Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
July 16, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Central Excise
TMI SMS
Articles
News
Notifications
Customs
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27/2019 - dated
12-7-2019
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ADD
Seeks to extend levy of anti-dumping duty till 27.10.2019, on imports of " Paracetamol" originating in or exported from china PR, extended vide notification No. 39/2018 Customs (ADD), dated the 20th August, 2018, in pursuance of order of Hon'ble High Court of Gujarat in the matter of SCA 5278/2019.
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51/2019 - dated
15-7-2019
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Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver
GST - States
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SRO-303 - dated
23-4-2019
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Jammu & Kashmir SGST
Amendment in Notification No. SRO-GST-1 dated 08-07-2017
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Rc.No. 258/2018/P&P/A3/No.8/2019 - VI(1)/297(a)/2019 - dated
13-6-2019
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Tamil Nadu SGST
Assigns the officers to perform the function as Appellate Authorities under Section 107.
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F.1-11 (91)-TAX/GST/2019 (Part-II) - 11/2019-State Tax (Rate) - dated
5-7-2019
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Tripura SGST
Specifies retail outlets established in the departure area of an international airport, beyond the immigration counters, making tax free supply of goods to an outgoing international tourist.
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Order No. 06 - dated
1-7-2019
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Tripura SGST
Tripura State Goods and Services Tax (Sixth Removal of Difficulties) Order, 2019.
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F.1-11(91)-TAX/GST/2019(PART) - dated
1-7-2019
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Tripura SGST
Seeks to extend the date from which the facility of blocking and unblocking on e-way bill facility as per the provision of Rule 138E of TSGST Rules, 2017 shall be brought into force to 21.08.2019.
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F.1-11(91)-TAX/GST/2019 - dated
1-7-2019
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Tripura SGST
Seeks to provide exemption from furnishing of Annual Return / Reconciliation Statement for suppliers of Online Information Database Access and Retrieval Services(“OIDAR services”).
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F.1-11(91)-TAX/GST/2019 - dated
1-7-2019
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Tripura SGST
Seeks to prescribe the due date for furnishing FORM GSTR-3B for the months of July, 2019 to September,2019.
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F.1-11(91)-TAX/GST/2019 - dated
1-7-2019
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Tripura SGST
Seeks to extend the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of more than 1.5 crore rupees for the months of July, 2019 to September,2019.
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F.1-11(91)-TAX/GST/2019 - dated
1-7-2019
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Tripura SGST
Seeks to prescribe the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of up to 1.5 crore rupees for the months of July, 2019 to September, 2019.
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F.1-11(91)-TAX/GST/2019 - dated
1-7-2019
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Tripura SGST
Tripura Goods and Services Tax (Fourth Amendment) Rules, 2019.
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Order No. 06/2019-State Tax - dated
28-6-2019
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West Bengal SGST
West Bengal Goods and Services Tax (Sixth Removal of Difficulties) Order, 2019
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Clarification regarding applicability of GST on additional / penal interest - Corrigendum issued - No GST on Penal Interest where goods purchased on installments (EMI) being financed by the Bank
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Advisory for Bill of Supply issued by Composition Taxable Person - If composition taxable person fails to comply with the conditions as mentioned in rule 5 of CGST Rules, the proper officer may initiate appropriate action against such persons under GST Law
Income Tax
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Addition u/s 68 - receipt of share capital - assessee having furnished the complete details of the 5 parties necessary for proving their identity, genuineness and creditworthiness, it was for the AO to have made further inquiries if he were to doubt those details - Without undertaking that exercise, the AO is not justified in rejecting the explanation offered by the Assessee - no addition
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Addition u/s 69C - capitation fee for admission in medical college - Chairman and managing trustee of college had accepted receipt of capitation fees and name of assessee son was also appeared - there being no credible explanation offered by the Assessee for the payment made as capitation fee, the AO is justified in adding it to the Assessee’s income
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Best judgment assessment u/s 144 - notice u/s.142(1) was intimated/served on the assessee informing that failure to produce audit report and books of account, the case shall be disposed of by invoking the provisions of section 145(3) - thus on non-compliance to notice u/s.142(1) AO was compelled to take recourse of provisions of section 144 - order justified
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Penalty u/s 272A(2)(k)/274 - delay in submitting quarterly TDS returns - assessee has submitted documentary evidence in support of serious illness of the accountant who was bed ridden and because of this the return in form 26Q has not been filed in time and circumstances was beyond the control of the assessee - sufficient and reasonable cause as per section 273B
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Penalty u/s 271(1)(c) - deduction u/s 80IA(4) denied as industrial undertaking was not approved by the CBDT - the assessee has made a claim anticipating sanction of scheme by the CBDT and it has disclosed this fact during the course of assessment proceedings - no deliberate effort was made for withholding such information or furnishing inaccurate particulars - no penalty
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Penalty u/s 271(1)(c) - accepted quantum addition - in penalty proceedings he offer explanation that the jewellery found during search were already offered to tax in the VDIS, 1997 - quantum assessment as well as the penalty proceedings are independent of each other - the explanation offered should be tested for its correctness and only if it is found to be palpably false or not acceptable, then the question of imposing the penalty would arise.
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Revision u/s 263 - change of opinion - in proceedings u/s 147 assessee contended that the transfer price was based on the individual assets and liabilities of the undertaking transferred and the sale would not qualify as “Slump Sale” as per Section 2(42C) - this explanation of the Assessee was accepted by the AO - for the very same reasons, the CIT has invoked the power u/s 263 - not permissible
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Nature of expenditure - contribution made towards the construction of the new bridge - the contribution enabling its being carried on more efficiently or more profitably and yet, at the same time, the fixed capital of the Assessee was left untouched - the expenditure was clearly on revenue account and not on capital account, though it resulted into an advantage of enduring nature
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Revision u/s 264 - payment of tax on FTS under the DTAA at wrong rate (20% instead 10%) - it is not even denied by the Department that the Petitioner committed a mistake and should have paid tax at 10% - extra 10% paid by the Petitioner was of its own volition, it was indeed prejudicial to the Assessee - all the ingredients of Section 264 stand attracted hence permissible
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Revision u/s 264 against intimation/order u/s 143(1) - an intimation passed u/s 143(1) is regarded as an ‘order’ for the purpose of Section 264 - hence revision petition u/s 264 would be maintainable
Customs
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Validity of order in the absence of show cause notice (SCN) and personal hearing - Principles of natural justice - The impugned order has been passed in breach of elementary principle of natural justice leading to a flaw in the decision making process - Matter restored before the Commissioner.
