Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
July 30, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
News
Notifications
GST - States
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423/2021/3(120)/XXVII(8)/2021/CTR-5 - dated
19-7-2021
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Uttarakhand SGST
Providing the concessional rate of SGST on Covid-19 relief supplies, up to and inclusive of 30th September 2021
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422/2021/3(120)/XXVII(8)/2021/CTR-4 - dated
19-7-2021
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Uttarakhand SGST
Amendments in the Notification of the Govt. of Uttarakhand, No. 525/2017/9 (120)/XXVII/ (8)2017 dated 29th June, 2017
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416/2021/01(120)/XXVII(8)/2021/CT-24 - dated
19-7-2021
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Uttarakhand SGST
Amendments in the notification of the Government of Uttarakhand, No. 311/202l/3(120) /XXVII(8) /2021/CT- 14 dated 31st May, 2021.
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414/2021/01(120)/XXVII(8)/2021/CT-22 - dated
19-7-2021
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Uttarakhand SGST
Waiver of the amount of late fee payable under section 47 by any registered person, required to deduct tax at source under the provisions of section 51 for failure to furnish the return in FORM GSTR-7 for the month of June' 2021 onwards, by the due date.
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413/2021/01(120)/XXVII(8)/2021/CT-21 - dated
19-7-2021
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Uttarakhand SGST
Amendment in notification of the Government of Uttarakhand, N0. 06/20l8/9(12O)XXVII(8)/20l7/CT-73 dated 1st January, 2018 (as amended from time to time).
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411/2021/01(120)/XXVII(8)/2021/CT-19 - dated
19-7-2021
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Uttarakhand SGST
Amendment in the notification of the Government of Uttarakhand, No. 97/20 l9/14(120) /XXVII(8)/20 l8/CT-76 dated 24th January,2019 (as amended from time to time)
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374/2021/3(120)/XXVII(8)/2021/CT-15 - dated
8-7-2021
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Uttarakhand SGST
Uttarakhand Goods and Services Tax (Fifth Amendment) Rules, 2021
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Detention of motor vehicle - RANGE ROVER motor vehicle transported from Coimbatore to Thiruvananthapuram as 'used personal effect' of the 2nd respondent - detention on the ground that the same was transported without the E-way bill - requirement of e-way bill for personal effect goods - used vehicles, even if it has run only negligible distances are to be categorized as 'used personal effects - Appeal of revenue dismissed - HC
Income Tax
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Disallowance of loss on revaluation of bonds and sale of RBI Bonds - capital or current asset - There is consistency in the pattern followed by the assessee and considering the nature of business the assessee has been doing, the bonds are rightly treated as current assets in the facts and circumstances of the case. The finding of fact recorded by the Tribunal is proper and correct - HC
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TDS u/s 194LA - tds on market value of Development Right’s Certificate (DRC) - the Hon’ble High Court held that the provisions of section 194LA of the Act are not attracted to a case of issue of DRCs by the BBMP for acquisition of land and therefore the assessee cannot be considered as an assessee in default under section 201(1) of the Act. - the provisions of section 194CA of the Act are not applicable / attracted in the facts and circumstances of the case - AT
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Penalty levied u/s 271(1)(c) - disallowance of the deduction claimed by the assessee u/s 35 - AO has not brought out his case as to why penalty u/s.271(1)(c) of the Act should be levied for filing inaccurate particulars of income in the case of the assessee. Merely not challenging the additions made in the assessment order in an appeal, cannot be the ground for imposing penalty u/s.271(1)(c) of the Act. - AT
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Validity of Assessment u/s 153C - Reopening of assessment u/s 147 - In view of such glaring fact covering huge racket of providing accommodation entries of issuing bogus bills, the ld. CIT (Appeals) being conscious of his powers and his authority in directing the ld. Assessing Officer to issue notice under Section 147/148 - CIT-A in guiding the AO giving a direction to proceed u/s 147-148 of the act are in conformity with the income tax act, the direction itself does not prohibit or curtail upon any power of the assessing officer mentioned in those sections, it is in conformity with the provisions of the law and by merely giving this directions the assessee is not aggrieved at all as he has all the rights vested in the income tax act to challenge such action of the assessing officer as and when taken. - AT
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Disallowance of mark to market loss - Pertinently, when the AO is accepting the gain offered as income by the assessee following similar accounting method, there is no justifiable reason to disallow the loss. It is also relevant to observe, the contention of the assessee that the loss determined on restatement of forward contract as on 31.03.2016 was reversed on 01.04.2016 i.e. on the first day of the succeeding assessment year, wherein, the forward contracts matured has not been controverted. Thus, any disallowance in the impugned assessment year would be prejudicial to the assessee, as, it would amount to double disallowance of the same amount. - AT
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Late filing fee u/s. 234E - intimation u/s 200A - when there are conflicting decisions, the view taken in favour of the assessee should be followed, the impugned order passed by the ld. CIT (A) confirming the late fee levied by the AO u/s 200A read with section 234E as the defaults are prior to 01.06.2015, is not sustainable in the eyes of law, hence fee levied u/s 234E is ordered to be deleted. - AT
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Additional depreciation on the machinery installed at various collection centers - business of pathological testing diagnostic laboratories - the collection centers are also integral part of the whole process of the business of diagnostic and report making central facilities and therefore there is no reason that additional depreciation on those facilities should not be allowed to the assessee when revenue has already accepted the claim that assessee is entitled to additional depreciation on the assets installed by it. - AT
Customs
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Issuance of SCN by proper officer - incompetent authority of Jurisdictional Officer or not - it is unambiguous that the Board appointed the Commissioner of Central Excise, Goa as a proper officer under Section 4(1) and the said Commissioner of Central Excise, Goa is empowered to exercise powers of the officers of customs under Section 5 and with reference to the definition of proper officer under Section 2(34) of the Act. Therefore, there is no ambiguity in respect of the powers exercised in the present case. - HC
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Seeking release and return of detained containers - entitlement of compensation towards the container idling charges - When disputed facts are raised between the parties, the same cannot be entertained and the High Court cannot conduct a roving enquiry with reference to the dispute, which is to be resolved with reference to the documents and evidence produced before the competent authorities. - HC
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Refund claim of Additional Customs Duty (ACD) - rejection on the ground that as per correlation sheet, the description in Bill-of-Entry and invoices did not tally and the last digit in the Bill-of-Entry No. 9252028 was entered as “3” instead of “8” - inadvertent mistake - matter remanded back for fresh consideration - AT
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Seeking return of bank guarantees furnished - with concern that the provisional clearance of the goods is pending consideration for over 2 and ˝ years purportedly on the ground of verification of genuineness of the certificate with regard to country of origin. The scheme of the Act does not permit the customs authorities to undertake such an exercise for an indefinite period of time. Hence, the customs authorities cannot be permitted to continue such exercise indefinitely and keep the petitioner bound to the sureties furnished by them. - customs authorities directed to conclude the provisional assessment positively within six (6) months - HC
Indian Laws
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Dishonor of Cheque - it is to be pointed out that it is the admitted case of the defacto complainant that the bank account belongs to the petitioner. However, the cheque has been drawn by the husband of the petitioner. - In that backdrop, a perusal of the cheque reveals that the cheque has been signed by P.Ramachandran and P.Rajeswari does not seem to be the signatory to the cheque. In such a scenario, taking action on the petitioner, who is merely the account holder, but who has not issued the cheque, would be wholly impermissible. - HC
Case Laws:
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GST
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2021 (7) TMI 1161
Maintainability of petition - Validity of SCN - SCN asking the petitioner to submit their reply within 30 days - HELD THAT:- The power of judicial review is to scrutinise the processes through which the jurisdiction is taken by the competent authorities in consonance with the law, but not the decision itself. Thus, the Courts always exercise restraint in entertaining a Writ Petition filed against the show cause notices. In the present case, the impugned show cause notice provides all the details regarding allegations. The petitioner is asked to submit their representations/defence or documents to defend their case by availing the opportunity. Therefore, the petitioner is expected to defend their case before the competent authority by submitting their explanations/defence statements and thereafter, the authorities are bound to consider the materials available on record as well as the grounds raised by the petitioner in their defence statement and take a decision and pass speaking order by furnishing reasons for such a decision This Court is of the considered opinion that the writ petitioner has not established any acceptable ground for the purpose of entertaining the Writ Petition - Petition dismissed.
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2021 (7) TMI 1159
Interest on delayed payment of tax - Section 50 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The petitioner submitted a representation to the first respondent on 03.11.2020, which is yet to be disposed of and such representation is entertainable under the provisions of the Act and the Authorities Competent is duty bound to dispose of the same on merits and in accordance with law. The first respondent is directed to consider the representation submitted by the petitioner on 03.11.2020 and pass an order on merits and in accordance with law and by affording an opportunity to the writ petitioner, as expeditiously as possible, preferably within a period of twelve weeks from the date of receipt of a copy of this order - Petition disposed off.
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2021 (7) TMI 1158
Detention of motor vehicle - RANGE ROVER motor vehicle transported from Coimbatore to Thiruvananthapuram as 'used personal effect' of the 2nd respondent - detention on the ground that the same was transported without the E-way bill - requirement of e-way bill for personal effect goods - Rule 138 of the Kerala Goods and Service Tax Rules, 2017 - HELD THAT:- It must be remembered that goods that are classifiable as used personal and household effect falls under Rule 138(14) (a) of the Kerala Goods and Services Tax Rules, 2017 and are exempted from the requirement of e-way bill. The 2nd respondent had purchased the vehicle after payment of IGST. A temporary registration was also taken apart from the motor vehicle insurance. The decision in the case of KUN MOTOR CO. PVT. LTD. AND VISHNU MOHAN VERSUS THE ASST. STATE TAX OFFICER, SQUAD NO. III, KERALA STATE GST DEPARTMENT AND STATE OF KERALA, REPRESENTED BY ITS SECRETARY, TAXES DEPARTMENT, THIRUVANANTHAPURAM [ 2018 (12) TMI 531 - KERALA HIGH COURT] held that used vehicles, even if it has run only negligible distances are to be categorized as 'used personal effects' - the facts in the present appeal is similar if not almost identical to the facts in the above referred decision, except for the change in place from Puthuchery to Coimbatore. Appeal dismissed.
