Rate) dated 28.06.2017. Thus, the laboratory reagents for rapid testing of foods safety parameters supplied by the applicant is appropriately classifiable under Customs Tariff Heading 3822 00 90 and is liable to GST at the rate of 12% as per entry at SI No. 80 of Schedule II of N/N. 01/2017 Integrated Tax (Rate) dated 28.06.2017.
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2021 (7) TMI 535
Classification of goods - rate of tax - Jackfruit Chips - Banana Chips - Sharkara Varatty - Halwa - Tapioca Chips - Potato Chips - roasted / salted / roasted and salted preparations of Ground nuts, Cashew nut and other seeds. HELD THAT:- Chapter 21 of the Customs Tariff covers Miscellaneous edible preparations . The Heading 2106 of the Chapter 21 covers food preparations not elsewhere specified or included. Those food preparations, not specified or included elsewhere in the tariff being preparations for use either directly or after processing for human consumption are to be classified under this head. Therefore, it is evident that the entry is a residuary entry in respect of edible preparations and hence the edible preparations shall be classified under this entry only if the same are not classifiable under any of the other specific entries for edible preparations - Explanation appended to the Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 clarifies that the rules for interpretation of the First Schedule of the Customs Tariff Act, 1975 including the Section and Chapter Notes and the General Explanatory Notes are applicable for interpretation of the GST Tariff / Rate Schedule. All the products other than Halwa - fall under the category of Namkeens classifiable under Customs Tariff Heading 2106 90, liable to GST at the rate of 5 % as per entry at SI Nos. 101 and 101A of Schedule I of N/N. 01/2017 Central Tax (Rate) dated 28.06.2017? - HELD THAT:- Applying the principles of interpretation in Rule 2 of the General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975 the Jackfruit Chips, Banana Chips, Sharkara Varatty, Tapoica Chips and Potato Chips (Whether salted/ masala or otherwise) are classifiable under Tariff Heading 2008 19 40 of the Customs Tariff Act, 1975. Regarding classification of roasted /salted / roasted and salted Cashew nuts, Ground nuts and other nuts there are specific headings under Chapter 20 that covers the products. Accordingly, roasted /salted / roasted and salted Cashew nuts are classifiable under Tariff Heading 2008 19 10 and other roasted /salted / roasted and salted nuts and seeds are classifiable under 2008 19 20 of the Customs Tariff Act, 1975. Halwa - fall under the category of Sweetmeat or otherwise - HELD THAT:- The product Halwa being prepared using maida and sugar is a sweetmeat and is appropriately classifiable under Customs Tariff Heading 2106 90 99. Rate of GST - HELD THAT:- It is evident that all the products that fall under Chapter Heading 2008 of the Customs Tariff Act, 1975 attract GST at the rate of 12 %. In respect of Halwa that falls under Customs Tariff Heading 2106 90 99 it is seen that there is an entry at SI No. 101 of Schedule I of N/N. 01/2017 - Central Tax (Rate) dated 28.06.2017 as per which all sweetmeats falling under Tariff Item 2106 90 attract 5% GST.
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2021 (7) TMI 534
Classification of services - resort providing various other services - providing house boat for cruises - meals were provided as part of package - Alcohol provided, if any, is to be billed separately - classified under the Chapter 99, Heading 9964 and Service Code 996415? - N/N. 11/2017-Central Tax (Rate) dated 28-06-2017 and N/N. 8/2017-Integrated Tax (Rate) dated 28-06-2017 - Input Tax Credit. HELD THAT:- The Scheme of Classification of Services is notified as Annexure to Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. Chapter 99 - Heading - 9964 pertains to passenger transport services and 996415 pertains to local water transport services of passengers by ferries, cruises and the like. The Explanatory Notes to the Heading 996415 states that the service code includes inland water cruises that include transportation, accommodation, food and other incidental services in an all-inclusive fare. The services rendered by the applicant as detailed above squarely falls under the Heading 996415 in view of the explanatory note and hence the services are appropriately classifiable under SAC 996415. Applicable rate of GST - HELD THAT:- The entry at SI No. 8 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 pertains to the rate of tax applicable for services falling under Heading -9964 - Passenger transport services - services rendered by the applicant that are classifiable under Heading 996415 is covered by the above entry in Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 and is accordingly liable to GST at the rate of 18%. Eligibility for ITC - HELD THAT:- Section 17 of CGST Act pertains to apportionment of credit and blocked credits. Sub-section (5) of Section 17 specifies the list of goods and services in respect of which input tax credit is not available except under the situations specified therein. Vessels, food and beverages are included in the list specified in Section 17 (5) and hence input tax credit of tax paid on vessels and in the repair and maintenance of vessels and in respect of food and beverages are not available except when they are used for the purposes specified therein. The applicant is eligible for the input tax credit in respect of the expenses incurred by them on refurbishing, furnishing, maintaining and repairing the vessel as the supplies are used for providing the taxable outward supply of passenger transport services specified in the exclusion clause in Section 17 (5) (aa) (i) (B) of the CGST Act - The applicant is also eligible for input tax credit on the supply of food during the cruise as the supply is an element of the outward taxable supply of passenger transport services and hence covered by the proviso to Section 17 (5) (b) (i) of the CGST Act.
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2021 (7) TMI 533
Classification of goods - rate of GST - marine engines and its spare parts - classifiable under general tax rate as per the entry of Schedule I, SI.No.252 of GST Act dated 28-06-2017, being the part of fishing vessel of heading 8902? - levy of GST - supply of materials and labour charges incurred during warranty period at free of cost on fishing vessels presented for repair works - Sch. No.I, Sl.No.252 of GST Act dtd.28-06-2017 - Rate of tax on puff insulated iceboxes produced by SIFFS and used by traditional fishermen at their fishing vessels for the purpose of reducing fish spoilage and maintaining good hygiene - rate of tax on marine engine, when it is supplied to defence department, patrol, flood relief and rescue operations. The rate of GST applicable to marine engines falling under Customs Tariff Heading 8407 and its spare parts when supplied for use as part of fishing vessels - HELD THAT:- Fishing vessels, factory ships and other vessels for processing or preserving fishery products fall under Customs Tariff Heading 8902 and is liable to GST at the rate of 5% as per entry at SI No. 247 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. However, as per entry at SI No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907 falling under any chapter of the Customs Tariff attracts GST at the rate of 5 %. Therefore, if the marine engines are supplied for use as part of fishing vessel falling under Customs Tariff Heading 8902, then the marine engine as part of fishing vessel will only attract GST at the rate of 5% as per the entry at SI No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 - If it is supplied for use other than as parts of fishing vessels as stated above, GST at the rate applicable under the respective Customs Tariff Headings in which they are classified, will apply. Whether GST is applicable for the free supply of materials and labour incurred during repair works within warranty period to the fishing vessels supplied by them? - HELD THAT:- The consideration received for the original supply includes the consideration for promise to repair or replace. Hence separate consideration is not charged for warranty repairs I replacement. The supply of goods and services for warranty repairs I replacement is incidental to the original supply and the value of supply made earlier includes the charges for the warranty supply also. Therefore, the supply of goods or services or both during warranty period without consideration in discharge of the warranty obligation is not liable to GST. However, if any additional consideration is received in respect of such supplies of goods or services or both it will be liable to GST at the rate applicable for the goods I services as per the rate schedule. Whether GST rate of 5% can be applied for supply of materials and service for maintenance or repair works of fishing vessels of Heading 8902? - HELD THAT:- In view of the clarification of the CBIC in Circular No. 47/21/2018 - GST dated 08.06.2018 in cases where contract of supply of repair or maintenance specifies that the spare parts and services are to be separately charged and the value of such spare parts and services supplied are shown separately, the spare parts and the services shall attract GST respectively at the rates applicable to such spare parts and service as per the GST rate schedule as the supply of the spare parts and repair service are distinct and separately identifiable. In such cases the spare parts being supplied for use as part of fishing vessels will attract GST at the rate of 5% as per entry at SI No. 252 of Schedule I of N/N. 01/2017 Central Tax (Rate) dated 28.06.2017 and the services will be liable to GST at the rate of 18% as per SI No. 25 (ii) of the N/N. 11/2017 Central Tax (Rate) dated 28.06.2017. The rate of GST applicable for Puff insulated iceboxes manufactured by the applicant and used in fishing vessels for the purpose of reducing fish spoilage and maintaining good hygiene - HELD THAT:- The puff insulated ice boxes are appropriately classifiable under Customs Tariff Heading 3923 10 30 - Articles for the conveyance or packing of goods, made of plastics - Boxes, cases, crates and similar articles - Insulated ware. The articles falling under Customs Tariff Head 3923 are liable to GST at the rate of 18% as per entry at SI No. 108 of Schedule III of N/N. 01/2017 Central Tax (Rate) dated 28.06.2017. The ice box is used in the fishing vessels for storage of fish to reduce spoilage and to maintain freshness of fish during conveyance - The product cannot be considered as a part of fishing vessel falling under Customs Tariff Heading 8902 and hence is not eligible for the concessional rate of GST as per entry at SI No. 252 of Schedule I of N/N. 01/2017 Central Tax (Rate) dated 28.06.2017. The rate of GST applicable to marine engines of Heading 8407 when it is supplied to defence department, patrol, flood relief and rescue operations - HELD THAT:- The vessels used by the Defence and other agencies for patrol, relief and rescue operations fall under Customs Tariff Heading 8906 - Other vessels including warships and lifeboats other than rowing boats. As per entry at SI No. 252 of Schedule I of N/N. 01/2017 Central Tax (Rate) dated 28.06.2017 parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907 falling under any chapter of the Customs Tariff attracts GST at the rate of 5 %. Therefore if the marine engines are supplied for use as part of vessel falling under Customs Tariff Heading 8906, which are used by the Department of Defence and other agencies for patrol, relief and rescue operations then the marine engine as part of such vessel will only attract GST at the rate of 5%.
