TMI Tax Updates - e-Newsletter
July 4, 2020

Case Laws in this Newsletter:

GST Income Tax Customs Securities / SEBI Insolvency & Bankruptcy Service Tax Central Excise Indian Laws

Articles

• Government Amendment bought in at the time of passing of Finance Bill, 2020 – Residential Status for Non-Residents
• Is mini-amnesty scheme for reducing late fees half-hearted?
• ARBITRATION MECHANISM IN NATIONAL STOCK EXCHANGE

News

• Maximum late fee for delayed filing of GSTR-3B return capped at ₹ 500

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• Income Tax Department Refunded ₹ 62,361 crore to more than 20 lakh taxpayers amid COVID-19 pandemic

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Notifications

GST - States

• (23/2020)-FD 03 CSL 2020 - dated 30-6-2020 - Karnataka SGST
  Seeks to provide one time amnesty by lowering/waiving of late fees for non furnishing of FORM GSTR-3B from July, 2017 to January, 2020 and also seeks to provide relief by conditional waiver of late fee for delay in furnishing returns in FORM GSTR-3B for tax periods of February, 2020 to July, 2020.

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• (22/2020)-FD 03 CSL 2020 - dated 30-6-2020 - Karnataka SGST
  Seeks to provide relief by lowering of interest rate for a prescribed time for tax periods from February, 2020 to July, 2020

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• 19666- FIN-CT1 -TAX- 0002 /2020 - dated 2-7-2020 - Orissa SGST
  To amend notification no. 18548-FIN-CT1-TAX-0002/2020 dated 22.06.2020 in order to further extend period to pass order under Section 54(7) of the OGST Act till 31.08.2020 or in some cases up to fifteen days thereafter

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• 19662- FIN-CT1-TAX- 0002/2020 - dated 2-7-2020 - Orissa SGST
  Notification to amend notification no. No. 18491-FIN-CT1-TAX-0002/2020, dated 22.06.2020 in order to extend due date of compliance which falls during the period from 20.03.2020 to 30.08.2020 till 31.08.2020

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• 19469 -FIN-CT1-TAX-0072/2017 - dated 1-7-2020 - Orissa SGST
  Amendment notification on Odisha State Authority for Advance ruling

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• F.17(131-Pt.-II)ACCT/GST/2017/5758 - dated 26-6-2020 - Rajasthan SGST
  Seeks to amend Notification No. F.17(131-pt-II) ACCT/GST/2017/5579, dated the 24h March, 2020

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• F.12(46)FD/Tax/2017Pt-IV-194 - dated 26-6-2020 - Rajasthan SGST
  State Government appoints Revisional Authority under RGST ACT, 2017

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• F.12(46)FD/Tax/2017-Pt.III-185 - dated 11-6-2020 - Rajasthan SGST
  Seeks to amend Notification No. F.12(46)FD/Tax/2017-Pt.V-177, dated the 18th May, 2020

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• F.12(46)FD/Tax/2017-Pt.III-184 - dated 11-6-2020 - Rajasthan SGST
  Extend period to pass order under section 54(7) of RGST Act, 2017

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• F.12(46)FD/Tax/2017-Pt.III-183 - dated 11-6-2020 - Rajasthan SGST
  Provisions of Rule 67A For Furnishing A Nil Return In Form GSTR-3B by SMS

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SEZ

• S.O. 2175(E). - dated 25-6-2020 - SEZ
  Amendment in Notification No. S.O.1637(E) dated 13th April, 2018

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Circulars / Instructions / Orders

GST - States

• GST CIRCULAR NO. 10/2020 - dated 15-6-2020
  Clarification in respect of levy of GST on Director's remuneration.

GST

• F. No. CBEC-20/10/07/2019-GST - dated 22-6-2020
  Reference form DGGI on Cross empowerment under GST
• F. No. CBEC-20/10/11/2019-GST/1001 - dated 22-6-2020
  Writ petitions filed in various High Court(s) related to transitional provisions in GST

Customs

• PUBLIC NOTICE NO. 29/2020 - dated 29-6-2020
  Launch of Indian Gustoms EDI System - (ICES -'1.5) for lmports and Exports, at ICD, Urs Hind Terminals Pvt. Ltd., Rangian, Kilaraipur-1, DehIon, District Ludhiana, Punjab-141118
• PUBLIC NOTICE No. 17/2020 - dated 23-6-2020
  Paperless Customs — Electronic Communication of PDF Based Copies of Shipping Bill & e-Gatepass to Custom Brokers/Exporters
• FACILITY No. 01/2020 - dated 19-6-2020
  Declaration of Sonamura, Jogigopha and Badarpur 'Port of Call/ Extended Port of Call' under PIWT&T as Customs notified port
• PUBLIC NOTICE NO. 29/ 2020 - dated 1-6-2020
  Special drive for disposal of applications for fixation of Brand Rate of Duty Drawback
• PUBLIC NOTICE NO. 30/ 2020 - dated 1-6-2020
  Review of Circular No. 17/2020 dated 03.04.2020 namely, 'Measure to facilitate trade during the lockdown period- section 143AA of the Customs Act, 1962'
• Public Notice No. 30/2020 - dated 1-6-2020
  COVID-19 Facilitation measures: Procedure for assessment in cases of non-submission of Original Country of Origin Certificate — Further amendment to Public Notice No. 16/2020 dated 10.04.2020, as amended vide Public Notice No. 24/2020 dated 19.05.2020
• Trade Notice 06/CCP/JMR/2020 - dated 21-5-2020
  Incidence of National Calamity Contingent Duty (NCCD) for calculation of Brand Rate of duty drawback
• PUBLIC NOTICE NO. 26/2020 - dated 19-5-2020
  Implementation of PGA e-SANCHIT- Paperless Processing under SWIFT - Uploading of Licenses/Permits/Certificates/Other Authorizations (LPCOs) by PGAs -further amendment of Public Notice No. 02/2020 dated 22.01.2020
• Trade Notice 04/CCP/JMR/2020 - dated 21-4-2020
  IGST refunds=on in SB005 alternate mechanism
• Addendum to public Notice No. 05/CCP/JMR/2020 - dated 18-4-2020
  Request for Amendments and Waiver Of Late Fee Charges in the Bills of Entry and regularization of Prior 85 Advance Bills of Entry through e-mail procedure as facilitation during outbreak of COVID-19

Highlights / Catch Notes

GST

• Input tax credit of GST paid - construction of commercial immovable property - the applicant has himself built the immovable property for which he has received various goods or services or both and is using the said property for giving the same on rent to his customers. Therefore, as per Section 17(5)(d), no ITC is available on any goods or services received by him for such construction and the same cannot be claimed by him. Thus, the provisions of Section (17) (5)(d) squarely applies in the subject case and thus the applicant cannot avail input tax credit.
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• Applicability of GST - accounting entry made for the purpose of Indian accounting requirements in the books of accounts of Project Office for salary cost of Expat employees - Since we find that there is a relation of employer and employee between the Project Office and the expat employees, the provisions of Schedule III of the CGST Act comes into play.
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• Classification of Services - GTA Services - consignment note issued by the Applicant - actual transportation done by third party - GST is payable at the Rate of 5% provided that credit of input tax credit charged on goods and services used in supplying the services has not been taken and a GST Rate of 12% will be applicable provided that the goods transport agency opting to pay central tax @ 6% under this entry on all the services of GTA supplied by it.
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Income Tax