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2021 (7) TMI 1147
Release of seized goods - levy of penalty - penalty levied although the matter is yet to be settled finally - goods are properly obtained through legitimate means or not - HELD THAT:- This Court having heard learned counsel for the parties and also on perusal of the materials on record, is of the view that it is the mandate of law that at the time of release, not only the value of the goods but also the penalty as may be payable as per the authorities are liable to be paid for which the owner of the goods may have to execute a bond with security thereof and, as such, in the present case, directing the applicants to execute bond and furnishing Bank Guarantee of the amount mentioned in the said communication cannot be said to be beyond the purview of law. The applicants shall execute a bond and furnish Bank Guarantee in respect of the amount mentioned in the communication - Application allowed.
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2021 (7) TMI 1145
Violation of principles of natural justice - opportunity of personal hearing not provided - specific case of the petitioner is that while settling the bill amounts received, departments had in fact deducted the tax payable - HELD THAT:- The petitioner's place of business was inspected by the enforcement wing officials on 10.09.2020. Based on the same, show cause notice was issued on 20.10.2020. The petitioner submitted his reply dated 24.12.2020. However, without granting an opportunity of personal hearing, the impugned orders were straightaway passed. This is on the face of it as violative of Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017. The matter is remitted to the file of the respondent to pass orders afresh in accordance with law - petition allowed by way of remand.
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2021 (7) TMI 1116
Refund on account of Assessment/Provisional Assessment/Appeal/Any other Order through portal - refund rejected on the ground that the taxpayer has wrongly filed the refund claim in the category of appeals as there was no amount deposited by the taxpayer while filing the appeal against the MOV-09, dated 16-9-2019 - HELD THAT:- It is found that RFD-01, dated 22-6-2020 was filed with Division for refund of IGST @ 18% and penalty of equivalent amount i.e. ₹ 7,50,618/- deposited in pursuance to appeal allowed by Commissioner (Appeals)-II, State Tax, Haridwar - Further, the appellant has deposited ₹ 7,50,618/- to the Electronic Cash Ledger vide Reference No. 201909160845602, dated 16-9-2019 but had not discharged his liability towards tax and penalty payable under the Act by debiting the electronic cash ledger in consonance to Section 49(3) of the CGST Act, 2017. Consequently, the same amount was available in his Electronic Cash Ledger for use. The proper officer i.e. the Assistant Commissioner, CGST Division, Bhiwadi has precisely rejected the refund claim that the taxpayer has wrongly filed the refund claim in the category of appeals as there was no amount deposited by the taxpayer while filing the appeal against the MOV-09, dated 16-9-2019. The appellant stated that show cause notice was issued without mentioning DIN No. upon it and as per Circular No. 128/47/2019-GST, dated 23rd December, 2019, generation and quoting DIN on any communication issued by CBIC to taxpayers including emails is mandatory with an objective to bring more transparency and accountability, hence this show cause notice seems to be invalid and to be treated as void ab initio since it is issued without DIN - Appeal disposed off.
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2021 (7) TMI 1115
Erroneous sanction of refund - export of services - SCN alleged that the period for which the refund claimed is May, 2018, whereas, the relevant payment was received only on 29-1-2019 which did not fall in the range of the relevant period - time limitation - HELD THAT:- In the case on hand the appellant has exported service through invoice dated 31-5-2018. The respondent had, after sanctioning provisional refund, chosen to allege that the refund sanctioned was erroneous and consequently the same is liable for recovery along with applicable interest and penalty under Section 73(1) of CGST Act, 2017 read with Section 54 of CGST Act, 2017. This allegation levelled in the notice to Show Cause (SCN) seamlessly culminated into the impugned Order, as the appellant neither replied to the notice nor appeared for the hearing, holding that the refund was erroneously sanctioned and therefore amount refunded is liable for recovery with applicable interest and penalty. Since the claim has been admittedly filed for the period May, 2018, the relevant period in this case has to be considered as May, 2018. In this regard it is found that the respondent on the logic that since the proceeds in foreign currency for the exports made in the month of May, 2018 has been received only during January, 2019, has come to the conclusion that no proceeds in foreign currency has been received in the month of May, 2018 and therefore determined the turnover of zero rated supply of services as zero and thereby amount eligible for sanction is also zero. It is found from the SCN that the respondent has given fifteen days time for the appellant to reply to the SCN and also granted hearing on 27-1-2020. The respondent though seems to have apparently fulfilled the tenets of principles of natural justice; the fact that cannot be denied is that the impugned Order has not emerged as a culmination of a complete and robust judicial process - It is an established Law that an adverse Order seeking to impose a demand shall not be passed without considering the contra stand of the aggrieved. The respondent are directed to pass afresh a speaking Order on merits after scrupulously adhering to the principles of natural justice by giving an opportunity to the appellant - petition dismissed.
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Income Tax
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2021 (7) TMI 1162
Characterization of income - Proceeds realized on sale of Certified Emission Reduction Credit - assessee had earned on the Clean Development Mechanism in its wing energy operations - Whether a capital receipt and not taxable? - HELD THAT:- More or less, in a similar case, the Apex Court had an occasion to consider such an issue in the case of Commissioner of Income Tax v. Maheshwari Devi Jute Mills Ltd.[ 1965 (4) TMI 10 - SUPREME COURT] wherein the question came up for consideration before the Apex Court as to whether by sale of loom-hours, the amount received could be termed as capital receipt or the income out of business. In the said decision, the Apex Court held that the amount received out of sale of loom-hours can be termed as capital receipt and not income out of business. Also see M/S. AMBIKA COTTON MILLS LTD. [ 2021 (3) TMI 442 - MADRAS HIGH COURT] - Decided in favour of the assessee.
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2021 (7) TMI 1151
Disallowance of loss on revaluation of bonds and sale of RBI Bonds - capital or current asset - Tribunal recorded a finding that the entry of government bonds cannot come within the purview of stock-in-trade and however committed serious error by including RBI bonds under the head 'current asset' and notional loss, at any rate, should not have been computed and allowance granted to assessee - HELD THAT:- Tribunal observed that the assessee had not made a conscious decision in investing in bonds, but the assessee was forced to accept the bonds in place of receivables and rightly held that the option could not be refused by the assessee. Otherwise the assessee would have to forego entire receivable amount. The assessee, in our view, gets cash only upon sale of the bonds. Till such time the bonds cannot be treated as capital asset, and as rightly held by the Tribunal, not even stock-in-trade. The assessee is recording notional loss or profit on revaluation of the earlier years as well. The same procedure is followed in the subject assessment year as well. There is consistency in the pattern followed by the assessee and considering the nature of business the assessee has been doing, the bonds are rightly treated as current assets in the facts and circumstances of the case. The finding of fact recorded by the Tribunal is proper and correct The option of treating the receivables converted as bonds realisable at a future point of time is tenable. In the facts of the case running out of cash reserves, the decision to treat bonds also as receivable has been taken. As correctly observed by the Tribunal, the treatment of an entry in a particular method needs to be appreciated in the peculiar facts of the case. In view of the above consideration, the questions of law cannot be decided in isolation to the circumstances of the case - Decided in favour of assessee.
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2021 (7) TMI 1143
Exemption u/s 11 - excessive remuneration paid to Dr. N.K. Arora - specified person - HELD THAT:- Given the profile of Dr. N.K. Arora who is associated with various search projects being carried out by the Indian Council of Medicine Research (ICMR), Member of National Advisory Group on immunization (NTAGI) - Ministry of Health Family Welfare, South-East Asia Regional immunization Technical advisory Group (SEAR ITAG) and he is also Member of the Covid 19 Group, is made to work under the assessee trust as per directions of the 16 Trustees of the Board of Trust. When undoubtedly Dr. N.K. Arora is not an author of the trust nor trustee nor has made substantial contribution to the trust he cannot be treated as a specified person. Hon ble Calcutta High Court in case of CIT vs. Rai Bahadur Biseswarlal Motilal Halwasiya Trust [ 2001 (6 ) TMI 31 - CALCUTTA HIGH COURT] held that, when trusts and institutions are two different entities clause (cc) of sub-section (3) of section 13 refers to the Manager of the Institution and not Manager of the Trust. When charitable nature of the trust is not in dispute and Dr. N.K. Arora has been working as per directions issued by the Board of Trustees to carry out various research projects as an Executive Director and being paid remuneration by the trustee stated to be commensurate to his functional profile, there is no question of treating him as a specified person under the garb of self created principle of de facto trustee merely on the ground that he is supervising the substantial activities of the trust. We are of the considered view that ld. CIT (A) has rightly reached the conclusion that provisions contained u/s 13(1)(cc)(ii) of the Act are not applicable to the case of the assessee trust. - Decided in favour of assessee.