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2021 (7) TMI 532
Condonation of delay in filing SLP - proposal for filing the Special Leave Petition was sent after almost six months, and it took another three months to decide whether to file Special Leave Petition or not - lethargy on part of the revenue department - Waiver of interest - Regularization of the Petitioner s GSTR-3B for August, 2017 by bringing it in line with GSTR-1 furnished by the Petitioner - HELD THAT:- We have repeatedly discouraged State Governments and public authorities in adopting an approach that they can walk in to the Supreme Court as and when they please ignoring the period of limitation prescribed by the Statutes, as if the Limitation statute does not apply to them. We have also categorized such kind of cases as certificate cases filed with the only object to obtain a quietus from the Supreme Court on the ground that nothing could be done because the highest Court has dismissed the appeal. The objective is to complete a mere formality and save the skin of the officers who may be in default in following the due process or may have done it deliberately. We have deprecated such practice and process and we do so again. We refuse to grant such certificates and if the Government/public authorities suffer losses, it is time when concerned officers responsible for the same, bear the consequences. Looking to the period of delay and the casual manner in which the application has been worded, we consider appropriate to impose costs on the petitioner(s) of ₹ 25,000/- for wastage of judicial time which has its own value and the same be deposited with the Supreme Court Advocates On Record Welfare Fund within four weeks - Special Leave Petition is dismissed as time barred.
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2021 (7) TMI 524
Seeking grant of Anticipatory Bail - quantum of amount involved is below ₹ 5 crores - bailable offence under Section 132 of CGST Act or not - HELD THAT:- The petitioners submits that the petitioners will appear before the concerned Commissioner on or before 09.07.2021. The said submission is placed on record. Application filed for interim bail does not survive for consideration and the same is disposed of.
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Income Tax
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2021 (7) TMI 531
Additional depreciation allowed in the next year, in case, the same cannot be allowed in the earlier year - provisions in the statute to carry forward the balance additional depreciation to the following years - HELD THAT:- Issue decided against revenue as decided in M/S. COMSTAR AUTOMATIVE TECHNOLOGIES PRIVATE LTD. [ 2020 (3) TMI 814 - MADRAS HIGH COURT]
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2021 (7) TMI 530
Disallowance u/s 14A r.w.r. 8D - Tribunal treating 3% of the exempt income as the expenditure to be disallowed u/s 14A - HELD THAT:- As decided in M/S. ENVESTOR VENTURES LTD. [ 2021 (1) TMI 922 - MADRAS HIGH COURT] disallowance under rule 8D of the IT Rules read with Section 14A of the Act can never exceed the exempted income earned by the Assesee during the particular assessment year and further, without recording the satisfaction by the Assessing Authority that the apportionment of such disallowable expenditure made by the Assessee with respect to the exempted income is not acceptable for reasons to be assigned the Assessing Authority, he cannot resort to the computation method under Rule 8D of the Income-tax Rules, 1962. Also see HCL TECHNOLOGIES LTD. [ 2018 (5) TMI 357 - SUPREME COURT] . - Decided in favour of the assessee.
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2021 (7) TMI 529
Rectification u/s 254 - DR submitted that this tribunal has erred in granting exemption under section 54F of the Act, to assessee as assessee violated provisions of section 54 (3) of the Act - HELD THAT:- We note that this tribunal denied the exemption under section 54F by following decision of Hon ble Karnataka High Court in case of Anand Basappa [ 2008 (10) TMI 99 - KARNATAKA HIGH COURT] Hon ble Karnataka High Court in case of CIT vs McDowell and Co Ltd [ 2008 (3) TMI 301 - KARNATAKA HIGH COURT] following the decision of Honda Siel Power Products Ltd [ 2007 (11) TMI 8 - SUPREME COURT] has held that the power under section 254 (2) of the Act cannot be exercised so as to review order passed by the Tribunal. Hon ble court held that application of principles laid down by the superior courts to the facts of the case on erroneous understanding of such principles, recording of an erroneous finding by the Tribunal based on facts on record, formation of a conclusion on erroneous application of provision of law to the facts of the case, etc., cannot be held to be a mistake apparent from record warranting rectification by the Tribunal in exercise of its power under section 254 (2) of the Act. We are of the view that by reconsidering the application of principles laid down by Hon ble Supreme Court to the facts of the case or by reconsidering its findings recorded or by reconsidering the application of the relevant provisions of law to the facts of the case in the present pet miscellaneous petition under section 254(2) this Tribunal would be exercising power of review of its earlier order on merits but not rectification of mistake apparent from record and such review would certainly is beyond the scope of section 254(2).
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2021 (7) TMI 527
Entitlement to raise a fresh claim during the assessment proceedings u/s 153A pursuant to search action u/s 132 - whether the Tribunal was justified in confirming the decision of commissioner of Income-tax (Appeals) order and thereby upholding the disallowance under section 14A of the Act? - HELD THAT:- The Tribunal, by placing reliance on the decision of JAI STEELS, [ 2013 (6) TMI 161 - RAJASTHAN HIGH COURT] has held that the assessment or re-assessment made in pursuance to Section 153A of the Act, is not a de novo assessment and therefore, it was not open to the assessee to claim and be allowed such deduction or allowance of expenditure which it had not claimed in the original assessment proceedings which in the case of the assessee stood completed vide order dated 15.01.2009 passed under Section 143(1) of the Act. The Tribunal, in our opinion, has followed the decision of Rajasthan High Court and we confer the view taken by Rajasthan High Court in JAI STEELS, supra. For the aforementioned reasons, the substantial questions of law are answered against the assessee and in favour of the revenue.
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2021 (7) TMI 525
Condonation of delay in filing the return of income -single judge bench has allowed the petition of the assessee - period of limitation for scrutiny assessment expiring - HELD THAT:- A bare reading of Section 119(1) clearly shows that the circulars/orders/instructions are binding on other income tax authorities and that the same are not binding on the CBDT itself. However, despite the above settled position of law, the CBDT has relied on Circular No. 9/2015 dated 09.06.2015 and rejected the application of the respondent/assessee. In the present case the CBDT has ignored the recommendations of the jurisdictional authorities to condone the delay in filing the return of income, at the time of considering the application of the respondent/assessee seeking condonation of delay in filing the return of income. The CBDT had sought for a report from the Principal Commissioner of Income Tax-II, as well as the jurisdictional Additional Commissioner of Income Tax. It is pertinent to note that both the Principal Commissioner of Income Tax-II as well as the jurisdictional Additional Commissioner of Income Tax have given a report that the delay in filing the return of income may be condoned. Though the CBDT has referred to the said opinions, but has not taken the same into consideration while deciding the application of the respondent/assessee. This Court is of the opinion that the order passed by the learned Single Judge does not warrant interference. As department has stated before this Court that the present case will become time barred for the purpose of scrutiny and therefore, for the purpose of scrutiny and other proceedings, the right of the revenue to proceed ahead in accordance with law by taking into account the date of limitation from the date the order has been passed by the learned Single Judge may be protected - The prayer made by the learned counsel for the Income Tax department appears to be genuine prayer and therefore, in the present case, for the purpose of scrutiny, if any, and for the purpose of other proceedings also, the limitation shall start from the date the order has been passed by the learned Single Judge.
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2021 (7) TMI 521
Stay of recovery of tax for a further period of 90 days or until disposal of the appeal whichever is earlier - HELD THAT:- Having regard to the submission made by the learned senior standing counsel appearing for the appellant-Revenue, since the Tribunal had already disposed of the main appeal [ 2016 (5) TMI 1249 - ITAT CHENNAI] the appeal filed as against the interim order passed in the said appeal has become redundant. Accordingly, the Tax Case Appeal is dismissed as infructuous.
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2021 (7) TMI 516
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Substantial questions of law involved in this appeal have been answered in favour of the assessee by this Court in M/S. QUEST GLOBAL ENGINEERING SERVICES PVT. LTD. [ 2021 (3) TMI 434 - KARNATAKA HIGH COURT] as held only expenses proportionate to earning of exempt income could be disallowed under Section 14A of the Act and the decision of MAXOPP INVESTMENT LTD [ 2018 (3) TMI 805 - SUPREME COURT] is an authority for the aforesaid proposition that the provision is relatable to earning of actual income. The object of Section 14A is to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income.