• Withholding of Refund - It is not in dispute that as on today, there is no determination of any further tax liability for any other assessment year which liability can be adjusted against the admitted refundable amount determined by the respondent No.1 assuming Section 241A is applicable or otherwise. Even otherwise no approval is granted by the Principal Commissioner or Commissioner as the case may be to withhold the refund up to the date on which the assessment is made. - Refund directed to be paid within 2 weeks.
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• Addition u/s 56(2)(viib) - taxing the share premium received - DCF Method of Valuation - The primary onus to prove the correctness of the valuation Report is on the assessee as he has special knowledge and he is privy to the facts of the company and only he has opted for this method. Hence, he has to satisfy about the correctness of the projections, Discounting factor and Terminal value etc. with the help of Empirical data or industry norm if any and/or Scientific Data, Scientific Method, Scientific study and applicable Guidelines regarding DCF Method of Valuation.
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• Unexplained cash deposit in the NRO bank account - Additions u/s 69 - once the assessee has provided an explanation which in the instant case, we find reasonable and plausible, the deposit so made cannot remain unexplained. In view of the same, we find that even though the assessee has failed to bring on record any evidence issued by Thomas Cook in support of exchange of foreign currency with Indian Rupees,there is no basis for invoking the provisions of section 69 in the instant case
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• Assessment of trust - ‘anonymous donation' - AO despite having the information could not show that, the donors are not existing or the assets are not existing. It is merely a case of donation of assets to the assessee trust where the assets and the donors both are identified - Additions towards anonymous donation directed to be deleted.
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• Assessment u/s 153A - If no incriminating material is found during the course of search, then, the amount of total income determined under the earlier completed assessments is to be adopted in a fresh assessments u/s 153A without making any further addition. - the assessee doesn’ t fall under the category of abated assessment.
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• Rectification u/s 254 - No mistake, much less, a mistake apparent on the face of record as envisaged under section 254(2) of the Act. What the assessee wants by filing this application is a decision from the Tribunal in a particular manner and to its own liking. This cannot be the intent and purpose of section 254(2) of the Act which is only for rectifying mistake apparent on the face of record.
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IBC

• Initiation of CIRP - The Petitioner has approached this forum only for recovery. He has not made out any case that the Corporate Debtor is insolvent and unable to repay its debts because of which CIRP should be initiated against it. We find that the Company is seeing an upswing in its business. - There was no financial debt within the meaning of the Code - Petition dismissed.
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Central Excise

• Clandestine removal - Once the weighbridge exists within the factory premises, the factum of clearance of goods from said weighbridge does not at all arise. This observation is sufficient to hold that weighbridge slips cannot be the evidence for proving that the goods were cleared from the appellant’s factory clandestinely. The weighbridge being within the factory premises, the weighment of any commodity or any entry in outgoing register from the said weighbridge cannot reflect clearance at all.
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• 100% EOU - Refund of unutilised cenvat credit - Appeal by Revenue - There is nothing in the appeal to show that the respondent is not entitled to refund of cenvat credit under Rule 5 of CCR, 2004. In fact, the appeal is silent about this rule itself.
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Case Laws:

• GST

• 2020 (7) TMI 83
  Maintainability of Advance Ruling Application - Levy of IGST or CGST and SGST - Renting of Immovable Property Service - reverse charge mechanism - applicability of N/N. 13/2017 dated 28th June, 2017 read with Notification No. 03/2018 - Central Tax (Rate) dated 25th January 2018 - HELD THAT:- Section 95 of the CGST Act, 2017 allows this authority to decide the matter in respect of supply of goods or services or both, undertaken or proposed to be undertaken by the applicant. The applicant has not undertaken the supply in the subject case. We find that, the applicant is a recipient of services pertaining to renting of immovable property in the subject case. The impugned transactions are not in relation to the supply of goods or services or both undertaken or proposed to be undertaken by the applicant and therefore, the subject application cannot be admitted as per the provisions of Section 95 of the GST Act. The present application filed for advance ruling is rejected, as being non-maintainable as per the provisions of law.

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• 2020 (7) TMI 82
  Input tax credit of GST paid - Input input services used for construction of commercial immovable property, subsequently used for renting - HELD THAT:- Section (17) (5) (d) bars a taxable person, in the subject case the applicant, from taking input tax credit for construction of immovable property (as in the subject case) which is on his own account, even when such goods or services or both are used in the course or furtherance of business (in the subject case, renting of the said property). Further, it is also seen from the submissions that the immovable property in the subject case is neither a plant or machinery. Thus, Section 17(5) (d) provides that no ITC is available in respect of any goods or services received by a taxable person for construction of an immovable property on his own account even if such inputs and input services are used in the course and furtherance of business. In the instant case the applicant has himself built the immovable property for which he has received various goods or services or both and is using the said property for giving the same on rent to his customers. Therefore, as per Section 17(5)(d), no ITC is available on any goods or services received by him for such construction and the same cannot be claimed by him. Thus, the provisions of Section (17) (5)(d) squarely applies in the subject case and thus the applicant cannot avail input tax credit. The applicant has placed reliance on the judgment rendered by the M/S. SAFARI RETREATS PRIVATE LIMITED AND ANOTHER VERSUS CHIEF COMMISSIONER OF CENTRAL GOODS SERVICE TAX OTHERS [ 2019 (5) TMI 1278 - ORISSA HIGH COURT] . In the said case it is seen that the party had constructed malls which were given further on lease. While holding that Section 17 (5) (d) was not ultra vires, the Hon ble Court ruled that the party was eligible for credit - Since the case of M/s. Safari Retreats Pvt. Ltd. is pending with the Hon ble Supreme Court, has not attained finality. It is also found that the Hon ble High Court has given the relief to the party invoking its writ jurisdiction while categorically holding that they are not inclined to hold Section 17(5)(d) to be ultra vires. Therefore, we are not relying upon the judgement of the Hon ble High Court.

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• 2020 (7) TMI 81
  Scope of Advance Ruling Application - Input tax credit in relation to jointly owned property - requirement of issuance of separate invoice showing the respective ownership share ratio of the each owner - HELD THAT:- Section 95 allows this authority to decide the matter in respect of supply of goods or services or both, undertaken or proposed to be undertaken by the applicant on the matters or questions specified in sub-section (2) of section 97. We find that, in the subject case the maintenance charges are collected by the society for having rendered Club or association services to all the four co-owners including the applicant. Thus, the supply of services, in respect of which the question has been raised, is being undertaken by the society and not by the applicant. Applicant is a recipient of services in the subject transaction. The impugned question raised by applicant is in relation to procedure to be followed by the society in respect of issue of invoices to applicant for the common area maintenance charges and hence the issue is not within the purview of Section 97(2) under the Act. Therefore, the subject application cannot be admitted. Whether there are any provisions under the CGST Act, 2017 by which credit of lumpsum CGST charged to the only one co-owner can be transferred to the other co-owners proportionately? - HELD THAT:- The subject application cannot be admitted. Further, it is also seen that the question raised does not fall under any of the provisions of Section 97 (2) of the CGST Act, 2017. The subject application for advance ruling made by the applicant is rejected under the provisions of sub-section 2 of Section 98 of the CGST Act, 2017.

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• 2020 (7) TMI 80
  Maintainability of Advance Ruling Application - Supply of goods of services or both - Levy of IGST - intermediary services received from Fair Relations GmbH - reverse charge mechanism - input tax credit - HELD THAT:- The applicant has not undertaken the supply in the subject case, and is also not proposing to undertake the supply. We find that, the applicant is a recipient of services from a person situated abroad. The impugned transactions are not in relation to the supply of goods or services or both undertaken or proposed to be undertaken by the applicant and therefore, the subject application cannot be admitted as per the provisions of Section 95 of the GST Act. Hence without discussing the merits of the case, we reject the subject application as not being maintainable. The question with regard to ITC need not be answered.

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• 2020 (7) TMI 79
  Applicability of GST - accounting entry made for the purpose of Indian accounting requirements in the books of accounts of Project Office for salary cost of Expat employees - HELD THAT:- A project office in an extension of the foreign Head Office, and as in the subject case shall carry on all activities relating and incidental to execution of the Project in India. Thus the expat employees are employees of the employer i.e. the Head Office and since the Project Office is an extension of the Head Office, there is a relation of employer and employee between the Project Office and the expat employees. For GST to be applicable on the accounting entry made for the purpose of Indian accounting requirements in the books of accounts of Project Office for salary cost of Expat employees paid by the Head Office, such accounting entry should be seen as a supply of goods, services or both. Since we find that there is a relation of employer and employee between the Project Office and the expat employees, the provisions of Schedule III of the CGST Act comes into play in this case as per which services by an employee to the employer in the course of or in relation to his employment will not be considered as a supply and therefore will not attract GST.