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Jurisdiction of SCN - There is no reason at this stage to suspect that the adjudicating Authority would not grant a fair and reasonable hearing to the petitioner and also decide upon the show-cause notice fairly taking into account the petitioner's contentions.
IBC
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The shareholder has a right to decide whether approving or disapproving the decision be proceeded with the corporate insolvency resolution process under Section 10 of the I&B Code. Such right does not stand curtailed by Deed of Pledge.
Central Excise
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Denial of CENVAT credit to the appellant on such general services (motor vehicle) on the ground that the same is covered in the exclusion clause is erroneous - credit allowed.
Case Laws:
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GST
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2019 (7) TMI 690
Release of detained goods - section 129(1) (a) of the Central Goods and Service Tax Act, 2017 - insufficient documents for transportation of goods - transport of Betel nuts - Confiscation - HELD THAT:- It goes without saying that the betel nut is a perishable commodity. The goods are lying in the open past almost 35 days. By the time the confiscation proceedings are concluded, probably, the goods may get completely destroyed or may suffer extensive damage. It is brought to our notice that as on date, the writ applicant has deposited the amount of tax to the tune of ₹ 2,29,320/- i.e. 5% under the GST. He has also deposited the amount of penalty to the tune of ₹ 2,29,320/-,i.e. equal to amount of tax amount. According to the respondents, the calculation of fine of confiscation of goods would come to ₹ 45,86,400/-. It goes without saying that the writ applicant would ultimately be governed by the final orders that may be passed in the confiscation proceedings subject to his right of preferring an appeal against such order of confiscation or availing any other legal remedy before the appropriate forum in accordance with law. The conveyance and the goods should be released pending the confiscation proceedings, subject to the writ applicant executing a personal bond of ₹ 45,86,400/- to the satisfaction of the respondents nos. 2,3 and 4 - On executing a personal bond of ₹ 45,86,400/-, the respondent shall, forthwith, release the conveyance and the goods, subject to the final outcome of the confiscation proceedings. Application disposed off.
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Income Tax
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2019 (7) TMI 709
Addition u/s 69C - capitation fee for admission in medical college - search conducted on medical college - Chairman and managing trustee of college had accepted receipt of capitation fees and name of assessee son was also appeared - Assessee, stated before AO that the admission process was undertaken by the Assessee s father-in-law - HELD THAT:- The Court finds that the AO has taken pains to summon Shri Bhati, the father-in-law of the Assessee and record his statement. Unfortunately, the statement made by the Assessee s father-in-law was not helpful in explaining the source of payment of ₹ 23 lacs as capitation fees. Shri Bhati only explained the payment of ₹ 7.18 lacs as regular fees. With there being no credible explanation offered by the Assessee for the payment made as capitation fee, the AO is justified in adding it to the Assessee s income. The Court is unable to find any legal error committed by the ITAT in dismissing the appeal of the present Appellant. - No substantial question of law arises
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2019 (7) TMI 708
Revision u/s 264 - payment of tax on FTS under the DTAA at wrong rate (20% instead 10%) - suo moto tax paid as per Indo Spain DTAA - maintainability of revision u/s 264 against intimation/order u/s 143 (1) - whether intimation/order is prejudicial even no tax is payable - rectification of mistake committed by the assessee is permissible to revise - HELD THAT: - There are at least three High Court decisions, referred to by this Court in Vijay Gupta [ 2016 (3) TMI 977 - DELHI HIGH COURT] which have taken an identical view, namely that an intimation u/s 143(1) is regarded as an order for the purpose of Section 264. Revenue has accepted all of the above decisions included in Vijay Gupta. Indeed for determining whether intimation u/s 143(1) should be construed as order the only limited context is that of Section 264. In the context of Section 147 and 148 it may have a different connotation. However, the fact remains that the consistent view of the High Court has been that for the purposes of Section 264 a revision petition seeking rectification of the return accepted by the Department in respect of which intimation is sent u/s 143(1) is indeed maintainable. This Court therefore disagrees with the view expressed by the CIT i.e. Respondent No.2 in the impugned order and holds that a revision petition u/s 264 would be maintainable vis-a-vis an intimation u/s 143(1), by the Assessee. Whether the intimation u/s 143(1) was prejudicial to the interest of the Assessee? - It must be noted here that although the tax calculated as payable in the return filed and accepted by the Department by sending intimation u/s 143(1) is nil, it cannot be said that no prejudice is caused to the Assessee thereby. Assessee has voluntarily paid tax at the rate of 20% in terms of the Indo Spain DTAA as tax on FTS and therefore there was no further tax to be paid at the time of filing of the return. However, it is not even denied by the Department that the Petitioner committed a mistake and should have paid tax at 10%. Even though, this extra 10% paid by the Petitioner was of its own volition, it was indeed prejudicial to the Assessee/Petitioner. Consequently, all the ingredients of Section 264 stand attracted. It is accordingly held that a revision petition under Section 264 of the Act by the Petitioner before the CIT against the intimation u/s 143(1) was maintainable. The Court fails to appreciate how the CIT could have declined to follow the decision of the jurisdictional Court i.e. this Court in Steria India Limited [ 2016 (8) TMI 166 - DELHI HIGH COURT] Although, an SLP may have been filed against the said decision the fact remains that the operation of the said judgment is not stayed by the Supreme Court. Being the jurisdictional High Court, as far as the CIT who issued the impugned order is concerned, he was bound by the decision of this Court. Inclusion of surcharge and cess above DTAA rate - HELD THAT: - Petitioner has sought a clarification regarding the erroneous payment of the surcharge. Indeed the Court finds that the payment of tax on FTS under the DTAA included surcharge and cess etc. There was no requirement that once the tax rate at the appropriate slab was paid, to separately pay the surcharge and cess. This Court quashes the impugned order passed by the Respondent No.2 and directs the Respondents to permit the Assesee to rectify its return by paying tax on FTS at 10%. The excess amount of tax, including the surcharge and cess paid shall be refunded to the Petitioner along with the interest due thereon, not later than eight weeks from today.