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2021 (7) TMI 515
Credit the Advance Tax paid by the petitioner and the Tax deducted at Source lying to the credit of the Petitioner - HELD THAT:- This Court is of the considered opinion that mixed question of facts and law is to be adjudicated with reference to the documents and evidences to be produced by the respective parties before the Competent Authority. High Court cannot conduct a Roving enquiry with reference to the disputed facts in a writ proceeding under Article 226 of the Constitution of India. Such an exercise is to be done by the Competent Authority by affording an opportunity to the parties concerned. In the present case, the application of law is to be made with reference to the facts as well as the legal principles laid down with reference to the provisions of the Act. Thus, this Court is of an opinion that the relief as such sought for cannot be granted in these Writ Petitions to the petitioner, and the adjudication is required for forming an opinion to decide the issue. In view of the facts and circumstances of the case, it is suffice if a direction issued to the respondent to consider the issues raised by the petitioner and take a decision and pass orders.
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2021 (7) TMI 514
Settlement Commission order u/s 245C - orders are sought to be assailed by the Commissioner of Income Tax, the petitioner herein primarily on the ground that there was no true and full disclosure in the application filed by the second respondents in the respective writ petitions, inasmuch as the additional amount of income declared in the returns filed pursuant to notice issued u/s 153A by them was far lesser than the amount of income ultimately arrived by the 1st respondent Settlement Commission in the impugned order - as stated additional income offered for settling the case was not different from the amount that was of in the revised returns filed pursuant to notice issued under Section 153A and there was no further additional disclosure of income over and above ₹ 50,00,000/- - HELD THAT:- The total income for the block assessment years 2006-07 to 2008-09 in the returns filed by the said 2nd respondent/applicant/2nd respondent herein was ₹ 2,10,06,060/-. After the search was completed under Section 132 the said 2nd respondent/applicant was issued with the notice dated 4.1.2010 under Section 153. The last date for filing returns expired on 03.02.2010. 2nd respondent/applicant initially filed an application under Section 245C of the Income Tax Act, 1961on 12.11.2010. As mentioned elsewhere in the order, the said application was also dismissed by the 1st respondent Settlement Commission by its order dated 16.11.2010. Thereafter, the 2nd respondent/applicant filed a return on 01.12. 2010 under Section 153 A of the Act and a fresh application under Section 245C of the Income Tax Act, 1961 on 01.12.2010 before the 1st respondent Settlement Commission. The application filed before the 1st respondent Settlement Commission, the 2nd respondent/applicant offered a total income of ₹ 5,05,69,810/- for these assessment years consisting of ₹ 2,95,63,750/ - as the additional income for the purpose of settling the case under chapter XIX-A of theIncome Tax Act, 1961. 1st respondent Settlement Commission after considering the reports of the petitioner Income Tax Department added another sum ₹ 2,93,16,704/- . This amount is double the additional amount offered by the 2nd respondent/applicant in the application filed under Section 245C of the Income Tax Act, 1961 for sum of ₹ 2,95,63,750/-. The amount of income enhanced is almost 100% of the additional income offered by the 2nd respondent/applicant. Therefore, it cannot be said that there was full and true disclosure of the additional income in the application filed under Section 245C The 1st respondent Settlement Commission therefore ought to have rejected the application for by these 2nd respondent/applicants as the intention of the 2nd respondent/applicant was only to take a chance by not disclosing truly and fully the correct additional income which was not disclosed at the time of filing of original returns under Section 139 of the Income Tax Act, 1961. It was intended take advantage of limited scope of enquiry in the proceeding before the 1st respondent Settlement Commission. The impugned order of the 1st respondent Settlement Commission is liable to be quashed. The above writ petitions filed by the petitioner Commissioner of Income Tax deserves to be allowed and are accordingly allowed.
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2021 (7) TMI 511
Bogus LTCG - Unexplained cash credit u/s 68 - penny stock purchases - during hearing, a clarification was sought by the bench as to the outcome of the investigations carried out by SEBI in the case of this scrip - HELD THAT:- The bench deem it fit to set-aside the findings of Ld. CIT(A) and restore the matter back to the file of Ld. CIT(A) for fresh adjudication after affording due opportunity of hearing to the assessee. CIT(A) is directed to reconsider the factual matrix in terms of the cited decision of the co-ordinate bench of this Tribunal as relied upon by Ld. AR as well as also consider the events arising out of orders passed by SEBI in case of this scrip. All the issues are kept open. The grounds thus raised stands allowed for statistical purposes.
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2021 (7) TMI 510
Penalty u/s 271AA - failure to keep and maintain information as required u/s 92D and not furnishing the report u/s 92E of the Act in relation to the assessment year 2013-14 - crux of the AO's point of view is that the assessee paid to the persons referred to in section 40A(2)(b) as per her own admission in the tax audit report and thus breached the mandate of sections 92D/92E - HELD THAT:- The first transaction of purchases was with Yogita Yogesh Mahajan, who is assessee s husband s brother s wife. She is neither the husband nor wife or brother or sister or any lineal ascendant or descendant of the assessee and hence not covered within the definition of relative as given in section 2(41). The second transaction of purchases is with Prabhavati Mahajan, proprietor Soni Adat Dukan, who is mother-in-law of the assessee. She is also not covered under section 2(41). The third transaction is payment of rent to Yogesh Pandurang Mahajan, who is assessee s husband s brother. He too does not fall within the definition of relative as given in section 2(41). The last transaction is payment of rent to Sunil Pandurang Mahajan, who is the assessee s husband. This transaction is covered within the meaning of term relative as given in section 2(41) and hence falls within the realm of section 40A(2)(b). As noticed above the definition of specified domestic transaction as given in section 92BA as embracing, inter alia, the transactions referred to in section 40A(2)(b) of the Act provided the aggregate of such transactions entered into by the assessee in the previous year exceeds a sum of five crore rupees. As the assessee s transaction covered u/s 40A(2)(b) is restricted only to ₹ 1.80 lakh, the same would not qualify as SDT u/s 92BA. A fortiori, sections 92D/92E also do not get magnetized and consequently, there can be no question of any penalty u/s 271AA. We, therefore, order to delete the penalty. - Decided in favour of assessee.
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2021 (7) TMI 508
Correct head of Income - Interest income earned from deposits kept in banks for availing bank guarantees - assessable under the head Income from other sources OR business income - HELD THAT:- The bank deposits have been made for availing bank guarantees to be given in favour of Income tax department and Customs department. So far as, the bank guarantees given in favour of income tax department is concerned, we agree with the view of the AO that the liability towards income tax arises upon the assessee, which owns eligible undertakings. The income tax liability arises upon the assessee on the profits already generated by the undertaking. Hence, the deposits made for availing such bank guarantees, in our view, cannot be linked with the business carried on by the undertakings. Hence we agree with the view of the tax authorities that the interest income earned on bank deposits made for securing bank guarantees in favour of income tax department cannot be considered as business income of the eligible undertaking. Accordingly, the same has been rightly assessed under the head Income from other sources. Also noticed that the bank guarantees have been given in favour of Customs department also - There should not any dispute that the transactions under the Customs Act could be linked to a particular undertaking, in which case, the interest income earned on the above said bank deposits could be linked to any particular eligible undertaking . Since transactions under Customs Act are related to import/export activities carried on by the undertakings, we are of the view that the decision rendered in the case of Hewlett Packard Global Soft Ltd [ 2017 (11) TMI 205 - KARNATAKA HIGH COURT ] can be applied on it. Accordingly, the interest income shall normally form part of business income of the undertaking. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to assess interest income from bank deposits for availing duty benefits under Customs Act as business income of the relevant undertaking. The assessee is directed to link the bank deposits with specific undertaking so that the AO could work out deduction u/s 10A accordingly. TP adjustment made in respect of ITES services - Comparable selection - HELD THAT:- As relying on the case of Indecomm Global Services (India) P [ 2019 (8) TMI 1664 - ITAT BANGALORE ] exclusion of M/s Infosys BPO Ltd, M/s TCS E-serve Ltd and M/s Excel Infoways Ltd. Following the above said decision, we direct exclusion of above said three companies. The co-ordinate bench has remanded the matter to the file of AO/TPO M/s Universal Print Systems Ltd and M/s BNR Udyog Ltd. Following the same, we restore these two companies to the file of AO/TPO with similar directions. Inclusion of Crystal Voxx Ltd - Plea raised by the Assessee is correct and the TPO ought to have regarded this company as comparable company because the only reportable segment of this company was BPO. We direct the TPO to include this company as a comparable company. Inclusion of foreign exchange gain as part of profits of undertaking for the purpose of computing deduction u/s 10AA - HELD THAT:- As relying on case of Wipro Ltd [ 2012 (2) TMI 535 - KARNATAKA HIGH COURT ] we direct the AO to consider foreign exchange gains realised on export proceeds as income derived from export and allow deduction u/s 10AA of the Act. Setting off of brought forward losses prior to computing deduction u/s 10AA - HELD THAT:- The Hon ble Supreme Court has held in the case of Yokogawa India Ltd [ 2016 (12) TMI 881 - SUPREME COURT ] that the deduction u/s 10A has to be made independently and immediately after the stage of determination of its profits and gains. held that the deductions under Section 10A therefore would be prior to the commencement of the exercise to be undertaken under Chapter VI of the Act for arriving at the total income of the assessee from the gross total income. In the present case, the deduction claimed by the assessee is under section 10AA, which is akin to the deduction allowed u/s 10A of the Act. Accordingly, the ratio laid down by Hon ble Supreme Court in the above said case shall apply to the deduction claimed u/s 10AA of the Act. Accordingly, we direct the AO to allow deduction u/s 10AA without setting off of brought forward losses. Deduction of expenses incurred on buy back of shares - HELD THAT:- This issue has been decided in favour of the assessee by the co-ordinate bench in the assessee s own case relating to AY 2011-12 [ 2020 (9) TMI 1102 - ITAT BANGALORE ] thus we direct the AO to allow the expenses incurred on buy back of shares. Non-grant of brought forward MAT credit - HELD THAT:- Since this issue requires factual verification, we restore this issue to the file of the AO with the direction to examine the claim of the assessee in accordance with law. Charging of interest u/s 234C - A.R submitted that the interest u/s 234C is chargeable on the returned income AND AO has charged said interest on assessed income - HELD THAT:- We find merit in the submission of Ld A.R, since it is in accordance with the provisions of sec. 234C of the Act. Accordingly, we direct the AO to charge interest u/s 234C of the Act on the returned income.