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• 2020 (7) TMI 78
  Classification of Services - GTA Services - consignment note issued by the Applicant - actual transportation done by third party - transportation services taken to dispatch of consignments for POSCO group companies between Customs Port and the place of business of POSCO group companies for import/export consignments and From POSCO group companies to their customer in India. What will be the classification of the services (whether under service codes 996511 or 996791 or 996799 or any other) of the Applicant in case the Applicant issues the consignment note however, the actual transportation is done through the third-party transporter (who also issues the consignment note)? - HELD THAT:- The applicant is a GTA providing Goods Transport Agency Services and the services provided by them are transport of goods by road. In the subject case, they have a contract/agreement with POSCO group companies to provide transportation services wherein they undertake dispatch of consignments by road for POSCO group companies. It is found that they are rendering Goods Transport Services to POSCO group of companies directly - the services supplied by them would be covered under Heading 9965 which covers Goods Transport Services , Sub Heading 99651 which covers Land Transport service of Goods and further under SAC 996511. What will be the applicable GST rate on the above service? - HELD THAT:- Having held that the services supplied by the applicant to POSCO group of companies are covered under Heading 996511, we have no hesitation in holding that GST applicable in this case will be covered under Entry 9(iii) of the Notification 11/2017(CT) Rate dated 28 June 2017 subject to conditions mentioned therein i.e. a GST Rate of 5% will be provided that credit of input tax credit charged on goods and services used in supplying the services has not been taken and a GST Rate of 12% will be applicable provided that the goods transport agency opting to pay central tax @ 6% under this entry on all the services of GTA supplied by it. Whether the Applicant would be eligible to avail the input tax credit of the 12% GST charged by the third-party transporters? - HELD THAT:- As far as the services provided by third party transporter to applicant are concerned, prima facie it appears that the third party transporters are classifying their services under Entry 22 (b) of Notification 12/2017 dt. 28.06.2017 and are not levying any tax on the services supplied by them to applicant. As no GST is paid by third party transporter, the applicant will not be entitled for any input tax credit on services provided by third party transporter. Whether the transporter would be right in charging GST @12% under forward charge mechanism to Applicant in terms of Notification No 20/2017-Central Tax (Rate) dated 22 August 2017 when Applicant as the main contractor, is already charging GST @ 12% under the same Notification, which is going to remain unchanged? - HELD THAT:- The question raised does not pertain to supply undertaken or to be undertaken by the applicant and therefore in view of the provisions of Section 95 of the CGST Act, 2019, this authority cannot answer the question. Procedurally, is it correct to have two GTA Service Providers and two consignment notes for the same movement of goods, one issued by the Applicant as main contractor and the other by transporters sub-contractor? - HELD THAT:- The question raised here pertains to procedure to be followed. The question does not fall under Section 97 (a) to (g) of Section 95 of the CGST Act, 2019, and therefore this authority refrains from answering the said question.

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• 2020 (7) TMI 77
  Time Limit for filing of TRAN-1 form - vires of Rule l17 of the Central Goods and Services Tax Rules, 2017 - unable to file form due to technical glitches in the portal - HELD THAT:- Issue notice - To await the judgment of the Supreme Court in Union of India Vs. Brand Equity Treaties Limited Ors., [ 2020 (6) TMI 517 - SC ORDER ].

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• 2020 (7) TMI 76
  Reopening of portal for filing of Form GST TRAN-1 - transitional credit - HELD THAT:- Considering the fact that the petitioner has approached this Court by filing the writ petition before 30.06.2020 which has been listed on 30.06.2020, in case the Special Leave Petition preferred by the respondents before the Supreme Court against the decision in Brand Equity Treaties Limited (supra) is rejected, and our decision is upheld, it goes without saying that this Court would not be powerless to direct the respondents to accept the GST Tran-I Form of the petitioner at a later point of time. List on 16.09.2020 along with other similar matters.

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• 2020 (7) TMI 75
  Reopening of GST portal for filing of GST Tran-I Form - transitional credit - submission of learned counsel for the petitioner is that the decision of this Court in BRAND EQUITY TREATIES LIMITED, MICROMAX INFORMATICS LTD., DEVELOPER GROUP INDIA PRIVATE LIMITED, RELIANCE ELEKTRIK WORKS VERSUS THE UNION OF INDIA AND ORS. [ 2020 (5) TMI 171 - DELHI HIGH COURT] , is pending consideration before the Supreme Court, and the Supreme Court has stayed the said decision - HELD THAT:- While issuing notice to the respondents, we adjourn the matter to 16.09.2020 when, we are informed, other similar petitions are coming up before the Court.

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• 2020 (7) TMI 74
  Requirement of Bank Guarantee for release of confiscated goods - HELD THAT:- Admittedly the petitioner claims himself to be only the owner of the vehicle as a transporter and has shown his disclaimer on the goods. In view thereof, the revenue department would be free to auction the goods in terms of the Rules. However, if the petitioner submits the bank guarantee in terms of Rule 140, relating to the valuation of the vehicle, the revenue department would, upon satisfaction, release the vehicle to the petitioner. As owners of the goods are not presently before this court, no order in this regard is required to be passed. Petition disposed off.

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• Income Tax

• 2020 (7) TMI 73
  Withholding of Refund - as per respondents since huge outstanding demand has been pending against the petitioner, the AO has initiated proceedings u/s 241A against the petitioner to withheld the refund after following prescribed procedure laid down in the Act - HELD THAT:- It is not in dispute that as on today, there is no determination of any further tax liability for any other assessment year which liability can be adjusted against the admitted refundable amount determined by the respondent No.1 assuming Section 241A is applicable or otherwise. Even otherwise no approval is granted by the Principal Commissioner or Commissioner as the case may be to withhold the refund up to the date on which the assessment is made. In this case, the assessment order under Section 143(1) for the assessment year 2014-2015 has already attained finality resulting in refund of amount in view of the judgment delivered by Hon ble Supreme Court on 29th April, 2020 and the order dated 28th May, 2020 passed by the respondent no.1. Insofar as the reliance placed by the learned counsel for the respondents on the judgment of the Delhi High Court in the case of Maruti Suzuki India Ltd. V/s. Deputy Commissioner of Income Tax [ 2011 (11) TMI 312 - DELHI HIGH COURT] the said judgment is not even remotely applicable to the facts of this case. Reliance placed by the learned counsel on the said judgment is totally misplaced. The respondents are directed to refund a sum of ₹ 833,04,88,000/- to the petitioner within two weeks from the date of uploading of this order without fail.

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• 2020 (7) TMI 72
  Addition u/s 40(a)(ia) - default under the first proviso of section 201(1) - Scope of amendment - HELD THAT:- We find that various submissions were made by the assessee before CIT(A) regarding section 201 amended by Finance Act, 2012. Reliance was also placed on the Tribunal order rendered in the case of Bharti Shipyard Ltd., Vs. DCIT [ 2011 (9) TMI 258 - ITAT MUMBAI] wherein it was held that this amendment is retrospective. As per the relevant paras reproduced from the order of CIT(A) as above, it is seen that there is no discussion or decision about these arguments made by the assessee in the written submissions filed by the assessee before CIT(A). Hence, we feel it proper to set aside the order of CIT(A) in both these cases and restore this matter back to the file of AO in both the cases for a fresh decision - Appeals of the assessee are allowed for statistical purposes.