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2019 (7) TMI 707
Nature of expenditure - contribution made by the Assessee towards the construction of the new bridge - revenue or capital expenditure - HELD THAT:- The test laid down by Lord Cave L.C. in British Insulated and Helsby Cables Ltd., [1925] 10 TC 155, 192 (HL) was to the effect that when an expenditure is made, not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade, there was very good reason (in the absence of special circumstances leading to an opposite conclusion) for treating such expenditure as properly attributable not to revenue, but to capital. The Supreme Court in L.H. Sugar Factory and Oil Mills (P) Ltd [ 1980 (8) TMI 1 - Supreme Court] held that it was not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. If the advantage consists merely in facilitating the assessee's business operations or enabling management and conduct of the business to be carried on more efficiently or more profitably, while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. These observations of the Supreme Court (supra) completely cover the controversy in the present case. As rightly held by the ITAT, in the present case, the contribution made by the Assessee towards the construction of the new bridge facilitated the business of the Assessee, enabling its being carried on more efficiently or more profitably and yet, at the same time, the fixed capital of the Assessee was left untouched. In the premises, the expenditure was clearly on revenue account and not on capital account, though it resulted into an advantage of enduring nature for the Assessee. It is difficult to see how EMPIRE JUTE COMPANY LIMITED VERSUS CIT [ 1980 (5) TMI 1 - SUPREME COURT] assists the Revenue in the present matter. Here, the Assessee, by spending for construction of the new bridge, had not acquired any property or right of permanent character the possession of which was a condition of carrying on its trade at all. What it thereby achieved was reduction of the cost of operating its profit-making apparatus. It was, thus, in the nature of expenditure as part of the process of profit earning, as explained by the Supreme Court in Empire Jute Co. Ltd. (supra). - Decided in favour of assessee.
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2019 (7) TMI 706
Revision u/s 263 - change of opinion - AO taken one permissible view, whether order is erroneous? - transfer of the business undertaking as a whole - reopening of assessment u/s 147 on same ground i.e invoking Section 50B (slump sale) - HELD THAT:- Notice was issued u/s 148 on the ground that the holding company ceased to hold whole of the share capital of the subsidiary company, the exemption granted has to be withdrawn as per provision of Section 47A. The original sale of the textile unit has to be treated as transfer and net worth has to be subjected to capital gains treating this transactions as a slump sales as per provisions of Section 50B. With regard to the proposal made by the AO for reopening the assessment by proposing to invoke Section 50B, the assessee stated that as per Section 2(42C) Slump Sale has to be defined to mean the transfer of one or more undertaking as a result of the sale for lumpsum sale without values being assigned to the individual assets and liabilities in such sales. It was further stated that in the assessee's case, the transfer price was based on the individual assets and liabilities of the undertaking transferred and the sale would not qualify as Slump Sale as per Section 2(42C). This explanation offered by the Assessee was accepted by the AO and the assessment was completed. For the very same reasons, the Commissioner has invoked the power u/s 263. In the order passed by the CIT, Coimbatore dated 10.03.2008, there is no reference to the reopening made by the AO, notice issued by him, reply given by the assessee and how the assessment was completed. Considering this fact, the Tribunal held that the power u/s 263 could not have been invoked by the Commissioner. The Tribunal rightly took note of the decision in Max India Ltd. [ 2007 (11) TMI 12 - SUPREME COURT] . Thus, revenue has not made any ground to interfere with the order passed by the Tribunal - Decided against revenue.
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2019 (7) TMI 705
Penalty u/s 271(1)(c) - rectification u/s 254 - assessee accepted quantum addition - in penalty proceedings he offer explanation that the jewellery found during search were already offered to tax in the VDIS, 1997 - HELD THAT:- On a perusal of the orders passed by the Tribunal, we find that what weighed in the mind of the Tribunal is primarily because the quantum assessment had attained finality and that the assessee had not challenged the said assessment. This, in our considered view, is an incorrect interpretation because both the quantum assessment as well as the penalty proceedings are independent of each other. Furthermore, the assessee's specific case is that the jewellery, which were recovered during search operations, were the jewellery, which were declared during the VDIS, 1997 and the assessee would explain that the balance amounts were inherited by her, some of which sridhana, etc. The Tribunal considered a similar issue in the case of Shanmugapriya [ 2016 (7) TMI 1529 - ITAT CHENNAI] and reconciliation was permitted and ultimately, the assessee succeeded before the Tribunal. There is no reason as to why such an indulgence should not be granted to the assessee considering the plea raised by her and more particularly in the affidavit filed in support of the said miscellaneous petition. The explanation offered by the assessee should be tested for its correctness and only if it is found to be palpably false or not acceptable, then the question of imposing the penalty would arise. Hence, the Tribunal could not have applied the decision of the Hon'ble Supreme Court in the case of Mak Data (P) Limited Vs. CIT [ 2013 (11) TMI 14 - SUPREME COURT] It appears that the decision in the case of Shanmugapriya was not placed before the Tribunal when the impugned order was passed. Nevertheless, this Court does not propose to foreclose the rights of the assessee on the said ground since it is pleaded that the facts are identical and the assessee Shanmugapriya is also a member of the very same family, which was the subject matter of the same search operations. Therefore, we are of the considered view that one more opportunity should be granted to the assessee to go before the AO to do the reconciliation by offering an explanation, which has been stated in these appeals as well as in the said miscellaneous petition before the Tribunal. The AO shall also take note of the decision in the case of Shanmugapriya and pass fresh orders on merits and in accordance with law uninfluenced by any of his observations made in the earlier order dated 23.9.2014. Consequently, the substantial questions of law are left open.
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2019 (7) TMI 704
Characterization of expenses - Deduction of the amounts spent on replacement of machinery - revenue expenditure OR current repairs - Replacement of independent complete machinery - treated as revenue expenditure - HELD THAT:- Substantial questions of law framed in these appeals are squarely covered against the assessee in the decision rendered by us in the case of M/S. KONGARAR SPINNERS LIMITED [ 2019 (6) TMI 1299 - MADRAS HIGH COURT] following the decision in the case of CIT, Gujarat Vs. Sarangpur Cotton Mfg. Co. Ltd. [ 2017 (4) TMI 301 - SUPREME COURT] herein held there are several machines and perform different functions. Therefore, when each of the department/division perform different functions, repair/ substitution of an old machine will not come within the definition of the word current repairs and deduction cannot be claimed thereunder. - Decided against assessee.