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2021 (7) TMI 507
Reopening of assessment u/s 147 - addition u/s 68 - non independent application of mind by AO - borrowed satisfaction - HELD THAT:- Reopening was made on the basis of the report of the Investigation Wing and there is no independent application of mind by the AO for the reopening. The Hon'ble High Court in a number of cases have held that the reopening on the basis of the report of the Investigation Wing without independent application of mind by the AO is not valid. Accordingly, the reassessment proceedings which were based on the report of the Investigation Wing and without independent application of mind by the AO have been held to be illegal. Since the AO, in the instant case, has reopened the assessment on the basis of report of the Investigation Wing and there appears to be no independent application of mind by the AO for reopening of the case, therefore, the reassessment proceedings initiated by the AO in the instant case, in our opinion, is not proper. Decided in favour of assessee.
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2021 (7) TMI 506
Validity of reassessment proceedings - Addition u/s 68 - HELD THAT:- CIT(A) after detailed discussions, dismissed each of the aspect raised by the assessee challenging the validity of the reassessment proceedings. In absence of any contrary material brought to our notice, the reassessment proceedings initiated by the AO and confirmed by the CIT(A) is upheld. Addition u/s 68 - As assessee, during the year, has sold the investment and has received the amount by cheque and, therefore, provisions of section 68 cannot be applied to realization of investment which was duly reflected in the balance sheet of the assessee company in the preceding assessment year. In my opinion, if the sale of share is bogus, then the purchase of the same shares is also bogus. If the case of the Revenue is that assessee's own money has come back to the assessee in shape of accommodation entry, then, the money of the assessee had gone in the preceding year in shape of purchase of the shares which were sold during the year. No action appears to have been taken in the preceding assessment year treating the purchase of the shares as bogus. Once such bogus purchase is sold then the entire amount, cannot be added u/s. 68 - set aside the order of the CIT(A) on this issue and direct the AO to delete the addition - Decided in favour of assessee.
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2021 (7) TMI 505
Difference in stock - Additions u/s 69B - difference between the statement given by the assessee wherein he has given estimation of the stock and the stock as valued by the valuer at the time of survey - Addition on the basis of statement during the course of survey - HELD THAT:- Admittedly, there is no difference in the quantitative tally or any discrepancy in purchase and sales or any excess quantity of jewellery was found so as to draw any adverse inference. Albeit the addition is based on the statement given by the assessee in respect of stock value at the time of survey and even in the statement there is no reference of excess quantity. CIT (A) analysis is de hors the basic fact that there was no difference in the quantitative tally nor the books of account have been rejected or the sale and purchase has been disputed. Once the opening stock, purchase and direct cost on the debit side is not in dispute; and on credit side sales have been accepted and there is no difference in the quantitative tally in the closing stock, then no addition can be made in the trading account. Here the addition is not based on undervaluation of closing stock but undisclosed investment in closing stock. Simply because there is a difference in the valuation made by the valuer and the value stated by the assessee during the survey in his statement as an approximate estimate of the stock available with him, addition cannot be made as undisclosed investment. Had it been case where there is excess quantity of stock found not recorded in the books or not explained, then perhaps addition on account of undisclosed investment could have been made.No reason to sustain the addition; therefore, the same is directed to be deleted. - Decided in favour of assessee. Disallowance of interest on the advance - HELD THAT:- Assessee had interest free unsecured loan from friends and relatives and this fact has also been noted by the Ld. CIT(A). Simply because the assessee has secured loan from Standard Chartered Bank that does not mean that same interest bearing fund have been given for interest free loan to other party. If assessee has interest free funds which far exceed the advance given, then there cannot be any presumption that such advance has been given only out of such interest bearing funds. Once the assessee has substantial interest free fund, then no addition/disallowance can be made on this score. Accordingly, this ground is allowed.
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2021 (7) TMI 504
Disallowance u/s. 14A r.w.r. 8D(2) - disallowance voluntarily made by the assessee - HELD THAT:- AR fairly stated that the exempt income derived by the assessee was more than what is incorrectly stated by the Ld. CIT(A) in his order and accordingly, prayed for restoring of this matter to the file of Ld. AO for de novo adjudication in accordance with law. We find that the law on this issue u/s. 14A of the Act is well settled as on date. We direct the Ld. AO to consider only those investments which had actually yielded exempt income to the assessee while doing the de novo assessment on the issue of disallowance u/s. 14A of the Act in accordance with law.
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2021 (7) TMI 503
Assessment of income - Income assessed at 8% on the turnover - AO treated the entire cash deposits in the assessee's bank account as turnover and assessed 8% of it as an income - As argued since the assessee earned commission from the gross receipts, invoking section 44AD is not correct - HELD THAT:- It is clear from the assessment order that on due consideration of material, assessee's submission etc that the AO originally proposed the cash withdrawals from the assessee's bank account as assessee's income which the assessee also admitted as commission and interest by his letter to accept receipts as his receipts and required the assessee to produce the proof towards the expenditure claimed by the assessee as against such receipts As seen from the assessment order that the AO required the assessee to explain within one day from the receipt of his letter and thereafter he concluded that the assessee did not explain and completed the assessment on 29.12.2017 taking a different turn. The assessee had placed whatever material available with him and made an attempt to substantiate his claim. It appears that the AO was inconsistent in his approach and completed the assessment without appreciating the material placed before the AO. Therefore, the order of the Ld. CIT(A) is set aside and the issues are remitted back to the AO for a fresh examination and due assessment. Assessee's appeal is allowed for statistical purposes.
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2021 (7) TMI 502
Bogus LTCG - Unexplained cash credit u/s 68 - penny stock purchases - HELD THAT:- CIT(A) held that the AO has clearly established the fact that the impugned transaction is manipulated with the collusion of brokers to paint credit worthiness to the transaction and to claim exemption u/s. 10(38) of the Act and sustained the respective assessment. We find from the records that the respective assessee has not placed any material to dislodge the findings recorded by the Ld. CIT(A). Therefore, all the above appeals, filed by the respective assessee, are dismissed.
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2021 (7) TMI 495
TP Adjustment - Comparability selection - functional profile - HELD THAT:- M/s. Container Corpn. of India Ltd - From perusal of the annual accounts of this company, we also find that Container Corporation of India is a Giant Company with turnover of more than ₹ 3,300/- crores, fixed asset base of around ₹ 2,244/- crores, Container fleet of 13,517 units, Speed Wagons of 6,722 and owning Terminals. The assessee, on the other hand, is a service-oriented company with turnover of ₹ 33.24 cr and fixed asset base (gross) of only ₹ 31.22 crores. Container Corporation of India is also operating in Virtual Monopoly conditions. From the above cumulative reasons, we find that FAR of Container Corporation of India is not akin to that of the assessee. It should, therefore, be rejected as a comparable. M/s. Sanco Trans Ltd - Handling charges earned is 40.96% of the total revenue and balance is passive income i.e., hire charges earned and warehouse charges earned which is 59.03%. There are no segmental accounts prepared. M/s. Sanco Trans has earned total operating revenue of ₹ 4296.36 lakh and total employee cost incurred is 511.96 lakhs which in ratio terms is 11.91%. This shows that this is also not a service-oriented company. For reasons akin to that stated above we, therefore, hold that M/s. Sanco Trans cannot be selected as a comparable TPO had computed the PLI of companies selected by him by presuming that FBT expense is a non-operating item - HELD THAT:- We have perused the material on record and it is seen that there is no adjudication by the Ld. DRP on this issue. We, therefore, direct the TPO to adopt a uniform policy. Once FBT expense is taken as non-operating while computing the PLI of comparable companies, a similar effect should also be given while computing PLI of the tested party. We, therefore, direct the TPO to re-compute the PLI of assessee excluding FBT expense.