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• 2020 (7) TMI 71
  Addition u/s 56(2)(viib) - taxing the share premium received during the previous year as income of the Assessee - DCF Method of Valuation - HELD THAT:- AO has erred in considering the actuals of revenue and profits declared in the future years as a basis to dispute the projections. At the time of valuing the shares as on 16.04.2012, the actual results of the later years would not be available. What is required for arriving at the fair market value by following the DCF method are the expected and projected revenues. Accordingly the valuation is on the basis of estimates of future income contemplated at the point of time when the valuation was made. It has been clarified by the Assessee that the product which was being developed by the Assessee has substantial value and the Assessee was able to raise funds to the tune of ₹ 50.13 crores from international market With regard to valuation has to be decided afresh by the AO on the lines indicated in the decision of ITAT, Bangalore in the case of VBHC Value Homes Pvt.Ltd., Vs ITO [2020 (6) TMI 318 - ITAT BANGALORE ] i.e., (i) the AO can scrutinize the valuation report and he can determine a fresh valuation either by himself or by calling a determination from an independent valuer to confront the assessee but the basis has to be DCF method and he cannot change the method of valuation which has been opted by the assessee. (ii) For scrutinizing the valuation report, the facts and data available on the date of valuation only has to be considered and actual result of future cannot be a basis to decide about reliability of the projections. The primary onus to prove the correctness of the valuation Report is on the assessee as he has special knowledge and he is privy to the facts of the company and only he has opted for this method. Hence, he has to satisfy about the correctness of the projections, Discounting factor and Terminal value etc. with the help of Empirical data or industry norm if any and/or Scientific Data, Scientific Method, Scientific study and applicable Guidelines regarding DCF Method of Valuation. The order of ld.CIT(A) is accordingly set aside for deciding the issue afresh after due opportunity of hearing to the Assessee. Appeal is allowed for statistical purpose.

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• 2020 (7) TMI 70
  Validity of assessment proceedings u/s 153A - unexplained foreign expenditure u/s 69C - HELD THAT:- We find that for Assessment Year 2011-12 assessee has not requested for any relief in the written submission filed before Ld. CIT(A). The relief claimed for other years was only regard to wrong application of package rates for preceding years. Since for Assessment Year 2011-12 no relief has been requested by the assessee himself as there is no difference in the expenditure incurred at the time of visit and the package rates. We thus find no merit in Ground raised by the assessee and the same deserves to be dismissed. Undisclosed cash investment u/s 69B - HELD THAT:- Two plots were purchased by the assessee s wife and his father in law by registered deed dated 13.6.2010. The mutation was pending for these two plots and the two cheques were kept as security from Universal Agro Farm. Apparently revenue authorities have failed to prove any live connection between the assessee and Universal Agro Farm relating to the two cheques found during the course of search. Whereas the documentary evidence filed by the assessee clarifies the transactions. No other efforts were made by the revenue authorities to confront Shri Shardendu Kumar Mishra. We find no justification in the action of the Ld. A.O making the addition of unexplained cash investment since the addition made by the Ld. A.O seems to be made merely on the suspicion and surmises. We accordingly set aside the finding of Ld. CIT(A) and delete the addition u/s 69B of the Act and allow Ground No.4 of the assessee s appeal. Cash and foreign currency found u/s 69 - unexplained cash and foreign currency - HELD THAT:- Since the cash amount has been accepted to have been received by the assessee cash found at the residential premises and locker of the assessee get duly explained and in the cash flow statement also the amount seized by the Income Tax Department has been considered. Since the revenue authorities have failed to challenge the correctness of the cash flow statement and were merely questioning that why the cash was kept in locker and not deposited in bank are not good ground to make addition for unexplained cash in the hands of the assessee - since assessee has successfully explained the source of cash found during the course of search, addition for unexplained income u/s 69A the Act deserves to be deleted. Voluntary disclosure u/s 132(4) - HELD THAT:- There is no evidence placed on record to show that unaccounted professional receipts which assessee failed to offer in the previous years has been offered to tax as surrendered amount so as to cover up the undisclosed gold and diamond jewellery and paid income from other source which the assessee failed to offer in the earlier years. In this situation the statement given under oath u/s 132(4) is a perfect documentary evidence because the amount surrendered is not linked to any material evidence found during the course of search on the basis of which the income could have been computed and the assessee has himself honoured the surrender made during search. We are thus of the considered view that the assessee was required to honour the surrendered income and offered it to tax in the Income Tax return. Though the difference is of ₹ 1,69,014/- but since the addition in challenge is only ₹ 1,40,914/- we confirm the same and dismiss assessee s. Unexplained expenditure u/s 69C - undisclosed income arising out of the loose paper - HELD THAT:- It is well settled that additions cannot be made on the basis of unsigned loose papers unless and until any corroborative evidence is available which shows the nexus of the transaction appearing in such loose sheet. In the instant case also though there is no direct nexus of the assessee with this loose paper except that it was found at his residential premises. But only because the loose sheet is written in the handwriting of the assessee s wife and the incomplete transactions/entries appearing in this loose sheets are connected to assessee s fathere in law and mother in law prima facie no addition is called for in the hands of the assessee. Even otherwise sufficient material have been placed on record to explain the rough jottings in the loose sheet which are basically the cash amount advanced to assessee s wife from her parents to be spend for purchase/maintenance of duplex/house at Bhopal and Smt. Alka Gupta maintained the details on behalf of her parents. No addition was called for by the Ld.A.O in the hands of the assessee for undisclosed income based on the loose paper appearing in page no.9 10 Annexure A-I/1 seized during the course of search. Short-term capital gain u/s 50C by adopting cost of acquisition - HELD THAT:- Expenses, brokerage incurred by the assessee at the time of purchase of plot were not considered by Ld. CIT(A) which includes transfer charges paid to the society, bank charges for draft preparation and legal fees. These expenses have been incurred in connection with purchase of the property and this form the part of total cost of the land and same deserves to be allowed against the sale consideration received by the assessee. Revenue authorities have not challenged the genuineness of this expenditure, we therefore allow the deduction of ₹ 1,42,103/- and for the remaining amount of ₹ 44,375/- the addition for Short Term Capital Gain stands confirmed. Unexplained investment in the renovation of house situated at Shahpura, Bhopal - HELD THAT:- CIT(A) only clinic was constructed and there was no other construction at the time of purchase of the house do not have any merit. The DVO has estimated the total valuation of the renovation of the house which is also not justified since only the renovation of the clinic was in question. However looking to the fact that details prepared by the assessee for the expenditure incurred on renovation is not fully documented, we therefore being fair to both the parties and looking to the smallness of the issue confirm the addition of ₹ 1,00,000/- for the undisclosed investment and delete remaining amount of ₹ 3,36086/-. Thus the assessee gets partial relief. This Ground of the assessee s appeal is partly allowed. Long term capital gain - HELD THAT:- The assessee received the value for the equity shares held. This amount was received in part of which some was in cash (which was duly accepted by the assessee during the course of search) and the remaining part in cheque. Since due to ongoing litigation between assessee and WHL delayed the completion of deal between the Bansal Group and the assessee and it was only on 08.02.2012 that the litigation between AMDPL and WHL came to an end. The registration of transfer of shares took place on 14.8.2012 and on the basis of these documents transaction of sale of shares completed in financial year 2012-13. Thus the assessee and other Directors/share holders has rightly disclosed the Long Term Capital Gain from sale of shares in their regular return of income for Assessment Year 2013-14. Therefore the action of the Ld. A.O making the addition for advance cash received on sale of shares during Assessment Year 2011-12 and 2012-13 and addition for the amount receivable post search was not justified and is liable to be deleted. Addition on the basis of loose sheet found during the course of search - HELD THAT:- All the transactions appearing in this loose sheet are duly recorded in the in the books of accounts. We therefore set aside the finding of Ld. CIT(A) and delete the addition. Addition advance received from Bansal group as part of the deal mentioned in MOU dated 24.10.2010 - HELD THAT:- Addition made by the Ld. A.O for the advance sum received against sale of shares was to be taxed in the year when shares have been transferred i.e. in the Assessment Year 2013-14 and since total consideration received by the share holders/Directors in cash and cheque have been accounted for and offered to tax under the head Long Term Capital Gain in Return of income filed for Assessment Year 2013-14, no addition was called for during the Assessment Year 2011-12 and 2012-13. We therefore delete the addition made in the case of the assessee for advance cash received during the Assessment Year 2011-12 from Bansal Group. Addition of cash investments - HELD THAT:- No merit in the contention of the assessee and submission made before lower authorities. No documentary evidence filed to show that loan of ₹ 1,25,000/- and ₹ 25,000/- was received for purchase of equity shares from Smt. Bharti Patel and even the notice issued to Shri Bharat Patel at the address shown by the assessee was not served. In all the facts and circumstances of the case wherein the assessee has not denied that the transaction appearing in the loose sheet and explanation given is not sufficient to justify the submission made by the assessee, we find no reason to interfere in the finding of Ld. CIT(A) and thus confirm the addition. Unexplained cash bribes given on the basis of seized document - HELD THAT:- Where the alleged documents primarily seems to be projection for different type of colleges to be established in future and there is no iota of evidence to show that any such investment in colleges has been made, then in such situation no addition could be made for the proposed bribes mentioned in the document. Ld. CIT(A) erred in not taking note of these facts and was thus not justified in confirming the action of the Ld. A.O. We therefore set aside the finding of Ld. CIT(A) and delete the addition made by the Ld. A.O on the basis of seized document. Unexplained expenditure calculated on the basis of seized document - HELD THAT:- Addition is on the basis of seized document No.123 of LPS-3 showing the payment of ₹ 39,500/- in total towards bill, stamp, notary and fees. The assessee has merely submitted that it is a dumb document. However looking to the seized document, we find that on this sheet there are other transactions also which have been striked off. There are figures mentioned relating to dividend which is also striked off. This document is certainly relating to the assessee. Since he has unable to give any explanation to it and the action of Ld. A.O needs to be confirmed. We thus find no reason to interfere in the finding of Ld. CIT(A) confirming the action of Ld. A.O for the addition towards unexplained expenditure. Unexplained investment - HELD THAT:- LPS-3 are rough calculation for proposed investment in immoveable property, Ld. A.O was not justified in making the addition since no actual transaction has taken place. We therefore set aside the finding of Ld. CIT(A) and delete the addition.