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2019 (7) TMI 703
Exemptions u/s. 11 12 denied - activities of the assessee authority are covered by first and second proviso to section 2(15) - Whether entitled to exemption u/s 11 and 12 as per provisions of section 13(8)? - HELD THAT:- Appellate Tribunal has taken view and had ensured the activities of AUDA are at par with the activities of the Gujarat Housing Board. The view taken is that the activities of the assessee are covered under Section 2(15). The endeavour on the part of Ms. Bhatt, the learned senior standing counsel appearing for the Revenue is to bring the case within the proviso. The submission of Ms.Bhatt is that the Gujarat Housing Board might be constructing residential houses for a weaker section of the society or to put it in other words for backward class of the society but, ultimately, it earns business and earns profit out of it. In our opinion what is sought to be submitted by Ms.Bhatt seems to have been taken care of by the decision of this Court in GUJARAT HOUSING BOARD (GHB) [ 2018 (7) TMI 2012 - GUJARAT HIGH COURT] With respect to Gujarat Housing Board itself on the very same proposed question of law, a coordinate Bench of this Court dismissed the appeal relying on the decision of this Court in the matter of AUDA. It is brought to our notice that the issue is now pending before the Supreme Court. Question proposed cannot be termed as a substantial question of law involved in this Tax Appeal.
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2019 (7) TMI 702
Addition on account of payment of commission - bogus transactions - CIT(A) held that submissions of PAN card and registration certificate are not sufficient to prove the genuineness of commission payment. The assessee did not take steps in bringing the concerned persons of M/s. Wise Agencies Pvt.Ltd. for verification - no reply in response to the notice u/s 133(6) HELD THAT:- Fact remains admitted that the assessee filed all details relating to the transactions that have taken place with M/s. Wise Agencies Pvt.Ltd. before the AO. Even the resolution passed by the Directors to strike off its name off register before the Registrar of companies. Form FTE placed, an application seeking striking off was filed on 02.11.2011 and it is clearly shows that was well before date of assessment order. Not disputed that all the payments were paid through banking channel i.e. Account Payee cheques by deducting TDS evidence. Supporting the agreement between the assessee and M/s. Wise Agencies Pvt.Ltd. clearly shows that an agreement entered in respect of telecom companies namely Airtel, Aircel, Tata, Vodafone, Reliance and power cable, CESC and others by the assessee as first party and the second party therein i.e. M/s. Wise Agencies Pvt.Ltd. shall arrange permission and to help and resolve any problem arising in the site work. The first party i.e. the assessee agreed to pay 5% as commission for providing the services by the second party. Therefore, it is clear that there was an agreement between the assessee with M/s. Wise Agencies Pvt.Ltd. for which the assessee paid commission @ 5 %. We find that both the authorities did not examine and discuss the evidence filed by the assessee. Therefore, the finding of both the authorities below that the transactions between the assessee and M/s. Wise Agencies Pvt.Ltd. are bogus and not genuine which is in our opinion contrary to the evidence brought on record by the assessee. In the case of CIT vs M/s. Inbuilt Merchant Pvt. Ltd. [ 2014 (3) TMI 1107 - CALCUTTA HIGH COURT] of Hon ble High Court of Calcutta wherein we find the AO held the transactions were not genuine as there was no reply in some cases and found no existence of such agents during the verification proceedings. The Hon ble High Court of Calcutta held that no addition is maintainable for non-receipt of any reply and non-existence of the parties therein. - Decided in favour of assessee.
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2019 (7) TMI 701
Condonation of delay - delay of 190 days - illness - HELD THAT:- Assessee filed an affidavit affirming therein that at the relevant point time he was ill and doctor advised him to take complete bed rest for 4 months, due to which, the delay occurred and hence, the delay may be condoned as there is no deliberate intention to file the appeal belatedly. As the assessee was prevented by sufficient reason, we condone the delay and admit the appeal for hearing and adjudication. Disallowance u/s 14A r.w.r. 8D - interest income received on the investment made out of the borrowed funds - interest expenditure allowed proportionately to the own funds - assessee has earned interest income, which was adjusted against the interest paid and the difference was declared as income from other sources - HELD THAT:- Considering the investment pattern adopted by the assessee during this year, it is clear that assessee has borrowed majority of the funds from lenders and made investment in M/s Pancharatna Metal Processing Ltd. It is clearly an investment activity, which is not earned any income during this year. Rule 8D can be applied only when there is mixed funds available with the assessee, which cannot be segregated, but, considering the financial pattern of the assessee, it is clear that interest expenditure incurred by the assessee is towards investment activities. Therefore, this expenditure can be set off against income from investments. Therefore, assessee cannot claim any expenditure, which is exempt from tax i.e. dividend income as well as share income from partnership firm. Therefore assessee is not eligible to claim portion of interest expenditure incurred towards investment activities, which has not earned any income. CIT(A) has allowed the interest expenditure proportionate to the borrowed funds and own funds. Therefore, we are inclined to accept the findings of the ld. CIT(A) and accordingly, interest expenditure is allowed proportionately to the own funds available with the assessee i.e. 22% and 78% of the interest expenditure is sustained. Accordingly, grounds raised by the assessee are dismissed. With regard to quantum of interest expenditure, the net expenditure to be considered not the total interest expenditure. - Decided against assessee.