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2021 (7) TMI 493
Bogus LTCG - Disallowing exemption u/s 10(38) - penny stock - Addition of Long Term Capital Gain on the listed equity shares treating it as income from undisclosed sources - HELD THAT:- In the instant case the entire transaction was carried out through the Demat account and banking channel upon which STT has been paid by the assessee before us. In order to hold the transaction is bogus and / or ingenuine, the Assessing Officer is required to bring in cogent/clinching evidence to prove the same. It is pertinent to mention that no observation is forthcoming from the orders passed by the revenue pointing out any material defect in the procedure followed by the assessee in such purchase and sale of the shares in question. Neither any cogent/corroborative evidence is brought on record by the revenue to hold otherwise and therefore, there is no doubt that the Assessing Officer has merely proceeded to arrive at his conclusion that the transaction. As taking into consideration the entire aspect of the matter in the absence of any independent enquiry made by the Ld. A.O as already observed by us respectfully relying upon the judgment passed by Hon ble Delhi Bench in the case of Swati Luthra [ 2019 (7) TMI 526 - ITAT DELHI] on the identical facts keeping in view of the orders passed by SEBI, we do not hesitate to observe that holding the said M/s Turbo Tech Engineering Ltd as a penny stock company by the authorities below without any corroborative evidence is uncalled for and unjustified. Such action is erroneous arbitrary whimsical and suffers from the principle of surmise and conjecture. Thus, the disallowance of the claim made by the assessee towards the Long Term Capital Gainbeing bogus based only on mere surmise and conjecture.Thus, the disallowance of the claim made by the assessee towards the Long Term Capital Gain is bad in law and liable to be quashed. Consequentially the addition of 3% of brokerage is also of no basis - Decided in favour of assessee.
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2021 (7) TMI 492
Reopening of assessment u/s 147 - capital gain on JDA transfer in the relevant assessment year - Transfer of capital asset u/s 2(47)((v) - capital gain tax in the year in which JDA is entered into - date of execution of Joint Development Agreement and G.P.A without HELD THAT:- In this case, originally there was no assessment u/s. 143(3) of the Act and reopening was made within four years from the end of relevant assessment year and the AO validly recorded reasons for reopening the assessment as recorded above. At the time of reopening, there need not be conclusive evidence for reopening an assessment. U/s 147 of the Act, reason to believe that income has escaped assessment confers jurisdiction to reopen the assessment where the case is not covered by the provisions of section 143. Intimation u/s. 143(1) cannot be treated as an order of assessment and there being no assessment u/s. 143(3), there is no question of change of opinion on the issue dealt by the AO for reopening the assessment. As AO has reason to believe that income had escaped assessment. It does not mean that there should have been final ascertainment about the fact by legal evidence and conclusion. We are of the opinion that the AO had reason to believe that income has escaped assessment and he duly recorded the reasons on this count. Being so, as held in the case of Rajesh Jhaveri v. ACIT , [ 2005 (3) TMI 55 - GUJARAT HIGH COURT] we uphold the reassessment. Capital gain on JDA - Transfer u/s 2(47) - AO sought to bring capital gain only on the reason that the assessee entered into JDA with the Developer. But there was no progress in the development in the assessment year under consideration. It was the submission of the ld. AR that there was no development activity until the end of FY 2006-07. Commencment of building construction has not been initiated a the building approval was obtained in the next financial year. Therefore, no income is said to have accrued as laid down in section 48 of the Act. Nothing is brought on record by the AO to show that there was development activity in the impugned land during the assessment year under consideration and cost of construction incurred by the developer was not known. Therefore, it is to be inferred that there was no construction activity by the developer during the assessment year in this land. The assessee only received a meagre amount of refundable deposit during the financial year as enumerated in clause 13 of the JDA. Being so, there was no transfer of property under this JDA. Also without accrual of construction to the assessee, assessee was not expected to pay capital gain on the JDA entered by the assessee with the developer. The condition laid down in section 2(47)(v) of the Act r.w.s. 53A of the Transfer of Property Act is not complied with as there was no willingness of the developer to perform his part of the duty in terms of the JDA. Accordingly it is held that there was no transfer for the assessment year under consideration as held by the Hon ble Supreme Court in the case of Seshasayee Steels P Ltd . [ 2019 (12) TMI 702 - SUPREME COURT] . Accordingly, we hold that there was no transfer in AY 2007-08. Grant of exemption u/s. 54/54F - grievance of the assessee is that the AO has granted deduction u/s. 54/54F only on single flat and assessee claimed exemption on two flats built up on two different floors - HELD THAT:- This issue is covered by the Hon ble jurisdictional High Court in the case of Arun K. Thiagarajan[ 2020 (6) TMI 513 - KARNATAKA HIGH COURT] the assessee is entitled to deduction u/s. 54/54F on two flats in principle, though they are in different floors, provided it satisfies all the conditions laid down in section 54/54F. Accordingly, this issue is remitted back to the file of AO fresh consideration, after giving opportunity of being heard to the assessee.
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2021 (7) TMI 491
Deduction claimed u/s 80P(2)(a)(i) - AO rejected the claim on the reasoning that the assessee is a bank, and hence provisions of 80 P are not applicable - HELD THAT:- We notice that, an identical issue has been considered by the co-ordinate bench in the case of Karkala Co-op Bank Ltd [ 2021 (2) TMI 854 - ITAT BANGALORE ] wherein an identical issue has been restored to the file of Ld.AO for examining it afresh as held that the Hon ble Supreme Court has settled many issues in the decision rendered by it in the case of Mavilayi Service Co-operative Bank Ltd.[ 2021 (1) TMI 488 - SUPREME COURT] and since the facts prevailing in the instant case needs to be examined afresh in the light of the principles enunciated by Hon ble Supreme Court in the above said case. Rejection of deduction u/s 80P(2)(d) - interest income earned on fixed deposits with other cooperative societies - HELD THAT:- In the instant case, the assessee has earned interest income from fixed deposits with other banks. In view of the decision rendered in case Totgars Co-operative Sale Society Ltd. [ 2015 (4) TMI 829 - KARNATAKA HIGH COURT] .the assessee is entitled for deduction of proportionate cost, administrative and other expenses. Accordingly, we set aside the order passed by Ld.CIT(A) on this issue and restore the same to the file of the AO with similar directions. Grounds raised by assessee stands allowed for statistical purposes
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2021 (7) TMI 490
Unexplained cash credit u/s.68 - opening balance of loan amount - allegation that, the assessee had provided no evidence to prove that the said amount represents a known liability which is payable - CIT-A deleted the addition - HELD THAT:- We concur with the view taken by the CIT(A), viz. that the interest accrued liability of ₹ 15.30 crore was transferred to the assessee on demerger/unbundling of the erstwhile MSEB; and as the said liabilities in question pertained to the earlier year, the same, thus, could not have been added during the year under consideration as an unexplained cash credit u/s 68 of the Act. We, therefore, finding no infirmity in the view taken by the CIT(A) uphold the deletion of addition - Decided against revenue. Disallowance of insurance charges of HVDC projects and lease rentals for HVDC projects - CIT-A deleted the addition - HELD THAT:- We concur with the view taken by the CIT(A), that as rightly claimed by the assessee that the expenses in question pertaining to the HVDC project were not in the nature of prepaid expenses, but pertained to the year under consideration i.e A.Y. 2008-09, therefore, the same were rightly claimed as deduction. Accordingly, in the backdrop of our aforesaid deliberations, we are of the considered view that no infirmity arises from the order of the CIT(A) to the extent he had vacated the disallowance of the HVDC expenses, viz. Insurance charges and lease rentals - Decided against revenue. Disallowance of stamp duty and service fee - CIT-A deleted the addition - HELD THAT:- Stamp Duty expenses and Service fees expenses having been incurred by the assessee in the normal course of its business, which had not resulted to creation of any capital asset of an enduring nature, thus were allowable as a deduction u/s 37(1) of the Act. Our aforesaid view is fortified by the judgment of the Hon ble Supreme Court in the case of India Cements Ltd. [ 1965 (12) TMI 22 - SUPREME COURT] wherein it has been held by the Hon ble Apex Court that the stamp duty, registration fees, lawyers fees etc. paid for obtaining a loan is allowable as a business expenditure. - Decided against revenue. Disallowance of freight expenditure - CIT-A deleted the addition - HELD THAT:- We concur with the view taken by the CIT(A) that the disallowance of freight expenses by the A.O was based on misconceived facts. As the aforesaid freight expenditure was incurred by the assessee for transportation/shifting of an existing capital asset i.e transformer (Nasik Circle), for the purpose of getting the same repaired, the same in our considered view, as observed by the CIT(A), and rightly so, was allowable as a revenue expenditure u/s 37(1) of the Act.- Decided against revenue.
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2021 (7) TMI 488
Addition u/s. 68 - bogus loans obtained by the assessee and consequential disallowance of interest thereon on such loans - CIT-A deleted the addition - HELD THAT:- As decided in own case Tribunal considering various materials placed on record held that the assessee has discharged initial burden by filing various documents to prove identity, genuineness and creditworthiness of the parties. The Tribunal held that the Assessing Officer was erred in making addition towards unexplained cash credits u/s. 68 of the Act and deleted the addition including the disallowance of consequential interest thereon. We do not find any good reason to interfere and reverse the findings of the Ld.CIT(A), especially when the facts being identical to the A.Y. 2012-13, A.Y. 2013-14 and A.Y.2014-15 wherein the Tribunal deleted the addition made u/s. 68 of the Act which order has been followed by the Ld.CIT(A). Thus, we do not find any infirmity in the order passed by the Ld.CIT(A). Grounds raised by the revenue are dismissed.