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• 2020 (7) TMI 69
  Unexplained cash deposit in the NRO bank account - Additions u/s 69 - not accepting the explanation of the assessee - whether the assessee has provided reasonable explanation explaining the source and nature of cash deposit of ₹ 9 lacs in his NRO account maintained with ICICI Bank? - whether the AO is correct in invoking the provisions of section 69 and bringing such receipts to tax in the hands of the assessee for the impugned assessment year? - HELD THAT:- We find the explanation of the assessee as a plausible explanation given the facts and circumstances of the present case. Where the source of such foreign currency and the fact of bringing such foreign currency in the country has not been disputed by the Revenue, the explanation of the assessee that out of such funds, he has deposited ₹ 8 lacs in his NRO bank account within a period of few days is a plausible explanation in terms of source, quantum and timing perspective. Secondly, where such salary income and interest on NRE account are exempt from tax in India at first place, a position which has been accepted by the Revenue and thus, not in dispute, then in such a scenario, subsequent deposit of the same or a part thereof in his NRO account maintained in India cannot be brought to tax in India. Thirdly, in his return of income, the assessee has disclosed long term capital gains on sale of plot on 27.11.2015 and the DLC Value has been shown as ₹ 17,82,707 which is same as the sale consideration of ₹ 17,82,707/- received by the assessee and there is no finding that the assessee has received any consideration over and above what has been shown in the return of income. Besides, the assessee has disclosed interest on FDR, Interest on NRO account, interest on IT refund in his return of income. There is thus no adverse finding recorded by the Assessing officer in terms of any source of income over and above the declared income in the return of income. Therefore, where there is no finding that the assessee has any other source of income, other than what has been declared by him, then in such a scenario, the explanation of the assessee cannot be discarded in absence of any adverse material on record. No doubt, the amount has been found deposited in his bank account and the onus is on the assessee to explain the nature and source of such deposit. But, once the assessee has provided an explanation which in the instant case, we find reasonable and plausible, the deposit so made cannot remain unexplained. In view of the same, we find that even though the assessee has failed to bring on record any evidence issued by Thomas Cook in support of exchange of foreign currency with Indian Rupees,there is no basis for invoking the provisions of section 69 in the instant case. In the result, the addition so made is directed to be deleted and the matter is decided in favour of the assessee and against the Revenue.

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• 2020 (7) TMI 68
  TDS u/s 194A - Non deduction of TDS on rent paid to Krishi Upaj Mandi Samiti - whether recipient Krishi Upaj Mandi Samiti is exempt under 10(26AAB)? - HELD THAT:- A certificate of the Chartered Accountant under first proviso to section 201(1) of the Act dated 3rd June, 2016 states about the amount of rent paid by the assessee to the payee and certifies that the rental income received from the assessee has been accounted for in the financial statements and the taxable income of the 'payee' is nil. This fact proves that there was no liability to pay income tax on the payee as taxable income was nil. Also decided in BRANCH MANAGER, STATE BANK OF BIKANER JAIPUR [2012 (4) TMI 210 - ITAT JAIPUR] it was held that there was no question of deducting TDS by the assessee under section 194A of the Act on the interest paid to Rajasthan Rural Road Development Agency (RRRDA) which is a society registered under Societies Act, 1958 and was wholly financed by the Stated Government. Thus, in view of the CBDT, circular vide No. 04 of 2002 on 16-7-2003 and the certificate of Chartered Accountant dated 3-6-2016 we are of the considered view that the assessee should not have been treated as assessee in default for non-deduction of tax at source on the rent payment to Krishi Upaj Mandi Samit - In view of the CBDT Circular No. 4 of 2002 dated 16-7-2013 and circular No. 18/2017 on 29-5-2017, are of the considered view that the assessee should not treated as assessee in default for non-deducting tax on rent paid to Krishi Upaj Mandi Samiti. - Decided in favour of assessee. Short deduction of TDS on rent paid u/s 201(1) - payment to Co-owners - AO in treating the share of money as rent liable to TDS - applicability of the provisions of section 194I of the Act - HELD THAT:- We find that the assessee had duly deducted the tax at source on the rent paid to the co-owners where the amount of rent exceeded the limit of ₹ 1,80,000/- and in two cases where the amount was below the limit of ₹ 1,80,000/- tax was not deducted - assessee should not be treated as assessee in default for short deduction of tax on rent payment to M/s. Sadhana Enterprises since the assessee has rightly deducted, collected and paid the tax on share of the rent paid to each of the co-owners. Revenue authorities failed to bring any contrary material to prove that the total rent was paid to M/s Sadhana Enterprises. Since the rent have been paid to each of the co-owners, tax deductible at source as per the provisions of section 194I of the Act, has been complied by the assessee. We, thus, set aside the finding of Ld. CIT(A) and allow ground no. 2 of the assessee.