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2019 (7) TMI 700
Acceptance of Revised computation of income without filing a revised return - case of the assessee that the return was filed based on provisional, un-audited accounts - on finalization of such accounts a revised computation of income was prepared which was made known to the authorities with a request to consider the same prior to the issuance of notice u/s 143(2) - HELD THAT:- It is an admitted fact that appellant has revised its income on its own after finalization of accounts. We have also carefully considered the order passed by CIT(A) who has taken into consideration the entire aspect of the matter. When the AO has not accepted the revised computation the disallowance and additions ought not to have been made on such revised income of the assessee; this particular aspect of the matter was considered by the Learned CIT(A) while deleting addition made by the AO. The reasoning given by the CIT(A), is according to us, just and proper without any infirmity so as to warrant interference. The question is accordingly answered in the affirmative, i.e. in favour of the assessee and against the revenue. Addition on account of rates and taxes - CIT-A deleted the addition - HELD THAT:- CIT(A) has allowed such expenses under the head rates and taxes in terms of the provision of section 43B of the Act in those year under consideration. The assessee has claimed the expenses under the head rates and taxes in terms of the provision of section 43B. The details of payment made before the due date of filing of return which was claimed as allowable expenses were also placed on record by the assessee. AO while holding such explanation rendered by the assessee not acceptable also invoked section 14A for the purpose of computing total income of the assessee indicating that no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act. CIT(A) following the same deleted such addition which, in our considered view is just and proper following the rule of consistency which has been failed to be controverted by the Revenue. Hence, this ground of appeal preferred by the Revenue is found to be devoid of any merit and thus dismissed. Addition u/s 14A - recording of satisfaction by AO - HELD THAT:- We find the assessee s case is squarely covered factually and legally in PCIT-vs-Shreno Ltd. [ 2018 (12) TMI 1145 - GUJARAT HIGH COURT] , hence the assessee is entitled to relief as claimed for which was rightly allowed by the CIT(A) by deleting the addition made by the Learned AO without any infirmity so as to warrant interference. The question is accordingly answered in the affirmative, i.e. in favour of the assessee and against the revenue. Addition on account of software development expenses - allowable revenue expenditure - HELD THAT:- As decided in N. J. India Invest Ltd. [ 2013 (7) TMI 738 - GUJARAT HIGH COURT] issue decided in favour of the assessee. However, the Learned DR failed to controvert such contention made by the Learned Senior Counsel appearing for the assessee. It is a settled principle of law that the expenditure in question is Revenue in nature and thus allowable as decided in different pronouncement including in the matter of N. J. India Invest Ltd. as relied upon by the Learned AR. Hence, we find no infirmity in the order passed by the Learned CIT in deleting such addition relying upon the ratio laid down as above. Thus Revenue s appeal is found to be devoid of any merit, hence dismissed. Addition on account of depreciation on printers and other accessories - @15% OR 60% - HELD THAT:- As perused the relevant materials available on record. We have carefully considered the order passed in the matter of BSES Yamuna Corporation Ltd. [ 2010 (8) TMI 58 - DELHI HIGH COURT] . We find that the matter is squarely covered by the ratio laid down therein and hence we find no infirmity in the order passed by the Learned CIT(A) in deleting the addition of ₹ 3,86,549/- as made by the Learned AO by allowing only 15% instead of 60% as claimed by the assessee. Disallowance u/s 14A made as considered while calculating income u/s 115JB - HELD THAT:- CIT(A) deleted such addition made by the Learned AO to the tune of ₹ 47,23,579/- and disallowance of ₹ 1,00,000/- u/s 14A made by the appellant has been directed to be considered while calculating income u/s 115JB by the Learned AO which has been challenged before us by the Revenue. The explanation given by the Learned CIT(A) in passing such direction upon the Learned AO is according to us justified in the present facts Disallowance of contribution to employee s provident fund - HELD THAT:- As per assessee that the issue be remitted to the file of the Learned AO for verification of such contention made by the assessee and to grant relief thereof. DR, however, has failed to controvert such contention made by the representative of the assessee. Hence, we set aside the issue to the file of the Learned AO for verification of the same upon considering the evidence on record and also considering the evidences which the assessee may choose to file at the time of hearing of the matter and to pass orders in accordance with law positively upon affording an opportunity of being heard to the assessee. In the result, assessee s ground of appeal is allowed for statistical purposes. Accrual of income - addition on account of interest income - HELD THAT:- The interest income earned from the differences of GMR, GSFS and SBI was ultimately added by the Learned AO to the income of the assessee on the ground that both the parties have confirmed the correctness of payment of amount and deduction of TDS. In appeal the Learned CIT(A) restricted it to GSFS and SBI. As we find from the records as well as the orders impugned before us that in support of recording the assessee has reiterated his plea that the assessee company booked its income as per books of accounts and the policies regularly followed by the company. However, no supporting documents has been placed by the assessee either before the Learned AO or before the first appellate authority showing that the amount received from GSFS and SBI was offered as income though TDS has been claimed by the assessee and hence we do not find any merit in the AR s submission on this issue for deletion of such addition on the basis of the judgment passed in the matter of DCIT-vs-Yahoo India Pvt. Ltd. [ 2016 (1) TMI 1129 - ITAT MUMBAI] for A.Y. 2008-09. We, therefore, confirm the addition made by the authorities below and dismiss the ground of appeal of the assessee. Disallowance of belated contribution to Employees Provident Fund - HELD THAT:- Jurisdictional High Court in the matter of CIT-vs-GSRTC Ltd. [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] in view of the provision laid down u/s 36(1)(va) read with section 2(24)(x), total sum was disallowed since the said sum was credited by the assessee to the employee s accounts in the relevant fund after the due date prescribed in the concern Act which was confirmed by the First Appellate Authority. - Decided against assessee.
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2019 (7) TMI 699
Penalty u/s 271(1)(c) - disallowance of deduction u/s 80IA(4) - deduction was disallowed to the assessee on the ground that its industrial undertaking was not approved by the CBDT - HELD THAT:- It appears that the assessee was prima facie of the view that its scheme would be approved and it will be entitled for deduction u/s 80IA(4). When the assessment proceedings were going on, its proposal was pending before the CBDT. This fact was in the knowledge of the department. As far as disallowance of the deduction claimed by the assessee in the quantum proceeding is concerned, since the assessee failed to fulfill the requisite condition that deduction has to be disallowed, but for the purpose of penalty, we have to ascertain whether a deliberate effort was made by the assessee for withholding such information or furnishing inaccurate particulars, which would lead to concealment of income. To our mind, the assessee has made a claim anticipating sanction of scheme by the CBDT and it has disclosed this fact during the course of assessment proceedings. It does not deserve to be visited with penalty in the above facts and circumstances. Therefore, we allow all three appeals of the assessee and delete the impugned penalty. - Decided in favour of assessee.
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2019 (7) TMI 698
Penalty u/s 272A(2)(k) /274 - delay in submitting quarterly returns in Form no. 26Q for Quarter-3 and Qtr-4 - proof of sufficient reasons for delay - bonafide belief - HELD THAT:- We note that the assessee was not given reasonable opportunity by the Assessing Officer to explain the delay in filing quarterly returns in form no. 26Q. We note that the assessee has submitted documentary evidence in support of serious illness of the accountant of the assessee who was bed ridden for considerable period of time who used to look after the entire accounts and TDS compliance and no new accountant could be appointed because suitable candidate was not available in the market therefore the delay in filing the form 26Q has occurred. Assessee has explained satisfactorily the reason of not filing the return in form 26Q for quarter-3 and quarter-4, we consider that because of serious illness of the accountant of the assessee the return in form 26Q has not been filed in time and circumstances was beyond the control of the assessee, hence it is sufficient and reasonable cause as per section 273B of the Act. See Hindustan Steel Ltd. [ 1969 (8) TMI 31 - Supreme Court] - Decided in favour of assessee.