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2021 (7) TMI 485
Revision u/s 263 - deduction under section 54B - HELD THAT:- The perusal of assessment order reveals that AO allowed the exemption/ deduction of capital gain under section 54, without discussing the nature of asset (agriculture land). There is no dispute about the location of the land/ impugned land sold by the assessee, which was situated in the heart of Surat City. Surat City is Metropolitan City. Further there is no discussion about the nature of land where further investment is made in agricultural land or not. The assessment is silent on the various questions raised by the AO. From the questionnaires raised by the AO, we find that very nature of asset was not examined by AO. No doubt the assessee declared capital gain but, whether its exemption can be claimed on purchase of other agriculture land, is not at all examined by the assessing officer. The question, whether the particular land is agriculture land has to be decided on considering the facts and circumstances of each case. The Superior Courts have laid down certain guideline having regards to certain guideline having regard to the following frequently occurring factors: sale of land for housing purpose; obtaining permission to sell the land for non-agriculture purpose; absence of cultivation prior to sale, absence of intention to cultivate land in future, location of land within in municipal area, the nature of the surrounding area; the price at which the land was sold within the municipal area and entry in municipal record. All these factors were not considered by the AO while passing the assessment order. We are of the prima facia view that the ld. PCIT validly assumed his jurisdiction for exercising his power under section 263 of the Act by taking view that the order passed by assessing officer is erroneous and in so far as prejudicial to the interest of justice. No doubt, that ld. Pr.CIT invoked the jurisdiction under section 263 of the Act on 23.03.2021, just before seven days of expiry of period of limitation for passing revision order. We find, though, the assessee filed its reply; however, it could not be re-opened and considered by ld. PCIT, due to glitch in the ITBA system. Facts remained that the ld. PCIT passed the impugned order without considering various pleas of the assessee raised in its reply. It is also a fact that the hands of ld. Pr CIT were tied by the period of limitation which was expiring on 31.03.2021 and ultimately the order was passed on 31.03.2021 - We are of the view that the matter require fresh adjudication as the same is passed in a hasty manner. Hence, we remit the case to the file of ld PCIT to consider the reply filed by the assessee and pass order under section 263 of the Act, afresh in accordance with law, without being influence by our observation. The ld. PCIT is further directed to give reasonable opportunity to the assessee. Appeal of the assessee is allowed for statistical purpose.
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2021 (7) TMI 484
Estimation of income - Bogus purchases - CIT-A restricted the disallowance to 12.5% of alleged non genuine purchases - HELD THAT:- CIT (Appeals) has estimated the profit element embedded in the alleged non genuine purchases at 12.5% and accordingly granted partial relief to the assessee in assessment year 2009-10. Whereas, profit element estimated at 12.5% in assessment years 2010-11 and 2011-12 being more than the disallowance made by the assessing officer, he has confirmed the same. Decision of learned Commissioner of Income-tax (Appeals) is in consonance with the view expressed by the Tribunal in similar nature of disputes. No infirmity in the aforesaid decision of learned Commissioner of Income-tax (Appeals).
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2021 (7) TMI 483
Addition on account of undisclosed sales - year of taxability - HELD THAT:- M/s Nirman Trimurti Developers the co-developer of the project has offered the sales receipts to tax in AY 2016-17. We find that the assessee has not furnished documentary evidences before the AO or the CIT(A) to substantiate that the assessee has received its share of 35% of sales receipts in the period relevant to AY 2017-18. Considering the fact that this factual aspect is required to be examined, we deem it appropriate to restore this issue back to the file of AO for denovo examination. AO shall tax the assessee s share in sale considered from the project in the year of actual receipt. Ground of the appeal are allowed for statistical purpose.
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Customs
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2021 (7) TMI 522
Levy of Composition fee - invocation of Bank Guarantee for non-fulfilment of export obligation - Public Notice No.9/2002-07, dated 22.05.2013 - HELD THAT:- In the present case, admittedly, such bank guarantee was given by the petitioner. The said public notice nowhere contemplates imposition of composition fee of 2% as charge. In other words, the composition fee, which is not contemplated in the Public Notice dated 22.05.2013, which is sought to be recovered from the petitioner through the impugned order, is impermissible. The petitioner has raised other grounds with reference to certain facts and circumstances and this Court is of the considered opinion that all those grounds are to be raised before the authority competent for read-judication, as the very imposition of composition fee itself is not contemplated in the public notice dated 22.05.2013. However, these factual aspects are to be adjudicated with reference to the records available and the mixed question of fact and law are to be adjudicated and findings are to be given. Such an exercise cannot be done by the High Court in a Writ proceedings. Thus, the case is to be remanded back for fresh consideration. Petition allowed by way of remand.
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2021 (7) TMI 509
Abandonment of goods - relinquishment of title to the goods - out of charge order already given by the proper officer for home consumption at a prior date - Section 23(2) of the Customs Act, 1962 - HELD THAT:- The appellant had paid the fine amount of ₹ 30,000/- and the penal amount of ₹ 10,000/- vide Challan No.2017457502 and the mode of payment being e-payment, the appellant did not challenge, but paid the same without questioning the legality of the same. This means that the offence, as alleged, had indeed been committed, which aspect is clearly hit by the proviso to Section 23(2) ibid., which takes away the right of the owner to relinquish his title to such goods. It is too late a stage for the appellant to raise an issue in so far as the levy of fine and penalty are concerned since, without questioning the same at the appropriate time before making the e-payment, the said plea cannot be urged for the first time now. Therefore, the contention of the Learned Advocate for the appellant that the collection of fine and penalty was without the authority of law cannot be gone into by this forum now. Appeal dismissed.
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Corporate Laws
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2021 (7) TMI 498
Sanction of Scheme of Arrangement (Demerger) - Section 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- Various directions regarding holding and convening of various meetings issued - direstions regarding issuance of notices for above meetings, also issued. The scheme is sanctioned - application allowed.
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2021 (7) TMI 487
Approval of Scheme of Amalgamation - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT:- The Scheme of Amalgamation, annexed with the petition as Annexure-A is sanctioned by this Tribunal to be binding with effect from 01.04.2017 on the Transferor Companies with the Transferee Company and their respective shareholders and all concerned. Application allowed.
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2021 (7) TMI 486
Approval of scheme of amalgamation - Sections 230-232 of the Companies Act, 2013 and other relevant provisions of the Act - HELD THAT:- From the material on record and after perusing the clarifications and submissions of the Petitioner Company to the Report, Supplementary Report of the RD, the Scheme appears to be fair and reasonable and does not violate any provisions of law and is not contrary to public policy. Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition is made absolute in terms of prayer clauses V(a) and (b) of the Company Scheme Petition. The Scheme is sanctioned with the Appointed Date fixed as 1st April, 2020. This order is subject to the sanction to the Scheme by the National Company Law Tribunal, Chennai Bench. The scheme is sanctioned - application allowed.
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Insolvency & Bankruptcy
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2021 (7) TMI 512
Seeking to constitute the Committee of Creditors in accordance with Section 21 of IBC - It is claimed by the Appellant that BPPL has furnished a collateral security to Respondent No. 2 STCI Finance Limited - STCI Finance Ltd. is financial creditor as defined in Section 5(7) and Section 5(8) of the IBC or not - HELD THAT:- The liability arising out of guarantee for any of the items referred in sub-clause (a) to (h) is Financial Debt. The requirement for a debt to be a financial debt and such a creditor to be a financial creditor has been explained very succinctly by Hon ble Apex Court in ANUJ JAIN VERSUS AXIS BANK LTD. [ 2020 (2) TMI 1259 - SUPREME COURT] where it was held that the root requirement for a creditor to become financial creditor for the purpose of Part II of the Code, there must be a financial debt which is owed to that person. He may be the principal creditor to whom the financial debt is owed or he may be an assignee in terms of extended meaning of this definition but, and nevertheless, the requirement of existence of a debt being owed is not forsaken. In order to differentiate between the nature and purpose of mortgage‟ and guarantee‟ with respect to a loan, the Hon ble Apex Court proceeds to clarify in Anuj Jain by holding that a mortgagee as a creditor shall be a secured creditor‟ but not a financial creditor‟ - The Appellant‟s reliance on Anuj Jain in support of his claim is, therefore, found to be out-of-context from the facts of the instant case. We may look at the ASCOT REALTY PRIVATE LIMITED VERSUS AJAY KUMAR AGARWAL, ORIENTAL BANK OF COMMERCE -SUBSTITUTED BY PUNJAB NATIONAL BANK, INDIA BULLS HOUSING RESPONDENT FINANCE LIMITED, FULLERTON INDIA CREDIT COMPANY LIMITED, SWARNA TECHNOLOGY PRIVATE LIMITED, ESKAY ENCLAVE PRIVATE LIMITED, YUTHIKA TRADING COMPANY PRIVATE LIMITED, PANDEY CHEMICAL PRIVATE LIMITED, ACTUAL DRESSES, GM DRESSES, KRYSTAL DRESSES, QUEEN DRESSES, RDH TECHNOLOGIES PRIVATE LIMITED [ 2020 (10) TMI 962 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI] where it was held that The matter cannot, of course, be settled merely by treating the ipsissima verba of Wiles, J., as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished Judge. Looking to the detailed exposition of Anuj Jain and Ascot Realty in the aforementioned paragraphs and the facts of the present case, we are of very clear and unambiguous view that on the basis of Corporate Guarantee given by BPPL for the loan provided by STCI Finance Ltd. (Respondent No. 2) to BIL; STCI Finance Ltd. is a financial creditor in the Corporate Insolvency Resolution Process of the Corporate Debtor BPPL - there are no error in the Impugned Order. Appeal dismissed.