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• 2020 (7) TMI 67
  Assessment of trust - anonymous donation' - AO noted that assessee has not maintained the record of identity of the donors indicating the complete address of such donors hence, above donation is an anonymous donation therefore same is required to be taxed under section 115BBC - only reason for addition is that addition in the books of the trust in the fixed assets as well as its disclosure as introduction of capital fund was made merely by a book entry - HELD THAT:- In the present case, the donors are identified, the assets are identified as it has been received by the assessee trust, the only issue that remains to be verified is the valuation of such assets. Before AO the donors confirmed by way of an affidavit that they have donated their identified land and building as well as plant and machinery to the assessee trust. AO despite having the above information could not show that, the donors are not existing or the assets are not existing. It is merely a case of donation of assets to the assessee trust where the assets and the donors both are identified. AO could have verified the land documents whether it stands in the name of the donors or not and whether same has been donated by them to the trust or not. This factor could also been verified by examining the existence of the trust properties and activities carried on it. The assessee could also have shown the documents of the land in the name of both the donors and how the same has been executed /transferred in the name of the above trust. Similar is the situation with respect to the plant and machinery - As this information has not been verified by the AO, this ground of appeal with respect to the addition is set aside to the file of the learned assessing officer with a direction to the assessee to show the existence of the land in the name of the donors and same is used by the trust for its activities. The assessee is directed to produce the relevant evidence before the assessing officer along with the necessary explanation which may be considered by the learned assessing officer and issue may be decided afresh. Accordingly, this issue is allowed with above direction. Addition in the hands of the assessee trust as anonymous donation - fact shows that assessee has shown the name and addresses of the donors. The assessee has also produced them before the assessing officer. The learned AO made the addition for the only reason that summons were issued to those donors but those summons could not be served and returned back to the AO. Definition of the anonymous donation is provided under subsection 3 of section 115BBC of the act. It provides that with respect to the voluntary donation, if the person receiving such contribution does not maintain a record of the identity indicating the name and address of the persons making such contribution and such other particulars as may be prescribed, then such donation can be considered as anonymous donation . In the present case, there is no information that any such other particulars has been prescribed as mentioned in subsection 3. Thus, the only condition is that assessee must maintain a record of identity indicating the name and address of the person making such contribution. In the present case the assessee has produced such persons who made voluntary contribution to the assessee. They also confirmed by the statement on oath before the ld AO. Based on this the AO himself stated that the identity of such persons were obtained. When the assessee has successfully demonstrated the name and address of the persons by producing them before the assessing officer along with their statement, the addition should not have been made as an anonymous donation . Naturally the name and identity of such persons have been shown by the assessee. Even otherwise in the assessment order itself the learned AO has mentioned that the authorised representative of the assessee has given the complete confirmation of those parties - AO merely doubted that when summons were not served on those parties, the letters containing the confirmation from the donors should have been received by the AO himself and it should not have come through the authorised representative of the assessee. This issue may arise in case of verification of the genuineness of the donation - lower authorities unjustifiably incorporated additional conditions to make the addition as anonymous donation which were not found in the income tax act. Addition made by the learned assessing Officer of ₹ 15 lakhs and confirmed by the CIT A deserves to be deleted. The orders of the lower authorities deserves to be reversed. In the result, ground relating to the addition as anonymous donation is allowed.

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• 2020 (7) TMI 66
  Loss from house property on account of loan borrowed on capital for construction of house.- disallowance of interest amount paid on housing loan and claimed as a deduction under section 24 (b) - assessee explained that that renovation in respect of a residential house was made by parents of the assessee - Assessee is merely a co-borrower of the loan granted by the bank - as per assessee family settlement amongst the family members of the assessee and because of this the appellant is the de facto owner of a portion of the property for which home loan was utilized for renovation and repair - HELD THAT:- According to us the property west in the assessee with effect from 8 April 2014. The assessee has taken a liability to pay the amount borrowed for the purpose of renovation of that house property to the banker. He was also one of the borrowers in that particular loan Case are very straight that assessee is owner of the 1/6 portion of the impugned property for renovation of which the amount was borrowed by the parents and other applicant including the assessee. Any interest arising there on requires to be granted as deduction to the assessee under the provisions of section 24 (b) of the income tax act as assessee is the owner of the property. CIT A merely stated that as name of the assessee has not been entered into the main super records he is not the owner of the property. There is a definite clause in the family settlement deed that each of the co-owner can get their names entered into the records of the municipal Corporation. Merely because of the fact that such act has not been carried out by the assessee, according to us he cannot be held to be not the owner of the property - family settlement deed also cannot be held to be a colorable device without examining the real motive of the deed. There are no conditions except the divisions of the property in the family settlement deed therefore, it cannot be inferred that it is executed with an ulterior motive - it is a simple partition of the property by the parents in four sons and themselves. Accordingly, we reverse the orders of the lower authorities and direct them to granted deduction under section 24 (b) of the act to the assessee of the interest amount paid of ₹ 2 lakhs on housing loan. Accordingly, all the grounds of the appeal, which are related to only this disallowance, are allowed. - Decided in favour of assessee.

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• 2020 (7) TMI 65
  Reopening of assessment u/s 147 - validity of reason to believe - reopening on the basis of information available on ITBA database - non application of mind by AO - HELD THAT:- As per reasons of reopening case of the assessee was reopened on account of cash deposits in the savings bank account amounting to ₹ 25,78,850/-, however, the AO had made the addition of ₹ 13,78,850/- meaning thereby the AO has not applied his mind and therefore, set aside the orders of the authorities below and quash reopening of assessment. Resultantly the addition made in the reassessment order would stand deleted and need not be adjudicated on merit. Aforesaid view is fortified by the following decision of Tajendra Kumar Ghai vs. ITO [ 2017 (6) TMI 491 - ITAT DELHI] wherein held belief of the AO should be based upon some specific and tangible material for the purpose of reopening of the assessment. The course adopted by the AO was wholly unjustified in recording the incorrect facts in the reasons for reopening of the assessment. - Decided in favour of assessee.

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• 2020 (7) TMI 64
  Assessment u/s 153A - Whether any incriminating material was found with regard to the addition made ? - HELD THAT:- Once a search takes place u/s 132 of the Act, the assessee is obliged to file returns for the six assessment years immediately proceeding the previous year relevant to the assessment year in which the search took place. In so far as the completed assessment as on the date of the search are concerned, the same are to be repeated as increased by additions, only if, based on incriminating material found during the course of search. If no incriminating material is found during the course of search, then, the amount of total income determined under the earlier completed assessments is to be adopted in a fresh assessments u/s 153A without making any further addition. Juxtaposing these principles to the facts of the instant case, we find that the case of the assessee doesn t fall under the category of abated assessment. It falls under the category of completed assessments. In the completed assessment, it is an admitted position that if no incriminating material was found during the search, no addition is called for. In the instant case too, no incriminating material was found with regard to the addition made by the Assessing Officer. DR failed to establish that the additions made in the case of the assessee were based on any incriminating material found in the course of search u/ s 132 of the Act. On perusal of the assessment order and on examination of the order of the ld. CIT (A), we find that the addition made is not based on any incriminating material. Since, the addition was not based on incriminating material and the fact that assessment has not been abated, these twin conditions go against the order of the revenue as declared by the judicial pronouncement of the Hon ble Jurisdictional High Court in the case of CIT Vs Kabul Chawala [ 2015 (9) TMI 80 - DELHI HIGH COURT ] and PCIT Vs Meeta Gutgutia [ 2017 (5) TMI 1224 - DELHI HIGH COURT ]. Hence the addition is liable to be deleted. - Decided in favour of assessee.

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• 2020 (7) TMI 63
  Rectification u/s 254 - PE in India or not? - tribunal directing the Assessing Officer to verify assessee's claim regarding stay of employees/ personnel in India for rendering service during the previous year - contention of the assessee that during the relevant previous year, assessee's employees/personnel were in India for rendering services for a period of less than 90 days, to be precise, 42 days - HELD THAT:- Neither the AO nor learned DRP have given any factual finding on the assessee's claim that during the previous year relevant to the assessment year under dispute, employees/personnel of the assessee were in India for only 42 days and not more than 90 days. While deciding assessee's ground raised on the issue of existence of PE, the Tribunal following its decision in assessee's own case for the assessment year 2012-13 has accepted in principle that the expression any 12 month period as mentioned in Article-5(2)(k)(i) of the India-U.K. Tax Treaty would mean the previous year or financial year as per section 3. Finding that assessee's claim regarding stay of its employees/personnel in India for rendering services for an aggregate period of 42 days has not been factually verified either by the AO or by DRP, the Tribunal while allowing the ground raised by the assessee has issued a direction to the AO to factually verify assessee's claim regarding stay of its employees/personnel in India for an aggregate period of 42 days during the previous year relevant to the assessment year under dispute. There cannot be any mistake in the aforesaid direction of the Tribunal as assessee's claim, though, was made before the Revenue authorities, however, neither the AO nor DRP has recorded any factual finding regarding the aforesaid claim of the assessee. In the aforesaid factual position, it becomes imperative to factually verify assessee's claim regarding the stay of its employees/personnel in India. In case, assessee's claim regarding stay of its employees/personnel in India is found to be correct, then it has to be held that during the year under consideration, the assessee did not have any PE in India. No mistake, much less, a mistake apparent on the face of record as envisaged under section 254(2) of the Act. What the assessee wants by filing this application is a decision from the Tribunal in a particular manner and to its own liking. This cannot be the intent and purpose of section 254(2) of the Act which is only for rectifying mistake apparent on the face of record. Tribunal after considering all relevant facts has taken a conscious decision of directing the Assessing Officer to verify assessee's claim regarding stay of employees/ personnel in India for rendering service during the previous year relevant to the assessment year under dispute. That being the case, there is no mistake in the decision of the Tribunal. No merit in the present application filed by the assessee.