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2019 (7) TMI 697
Best judgment assessment u/s 144 - non-compliance to notices u/s.142(1) - disallowance of interest and salary paid to the partners by taking support of provisions of section 184(5) - HELD THAT:- A.R. in all fairness, accepted that in compliance to notice u/s.142(1), the assessee only submitted bank statement and did not submit audit report for the current year and past two years alongwith complete names and address of sundry creditors and sundry debtors. AO also issued another notice u/s.142(1) on 5.2.2015, which was duly served on the assessee but there was no compliance by the assessee. From para 4.3 of the assessment order, AO has categorically noted that after several notices u/s.142(1) a show cause notice dated 5.2.2015 alongwith another notice u/s.142(1) was intimated/served on the assessee informing that failure to produce audit report and books of account, the case shall be disposed of by invoking the provisions of section 145(3) AO has reproduced the contents of show cause notice. Thereafter, the AO further noted that the assessee has also failed to comply with the terms of notice u/s.142(1) of the act i.e. dated 5.2.2015. Hence, the assessment should be framed by invoking the provisions of section 144 of the Act - Thus on non-compliance to notice u/s.142(1) dated 5.2.2015 of the Act by the assessee Assessing Officer was compelled to take recourse of provisions of section 144 in framing assessment under best judgement assessment. Assessing Officer was right in framing assessment order u/s.144 and in denying allowance of interest and salary paid to the partners by taking support of provisions of section 184(5). Hence, the sole ground of the assessee being devoid of merits is dismissed. - Decided against assessee.
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2019 (7) TMI 696
Allowability of loss of trading in derivatives - AO alleged that assessee had failed to furnish the necessary evidence to justify that the loss represented the trading activities in the derivatives and covered u/s 43(5)(d) - speculative loss OR business loss - In appellate proceedings assessee furnished all evidences - CIT(A) held that F O transactions were carried out electronically on a screen based system through a registered stock broker namely JM Financial Services Pvt Ltd which is registered with the NSE and transactions are supported by time stamped contract notes and bills and invoices issued by the NSE hence appellant was covered u/s 43(5)(d) - Tribunal upheld the order HELD THAT:- There is a concurrent finding recorded by the two Revenue authorities as regards the loss sustained by the assessee fulfilling all the conditions, as specified under Section 43(5)(d). Essentially, this appeal is more on facts rather than on any substantial question of law. In view of concurrent finding of fact recorded by the two Revenue authorities, we would not like to disturb the same. - appeal fails and is hereby dismissed.
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2019 (7) TMI 695
Set off of the loss incurred by trading in F O against business income - contention on behalf of the assessee that Explanation to Section 73 cannot apply to loss arising from derivative transactions which are categorically excluded from being regarded as speculative business as defined under S.43(5) - HELD THAT:- As decided in ASIAN FINANCIAL SERVICES LTD. VERSUS COMMISSIONER OF INCOME TAX-3 KOLKATA [ 2016 (3) TMI 685 - CALCUTTA HIGH COURT] once it is deemed to be a normal business loss on the basis of proviso appended to Section 43(5) a question of applying Section 73 of the Act or the Explanation thereto for the purposes of refusing loss to be set off against business income is wholly incorrect. The Hon ble Calcutta High Court after taking note of the decision of Hon ble Delhi High Court in DLF Commercial [ 2013 (7) TMI 334 - DELHI HIGH COURT] took a distinct stand that derivatives cannot be treated at par with shares for the purposes of Explanation to Section 73 because the legislature has treated it differently. Thus, in view of the aforesaid position enunciated by the Hon ble High Court in Asian Financial Services (supra), we find good deal of force in the case of assessee. The claim of the assessee thus requires to be allowed on this ground alone. Disallowance u/s 14A read with Rule 8D - suo mota disallowance by the assessee - HELD THAT:- The suo mota disallowance by the assessee is prima facie sufficient to cover the possible expense attributable to tax exempt income. Needless to say, the operation of Rule 8D is not automatic. It is hedged by Rules. Likewise, Section l4A of the Act inheres in it the concept of reasonableness. It is unconceivable to say that assessee has incurred ₹ 6.44 Lakhs out of total expense of ₹ 9.63 Lakhs to earn a paltry dividend income of ₹ 6.l3 Lakhs while the remaining expenditure attributes for generation of substantial revenue of taxable nature noted above. The action of the Revenue is therefore prima facie inexplicable. Consequently, we set aside and cancel the addition made by the AO u/s 14A. - Revenue appeal dismissed.
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2019 (7) TMI 694
Commission to sole selling agent - whether should be included in the total turnover when actually the said sum is not received by the assessee at all? - HELD THAT:- Issue considered in favour of the assessee. In the earlier decision in the assessee's own case for the AY 2003-04 and 2004-2005, the appeal filed by the Revenue against the said order of the Tribunal was dismissed. Accordingly, substantial question of law No.1 has decided in favour of the assessee Deduction u/s 80HHC - Royalty income which treated as business income - Whether the interest and profit of sale of assets do not qualify for deduction under Section 80 IB as profits not derived from industrial undertaking ? - Whether License fee received for Makshi unit, can be under clause (baa) of Section 80HHC even though there is no reference to License fee in clause (baa)? - HELD THAT:- As in the assessee's own case for the Assessment Years 2003-04 and 2004-05, the questions were considered against the assessee and such decision was upheld by this Court. Therefore, substantial questions of law Nos.2 to 6 have to be answered in favour of the Revenue and against the assessee.
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2019 (7) TMI 693
Rectification u/s 154 - mistake committed in the original Order of the Ld.AO passed U/s. 143(3) - treatment in the statement of affairs of the assessee company by excluding the profit derived from the sale of old machinery while computing the MAT U/s. 115JB - HELD THAT:- From the facts of the case it is apparent that the various Higher Judiciaries have taken divergent view on the issue where certain Capital loss are directly entered in the balance sheet without routing it through P L Account. Though the Companies Act, 1956 mandates any Profits and Loss to be routed through P L Account, the issue with respect to computation of MAT in such circumstance as admitted by both the parties is not settled by the decision of the Hon ble Apex Court. In this situation it cannot be said that there is an apparent mistake in the original order of the AO passed U/s. 143(3) of the Act which is required to be rectified. In this circumstance the AO has jurisdiction only to reopen the case of the assessee U/s. 147 148 and pass speaking order after hearing both sides. In the case of the assessee the AO has invoked the provisions of section 154 and passed Order without affording the assessee an opportunity of being heard which is erroneous. Therefore, the CIT (A) has also erred in confirming the order of the Ld. AO passed U/s. 154 of the Act. Hence, we hereby set-aside the order of the Ld. CIT (A) and further quash the order of the Ld. AO who had erroneously invoked the provisions of section 154 of the Act. Since we have decided the appeal of the assessee in its favour by setting aside the order of the Ld. CIT (A) and quashing the order of the Ld. AO, the Stay Application filed by the assessee does not survive.