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2021 (7) TMI 1142
TDS u/s 194LA - tds on market value of Development Right s Certificate(DRC) - holding the assessee as an assessee in default u/s.201(1) of the Act and levied interest on the tax not deducted at source u/s.201(1A) - HELD THAT:- We do not concur with the prayer of the learned DR that the matters in these appeals; i.e., the applicability of the provisions of section 194LA, the section 201(1) / 201(1A) of the Act; in the case on hand be restored to the file of the CIT(A); as in our view, that would only prolong proceedings; more so when this issue is covered in favour of the assessee by the binding decision of the Hon ble Karnataka High Court in the assessee s own case for Assessment Years 2010-11 and 2011-12 [ 2015 (10) TMI 2184 - KARNATAKA HIGH COURT] as considered the issue in detail, both on facts and in law and has held that the provisions of section 194LA of the Act would apply only in the case of a compulsory acquisition and not to a case where lands were surrendered by land owners under section 14B of KTCP Act. Hon ble High Court also held that since BBMP is not paying consideration for acquisition of land in the form of cash, cheque, DD or any other mode prescribed under section 194LA but is only issuing CDR, the provisions of section 194LA of the Act are not attracted. The Hon ble Court also held that when CDRs are issued, it is not possible to quantify the value in monetary terms and therefore TDS obligations cannot operate. For all the above reasons, the Hon ble High Court held that the provisions of section 194LA of the Act are not attracted to a case of issue of DRCs by the BBMP for acquisition of land and therefore the assessee cannot be considered as an assessee in default under section 201(1) of the Act. Thus we hold that the provisions of section 194LA of the Act are not applicable / attracted in the facts and circumstances of the case on hand and therefore we hold that the impugned orders under section 201(1) and 201(1A) of the Act are bad in law and hereby quashed. - Decided in favour of assessee.
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2021 (7) TMI 1141
Validity of assessment u/s 147 - assessee argued AO has not disposed off the objections with regard to validity of reopening of assessment under section 148 - HELD THAT:- The admitted position is the AO has not disposed off the objections by a speaking order. Under the circumstances, it is clear that the mandatory procedure of disposal of objection by the AO before proceeding with the assessment has not been followed and therefore the order of assessment cannot be sustained and has to be quashed. See M/S. DEEPAK EXTRUSIONS PVT. LTD. VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1 (4) , BANGALORE [ 2017 (3) TMI 1257 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2021 (7) TMI 1140
Admissibility of fresh claims made by the assessee during the appeal proceedings which were not made before the AO by filing a revised return - HELD THAT:- The issue now stands settled in favour of the assessee by various decisions that an assessee is entitled to raise before the appellate authorities additional grounds in terms of additional claims not made in the return filed by it. We find in the case of Pruthvi Brokers Shareholders [ 2012 (7) TMI 158 - BOMBAY HIGH COURT] has held that the assessee is entitled to raise before the appellate authorities additional ground in terms of additional claims not made in the return filed by it. Various other decisions relied on by the ld. Counsel in the paper book also support the case to the proposition that the assessee can always make a new claim before the appellate authorities which was not claimed before the AO by filing a revised return of income. Since, in the instant case, the assessee has made this additional claim by filing additional grounds, the ld.CIT(A) should not have rejected the same merely on the ground that the assessee has not made such claims before the AO by filing a revised return as per the provisions of section 139(5) of the Act. We, therefore, deem it proper to restore the issue to the file of the CIT(A) with a direction to admit the additional ground.
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2021 (7) TMI 1139
Penalty levied u/s 271(1)(c) - disallowance of the deduction claimed by the assessee u/s 35 - HELD THAT:- Proceedings u/s.271(1)(c) of the Act, is a separate proceedings than from the assessment proceedings and the omission or error i.e. concealment of income or furnishing of inaccurate particulars of income should come out specifically from the return of income filed by the assessee before the Department. There is no scope for any guess work or surmises or any hypothetical situation for imposing penalty u/s.271(1)(c). AO has not brought out his case as to why penalty u/s.271(1)(c) of the Act should be levied for filing inaccurate particulars of income in the case of the assessee. Merely not challenging the additions made in the assessment order in an appeal, cannot be the ground for imposing penalty u/s.271(1)(c) of the Act. The Revenue has also not disputed the fact that when deduction was claimed in return of income by the assessee at that time SHGPH was a notified organization by Government of India u/s.35(1)(ii) of the Act. The Ld. DR could not bring on record any evidences contrary to these facts on record. In such scenario, we are of the considered view that this is not a fit case for imposing penalty u/s.271(1)(c) of the Act and therefore, we do not find any reason to interfere with the findings of the Ld. CIT(Appeals) and relief provided to the assessee is hereby sustained - Decided in favour of assessee.
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2021 (7) TMI 1137
Allowability of the claim of liquidated damages - HELD THAT:- We find that CIT(A) after considering the submission made by the assessee had given a finding that the amount did not constitute the provision for liquidated damages but in fact it was the deductable expenditure as the aforesaid amount of liquidated damages were actually deducted by BSNL/MTNL. Before us, Revenue has not pointed to any fallacy in the findings of CIT(A). In such a situation, we find no reason to interfere with the order of CIT(A). Thus the grounds of the Revenue are dismissed.
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2021 (7) TMI 1136
Allowability of enhanced compensation - AO had disallowed the expenses but CIT(A) has held that AO was not justified in disallowing the expenses - HELD THAT:- Assessee has paid enhanced rent pursuant to the agreement entered into in 1996, but in any of the earlier years in the assessments that have been framed, no disallowance of rent has been made by Revenue. We agree with the contention of DR that the principle of res judicata is not applicable to income tax proceedings and each assessment year is an independent but at the same time the Hon ble Supreme court in the case of Radhasoami Satsang vs CIT [ 1991 (11) TMI 2 - SUPREME COURT] has held that even though principles of res judicata do not apply to income tax proceedings, but where a fundamental aspact permeating through different assessment years has been found as the fact one way or the other and the parties have allowed the position to be sustained by not challenging the order, then it would not be appropriate to allow the position to be changed in the subsequent year - based on the view of disallowance of enhanced rent paid in the year under consideration, no reassessment proceedings for earlier years has been initiated by the Revenue. Considering the totality of the aforesaid facts and relying on the aforesaid decision rendered in the case of Radhasoami Satsang (supra), we find no reason to interfere with the order of CIT(A). Thus the ground of Revenue is dismissed. Commission paid to shareholder Directors - disallowance made by AO of the commission paid to the whole time Directors of the company - HELD THAT:- As undisputed fact that three whole time working Directors had been paid commission and the commission payment is as per the limits prescribed under the Companies Act, the commission payment has been approved by the shareholders in the general meeting of shareholders. It is the case of AO that no dividend has been paid by the assessee and had the assessee not paid the commission, it would have been required to distribute the amount as dividend necessitating the payment dividend tax. The aforesaid observation of the AO of assessee not paying of dividend is contrary to the fact as the assessee has been paying dividend in the past and during the year under consideration, assessee has paid dividend @ 50% to its share holders. Before us, Revenue has not pointed out any fallacy in the findings of CIT(A) nor has controverted to the factual submissions made by Learned AR. Disallowance u/s 14A r.w.r 8D - HELD THAT- It is an undisputed fact that assessee has earned dividend of ₹ 50,900/- and had suo moto worked out the disallowance u/s 14A r.w.r 8D of the Act at ₹ 3,12,523/-. AO has further disallowed ₹ 3,12,707/- u/s 14A of the Act resulting into double disallowances. We find in the case of Joint Investments Pvt. Ltd.[ 2015 (3) TMI 155 - DELHI HIGH COURT] has held that the disallowance u/s 14A r.w.r 8D cannot exceed the dividend income - find no reason to interfere in the order of CIT(A) and thus the ground of Revenue is dismissed.
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2021 (7) TMI 1135
Validity of Assessment u/s 153C - Reopening of assessment u/s 147 - assessee is part of group of persons who are engaged in providing bogus entries by supplying bogus bills of steel to various concerns - HELD THAT:- Addition has been made on account of cash deposits in various bank accounts held by M/s. Rishav Trading Company, whose proprietor was Mr. Manoj Kumar Jain the appellant in this case. CIT (Appeals) has correctly held that there is no seizure of any document and the only asset found was the cash deposited in the bank account and there is no satisfaction that any money belongs to the assessee. The satisfaction recorded by the Assessing Officer mention that assessee is involved in providing accommodation entries. On this basis the jurisdiction assumed by the ld AO under Section 153C of the Act was held to be invalid. CIT A issued direction to the learned assessing officer to initiate action u/s 147 148 of the income tax act. Consequently he also did not decide any other grounds of appeal and dismiss them as the order of the assessment was passed u/s 153C of the act itself. Magnitude of the accommodation entry racket operated by the assessee in connivance with other persons. The bank account of M/s. Rishav Trading Company shows a mammoth credit for which the assessee has no explanation. The addition has been made in the hands of assessee on protective basis. No doubt on legal ground the orders u/s 153C of the Act were quashed by the ld. CIT (Appeals). In view of such glaring fact covering huge racket of providing accommodation entries of issuing bogus bills, the ld. CIT (Appeals)being conscious of his powers and his authority in directing the ld. Assessing Officer to issue notice under Section 147 / 148 CIT A in guiding the AO giving a direction to proceed u/s 147 148 of the act are in conformity with the income tax act, the direction itself does not prohibit or curtail upon any power of the assessing officer mentioned in those sections, it is in conformity with the provisions of the law and by merely giving this directions the assessee is not aggrieved at all as he has all the rights vested in the income tax act to challenge such action of the assessing officer as and when taken. When such a glaring facts of money laundering racket run by assessee are found by the income tax department, income tax authority is duty-bound to correct any procedure or other lapses in the assessment order by guiding its subordinate authorities to correct the same and proceed in accordance with the law. There is nothing illegal and improper in such directions. Even the case before us clearly shows that huge bogus bills of several hundred crores were issued by this group of persons, only one of them is before us. There cannot be two opinions on the issue that such practices must be curbed and must be tested on the strictest provisions of the law. In fact in this case the learned assessing officer has made addition on protective basis in the hands of the assessee but we do not know where the substantive additions have been made in the hence of the beneficiaries or not. No infirmity in the order of the ld. CIT (Appeals) in giving direction to the Assessing Officer for issuing notices under Section 151 of the Act. It was not the case that Assessing Officer has already issued notice to the assessee and assessee did not have any opportunity to defend him before the ld. Assessing Officer. In view of this, ground No. 1 of the appeal is dismissed.