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• Customs

• 2020 (7) TMI 62
  Sealing of Complete Warehouse - grievance of the petitioner is that the rented warehouse of the petitioner, the petitioner has not been able to use the said warehouse despite the petitioner paying the rent to the landlord - HELD THAT:- Mr. Harpreet Singh has taken instructions and he states that the petitioner may approach the respondents today, or tomorrow, and that necessary orders would be passed for placing the goods in question in a bonded warehouse, and deasealing of the petitioner s warehouse, so that the petitioner could put the same to use. So far as the petitioner s prayer for a direction to the respondents to pay the rent for the period that the rented warehouse premises have remain seized is concerned, in these proceedings, we are not in a position to pass any such directions as the same would involve determination of disputed questions of fact. However, we leave it open to the petitioner to pursue its other remedies in this regard before an appropriate forum/ Court. Petition disposed off.

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• 2020 (7) TMI 61
  Condonation of delay in filing appeal - Time Limitation - appellant had challenged the order of 4th December, 2012 before Commissioner (Appeals) but after a delay of more than 90 days from the date of order - Section 35 of CEA, 1944 - HELD THAT:- The appellant had challenged the order of 4th December, 2012 before Commissioner (Appeals) but after a delay of more than 90 days from the date of order. It is apparent from the appeal that the Order-in-Original was received by the appellant on the date of order itself, as it is mentioned in para (xii) of the appeal. The delay despite admitted receipt of the order is opined to be highly unreasonable. The only ground taken for the said delay is the change of lawyer. The said ground is not supported by any document nor even the affidavit of any of the lawyers to this effect has been filed. Otherwise also no circumstance has been explained by the appellant which would have prohibited him to coordinate among the lawyers or to engage the another lawyer well within time. In the given circumstances the sole reason quoted for such delay is definitely not sufficient to explain the same - Commissioner (Appeals) has committed no error while dismissing the appeal on the score of limitation itself. The Commissioner (Appeals) has a statutory mandate in view of Section 35 of CEA, 1944 to not to accept appeal if filed beyond 30 days of the expiry of the period of 60 days from the date of receipt of order - The Hon ble Apex Court in the case of Singh Enterprises vs CCE, Jamshedpur [2007 (12) TMI 11 - SUPREME COURT] while upholding the order of Commissioner (Appeals) dismissed the appeal on ground of limitation. There is no error in the order under challenge. While filing the appeal before this Tribunal also, appeal was filed after 1536 number of days of the order under challenge with the same reason for delay as was taken before the Commissioner (Appeals) alongwith an application for condonation of delay - the reason quoted is not sufficient to explain such a substantial delay. The condonation of delay application filed with the impugned appeal stands dismissed.

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• Securities / SEBI

• 2020 (7) TMI 60
  Collective Investment Schemes - show cause as to why the Yatra Art Fund should not register itself with SEBI in the prescribed corporate form, as otherwise the collective investment scheme carried out by the Trust would be illegal - SCN also mentioned that all amounts collected should be refunded within a period of 30 days from the said show cause notice - HELD THAT:- The statutory scheme is that, if a collective investment scheme, as defined, is to be floated by a person, it could only be done in the form of a collective investment management company and in no other form. This is the reason why Section 11AA uses the expression company in sub-Section (2) and not the word person (as the CIS Regulations of 1999 had come into force on 15-10-1999; Section 11AA being enacted and coming into force on 22-2-2000). Once the statutory scheme becomes clear, it is clear that the collective investment scheme that was being carried on by the appellants in the form of a private Trust would be in the teeth of the Statute read with the CIS Regulations and would thus be illegal. This being the case, it is difficult to upset any part of SEBI's order that remains after the penultimate part of the order was set aside by the Appellate Tribunal. This litigation has been going on for an extremely long period of time and instead of remanding the matter to SEBI to decide the refund issue afresh, we order as follows: The principal amount repayable to each investor of both the Schemes shall be paid back within a period of six months from today in the following manner: We are informed that so far as the first Fund is concerned, 81.32 per cent of the total principal sum of ₹ 10.95 crores has been repaid. Insofar as Fund No. 2 is concerned, we have been informed that 50 per cent of the principal amount of ₹ 21.92 crores has been repaid. The balance owing to the 50 investors of Fund No. 1 and to the 132 investors of Fund No. 2 be therefore, repaid within six months from the date of this judgment. So far as the interest at the rate of 10 per cent is concerned, this amount will be paid on the principal outstanding amount from the date on which it becomes due to each such member, till the date on which each Fund came to an end, i.e., insofar as Fund No. 1 is concerned till 15-9-2011 and so far as Fund No. 2 is concerned till 31-1-2012. The aforesaid interest shall be paid within nine months from the date of this judgment. Once the amounts are actually paid within the time period specified, compliance report be filed with SEBI in this behalf.

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• Insolvency & Bankruptcy

• 2020 (7) TMI 59
  Time Limitation - section 7 of the Insolvency and Bankruptcy Code, 2016 - CIRP process - HELD THAT:- The effect of Section 18 of the Limitation Act, 1963 is that an acknowledgment of liability in respect of a right made in writing and signed by the debtor before expiration of prescribed period for a suit or an application would result in a fresh period of limitation being computed from the time when acknowledgment was so signed. It is abundantly clear that such acknowledgment of liability must be made by the debtor in writing and signed by him before the expiration of prescribed period of limitation. The ample evidence brought on record by the 'Financial Creditor' and not disputed, denied or refuted by the 'Corporate Debtor' brings it to the fore that the financial debt is payable and the acknowledgment in writing before expiry of period of limitation by the 'Corporate Debtor' through a series of written communications in the form of letters, settlement, proposal, settlement agreement and payments made in pursuance thereof have extended the limitation as each of these has the effect of giving a fresh lease of life to the liability with fresh period of limitation commencing from such acknowledgment in writing having been made within limitation period, OTS followed by settlement agreement and part payments made on two occasions in pursuance thereof. Admittedly, application under Section 7 of the 'I B Code' has been filed within three years of the last part payment of ₹ 1.5 Crore approx. effected on 9th February, 2017. This factual position emerging from documentary evidence on record stares in the face of the Appellant who has preferred the appeal without substantial grounds - Appeal is dismissed.