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2019 (7) TMI 692
Penalty u/s. 271(1)(c) - assessee declaring NIL income after claiming the benefit of exemption u/s. 11 12 - HELD THAT:- Addition on which the penalty has been initiated by the AO has already been deleted by the ITAT. Therefore, the penalty in dispute is not sustainable/survive. Hence, we are of the considered view that the Ld. First Appellate Authority has passed a well reasoned order on the basis of the ITAT order, which does not need any interference on our part, therefore, we uphold the same and accordingly, reject the grounds raised by the Revenue.
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2019 (7) TMI 691
Constitutional validity of the third proviso to Section 254(2A) challenged - discrimination, based on an impermissible or invalid classification - grant extension of stay beyond 365 days - HELD THAT:- Petitioner seeks leave to withdraw the special leave petition. The special leave petition is dismissed as withdrawn.
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2019 (7) TMI 680
Re-opening of assessment u/s 147 - original assessment u/s 14(3) - notice beyond 4 years - information alleging accommodation entry received from Investigation Wing - CIT(A) also noted that the incriminating documents relied upon by the AO were seized during the search u/s 132 and, therefore, the assessment proceedings should have been initiated u/s 153(C) - HELD THAT:- As regards the reopening of the assessment u/s 147, the Court finds that CIT(A) was right in holding that with the Assessee having furnished all the details during the original assessment proceedings, the reopening of the assessment after the expiry of 4 years did not meet the jurisdictional requirement u/s 147 of the Act. - decided in favour of assessee Addition u/s 68 - receipt of share capital - information alleging accommodation entry received from Investigation Wing - AO disallowed 56,800 shares were issued to the 5 parties out of the 2,30,000 equity shares issued - AO had not issued notices u/s 133(6) for verification - ITAT held that once the Assessee had discharged the initial onus by furnishing a necessary document to prove the identity and creditworthiness of the share applicants, the onus shifted on to the Revenue - HELD THAT:- This Court is not persuaded to take a different view in the matter. Indeed with the Assessee having furnished the complete details of the 5 parties necessary for proving their identity, genuineness and creditworthiness, it was for the AO to have made further inquiries if he were to doubt those details. Without undertaking that exercise, the AO is not justified in simply rejecting the explanation offered by the Assessee. - The Court is unable to find any illegality or infirmity in the impugned order of the ITAT. No substantial question of law arises. - The appeal is accordingly dismissed.
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Customs
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2019 (7) TMI 689
Validity of order in the absence of show cause notice (SCN) and personal hearing - Principles of natural justice - It is the case of the petitioner that it came to know about the impugned order only when the order was received by the Partner of the Firm imposing penalty of ₹ 10,000/upon him, in the month of August 2018 - HELD THAT:- Before subsection (b) of Section 153B of the Act could be invoked, the authorities must establish that the show cause notice could not be served upon the party by the modes specified in subsection (a) of Section 153B of the Act. Thus, invoking subsection (b) by affixing it on the notice board of Customs House can only be done on failure of the mode of service provided in Section 153(1)(a) of the Act. In this case, undisputedly the Revenue is unable to show that the Show Cause Notice dated 9th February 2017 was served upon the parties or attempted to be served the parties by sending it by registered post or by courier (as approved by the Commissioner of Customs). In absence of the Revenue being able to establish the same, the invocation subsection (b) of Section 153(1) of the Act is not permissible. Thus, no satisfactory service of Show Cause Notice under the Act is shown by the respondent. The impugned order has been passed in breach of elementary principle of natural justice leading to a flaw in the decision making process - the impugned order of the Commissioner of Customs is set aside and the Show Cause Notice restored to him for fresh adjudication. Petition allowed.
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2019 (7) TMI 688
Cancellation of the export shipments - delay in filing shipping bills - provisional release of goods - HELD THAT:- The impugned order dated 4th December, 2018 allowing provisional release of the said goods was under Section 18. It is not correct to state that such provisional assessment of the shipping bill can only be done consequent to a seizure of the said goods under Section 110 of the Act. The impugned order dated 4th December, 2010 is not one made under Section 110A of the Act as submitted by the petitioner but it is an order of provisional assessment of the shipping bill dated 23rd August, 2018. However, the impugned order dated 4th December, 2018 stands superseded / abandoned by the Revenue in view of the seizure of the said goods by order dated 15th April, 2019 under Section 110 of the Act. Mr. Jetly, learned Counsel for the Revenue states that the investigations are in progress and it would not be possible for them to expedite the issue of show-cause-notice. The investigation itself may take a long time before a show-cause notice can be issued. However, in the meanwhile, it is submitted by the Revenue that the Commissioner of Customs, Nhava-Sheva (the Adjudicating Authority) would consider the petitioner's request for provisional release of the said goods under Section 110A of the Act - Mr. Jetly, on instructions, states that the order on provisional release of the said goods under Section 110A of the Act will be passed within a period of three weeks from today. This statement is accepted. Petition disposed off.
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2019 (7) TMI 687
Jurisdiction of SCN - Concessional benefit of N/N. 46/11 dated 1st June, 2011 denied - Recall of Customs Duty - Section 28 of the Customs Act, 1962 - effective rates of duty over the goods imported from ASEAN countries - country of origin of goods imported - Case of petitioner is that the impugned notice under the said Act seeks to overwrite the provisions of a treaty entered between the Government of India and Government of Malaysia being the ASEAN India Free Trade Agreement (AIFTA) - scope of certificate issued by a competent Authority. HELD THAT:- The issues raised in the petition could be appropriately addressed while responding to the showcause notice. The adjudicating Authority would consider the petitioner's submissions and adjudicate upon the show-cause notice without in any manner being influenced by or controlled by the view taken by the Central Board of Indirect Taxes and Customs while communicating with the Malaysian Authorities. There is no reason at this stage to suspect that the adjudicating Authority would not grant a fair and reasonable hearing to the petitioner and also decide upon the show-cause notice fairly taking into account the petitioner's contentions. The various communications which have been referred to by the CBIC which create an apprehension in the mind of the petitioner that the adjudication proceedings would be an empty formalities as the CBIC has already taken a view against the petition may not be entirely justified. Petition dismissed.