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2021 (7) TMI 1134
Unexplained income - receipt of on-money i.e. money in cash, over and above booking amount was found - AO was of the view that the gross amount calculated on the basis of such evidence is to be treated as unexplained income of the assessee whereas on appeal, CIT(A) has recorded a finding that only element of profit embedded in such cash receipts is to be treated as income of the assessee - assessee has accounted for 8% of such receipts as its income, whereas the ld.CIT(A) has estimated the profit element on such receipt at 20% - HELD THAT:- As relying on assessee's own case [ 2020 (4) TMI 844 - ITAT AHMEDABAD] direct the AO to assess the income of the assessee by adopting 8% of the profit out of the alleged unaccounted on-money receipts - the income declared by the assessee at the rate of 8% is to be accepted instead of 20% directed by the ld.CIT(A). To make it more specific, this appeal of the assessee is partly allowed in the same term as the appeals of the Asstt.Years 2012-13 to 2015-16, which have been allowed by the Tribunal, whereas the appeal of the Revenue is dismissed.
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2021 (7) TMI 1133
Revision u/s 263 - lack of enquiry v/s lack of investigation - as per PCIT discrepancy in the revised and original audit report,no enquiry in case of unsecured loans and no enquiry in case of sundry creditors and debtors - HELD THAT:- In the first issue of discrepancies in the revised and original audit report, assessee has referred to various pages of the paper-book and shown to us that revision was done due to change in the depreciation and some figures in original balance-sheet, mentioned erroneously under wrong heads, which were later on observed and rectified. Once the assessee has revised his return within the permissible period, then said return substitute the original return of income for all purposes and the original return is to be ignored. The assessee has already filed revised audit report, which in itself is self-explanatory as how the loss claimed by the assessee has been reduced due to the reduction in claim of the depreciation. We also find that the revised return the assessee has reduced the loss as compared to the original return and hence there was no occasion of any suspicion of excess claim, which warrant comparison of the figures with the original return. Before the PCIT, the assessee has produced all the details of the original return and revised return along with enclosures, but PCIT has not pointed out any error in the said explanation of the assessee. He has merely directed the Assessing Officer to obtain all the details and take necessary action. This action of the Learned PCIT is not justified in view of the precedents discussed above. Unsecured loans - Assessee filed all the confirmations of unsecured loans before the Learned PCIT and detailed in respect of addition to loan during the year under consideration. Though PCIT has mentioned that no bank statement or Copy of IT return has been filed in respect of the lenders and therefore directed the Assessing Officer to verify and take appropriate action. PCIT has not pointed out as which loans have been accepted erroneously by the Assessing Officer. Similarly, on the issue of sundry creditors, it was submitted by the assessee before the Learned PCIT that once trading results are accepted by the Assessing Officer, no addition can be made for sundry creditors under section 68 of the Act. It has been submitted by assessee that entire audited books of accounts were produced before the Assessing Officer. The Learned PCIT, though mentioned in his order that no address or PAN of sundry creditors were provided to him, however, he himself did not verify as to which creditor was prime facie not genuine. We also note from the submission of the assessee before the Learned PCIT that the information in respect of claim of the depreciation, unsecured loans and sundry creditors in prescribed perform were duly filed by the assessee. The copy of query letter issued by the Assessing Officer on 17.10.2017. In the said query letter, he has inquired about confirmation of unsecured loans and also inquired as why there was increase in interest on unsecured loans. The reply of assessee in respect of the above query raised by the AO - In said reply, the assessee has complied the direction of the AO and even justified reasons for increase in interest on unsecured loan. Moreover, in the year under consideration, loan was added in case of Sh. B.K. Gupta, Sh. K.L. Gupta, Sh. N.K. Gupta and Sh. Tanuj Datta. All these persons are either director or relative of director and assessed under the same Assessing Officer, and thus all information in respect of these parties were already available with the AO and he was not required to call for such information from the Assessing Officer. We find that the Assessing Officer has accepted the trading results of the assessee and ld. PCIT has also not pointed out any error. When the ld. AO has accepted the trading results, it is deemed that he has verified the sundry creditors/debtors. Thus, to alleged that no enquiry was done by the AO as regard to sundry creditor is not correct. Moreover, the addition cannot be made for sundry creditor, without disallowing purchase as held in the case of Ritu Anurag Agarwal (supra). In the case of assessee, trading results are accepted and no purchase are disallowed. In the circumstances, it cannot be said that no inquiry has been done by the AO, which should have been done in the case. PCIT has failed to point out any specific error in the order of the Learned Assessing Officer and in absence of which twin conditions of section 263 of the Act are not satisfied and therefore we quash the finding of the Ld. PCIT and set aside the said order of the PCIT. - Decided in favour of assessee.
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2021 (7) TMI 1132
Disallowance of mark to market loss - forward contracts entered by the assessee with banks are in respect of underlying import/export transactions - HELD THAT:- A perusal of the impugned assessment order would reveal that simply relying upon the CBDT instruction no. 3/2010, the AO has disallowed the claim of loss - on a careful perusal of CBDT Instruction No. 3/2010 (supra), we are of the view that the instruction clearly speaks about foreign exchange derivatives contract and not hedging transactions. Thus, in our view, CBDT instruction no. 3/2010 would not be applicable to the assessee. The Hon ble Supreme Court in case of CIT vs. Woodward Governor India (P) Ltd. [ 2009 (4) TMI 4 - SUPREME COURT] has held that any gain or loss on outstanding receivables at the year end would be allowable. This ratio laid down by the Hon ble Supreme Court has been followed by subordinate Courts and Tribunals in a number of decisions. Also see BADRIDAS GAURIDU (P.) LTD. [ 2003 (1) TMI 61 - BOMBAY HIGH COURT] and M/S. D. CHETAN CO. [ 2016 (10) TMI 629 - BOMBAY HIGH COURT] Pertinently, when the AO is accepting the gain offered as income by the assessee following similar accounting method, there is no justifiable reason to disallow the loss. It is also relevant to observe, the contention of the assessee that the loss determined on restatement of forward contract as on 31.03.2016 was reversed on 01.04.2016 i.e. on the first day of the succeeding assessment year, wherein, the forward contracts matured has not been controverted. Thus, any disallowance in the impugned assessment year would be prejudicial to the assessee, as, it would amount to double disallowance of the same amount. Thus we allow assessee s claim of loss. - Decided in favour of assessee.
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2021 (7) TMI 1131
Late filing fee u/s. 234E - intimation u/s 200A - Late filing of TDS returns / statement - contention that fee u/s 234E is not leviable before 01.06.2015, i.e., the date when clause (c) was inserted in section 200A(1) for the computation of the said fees at the time of processing - conflicting decisions by different High Courts - HELD THAT:- Identical issue has been examined in the case of Supreme Brahmaputra (JV) [ 2020 (9) TMI 289 - ITAT DELHI ] when there are conflicting decisions, the view taken in favour of the assessee should be followed, the impugned order passed by the ld. CIT (A) confirming the late fee levied by the AO u/s 200A read with section 234E as the defaults are prior to 01.06.2015, is not sustainable in the eyes of law, hence fee levied u/s 234E is ordered to be deleted. Consequently, the appeal filed by the assessee is allowed.
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2021 (7) TMI 1129
Exemption u/s 11 - rejecting the application u/s 12AA - HELD THAT:- In the case of Commissioner of income tax versus Baba Kartar Singh Dukki Education Trust [ 2013 (10) TMI 1175 - PUNJAB HARYANA HIGH COURT] as held that the object of section 12AA of the Act is to examine the genuineness of the objects of the Trust and though while examining genuineness, the income as well as resources of the Trust may be taken into consideration but any suspicion cannot be the sole criteria for rejecting an application for registration u/s 12 AA of the Act. In the case of Saint Kabir Educational Trust [ 2010 (3) TMI 1093 - ITAT AMRITSAR] as held that the scope and nature of enquiries at the stage of grant of registration are prescribed under section 12AA of the Act, therefore the CIT has no jurisdiction to conduct inquiries which falls beyond the scope of the statutory provisions. While granting registration to a charitable Trust or institution, the CIT is supposed to examine whether or not the objects of the Trust are charitable. When genuineness of the activities is not in doubt, the CIT has no jurisdiction to refuse registration u/s 12AA of the Act on any irrelevant ground. As pointed out by the Ld. counsel, in the present case, after examining the issue as per the order of the ITAT, the Ld. CIT(E) has not recorded any adverse observations in the impugned order in respect of the charitable activities carried out by the appellant Trust. So far as the Tax liability in respect of the corpus donation is concerned the same was not the issue for determination before the Ld. CIT(E) as the same has already been dealt with by the coordinate Bench in the first round of appeal and no direction was issued to look into the said issue. Hence, we find merit in the contention of the Ld. counsel that that since the Ld. CIT(E) has not given any adverse finding in respect of the charitable activities carried out by the assessee Trust, the Ld. CIT(E) ought to have granted registration to the appellant Trust. Hence, in our considered view, the impugned order is erroneous and therefore liable to be set aside. We therefore, respectfully following the ratio laid down in the cases discussed above, allow the appeal of the assessee and set aside the impugned order dated 12.03. 2020 and direct the CIT(E) to grant registration under section 12AA of the Act to the appellant Trust. - Decided in favour of assessee.