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2021 (7) TMI 501
Seeking voluntary dissolution of Mitlite Electric Company Private Limited - section 59 of the Insolvency and Bankruptcy Code, 2016 (Code) read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 - HELD THAT:- The voluntary liquidator has filed an affidavit confirming that neither he nor the Company has received any objection with regard to the present liquidation proceedings of the company from any authority whatsoever - applicant states that necessary compliances of Section 59 and other relevant provisions of the Insolvency and Bankruptcy Code, 2016 read with the regulations have been made within time, more specifically submission of the Form GNL-2 to the ROC and the intimation to the IBBI vide email, after realisation and distribution of the assets to its members and closure of the Bank account. In view of the satisfaction accorded by the voluntary liquidator by way of the present application accompanied by an affidavit, the said company is hereby dissolved with effect from the date of the present order - Application allowed.
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2021 (7) TMI 500
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Service of demand notice - HELD THAT:- In the present case admittedly the demand notice in Form-3 as per Section 8 of the Code was sent on 27.07.2019. It is thus seen that before filing the present application under Section 9 of the Code, requisite notice under Section 8 was duly served on the Respondent. In response to Section 8 notice, respondent Corporate Debtor has sent its reply. However, no pre-existing dispute regarding the services rendered by the applicant has been claimed or proved by the respondent. In the present application all the aforesaid requirements have been satisfied. It is seen that the application preferred by applicant operational creditor is complete in all respect. The material on record clearly goes to show that the respondent committed default in payment of the claimed operational debt even after demand made by the applicant operational creditor. The respondent failed to show that the claim of applicant is disputed. Once, the application is complete and in the absence of any dispute and with the subsistence of default, the application is liable to be admitted. Application admitted - moratorium declared.
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2021 (7) TMI 499
Seeking permission by suspended director of the Corporate Debtor to submit a Resolution Plan to the R.P and members of the COC - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Learned counsel for the respondent stated that since the CIR Process is to be completed on or before 23.7.2021, if this Tribunal grants a short period to the applicant to submit the Resolution Plan, the Resolution Professional has no objection in accepting the Resolution Plan for placing before the CoC for its consideration. Learned counsel for the applicant stated that he may be granted a short time to submit the Resolution Plan bringing to the notice of the Resolution Professional the Certificate obtained by the applicant as an MSME. In view of the fact that the CIR Process is to be completed on 23.7.2021, the applicant is granted permission to submit the Resolution Plan within a week from the date of receipt of this order. If the applicant submits such a Resolution Plan, the Resolution Professional shall place the Resolution Plan before the Committee of Creditors for their consideration and further steps in the matter shall be taken without further delay, so that the CIR Process can be concluded in time. Application disposed off.
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2021 (7) TMI 497
Seeking Liquidation of Corporate Debtor - seeking to appoint the Resolution Professional as the Liquidator of the Corporate Debtor - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It appears from the record that failure of the Resolution Applicant to infuse funds as proposed in the time line has contravened the provisions of the Resolution Plan approved by this Tribunal. From a reading of the Section 33(3) (4) of the Insolvency and Bankruptcy Code, 2016, it is clear that if the Resolution Applicant fails to implement the Resolution plan within the timeframe as agreed, any person other than the Corporate Debtor can apply for Liquidation of the Corporate Debtor - In the present case, the Liquidation Value of the Corporate Debtor is ₹ 41,74,00,000 which is more than the upfront payment offered in the Resolution Plan i.e. ₹ 26,75,00,000 and that the Resolution Applicant has failed to honour his commitments in the Resolution Plan. The only course open to this Tribunal is to invoke Section 33(3) and (4) of the I B Code, 2016 and order Liquidation of the Corporate Debtor. Shri Jasin jose, the proposed Liquidator has not filed the prescribed form accepting his appointment as Liquidator. Hence he has to be directed to produce the consent as per rules. M/s. Churakulam Tea Estate Private Limited is hereby put under liquidation with immediate effect under Section 33(1) of I B Code, 2016 - Application allowed.
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2021 (7) TMI 496
Seeking modification in Resolution Plan - incorporation of mutually agreed position regarding the grace period - permission to follow the revised timeline based on mutual agreement between the parties during the 9th CoC meeting - seeking grant of extension of two months to the timelines proposed under the Resolution Plan - HELD THAT:- The prayer to modify the Resolution Plan incorporating mutually agreed position regarding the grace period and to follow the revised timeline based on that cannot be accepted by this Adjudicating Authority, because once a Resolution Plan is approved by the Adjudicating Authority, it cannot be reopened and add another condition in the Plan. In this connection, the decision of Hon'ble the Supreme Court in Rahul Jain v. Rave Scans Pvt. Ltd [ 2019 (11) TMI 449 - SUPREME COURT ] may be referred to, in which it was held that once a Resolution Plan is approved by the NCLT, it attains finality and cannot be disturbed. Since, it is clear that the Applicant failed to honour his commitments in complying with the conditions in the approved Resolution Plan, grant of any further time is not called for in this matter - application dismissed.
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2021 (7) TMI 494
Seeking grant of 45 days' time to the Directors of the applicant company to clear off the debt due to the Respondent in the IBA and the other Creditor CSB Bank - re-structuring the applicant company - HELD THAT:- To arrive at a conclusion whether further time can be granted to the applicants to settle the matter by restructuring the company, we have gone through the 2005 Report of the Expert Committee on Company Law (JJ Irani Committee Report) in which it is stated that to provide an opportunity for genuine effort to explore restructuring/rehabilitation of potentially viable businesses with consensus of stakeholders reasonably arrived at. Where revival/rehabilitation is demonstrated as not being feasible, winding up should be resorted to. Where circumstances justify, the process should allow for easy conversion of proceedings from one procedure to another. This will provide opportunity to businesses in liquidation to turnaround wherever possible. Similarly, conversion to liquidation might be appropriate even after a rehabilitation plan has been approved if such a plan was procured by fraud or the plan can no longer be implemented. Even though the time sought by the Applicants have already expired, taking into account the fact that the applicants have filed this application on 09.04.2021, exercising the discretionary power of this Tribunal under Rule 11 of the NCLT Rules, 2016, this Tribunal dispose of the application - The Applicants are granted 30 days' time from today to clear off the debt due to the Respondent in the IBA and another Creditor CSB Bank, so as to get re-structured the Applicant Company. Dated the 28th day of June, 2021.
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2021 (7) TMI 489
Seeking relief from the duty assigned to Liquidator to act as a liquidator for the corporate debtor company - seeking appointment of any other person in place of the applicant in the mentioned matter to act as a liquidator - HELD THAT:- The Applicant has been facing some issues with regard to her health and family concerns - Also, no fees had been paid to the Applicant so far since 06.09.2019 as the fees has to be paid from the sale proceeds of the assets as per the slabs fixed by IBBI and till date not a single asset has been sold or auctioned by the Applicant. From the panel of resolution professionals approved for NCLT, Jaipur Bench for appointment as IRP or Liquidator, Mr. Sourab Malpani with Registration No. IBBI/IPA-001/IP-P01265/2018-2019/12047 is selected - Therefore Mr. Sourab Malpani is appointed in replacement of Ms. Sarita Duck for continuing the liquidation proceedings in respect of the Corporate Debtor, M/s. Balajidham Buildestate Pvt. Ltd. Ms. Sarita Duck, shall hand over the entire records and the assets of the company which have been taken over by her in course of the corporate insolvency process and liquidation process to the Liquidator forthwith. Mr. Sourabh Malpani, Liquidator shall take over the charge of the aforesaid records and the assets and perform his duties as required under the Code and the relevant Rules and Regulations thereunder - the Liquidation fees payable as per the provisions of the Code shall be divided between Ms. Sarita Duck for the duties carried out by her and the Liquidator appointed herein in the ratio of 3:7. Application allowed.
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FEMA
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2021 (7) TMI 523
Intimation by recipients of foreign contributions - Foreign Contribution Regulation Act, 2010 ( FCRA ) - peculiarities in the FC-4 Form, whereunder returns, regarding contributions received by beneficiaries under the Foreign Contribution Regulation Act, 2010 ( FCRA ) are required to be filed - petitioners accounts wherein foreign contributions were received were not in the SBI, till 7th October, 2020. As a result, the petitioners submit that it has become impossible for them to submit the return under FC-4 Form for the year 2019-2020.HELD THAT:- To a query from the Court as to how this situation could be remedied, Mr. Farman Ali, learned Counsel for the respondent, seeks a short adjournment in order to enable him to obtain instructions specifically on this aspect. However, he submits that no stay ought to be granted, as the petitioners can submit their return even after 30 th June, 2021, with appropriate penalty. This submission does not commend itself to acceptance at all. The citizen cannot be penalised for a discrepancy in the form prescribed by the respondent which has resulted in the form being unable to be submitted even in the case of a law abiding citizen. In view thereof, till the next date of hearing, the respondent is restrained from taking any coercive action against the petitioner for failure to file the requisite return under the FC-4 Form before 30 th June, 2021.