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Insolvency & Bankruptcy
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2019 (7) TMI 686
Winding up of Company - Applicability of provisions of the I B Code - consent of the Central Government to start the Corporate Insolvency Resolution Process of the Corporate Debtor in view of Section 16G(1)(c) of the Tea Act, 1953 - case of the Appellant is that out of these 7 gardens, the Operational Creditor supplied from the garden Birpara Tea Estate and therefore it is not in dispute that the supplies made to the Corporate Debtor is under the management and control of the Tea Board. HELD THAT:- From plain reading of Section 16(1)(c) of the Tea Act it is clear that where the management or a tea undertaking or tea unit owned by the company has been taken over by the Tea Board no proceeding for the winding up of such company shall lie in any court except with the consent of the Central Government - If the interpretation as given by the Respondent is accepted then it is to be held that Section 16G(1)(c) of the Tea Act, 1953 is not conflicting with Section 9 of the I B Code and thereby Section 9 will have an over-riding effect on Section 16G(1)(c) of the Tea Act, 1953. From the finding of the Hon ble Supreme Court decision in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [ 2019 (1) TMI 1508 - SUPREME COURT] it is clear that the Corporate Insolvency Resolution Process while allows a resolution process but liquidation is not desirable under the I B Code. Section 16G(1)(c) relates to winding up and on the other hand Section 9 of the I B Code application filed is not a proceeding for winding up but for initiation of Corporate Insolvency Resolution Process to ensure revival and continuation of the Corporate Debtor by protecting the Corporate Debtor from its own management and from corporate debt by liquidation. Section 9 of Insolvency and Bankruptcy Code occupies different field than Section 16G(1) of the Tea Act, 1953. For filing an application under Section 9 against Tea Company under the management of the different board, no permission of the Central Government is required in terms of Section 16G(1) of the Tea Act, 1953 - the impugned order is set aside and case remitted back to the Adjudicating Authority, Kolkata Bench, Kolkata to pass appropriate order under Section 9 of the I B Code after notice and hearing the parties. Appeal allowed by way of remand.
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2019 (7) TMI 685
Admissibility of petition - initiation of Corporate Insolvency Resolution Process - default in repayment of debt - HELD THAT:- There is a clear default on the part of the Corporate Debtor in making payment against the goods supplied by the Petitioner, and there is no existing dispute regarding the same. The petition filed under Section 9 of I B Code, 2016 is admitted - Moratorium declared.
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2019 (7) TMI 684
Initiation of corporate insolvency resolution process by corporate applicant - Section 10 of the I B Code - voting rights of the shareholders upon the occurrence of an event of default - HELD THAT:- In terms of clause (c) of sub-section (3) of Section 10 of the I B Code the special resolution passed by shareholders of the corporate debtor or resolution 7 passed by at least three fourth of the total number of partners of the corporate debtor approving to file the application, is to be enclosed - Even if it is presumed that the shareholder ceased to exercise their right to vote with regard to the companies aforesaid, their right under clause (c) of sub-section (3) of Section 7 does not stand superseded by the aforesaid provision. The shareholder has a right to decide whether approving or disapproving the decision be proceeded with the corporate insolvency resolution process under Section 10 of the I B Code. Such right does not stand curtailed by Deed of Pledge dated 28th March, 2013. Appeal dismissed.
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Central Excise
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2019 (7) TMI 683
Remission of duty - Rule 21 of Central Excise Rules, 2002 - HELD THAT:- The Adjudicating Authority was directed to reconsider the remission application filed by the writ-applicant. Instead of reconsidering the remission application filed by the writapplicant, straightway the impugned showcause notice has been issued. Let Notice be issued to the respondents, returnable on 31/07/2019.
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2019 (7) TMI 682
Permission for withdrawal of appeal - monetary amount involved in the appeal - Clandestine removal - non-speaking order - ignoring evidence (admission of the partner) - HELD THAT:- At the time of hearing,learned counsel for the appellant admits that in view of instructions dated 11.7.2018 issued by Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (Judicial Cell) the instant appeal is not maintainable before this Court, the monetary limit being below ₹ 50,00,000/-. Appeal dismissed as withdrawn.
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2019 (7) TMI 681
CENVAT Credit - input services - General Insurance Services - Works Contracts Services - Motor Car Services/General Services - periods from March, 2015 to December, 2015 and January, 2016 to September, 2016. Transit insurance - HELD THAT:- A close reading of the definition of input service would clearly reveal that only General Insurance on goods concerning motor vehicles are excluded from the purview of availment of CENVAT credit that to if the said vehicle is not capital goods and the inclusive definition contained in CENVAT Credit Rules, 2004 has not confined the services mentioned therein up to the place of removal except services availed for storage - the tax paid on transit insurance for export of goods is an admissible credit - credit allowed. Works Contract Services - Repairs, renovation and modernisation of factory or its premises - denied on the ground that the works were in the nature of civil job or part thereof on works contract basis - HELD THAT:- The invoices are mostly issued by the interior designers and the sample invoice of M/s Jindani Associates, referred by the Commissioner (Appeals), indicates the nature of work was hacking of floor or walls, cement slurry-cod as well as polymer basis water-proofing of floor and wall. It can very well be said that those are of the nature of repair and renovation and cannot be equated with just construction of civil structure - In the case laws reported in M/S ION EXCHANGE I LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, SUARAT-II [ 2017 (12) TMI 151 - CESTAT AHMEDABAD] , and M/S. KNOAH SOLUTIONS PVT. LTD. VERSUS CC, CE ST, HYDERABAD [ 2016 (6) TMI 679 - CESTAT HYDERABAD] it was consistently held by the Tribunal that such modernization, renovation and repair of factory premises are admissible input services. Therefore, the appellant is entitled to take and utilise those credits and the findings of the Commissioner (Appeals) is also erroneous in this respect - credit allowed. Motor car service - HELD THAT:- A cursory reading of sub-clause (BA) clearly indicates that such credit is admissible if the same motor vehicle is a capital goods. Appellant not only asserts the same to be capital goods of the appellant s company during hearing of the case but also Order-in-Original at page 19 indicates that appellant had taken the same view before the adjudicating authority that the vehicle was owned by the company and was used for the business activities of the company and this fact remained undisputed all throughout the proceedings - This being the facts on record denial of CENVAT credit to the appellant on such general services (motor vehicle) on the ground that the same is covered in the exclusion clause is erroneous - credit allowed. Appeal allowed - decided in favor of appellant.
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