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2021 (7) TMI 1127
Addition u/s 69B - additions were made by the Revenue alleging that Sh. Kulwinder Singh had paid on money on the purchase of the land from PISCO - HELD THAT:- When the additions made in the hand of Kulwinder Singh for allegedly purchasing land from PISCO were deleted by the Tribunal and the finding of the Tribunal were confirmed by the Hon'ble High Court. In our considered opinion no additions can be sustained in the hands of the assessee, more particularly when the additions made in the hands of seller were deleted by the Tribunal and confirmed by the Hon'ble High Court. In fact there is no evidence or document in possession of the Assessing Officer on the basis of which the satisfaction can be withdrawn of the Assessing Officer in respect of escapement of income as record in the order. Once the addition in the hands of Sh. Kulwinder Singh (seller) have been deleted, there is no reason upholding the same in the case of the purchaser (in the assessee before us), therefore, respectively following the decision in the identical case as referred by the CIT(A) in paragraph 4.2 of the appellate order and also decision of the Hon'ble High Court in [ 2019 (5) TMI 1327 - PUNJAB AND HARYANA HIGH COURT] We do not find any merit, in the appeal of the Revenue and accordingly the same is dismissed.
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2021 (7) TMI 1124
Rectification of mistake u/s 154 - penalty proceedings u/s 271(1)(c) - as argued there is no addition sustaining which can warrant levy of penalty u/s 271(1)(c) - HELD THAT:- Once the entire edifice for levy of penalty has been knocked down, that is, the additions on which penalty was levied has been deleted / quashed by the Tribunal which is an admitted fact and also brought to the notice of Ld. CIT(A) at the first stage itself, then there was no reason that penalty should not have been deleted/quashed. There cannot be a scenario where the addition in the quantum proceedings have been quashed or have been deleted and at the same time the penalty for the same addition is sustained, even if it is due to acquiescence or ignorance of the assessee. Thus, in the interest of substantial justice we deem fit that the penalty levied should have been quashed by the Ld. CIT (A) and the doors for remedy should not have been closed for some technical reasons. Once the levy of penalty itself has no legs to stand, then penalty also cannot subsist. - Decide in favour of assessee.
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2021 (7) TMI 1123
Additional depreciation on the machinery installed at various collection centers - Assessee is into business of pathological testing diagnostic laboratories is the main business of the assessee blood tests etc on collection samples at diagnostic tests at the central facilities can be carried out - According to the CIT - A these collection centers do not produce any article or thing and therefore are in the nature of office premises hence he disallowed the additional depreciation on these assets but allowed the additional depreciation on the assets which are used in the diagnostic centre and report making central facilities - HELD THAT:- We find that the collection centers are also integral part of the whole process of the business of diagnostic and report making central facilities and therefore there is no reason that additional depreciation on those facilities should not be allowed to the assessee when revenue has already accepted the claim that assessee is entitled to additional depreciation on the assets installed by it. The past assessment record also stated to be acceptance of this claim of assessee which is not negated by revenue. In view of this solitary ground raised by the assessee is allowed and the learned assessing officer is directed to grant claim of additional depreciation to the assessee which was restricted by the learned CIT - A. Accordingly ground number 1 - 3 of the appeal are allowed. Tax credit - HELD THAT:- As assessee is eligible for the tax credit of the income, which is been included in the return of income of the merged entities. Therefore, we direct the assessee to approach the assessing officer with the requisite claim, the AO is directed to verify the same and grant the credit in accordance with the law. Accordingly, the additional ground raised by the assessee is allowed with above direction. Deduction of education cess paid by the assessee on the total income - HELD THAT:- The issue of deduction of education cess as an allowable deduction is covered in favour of the assessee by the decision of the honourable Bombay High Court in Sesa Goa Ltd. [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] and therefore we direct the learned assessing officer to grant the deduction of the same. Claim of the dividend distribution tax - HELD THAT:- We find that same is not an expenses incurred by the assessee wholly and exclusively incurred for the purposes of the business and therefore same is not allowable to the assessee u/s. 37 (1) of the act. The learned authorized representative also could not show us any other provisions of the income tax act where the expenditure is allowable to the assessee. In the result, the claim of the deduction of dividend distribution tax made by the assessee in this additional ground is rejected.
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2021 (7) TMI 1122
Stay of demand - recovery proceedings - HELD THAT:- Assessee had already remitted more than 20% of the outstanding demand. We find that the provisions of Section 254(2A) of the Act read with first proviso thereon stipulates payment of 20% of the demand for the Tribunal to grant stay of demand. Though, in our considered opinion, the said proviso cannot be made applicable for extension of stay, as is present in the instant case before us, we still would like to rely on the said proviso to Section 254(2A) of the Act. Considering the compliance made to by the assessee to the said section 254(2A) of the Act; also considering the fact that the appeal for A.Y.2014-15 which was already heard by this Tribunal and order awaited thereon ; and further considering the fact that same addition was made in A.Y.2015-16 (i.e. the year under consideration before us), we are inclined to grant stay of demand for a period of six months from today or till the disposal of the appeal by this Tribunal for the A.Y.2015-16, whichever is earlier.
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2021 (7) TMI 1121
Validity of Assessment u/s 153A - Assessment as barred by limitation - Calculation of six preceding assessment years - HELD THAT:- A terminal date for determining of six preceding assessment years for the purpose of Section 153C r.w.s. 153A would be the date of handing over the documents or the dated of recording of the satisfaction. Admittedly, the six preceding assessment years in the case of the assessee is from Assessment Year 2009-10 and ending on 2014-15. Accordingly, we hold that ld. CIT (A) was correct in law that no assessment u/s.153C was made in respect of Assessment Year 2007-08 and is barred by limitation. Appeals of the Revenue are dismissed
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2021 (7) TMI 1120
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:- We observe that identical issue came up before the Tribunal for assessment years in own cases wherein the Assessing Officer made addition u/s. 68 of the Act in respect of alleged bogus loans obtained by the assessee from Bhanwarlal Jain Group. The 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. - Decided in favour of assessee.
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2021 (7) TMI 1119
Addition of increase in Modvat credit u/s 145A - Assessee argued assessee has been consistently and regularly following the same valuation method for the last 15 years and there is no deviation in valuation formula - HELD THAT:- Appellant was correct to argue that this modvat has never been debited to Prof it and loss account. It is only reflected in the balance sheet in the assets side. Therefore, cannot be treated as income at all. Further, also relying on the Hon ble Supreme Court decision in the case of CIT Vs. Indo Nippon Chemicals [ 2003 (1) TMI 8 - SUPREME COURT] wherein it is held as under Modvat credit available to manufacturers upon purchase of duty paid raw material though irreversible does not amount o chargeable income. We Considering the decision of the CIT(A) for the A.Y 2011-12, direct the Assessing officer to delete the addition. Addition u/s 50C - contention of the AR that the assessee company has become a sick industrial company and the assets were being sold to cut down the costing and repayment of the loans - HELD THAT:- We find that in the assessment proceedings the assessee has filed the explanations on sale of depreciable Assets units is Chennai, which was unused for years and was in an unusable condition Further on verification of agreements filed in the course of hearing,we find that the assessee has sold depreciable assets being building and the same was mentioned before the lower authorities. Whereas the Ld.AR has relied on the BIFR order and the assessee company financials with negative net worth. We find that there is no bifurcation of value of building which is depreciated over the period of time. A.O. has pointed out only difference aspect but the fact remains the assessee company has become sick company and burdened with financial difficulties and the net worth has become negative. The assessee company has made a distress sale at realizable price, which is justified considering the financial constrains and the circumstances of selling the depreciable asset and was in an unusable condition. Accordingly, we set-aside the order of the CIT(A) on this ground of appeal and direct assessing officer to delete the addition. In the result, the appeal filed by the assessee is allowed. Set off and carry forward of unabsorbed deprecation pertaining to A.Y1996-97 to 2001-02 beyond the stipulated period - HELD THAT:- We found that the Ld.CIT(A) has relied on the decision of the Hon ble Gujarat High Court in the case of General Motors Ind Pvt Ltd., Vs. DCIT [ 2012 (8) TMI 714 - GUJARAT HIGH COURT] . We find on the similar disputed issue the Hon ble Supreme court of India in CIT VS Associated Cables (P) Ltd [ 2019 (5) TMI 1083 - SUPREME COURT OF INDIA] has dismissed the SLP filed by the Revenue against the Jurisdictional Bombay High Court order. DR could not controvert the observations of the CIT(A) with any new cogent evidence or information. Whereas, the Ld.CIT(A) relied on the Hon ble High Court and Hon ble Tribunal decisions and passed a reasoned order. Accordingly, we do not find any infirmity in the order of the Ld.CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue.
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2021 (7) TMI 1112
Computing value of perquisites u/s 17(2) - assessee is a Trust constituted under Charitable Endowment Act, 1890 - value of residential accommodation provided by the Central Government or any State Government to the employees either holding office or post in connection with affairs of the Union or of such State or serving with any body or Undertaking under the control of such Government on such deputation - Whether on the facts and circumstances of the case, the appellant is an instrumentality and/or agency of the Government and thus has to be treated at par with the Government employees under Table 1 of Rule 3 of the Income Tax Rules, 1962? - Whether the appellant can be treated as an assessee in default without the Assessing Officer establishing that the appellant has extended any concession in the form of accommodation to its employees? - HELD THAT:- As decided in INDIAN INSTITUTE OF SCIENCE VERSUS THE DY. COMMISSIONER OF INCOME TAX CIRCLE 16 (2) , BANGALORE [ 2021 (7) TMI 1052 - KARNATAKA HIGH COURT] appeal dismissed.
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Customs
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2021 (7) TMI 1157
Provisional release of imported goods - Return of bank guarantees - Areca nuts - proper officer in terms of Section 45(1) of Customs Act - country of origin certificate - HELD THAT:- Section 45 of the Act provides all goods imported into India and unloaded in customs area shall remain in the custody of such person as may be approved by the Principal Commissioner of Customs or Commissioner of Customs unless they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII of the Act. On the other hand, Section 100 deals with seizure of goods on a reasonable belief that the goods are liable to confiscation under the Act. In the present case the customs authorities had not seized the goods on such reasonable belief that they are liable to confiscation. On the other hand, the goods had been kept in custody in exercise of powers under Section 45 of the Act, pending its clearance - no case of unconditional release of the goods in the factual matrix with reference to sub-section (2) of Section 110 of the Act is made out. The provisional clearance of the goods is pending consideration for over 2 and years purportedly on the ground of verification of genuineness of the certificate with regard to country of origin. The scheme of the Act does not permit the customs authorities to undertake such an exercise for an indefinite period of time. Hence, the customs authorities cannot be permitted to continue such exercise indefinitely and keep the petitioner bound to the sureties furnished by them - Petition disposed off.
