TMI Tax Updates - e-Newsletter
July 8, 2019

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

TMI SMS

• Audit under Rule 5A of the Service Tax on introduction of GST is an issue that requires detailed consideration - No interim stay / relief

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Articles

• Budget 2019; Lower basic rate of income tax in case of companies – should also be applied to other assesses having turnover up to ₹ 400 crore. Marginal rate can be reduced to 25% in all cases to avoid unjust higher rates.
• Clarification on applicability of GST on discount under GST
• Clarification about GSTR 9 & 9C (Press Release dt. 03.07.2019)
• RECENT CHANGES IN ‘NIDHI RULES, 2014’
• Birds eye view - budget updates

News

• Issue Price of the Sovereign Gold Bond Scheme 2019-20 (Series II) during the subscription period from 8th July to 12th July, 2019 would be ₹ 3,443 per gram with Settlement Date being 16th July, 2019;

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Notifications

GST - States

• 68/GST-2 - dated 5-7-2019 - Haryana SGST
  Extend the date from which the facility of blocking and unblocking on E-Way Bill facility as per the provision of Rule 138E of HGST Rules, 2017 shall be brought into force from 21.08.2019 under the HGST Act, 2017.

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• 67/GST-2 - dated 5-7-2019 - Haryana SGST
  Order under section 172 of the HGST Act, 2017 to extend the due date for furnishing FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C under section 44 of the said Act.

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• 66/GST-2 - dated 5-7-2019 - Haryana SGST
  Exemption from furnishing of Annual Return / Reconciliation Statement for suppliers of Online Information Database Access and Retrieval Services (“OIDAR services”) under the HGST Act, 2017.

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• 65/GST-2 - dated 5-7-2019 - Haryana SGST
  Prescribe the due date for furnishing FORM GSTR-1for registered persons having aggregate turnover of more than 1.5 crore rupees for the months of July, 2019 to September, 2019 under the HGST Act, 2017.

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• EXN-F(10)-5/2018 - dated 10-6-2019 - Himachal Pradesh SGST
  Corrigendum - Notification No.28/2018-State Tax dated 3rd July, 2018.

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• Order No. 05/2019-State Tax - dated 30-5-2019 - Himachal Pradesh SGST
  THE HIMACHAL PRADESH GOODS AND SERVICES TAX (REMOVAL OF DIFFICULTIES) ORDER, 2019

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• 22/2019-State Tax - dated 30-5-2019 - Himachal Pradesh SGST
  Seeks to notify the provisions of rule 138E of the HPGST Rules w.e.f 21st June, 2019.

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• 21/2019-State Tax - dated 30-5-2019 - Himachal Pradesh SGST
  Benefit of notification of the Government of Himachal Pradesh No. 02/2019– State Tax (Rate), dated the 7th March, 2019.

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• 16/2019-State Tax - dated 30-5-2019 - Himachal Pradesh SGST
  The Himachal Pradesh Goods and Services Tax (Second Amendment) Rules, 2019.

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• 11/2019 No. FD 48 CSL 2017 - dated 3-7-2019 - Karnataka SGST
  Seeks to specifies retail outlets established in the departure area of an international airport, beyond the immigration counters, making tax free supply of goods to an outgoing international tourist, as class of persons who shall be entitled to claim refund.

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• Order No. 06/2019 - FD 47 CSL 2017 - dated 29-6-2019 - Karnataka SGST
  The Karnataka Goods and Services Tax (Sixth Removal of Difficulties) Order, 2019.

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• 12/2019 - No. FD 47 CSL 2017 - dated 29-6-2019 - Karnataka SGST
  Seeks to provide exemption from furnishing of Annual Return / Reconciliation Statement for suppliers of Online Information Database Access and Retrieval Services(“OIDAR services”).

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• 11/2019 - No. FD 47 CSL 2017 - dated 29-6-2019 - Karnataka SGST
  Seeks to prescribe the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of up to 1.5 crore rupees for the months of July, 2019 to September,2019.

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• 14/2019 - No. KGST.CR.01/2017-18 - dated 28-6-2019 - Karnataka SGST
  Seeks to extend the due date for furnishing the declaration FORM GST ITC-04.

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• 13/2019 - No. KGST.CR.01/2017-18 - dated 28-6-2019 - Karnataka SGST
  Seeks to prescribe the due date for furnishing FORM GSTR-3B for the months of July, 2019 to September, 2019.

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• 12/2019 - No. KGST.CR.01/2017-18 - dated 28-6-2019 - Karnataka SGST
  Seeks to extend the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of more than 1.5 crore rupees for the months of July, 2019 to September,2019.

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• 11/2019 - No. KGST.CR.01/2017-18 - dated 28-6-2019 - Karnataka SGST
  Seeks to extend the due date of filing returns in FORM GSTR-7.

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• 10/2019 - No. FD 47 CSL 2017 - dated 28-6-2019 - Karnataka SGST
  Seeks to extend the date from which the facility of blocking and unblocking on e-way bill facility as per the provision of Rule 138E of CGST Rules, 2017 shall be brought into force to 21.08.2019.

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• 04-C/2019 - No. FD 47 CSL 2017 - dated 28-5-2019 - Karnataka SGST
  The Karnataka Goods and Services Tax (Fourth Amendment) Rules, 2019.

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• 04-B/2019 - No. FD 47 CSL 2017 - dated 15-4-2019 - Karnataka SGST
  The Karnataka Pradesh Goods and Services Tax (Third Amendment) Rules, 2019.

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• G.O.(P) No.96/2019/TAXES - S.R.O. No. 435/2019 - dated 29-6-2019 - Kerala SGST
  The Kerala Flood Cess (Second Amendment) Rules, 2019.