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Service Tax
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2021 (7) TMI 528
Consolidated application seeking leave to amend the petition and for interim relief - HELD THAT:- It is not proper to file such consolidated application. In any case, on this occasion, we grant leave to the petitioners to amend the petition. Amendment to be carried out within three weeks and amended copies of the petition to be supplied to the learned counsel for the respondent within the same period. A stay is granted to the operation of the adjudication order dated 18/2/2021 subject to the petitioners depositing with the Commissioner of Central Goods and Service Tax 10% of the demanded amount within a period of four weeks from today. It is made clear that if there is failure to deposit within this period, then, the interim relief now granted will stand vacated without any further reference to this Court - application disposed off.
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2021 (7) TMI 520
Challenging the order of the settlement application - erroneous demand of interest - HELD THAT:- This Court is of the considered opinion that admittedly the application filed under Section 32E of the 1944 Act, for settling the issues, was entertained by the Settlement Commission. The Settlement Commission also adjudicated the issues with reference to the informations and particulars provided by the assessee. The Settlement Commission accepted the terms of reference and finally granted immunity to the applicant/petitioner from prosecution and the order was passed. The petitioner has no grievance in respect of the other orders passed, except the interest portion directed to be paid by the petitioner. It is clear that it is an admitted fact that the applicant/petitioner has raised bill on the service recipient charging 100% of the applicable rate of service tax. Having charged service tax at 100% and paying only 50% of the tax to the Government clearly establishes short payment by service provider, attracting interest. Under these circumstances, the Settlement Commission held that interest is chargeable from the date on which the service tax became payable by the applicant/petitioner, as alleged in the show cause notice, as contended by the jurisdictional Commissioner. Thus, the Settlement Commission settled the service tax liability and interest liability at ₹ 81,59,255/- and ₹ 14,61,006/- respectively. This Court is of the opinion that the order passed by the Settlement Commission, pursuant to the admission made by the parties, need not be interfered with. However, if there is any error apparent on record or if there is any factual error regarding the admitted statements, the Settlement Commission is empowered to rectify such mistakes by following the procedures contemplated. In this regard, the petitioner is at liberty to file an application, if required. Petition disposed off.
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CST, VAT & Sales Tax
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2021 (7) TMI 519
Exemption from sales tax - Viscose Staple Fibre (VSF) - Hank Yarn - Exemption under Entry 44 of the Fourth Schedule to the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- The issue of exemption of VSF and PFA Hank yarn has now been settled by a Hon'ble Division Bench of this Court in the case of M/S. AAKAVI SPINNING MILLS (P) LTD. VERSUS THE AUTHORITY FOR CLARIFICATION AND ADVANCE RULING REP. BY THE COMMISSIONER OF COMMERCIAL TAXES EZHILAGAM, CHEPAUK CHENNAI, THE ASSISTANT COMMISSIONER (CT) [ 2020 (2) TMI 370 - MADRAS HIGH COURT] , whereby, the Hon'ble Division Bench had held that Cotton Hank yarn continuous to be exempted in Entry 44 and so also, VSF and PFA. The proposal in the impugned notice for levy of taxes on sale of VSF Hank yarn cannot be sustained - However, if there are any other issues with regard to proposal of levy tax, it would be appropriate to grant liberty to the assessee to give their reply to the same. The impugned notice, the proposal of levy of sales tax on VSF Hank Yarn, is hereby set aside - Petition disposed off.
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2021 (7) TMI 517
Maintainability of review petition - Authority to undertake a review contemplated under Section 67(5) of Andhra Pradesh Value Added Tax, 2005 - review can be undertaken only by the Authority for Clarification and Advance Ruling (ACAR) by exercising suo motu power or whether a dealer who invited clarification and advance ruling from ACAR can also seek for review being not satisfied with its order? HELD THAT:- Section 67 makes it clear that the review petition is maintainable at the instance of the dealer who is affected by the ruling of ACAR. Then coming to the argument of the learned Government Pleader that since the petitioner has already filed the appeal and the same is pending and therefore, the review petition is not maintainable is concerned, we do not find force in the said argument in view of the peculiar facts and circumstances. It is true that the petitioner filed the appeal before the VAT Tribunal - However, since the regular Chairman of the Tribunal is not functioning and as the Principle District Sessions Judge, Visakhapatnam is holding the functions of the Tribunal as a Full Additional Charge only half-a-day for a week and in the meanwhile the notice of assessment of VAT dated 12.11.2020 was issued by 1st respondent, the petitioner has no other go except filing a review petition before ACAR. Upon review petition being numbered by virtue of this order, the petitioner shall withdraw the appeal pending before the VAT Tribunal and then only proceed with the review petition - the 2nd respondent is directed to consider the review petition dated 14.12.2020 filed by the petitioner and afford personal hearing to the petitioner and pass appropriate orders - Petition allowed.
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Wealth tax
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2021 (7) TMI 513
Re-opening of assessment under the Wealth Tax Act, 1957 - Orders passed under Section 18(1)(c) of the Wealth Tax Act - Validity of reopening of assessment - non speaking order passed - impugned orders preceded the issue on a notice under Section 17 of the Wealth Tax Act, 1957, which is pari materia with Section 147 of the Income Tax Act, 1961 - HELD THAT:- There is no dispute in the facts and circumstances of the case that no speaking order was passed before passing the impugned Assessment Orders. The provisions of the Income Tax Act, Wealth Tax Act as far as the reopening of the assessments are concerned are pari materia with Section 17 of the Wealth Tax Act, 1957 and Section 147 of the Income Tax Act, 1961. As rightly contended by the learned counsel for the petitioner, the decision of the Hon'ble Supreme Court in G.K.N.Driveshafts case [ 2002 (11) TMI 7 - SUPREME COURT ] is to be applied even for re-opening of assessment under the Wealth Tax Act, 1957 - we therefore of the view, the impugned order deserves to be set aside. Accordingly, remit the case back to the respondent to pass a speaking orders on merits in accordance with law following the decision of the Hon'ble Supreme Court in G.K.N.Driveshafts case.
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Indian Laws
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2021 (7) TMI 526
Dishonor of Cheque - insufficiency of funds - no reasonable opportunity was given to the accused to further cross examine P.W.1 and also to lead her evidence - principles of natural justice - HELD THAT:- On 12.11.2014, the request made by the accused' side for an adjournment was rejected and the defence evidence was taken as 'nil' and the arguments of the learned counsel for the complainant was heard, the matter was posted for defendant's arguments on 26.11.2014. On 26.11.2014, the request made by the accused for an adjournment was rejected and defendant's arguments was also taken as 'heard' and the matter was posted for Judgment, to 10.12.2014. However, on 10.12.2014 and the next date of hearing which was 22.12.2014 the Court did not pronounce the Judgment and posting the matter to 31.12.2014, it proceeded to pass the impugned Judgment convicting the accused before it as guilty for the offence punishable under Section 138 of the N.I. Act. The recording of the proceedings in the Trial Court shows that though the matter was initially posted for further cross examination of P.W.1 and was called for the said purpose on 17.02.2014, the request for an adjournment was rejected. The Order Sheet does not mention as to why adjournment was refused / rejected. It can be noticed that prior to that no adjournment for further cross examination of P.W.1 was sought for from the accused' side. As such, the very first request for an adjournment for further cross examination of P.W.1 by the accused was rejected by the Trial Court. In addition to this, the application filed by the accused on the very next date of hearing under Section 311 Cr.P.C. was also rejected on the very same day based upon the oral objection by the complainant - in the entire process of further cross examination of P.W.1, only a single adjournment was granted to the accused and further hearings were all with respect to filing of Section 311 Cr.P.C. application by the accused and rejection of the same by the Trial Court. Thus the accused was not given a reasonable opportunity to cross examine P.W.1. Since the accused has not been granted a reasonable opportunity to put forth her case including cross examining P.W.1, the impugned Judgment passed by the Trial Court which was further confirmed by the Sessions Judge's Court deserves to be set aside and the matter deserves to be remanded with a direction to the Trial Court to give a reasonable opportunity to the accused to further cross examine P.W.1 and to lead defene evidence if she opts so - Petition allowed by way of remand.
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2021 (7) TMI 518
Appointment of a Retired District Judge as the Sole Arbitrator - alteration of cost per unit in the event there is any variation in the tax paid or otherwise - HELD THAT:- This Court prima facie opines that the controversy between the petitioner and the respondent would include the question whether the respondent could have insisted for reduction in the agreed cost per unit consequent to reduction in the GST rate., and the controversy would be within the fold of a dispute contemplated for resolution by arbitration under the agreement dated 31.08.2017. The petitioner has invoked the arbitration Clause in issuing the legal notice dated 16.12.2020 calling upon the respondent to convey willingness for accepting the nomination by the petitioner, but the respondent has failed to signify such acceptance. Smt. H.S.Kamala, retired District Judge, is appointed as the Sole Arbitrator to enter reference of the dispute between the petitioner and respondents and conduct the arbitration proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the said Arbitration Centre - Petition allowed.
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