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2021 (7) TMI 1155
Smuggling - Foreign Origin (FO) Gold - recovery of the gold from the secret cavity beneath the driver s seat of that vehicle - recording of statements u/s 108 of the Customs Act, 1962 - HELD THAT:- The case diary which has been produced in a sealed cover, has been perused. Undisputedly, the investigation is pending and Challan has not been filed so far. Having regard to the nature of material which has come on record, the release of the applicants during the pendency of the investigation would not be proper as the prosecution is in the process of collecting further evidence against them - application dismissed.
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2021 (7) TMI 1153
Validity of Notifications dated 04.05.2007, 04.05.2007 and 05.09.2006 - issuance of SCN by proper officer - incompetent authority of Jurisdictional Officer or not - HELD THAT:- The proper officer is defined as in relation to any functions to be performed under the Act, means the Officer of Customs, who is assigned those functions by the Board or the Commissioner of Customs. Thus, the proper officer is defined so as to include the officer of customs, who is assigned those functions by the Board. In the present case, by invoking the powers under Section 4(1) of the Act, the Board conferred powers to the Commissioner of Central Excise, Goa and authorises him to exercise the powers and discharge the duties conferred or imposed on the Commissioner of Customs, Port Imports, Chennai for the purposes of adjudicating the matters relating to show cause notice. Therefore, it is unambiguous that the Board appointed the Commissioner of Central Excise, Goa as a proper officer under Section 4(1) and the said Commissioner of Central Excise, Goa is empowered to exercise powers of the officers of customs under Section 5 and with reference to the definition of proper officer under Section 2(34) of the Act. Therefore, there is no ambiguity in respect of the powers exercised in the present case. As far as the show cause notices are concerned, the merits are to be adjudicated by the competent authority/the respondent. High Court cannot adjudicate the disputed facts with reference to the documents and evidences to be produced by the respective parties. Thus, the petitioner has to submit their explanations/objections, if any, along with the documents and evidences to the respondents enabling them to consider the same and pass orders by following the procedures as contemplated and by affording opportunity to the writ petitioners. Such an exercise is to be done as expeditiously as possible. In view of the fact that the jurisdiction point raised by the petitioner fails, this Court has no hesitation in forming an opinion that the petitioners have not established the ground of jurisdiction and thus, the petitioners are bound to respond to the show cause notices and on receipt of any such objections/explanations, the respondents are bound to continue the proceedings, conclude the same as expeditiously as possible - Petition dismissed.
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2021 (7) TMI 1152
Seeking interest on delayed disbursal of refund - circular bearing No.276/186/2015-CX.8A dated 01.06.2015 - HELD THAT:- Admittedly, there is no interim order in the appeal filed by the respondents and therefore, the petitioner is entitled for the interest as ordered by this Court - But, in spite of the orders passed by this Court and in spite of the circular bearing No.276/186/2015-CX.8A dated 01.06.2015, the first respondent had refused to pay interest to the petitioner and had driven the petitioner to come before this Court once again for his entitlement. The earlier order is very clear as to the interest. The respondents are directed to pay the interest due to the petitioner within a period of four weeks from the date of receipt of a copy of this order - Petition allowed - decided in favor of petitioner.
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2021 (7) TMI 1150
Seeking release and return of detained containers - entitlement of compensation towards the container idling charges - in spite of petitioner's request, the respondents have not taken any steps to release the containers as specified - HELD THAT:- This Court is of the considered opinion that imports and exports are to be done by following the procedures contemplated and by complying with the mandatory requirements. The relief as such sought for in the present writ petition to direct the respondents to forthwith release and return the containers, itself is absurd. Such a relief requires adjudication in view of the fact that there are statutory requirements and compliance of the terms and conditions with the Customs Cargo Service Provider and other aspects of the matter. Without adjudicating all those factors, the High Court cannot issue a writ granting the relief in the writ petition filed. When disputed facts are raised between the parties, the same cannot be entertained and the High Court cannot conduct a roving enquiry with reference to the dispute, which is to be resolved with reference to the documents and evidence produced before the competent authorities. The relief as such sought for in the present writ petition cannot be granted and the petitioner is at liberty to approach the competent authority of the respondents or before the competent forum for the purpose of adjudication of disputes and redressal of grievances - Petition disposed off. W.P.No.33118 of 2018 Seeking to declare the conduct of the respondent detaining the petitioner's containers, as illegal - HELD THAT:- The petitioner has to comply with the statutory requirements, including the payment of charges to be paid as per the terms and conditions of the contract or under the Statute. However, for grant of any such declaration as sought for, elaborate adjudication is required. The High Court cannot entertain any such adjudication which is to be done with reference to the documents and evidence, and therefore, the petitioner is at liberty to approach the competent authorities for adjudication of issues or before the competent forum in the manner known to law - Petition disposed off.
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2021 (7) TMI 1148
Grant of default bail - Smuggling - contraband gold bars - discharge of burden of proof u/s 123 of the Customs Act, 1962 - offence punishable under Section 135(1)(b)(i)(A) and Section 135(1)(b)(i)(C) of the Customs Act, 1962 - HELD THAT:- The petitioners in the instant case have been granted default bail as per the proviso (a) (ii) of Section 167(2), CrPC as the investigating authority could not submit the final complaint within the prescribed period of 60 (sixty) days considering the fact that the offences under Section 135(1)(b)(i)(A) and Section 135(1)(b)(i)(C) of the Customs Act, 1962 are punishable with rigorous imprisonment which may extend upto a period of 7 (seven) years and fine. As the provisions of Chapter XXXIII (Provisions as to Bail and Bonds) are applicable also in respect of the default bail granted as per the proviso (a)(ii) and (a)(ii) to Section 167(2), CrPC, the Court is empowered to impose the conditions (a), (b) and (c) as per sub-section (3) of Section 437, CrPC and it may also impose such other conditions as it considers necessary in the interests of justice. Section 439(1)(a) of the Code has also empowered the Court to impose any condition which is considered necessary for the purpose. Though no exception can be taken in respect of the order of the learned jurisdiction Court for release of the petitioners on default bail on furnishing bail of ₹ 1,00,000/- each in today s context and in view of the purported involvement of the petitioners in an offence involving smuggling of gold bars of huge quantity of substantial value but considering the fact that they have failed to furnish the bail bonds for the said sum since 08.06.2021 till date, this Court in the interests of justice and taking into consideration the right to personal liberty of a person, as ingrained in Article 21 of the Constitution of India, has found it to be a fit case to exercise the discretion available under sub-section (2) of Section 440 of the Code to reduce the amount of bail bond from ₹ 1,00,000/- each to ₹ 50,000/- each. The two petitioners i.e. the two accused shall be released on bail on furnishing a bail bond of ₹ 50,000/- each with 2 (two) sureties each of the like amount - Petition disposed off.
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2021 (7) TMI 1144
Maintainability of appeal - Form No. CA-1 under Rule 3(1) of the Customs (Appeals) Rules, 1982 read with Section 128 of the Customs Act - Confiscation - Foreign Currency - HELD THAT:- The form prescribed for filing an appeal before the Commissioner (Appeals) is CA-1, though Column No. 4 seeks for providing the date of communication of the order appealed against, the same cannot be controlled the manner in which an appeal is to be preferred. If there are separate dates on which different appellants had received the orders, those different dates can be provided in the column. Further, when right of appeal is a vested right and a creation by the statute, the form prescribed or any column in the form so prescribed cannot control the right to file an appeal. Appeal to the Commissioner of Appeals cannot be determined either by the rules governing the appeal to the Customs, Excise Service Tax Appellate Tribunal (CESTAT). The respondent to take up the appeal already filed by the appellants, accept and treat the same as duly filed, number the same and consider it in accordance with law - Appeal allowed.
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2021 (7) TMI 1126
Refund claim of Additional Customs Duty (ACD) - rejection on the ground that as per correlation sheet, the description in Bill-of-Entry and invoices did not tally and the last digit in the Bill-of-Entry No. 9252028 was entered as 3 instead of 8 - inadvertent mistake - rejection without ascertaining/verifying the claim of the appellant submitted by the letter containing revised correlation sheet duly certified by the Chartered Accountant - HELD THAT:- The mistake, as canvassed by the Learned Advocate for the appellant, appears to have been explained, but however, the same requires to be verified with the support of documentary evidences like the certificate or self-supporting letter like the one dated 07.12.2019 filed by the appellant. Since this requires factual verification based on the documents, and also taking into consideration the common request for remand, impugned order is set aside and matter remanded back to the file of the Adjudicating Authority who may call for all such documents that may be required and pass an appropriate speaking order in accordance with law - appeal allowed by way of remand.