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• 2020 (7) TMI 58
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Debt, as defined under the Code in section 3(11) means a liability or obligation in respect of a claim which is due from any person, and includes a financial debt or an operational debt. Such a debt would arise from a claim, as defined in section 3(6), i.e. from a right to payment in the hands of the Creditor. Such a right could arise from the terms and conditions agreed to by the concerned opposite parties, in the shape of a Contract or an Agreement or Board Resolution, if any, so that the same could be enforced in the case of default. Section 3(12) of the Code defines as non-payment of a debt when the whole or part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the corporate debtor - The definition of 'Financial Debt' in section 5(8) of the Code clearly postulates that any money advanced must be for a consideration i.e., there must be a need for the borrowing of such money and the money must be advanced against consideration for the time value of money. The Petitioners' claim, debt and default relate to FY. 2012-13 onwards. The Code came into effect in 2016 and this Petition was filed on 25-10-2017. As per our findings above, the financial debt does not exist, as per the provisions of the Code and is also not borne out of the Financial Statements of the Corporate Debtor. Defaults 3 years prior to the Demand Notice are therefore barred by limitation. In fact part of the alleged debt was barred by limitation even prior to the commencement of the Code, and it is well settled that the IBC cannot be used for reviving a time barred debt. The Petitioner has approached this forum only for recovery. He has not made out any case that the Corporate Debtor is insolvent and unable to repay its debts because of which CIRP should be initiated against it. We find that the Company is seeing an upswing in its business. Earlier Canara Bank had issued a SARFAESI Notice to the Company in July 2016 but has now proceeded to extend loans to it showing confidence in the Company's solvency. It is engaged in important task of road repairs and has tied up with important government departments like BBMP. The Work Orders placed on the Company by BBMP show that the Company's business is continuing well and that it is a more than viable going concern. There was no financial debt within the meaning of the Code - Petition dismissed.

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• 2020 (7) TMI 57
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- There is a violation of the consent terms which have been entered into between the financial creditor and the Corporate Debtor - The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Application admitted - moratorium declared.

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• 2020 (7) TMI 56
  Liquidation of Corporate Debtor - sections 33 34 of the Insolvency and Bankruptcy Code, 2016 - grievance of the Appellant is that he is against the appointment of the Liquidator - HELD THAT:- We are not inclined to interfere with the impugned order as after the liquidation the 'Committee of Creditors' has no role to play and they are simply a claimant whose matters are to be determined by the Liquidator and cannot move an application for removal of Liquidator in absence of any provisions under the law. Appeal dismissed.

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• 2020 (7) TMI 55
  CIRP Proceedings - Raising fresh demand of interest after approval of Resolution Plan - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Though the Applicants have mentioned in their respective applications that CD/RP assured them, payments of past invoices and protection of supplies made during CIRP as per IRP Cost, this Adjudicating Authority do not find any evidence, in the form of any communication, in black and white to prove their contentions. We have also observed that RP vide his e-mail dated 25-10-2018 informed the Applicant that all payments made on or after 18th July, 2017 until today have been against the supplies made by the Applicant since 18th July 2017 and the Applicant would be free to set off their bills against supplies made by the Applicant from 18th July 2017 onwards. It is observed that in spite of receiving this clarification from the RP, the Applicant continued to make supplies as is evident from the Invoices No. AOPL/138/18-19 dated 31-10-2018 onwards. This Adjudicating Authority observes that Petitioners of the aforesaid IAs are the Operational Creditors and they have submitted their claims in response to the public announcement made by the IRP/RP calling for claims from the creditors of the Corporate Debtor Company against whom the Corporate Insolvency Resolution Process was ordered by this Adjudicating Authority. In the respective Forms submitted by the Petitioners/Operational Creditors, the Petitioners/Operational Creditors submitted their claims along with the interest. However, the Petitioners/Operational Creditors were informed of their claims admitted by the IRP/RP without interest. Accordingly, the Petitioners/Operational Creditors should have raised their voice and concern at the time when the Resolution Plan in respect of the Corporate Debtor Company was approved by this Adjudicating Authority. Application disposed off.

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• Service Tax

• 2020 (7) TMI 54
  CENVAT Credit - duty paying invoices - photocopies of invoices, audited Trial Balance, Advice of Transfer/Transfer Advice Note - valid documents as specified in Rule 9 of Cenvat Credit Rules, 2004 or not - HELD THAT:- The existence of original invoice and its genuineness is not disputed by Revenue. In fact such documents were produced before the lower authorities. Therefore, the duty involved has been paid and there is no dispute that the equipment in question has been used at the sites where credits were taken. In such circumstances, considering the commercial practice which was necessary for efficient procurement of the equipments in question, this procedural lapse cannot be considered a reason to deny Cenvat credit involved. Appeal dismissed - decided against Revenue.

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• Central Excise

• 2020 (7) TMI 53
  Clandestine removal - sponge iron - shortage in stock of coal and sponge iron - no corroborative evidences - HELD THAT:- From the show cause notice, it is observed that existence of weighbridge is admittedly within the factory premises. The weighbridge slips are considered as one of the important documents by the adjudicating authorities below providing the alleged clandestine removal. Once the weighbridge exists within the factory premises, the factum of clearance of goods from said weighbridge does not at all arise. This observation is sufficient to hold that weighbridge slips cannot be the evidence for proving that the goods were cleared from the appellant s factory clandestinely. The weighbridge being within the factory premises, the weighment of any commodity or any entry in outgoing register from the said weighbridge cannot reflect clearance at all. The shortage is alleged on the basis of an estimate weighment of sponge iron the estimation cannot take place of evidence. Specially, when there is no investigation as to where from the noticed excess inputs were sourced so as to manage such excess clearances. No investigation as regard electricity excess usage. No third party investigation as regards transporters buyers etc. Above all, no attempt to track any money trail as alleged. Law has been settled that where the allegation of duty. To prove the allegation of clandestine sale, further corroborative evidences are also required. Apparently, there is no investigation conducted by the Department qua any of said aspects. Alleged admission of Shri Devi Lal Sahu - HELD THAT:- The statement contains only a declaration to comply with the law. It cannot be taken as an admission of any clandestine removal. Question of the said statement to be the corroboration of the alleged guilt does not at all arise - in the absence of direct admission of clandestine removal the mere fact of the shortage found cannot sustain the charge of clandestine manufacture and removal. Accordingly the confirmation of demand is merely presumptive hence, not sustainable. The adjudicating authority below has based the decision on assumptions and surmises and in total ignorance of the documents and submissions produced/made by the appellant. Those documents and the facts submitted are sufficient to falsify the allegations - appeal allowed - decided in favor of appellant.

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• 2020 (7) TMI 52
  100% EOU - Refund of unutilised cenvat credit - Revenue s arguments in their appeals that the respondent is not manufacturing any excisable goods is devoid of any merit and is contrary to the facts on record - HELD THAT:- From the impugned order and the orders of the original authority as well as the documents submitted by the Counsel for the Respondent, we find that the respondent is indeed registered for manufacture of excisable goods by the department themselves. Central excise tariff heads of the goods which are manufactured are also indicated. We are sure, if the department had gone through these documents, they would have had no doubt that the respondent is manufacturing excisable goods. It is also not in dispute that the respondent has been filing ER-1 returns and also been clearing some manufactured goods on payment of excise duty to Domestic Tariff Area. In view of the above, the entire argument that the respondent is not a manufacturer of excisable goods is without any force. The respondent has also been registered under the service tax law with the department for rendering taxable services. The argument of the Revenue that the respondent is not rending any taxable service is contrary to the registration given by the department and is not substantiated. As far as the argument that Notification No. 41/2007-ST is not a scheme of rebate is concerned, the department appears to have ignored that the refund applications were filed under Rule 5 of the CCR, 2004 which clearly provides for refund of unutilised cenvat credit on inputs and input services in case of export of goods or export of services. Notification No. 41/2007-ST only prescribes the procedures, conditions and safeguards for such refund. There is nothing in the appeal to show that the respondent is not entitled to refund of cenvat credit under Rule 5 of CCR, 2004. In fact, the appeal is silent about this rule itself. The Revenue s appeal is frivolous and has been filed without any application of mind and without even checking the basic facts including the fact that the respondent is registered with the department both under Central Excise under Service Tax and has been clearing excisable goods to Domestic Tariff Area on payment of excise duty and has also been clearing such goods for export under ARE-1 duly signed by the officers of the department - Appeal dismissed - decided against Revenue.

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• Indian Laws

• 2020 (7) TMI 51
  Bail Application - commercial quantity of contraband - overcrowding in jails - corona positive cases present - HELD THAT:- No ground is made out for entertaining these (interim) bail applications. Bail application dismissed.

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