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2021 (7) TMI 1114
Classification of imported goods - Supari - reliability on the opinion of the FSSAI notified laboratory - reliability and completeness on the test report given by the CRCL (Central Revenues Control Laboratory), Chennai - validity of speaking orders - Whether the opinion of the FSSAI notified laboratory can be relied upon for classification of the imported goods? - HELD THAT:- The report very clearly stated in its first page that the physical appearance of the betel nuts are Brown Colour Whole Nuts and in the page No. 3, the opinion has been given by the Lab stating that the sample description confirms to BETEL NUTS (BOILED SUPARI) as stated in the test memo. The FSSAI notified lab report can be considered only for the purpose of fitness for human consumption and it cannot be considered for the classification of the goods under the Customs Tariff Act. Therefore, the reliance by the appellants is not correct and totally misconceived. Whether the test report given by the CRCL (Central Revenues Control Laboratory), Chennai is complete and reliable? - HELD THAT:- The supari which is the a processed betel nut cut into pieces at three stages, free of finer particles and roasted could only be considered as a product which will fall under CTH 21. Whereas, the appellants are clearly attempting to mislead the department that whole betel nut has to be treated as API Supari. They have not provided any kind of evidence to prove that what is known as API supari in the market parlance. It is also on record that M/s. Nadaraj International company Ltd., has issued identical type of certificate in the case of Commercial Invoice 03/2020 related to M/s. S.T. Enterprises. Chapter 8 clearly covers edible fruits and Chapter Notes 3 states dried nuts of this chapter may be partially rehydrated or treated for the following purposes, i.e. moderate heat treatment for additional preservation or stabilization and by addition of vegetable oil to improve or maintain their appearance. The GENERAL notes of Chapter 8 states that Fruits and nuts of the Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled - As per Chapter Notes 3 the character of the betel nut is retained. The appellants have not provided any evidence to show that the character of the betel nut is not retained by the boiling (re-hydrating) on the drying process. The speaking Order No. 2/2020, dated 9-12-2020 in the case of M/s. S.T. Enterprises, Overseas, No. 308, Kriti Deep Building, DDA Real Business Center, Nangal Raya, New Delhi-110046 (B/E. No. 1017900, dated 18-11-2020) and speaking Order No. 3/2020, dated 9-12-2020 in the case of M/s. Ayush Business Overseas, 3rd Floor, House No. 1/20, Sindhora Kalan City, New Delhi-110052 (B/E No. 1017898, dated 18-11-2020) passed by the respondent i.e. Authorised Officer, J. Matadee Free Trade Warehousing Zone (FTZ), Mannur Village, Sriperumpudur, Kanchipuram Dist.-600210 classifying the impugned goods betel nuts - whole under CTH 0802 80 10, is upheld. Appeal disposed off.
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2021 (7) TMI 1113
Seeking return of bank guarantees furnished - import of Areca Nuts - no SCN issued within six months from the date of seizure of the goods - HELD THAT:- The goods had been seized in exercise of powers under Sub-section (1) of Section 110 of the Act. On the other hand, it appears that they had been kept in the custody of the proper officer, pending verification of the country of origin certificate. It appears that there was no seizure of goods, as envisaged under Section 110(1) of the Act. On the other hand, the instant case relates to clearance of imported goods as governed by Chapter VII of the Act. Sections 45, 48 and 49 deal with the manner in which the imported goods ought to be kept pending their clearance upon submission of bills of entry under Section 46 thereof. In the present case the customs authorities had not seized the goods on such reasonable belief that they are liable to confiscation. On the other hand, the goods had been kept in custody in exercise of powers under Section 45 of the Act, pending its clearance. Therefore, no case of unconditional release of the goods in the factual matrix with reference to sub-section (2) of Section 110 of the Act is made out - with concern that the provisional clearance of the goods is pending consideration for over 2 and years purportedly on the ground of verification of genuineness of the certificate with regard to country of origin. The scheme of the Act does not permit the customs authorities to undertake such an exercise for an indefinite period of time. Hence, the customs authorities cannot be permitted to continue such exercise indefinitely and keep the petitioner bound to the sureties furnished by them. Petition disposed off.
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Corporate Laws
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2021 (7) TMI 1117
Seeking restoration of name of the Company in the Register maintained by the Respondent/RoC - Section 252 of the Companies Act, 2013 - HELD THAT:- The Company has not placed on record any document to show that they have been active and carrying on its business operations immediately two years preceding the date of strike off. However, a perusal of other communications exchanged between the Government of Tamil Nadu and Applicant Company and also from the Memorandum of Understanding, it is seen that the Company is having future prospects of running the same for the purpose of which it was incorporated. Taking into consideration the provisions of Section 252 of the Companies Act, 2013 and more particularly the 'just' ground as envisaged under sub - section (3) of Section 252 of the Companies Act, the restoration of the name of the Applicant Company in the register maintained by the Respondent, is ordered, subject to the directions imposed. Application allowed.
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2021 (7) TMI 1111
Winding up petition - proceedings transferred to NCLT - Section 434(1)(c) of The Companies Act, 2013 - HELD THAT:- The exercise of extraordinary jurisdiction under Article 226 of the Constitution of India, in such cases of complex facts, financial statements claims will be inappropriate and such question of facts may not be properly adjudicated at all under Article 226 of the Constitution of India. Such fact finding exercise necessarily should be undertaken by the appropriate fact finding Tribunal and Authorities. The winding up proceedings pending before the learned Company Judge are not at the advance stage of the winding up of the Company and the said proceedings are pending for long period since 1986 without much of the progress and that may be apparently because the Assets of the Company were sold in favour of M/s. Shree Industries Limited (SIL), and thereafter,there nothing much was left with the Company in Liquidation -M/s. Ganpati Pulp to square up the dues of the other Secured and Unsecured Creditors and also the workmen. It is requested all the learned Counsels appearing the present matter today before us or who have already put in their appearance in this matter to file a brief two page Note either agreeing to the aforesaid proposed order of the Court or if they wish to make a submission against the aforesaid proposed order, they may do so with reason and case law, if any.
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2021 (7) TMI 1110
Settlement of the dues of Respondent No.9 - seeking to fix meeting with Time, Date and Venue fixed may be fixed by the Court to take further steps for settlement of dues - HELD THAT:- Let the meeting of these parties and other related parties as indicated in the Order dated 17.2.2021 passed by this Court take place at Bombay in the office of Respondent No.9 M/s. ASREC (India) Ltd., on 24th and 25th June 2021 at 11:00 a.m. It is expected that the concerned parties involved in this dispute particularly, Respondent No.5 and Respondent No.9 shall make it a point to convene and hold such meeting and proceed further in appropriate manner in the letter and spirit of the earlier directions of this Court and undertake the process of settlement of the dues as indicated in the said Order dated 17.2.2021. Let the Report of such meeting be filed by both these parties and be placed before this Court on the next date of hearing. List the matter again on 1.7.2021.
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Insolvency & Bankruptcy
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2021 (7) TMI 1130
Validity of approved Resolution Plan - submission of Resolution Plan beyond the date prescribed in Form-G - decision of CoC to approve the plan - no objection shown before RP and CoC to dispute the claims placed - Whether there has been material irregularity in exercise of powers by the Resolution Professional during the Corporate Insolvency Resolution Period? - HELD THAT:- The RP has published the list of creditors on 24.08.2018, 29.11.2018, 10.12.2018 and finally on 24.01.2019 and in these lists the claims of the Appellant were shown as disputed claims. These lists were displayed on website, however, the Appellant has not raised any objection before the RP and CoC that the estimate of the amount of claims has not been shown in the lists - In this Application in Paras 16, 17, 21 to 30 there are specific allegations that the Appellant s claims fall within the scope of fraudulent trading and wrongful trading transactions under Section 66 of the IBC. However, the Appellant has not contested these applications before the Adjudicating Authority. The Appellant in rejoinder did not dispute the aforesaid facts, however, stated that the Application has no relevance to the determination of the issues involved in the present Appeal. The Appellant has not challenged the findings of the A M report dated 15.01.2019 and SEBI interim order dated 16.08.2018 - the Appellant has failed to convince that the RP has committed any material irregularity in exercise of powers during the CIRP. Whether the debts owed to the Operational Creditor (Appellant) of the Corporate Debtor have not been provided for in the Resolution Plan in the manner specified by the Board? - HELD THAT:- Appellant heavily placed reliance on the Judgment of Hon ble Supreme Court in the case of NTPC Ltd (Simhadri Project) [ 2020 (11) TMI 973 - SUPREME COURT ] - According to the Appellant, the claims of the Appellant was pending adjudication before the Arbitrator, therefore, according to the Appellant, the claim amount should have been reflected under the heading Claims of Operational Creditors . The Hon ble Supreme Court do not agree with this submission and held that the Appellant s claims has rightly been described in the memorandum as other creditors claims (Claims under Adjudication). The Appellant has raised this objection before the approval of Resolution Plan. In the present Appeal, the facts are quite different the Appellant s claims are not only disputed claims but are the fraudulent extortionate credit transactions. Thus, this Judgment is not helpful to the Appellant. The Appellant has failed to make out a case for interference in the impugned order - Appeal dismissed.
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2021 (7) TMI 1128
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:- The date of default is 22.01.2018 and the present application is filed on 24.01.2019. Hence the application is not time barred and filed within the period of limitation - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The present application is filed on the Performa prescribed under Rule 6 of the Insolvency and Bankruptcy Code, 2016 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 r/w Section 9 of the code and is complete. There is a pre-existing dispute among the parties and the same is validated as per emails dated 23.04.2018, wherein the corporate debtor had raised dispute with regards the incomplete and delayed service, further as per email dated 07.06.2018, wherein the corporate debtor had also requested the applicant to complete the work at site - corporate debtor had also raised dispute in its reply to the demand notice of the applicant. Thus, a conclusion can be drawn that there is Preexistence dispute which was raised by the corporate debtor time and again much prior to the notice served under section 8 of I B Code. It is a fit case to reject the application under section 9 of the I B Code - the application is rejected.
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2021 (7) TMI 1125
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Homebuyers/flatowners - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The petitioner is representing the members of 300 flat owners, out of total 644 flats and as per the requirement of Section 7 of IBC, 2016 proviso, an application needs to be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent of the total number of such creditors in the same class whichever is less. Since, the petitioner is representing 300 flat buyers, the petitioner is a registered Association duly elected by the 300 flat buyers and there is a resolution of the Association, which authorizes the petitioner to pursue the matter, the petitioner has fulfilled the minimum requirement for filing an application under the amended Section 7 of IBC, 2016. On plain reading of the definitions, it is found that the 'debt' means a liability or obligation in respect of a claim, which is due from any person and includes a financial debt and operational debt. And the 'financial debt is a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes the amount paid under either of the clauses from (a) to (i) of Section 5 of the IBC, and the person who paid the money and to whom such debt has been legally assigned or transferred to is known as 'Financial Creditor'. It is an admitted fact that as per the clause (D) of the agreement at page 176 of the paper book, on the balance of 75% of the deposit, the developer shall pay annually interest at the rate of State Bank of India's rate for three years' term deposit and interest shall be paid from the date of providing maintenance services i.e., 01.05.2007 or from the date deposits are made by owner(s), whichever is later - In view of this clause of the agreement, when we consider the definition of 'financial debt', it is seen that money was borrowed against the payment of interest and that amount was raised from the allottees under a real estate project - the amount raised by the corporate debtor comes under the definition of financial debt' and the petitioner, who is representing the 300 flat buyers of that project, is the 'financial creditor' in terms of Section 5 (7) of IBC 2016. It is admitted by the Corporate Debtor in its reply that the maintenance is being carried out by the petitioner Association, w.e.f. 01.04.2018. Therefore, as per the agreement clause, the Corporate Debtor was bound to refund the amount, the day when the Association was formed. Since it is admitted by the Corporate Debtor that the Association has been carrying out the maintenance work w.e.f. 01.04.2018, therefore, the date of default is 01.04.2018 - It is seen in the part-TV of the application that the date of default is shown as 01.04.2018 and the total amount of default including interest is indicated of ₹ 10,80,77,619/-. The present application is filed on 26.02.2019, hence it is within the limitation period. Thus, there is a financial debt paid by the flat buyers, who are represented through the Registered Association and that amount has not been refunded by the Corporate Debtor as yet, therefore, there is a default in making the payments of debt amount - the applicant has succeeded in establishing that there Is a financial debt and Corporate Debtor is in default in making the payment of that financial debt, the application is complete - application admitted - moratorium declared.
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2021 (7) TMI 1118
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Adjudicating Authority is of the view that the Corporate Debtor in its reply to the demand Notice dated 19.12.2019 does not dispute the fact that the salary to the Operational Creditor has to be paid however, a condition has been laid that the Operational Creditor has to first recover the outstanding dues of ₹ 10,00,000/- from the customers therefore, it is a clear admission of default and this Adjudicating Authority does not have to indulge in the details or the terms of the Contract/Appointment letter. Pre-existence of dispute - HELD THAT:- The Corporate Debtor has rendered two different dates i.e. 10.12.2019 and 19.12.2019 for the alleged legal notice. The alleged dispute raised in the said legal notice is an afterthought and contrary to the stand taken by the Corporate Debtor. The Corporate Debtor has failed to produce any tracking report which could depict that the said Legal Notice dated 19.12.2019 was ever delivered to the Operational Creditor - thus, the defense of pre-existence of dispute can be categorized as a moonshine dispute. The application is admitted - moratorium declared.
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Service Tax
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2021 (7) TMI 1146
Levy of service tax - professional services - services provided by an advocate or a partnership firm of advocates providing legal services - HELD THAT:- A compliance affidavit has been filed by the Principal Commissioner, GST Central Excise Commissionerate, Bhubaneswar enclosing the copies of instructions issued on 9th April, 2021 and 15th April, 2021 reiterating, inter alia, that the services provided by an advocate or a partnership firm of advocates providing legal services to any person other than a business entity and to a business entity with a turnover up to rupees ten lakhs in the preceding financial year are exempted from levy of service tax. Petition disposed off.
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Central Excise
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2021 (7) TMI 1138
Entitlement to Interest within three months of the date of final order of this Tribunal - amount deposited by way of pre-deposit as per the stay order of this Tribunal - Section 35FF of CEA - HELD THAT:- The Commissioner (Appeals) have erred in making reference to Section 11BB instead of the correct Section 35FF, and have passed erroneous order. Thus, the impugned order is set aside and further following the ruling of Supreme Court in SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [ 2006 (1) TMI 55 - SUPREME COURT] , the appellant is entitled to interest @ 12% per annum from the date of deposit till the date of refund - thus, the adjudicating authority is directed to grant interest as directed within a period of 45 days from the date of receipt on service of copy of this order. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2021 (7) TMI 1160
Maintainability of petition - alternative remedy of appeal was not exhausted - validity of assessment order - HELD THAT:- Admittedly, the present Writ Petitions are filed challenging the final assessment orders and therefore, the petitioner is bound to exhaust the statutory remedies provided under the provisions of the Act. The importance of the appellate remedy at no circumstances be undermined, as the appellate authorities are the final fact finding authorities - Preferring an appeal is the rule. Entertaining a Writ Petition before exhausting the appellate remedy is an exception. Undoubtedly, writ proceedings may be entertained before exhausting the appellate remedy. The power of judicial review of the High Court under Article 226 of the Constitution of India is to scrutinize the processes through which a decision is taken by the competent authority by following the procedures as contemplated, but not the decision itself. Therefore, the routine entertainment of a Writ Petition by dispensing with appellate remedy is not preferable and such an exercise would cause injury to the institutional hierarchy and the importance attached to such appellate institutions. The appellate institutions provided under the statute at no circumstances be undermined by the higher Courts - The High Court cannot conduct a roving enquiry with reference to the facts and circumstances based on the documents and evidences. Based on the mere affidavits filed by the litigants, the disputed facts cannot be concluded. The practise of filing the Writ Petition without exhausting the statutory remedies are in ascending mode and such Writ Petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming - the petitioner is at liberty to prefer an appeal before the jurisdictional competent authority, in a prescribed format, complying with the provisions of the Acts and Rules, within a period of four weeks from the date of receipt of a copy of this order - Petition disposed off.
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Indian Laws
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2021 (7) TMI 1156
Termination of dealership - breach of Clause 45 (d) of dealership agreement - Co- operative Society appointed as dealer, involved in a criminal offence or not - petitioner was convicted under Section 138 of Negotiable Instruments Act, 1881, for dishonor of cheque - heinous case or case involving moral turpitude or otherwise? - HELD THAT:- Apex Court in the case of P. MOHANRAJ ORS. VERSUS M/S. SHAH BROTHERS ISPAT PVT. LTD. [ 2021 (3) TMI 94 - SUPREME COURT] has reiterated that proceedings under Negotiable Instruments Act are basically civil in nature having criminal colour. Apex Court has defined the proceedings aptly as civil sheep in a criminal wolf's clothing and has reiterated the law laid down - Similarly, in M/S. METERS AND INSTRUMENTS PRIVATE LIMITED ANR. VERSUS KANCHAN MEHTA [ 2017 (10) TMI 218 - SUPREME COURT] , it has been held that nature of offences under Section 138 of Negotiable Instruments Act is primarily a civil law and 2002 amendment specifically made it compoundable. Thus, it is clear that proceedings under Section 138 of Negotiable Instruments Act are civil in nature with criminal overtones - impugned order is quashed - respondent is directed to allow petitioner to run the Petroleum outlet allotted to him vide agreement dated 1.8.2008 - petition allowed.
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2021 (7) TMI 1154
Dishonor of Cheque - Trial Court awarded punishment in the form of imprisonment for the said offence - dispute is amicably settled with the respondent no.2-complainant, with regard to the offence, after the order of conviction is passed - complainant filed an affidavit interalia stating that if the order of conviction passed against the applicants is quashed and set aside, he has no objection - compounding of offences - HELD THAT:- This Court, in the case of Khokhar Iliyas Bismilla Khan Vs. State of Gujarat Anr. [ 2021 (6) TMI 868 - GUJARAT HIGH COURT] , had an occasion to deal with a similar issue which is involved in the present matter, where it was held that Taking into account the fact that the parties have settled the dispute amicably, in view of this court the compounding of the offence is required to be permitted. Thus, when the parties have settled the dispute amicably, compounding of the offence is required to be permitted - However at this stage, it is required to be noted that the respondent no.2 has filed a complaint under Section 138 of the N.I. Act for dishonour of cheque amounting to ₹ 1,43,606/- and, hence as per the decision rendered by the Hon'ble Supreme Court, suitable amount i.e 15% of ₹ 1,43,606/- is required to be deposited by the applicants with the Gujarat State Legal Services Authority. Application allowed.
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2021 (7) TMI 1149
Dishonor of Cheque - chque was signed by the Husband (who was not the joint holder) - allegation is that ingredients as contemplated in Section 138 of the Negotiable Instruments Act having not been fulfilled - debt or liability on the part of the drawer of the cheque or not - Section 138 of the Negotiable Instruments Act - HELD THAT:- It is evident that to take action against non-payment of any cheque amount due to its return by the bank as unpaid, there should exist any debt or liability on the part of the drawer of the cheque and the recipient of the cheque. In the present case, it is the admitted stand of the parties that there was no debt or liability on the part of the petitioner to the complainant. Therefore, mere issuance of cheque belonging to the petitioner would not suffice to attract Section 138 of the Negotiable Instruments Act in the absence of the other ingredients of the said section being fulfilled. Further, it is to be pointed out that it is the admitted case of the defacto complainant that the bank account belongs to the petitioner. However, the cheque has been drawn by the husband of the petitioner. It is not the case of the defacto complainant that the account is a joint account. In that backdrop, a perusal of the cheque reveals that the cheque has been signed by P.Ramachandran and P.Rajeswari does not seem to be the signatory to the cheque. In such a scenario, taking action on the petitioner, who is merely the account holder, but who has not issued the cheque, would be wholly impermissible. This Court is of the considered view that the present complaint against the petitioner is legally untenable and the cognizance of the said complaint taken by the Magistrate leading to the registration of the case deserves to be interfered with - petition allowed.
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