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• Order No. 06/2019-State Tax - dated 4-7-2019 - Maharashtra SGST
  THE MAHARASHTRA GOODS AND SERVICES TAX ACT, 2017 (SIXTH REMOVAL OF DIFFICULTIES) ORDER, 2019.

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• GST-1019/C.R.69 /Taxation 1 - dated 4-7-2019 - Maharashtra SGST
  Corrigendum to Notification No. 03/2019-State Tax (Rate) dated 30th March 2019.

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• GST-1019/C.R. 69(1)/Taxation 1 - dated 4-7-2019 - Maharashtra SGST
  Corrigendum to Notification No. 26/2018-State Tax (Rate) dated 31st December 2018.

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• 30/2019-State Tax - dated 4-7-2019 - Maharashtra SGST
  To provide exemption from furnishing of Annual Return / Reconciliation Statement for suppliers of Online Information Database Access and Retrieval Services(“OIDAR services”).

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• 27/2019-State Tax - dated 4-7-2019 - Maharashtra SGST
  To prescribe the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of up to 1.5 crore rupees for the months of July, 2019 to September, 2019.

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• 25/2019-State Tax - dated 4-7-2019 - Maharashtra SGST
  To extend the date from which the facility of blocking and unblocking on e-way bill facility as per the provision of Rule 138E of MGST Rules, 2017 shall be brought into force to 21.08.2019.

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• 11/2019-State Tax (Rate) - dated 4-7-2019 - Maharashtra SGST
  To specifies retail outlets established in the departure area of an international airport, beyond the immigration counters, making tax free supply of goods to an outgoing international tourist, as class of persons who shall be entitled to claim refund.

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• 29/2019-State Tax - dated 3-7-2019 - Maharashtra SGST
  To prescribe the due date for furnishing FORM GSTR-3B for the months of July, 2019 to September, 2019.

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• 28/2019-State Tax - dated 3-7-2019 - Maharashtra SGST
  To extend the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of more than 1.5 crore rupees for the months of July, 2019 to September, 2019.

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Income Tax

• 52/2019 - dated 4-7-2019 - IT
  U/s 10(46) of IT Act 1961 - Central Government notifies ‘Chhattisgarh Building and Other Construction Workers’ Welfare Board’ a Board constituted by the Government of Chhattisgarh in respect of the specified income arising to that Board

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• 51/2019 - dated 4-7-2019 - IT
  Exemption to specified income in the hands of National Skill Development Corporation u/s 10(46)

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Circulars / Instructions / Orders

GST - States

• 39T of 2019 - dated 5-7-2019
  Deemed adoption of certain Circulars issued by CBIC.
• KSA/GST.CR-05/2019-20 - dated 1-7-2019
  Corrigendum to CCT Circular No. GST-02/2019-20 dated 5th April, 2019.
• 10/2019-20 - dated 28-6-2019
  Clarification on various doubts related to treatment of secondary or post-sales discounts under GST.
• 09/2019-20 - dated 28-6-2019
  Processing of refund applications in FORM GST RFD-01A submitted by taxpayers wrongly mapped on the common portal.
• 08/2019-20 - dated 28-6-2019
  Clarification regarding determination of place of supply in certain cases.
• 07/2019-20 - dated 28-6-2019
  Clarification regarding applicability of GST on additional/penal interest.
• 06/2019-20 - dated 18-6-2019
  Clarification regarding filing of application for revocation of cancellation of registration in terms of Removal of Difficulty Order (ROD) number 05/2019 No. FD 47 CSL 2017 dated 23.04.2019.

DGFT

• 18/2015-2020 - dated 5-7-2019
  Fixation of Standard Input Output Norms for Food Products (Product Code: ‘E’)
• TRADE NOTICE NO. 23/2019-2020 - dated 5-7-2019
  Additional quota of Toor allowed for import for the fiscal year 2019-20
• TRADE NOTICE NO. 24/2019-2020 - dated 5-7-2019
  Inviting applications for allotment of additional import quota of Pigeon Peas (Cajanus Cajan)/Toor Dal for 2 lakh MT for the fiscal year 2019 - 2020

Customs

• 18/2019 - dated 5-7-2019
  Partial discharge of bonds executed by nominated agencies/ banks under notification No. 57/2000-Customs dated 08.05.2000

Highlights / Catch Notes

GST

• Profiteering - HP V202b 19.5 inch Computer Monitor - benefit of reduction in the GST rate reduction - allegation made by the Applicant is not correct since there was no reduction in the rate of tax during the relevant period (between December 2018 to March 2019) on the “Computer Monitor of 19.5 inch” - no Profiteering
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• Composite supply or not - services of lodging and food exclusively to the students - applicant is engaged in supplying flood, laundry service, housekeeping service. etc. which are not naturally bundled with the lodging service - all these components are independent of each other and can be supplied separately hence there is no principal Service - not a composite supply
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• Applicability of Exemption Notification - services of lodging and food exclusively to the students - appellant has to impart remedial classes to the week students at the instruction of the parents of the boarders /day boarders and has nothing to do with activities undertaken by St Michael’s School - does not come under the definition of “Educational Institution” - no exemption
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Income Tax

• Section under which assessment order was passed - the assessment for the year under consideration were u/s 144 and mentioning of Section 143(3) in the preamble of the assessment order is an error which is apparent on the face of the order and requires to be rectified. Therefore, the corrigendum is legal and valid.
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• Treatment of ‘rental income’ as ‘income from other sources’ - receipts from its factory building - Whether there existed ‘leave and licence’ agreement and not ‘rental agreement’ would not change the colour of receipts in the hands of the assessee - Taxable as income from House Property.
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• Levy of fees u/s 234E - transfer of immovable property - the contention of inapplicability of section 194IA is redundant and is not available to be taken by the assessee - TDS statements in Form no.26QB also comes within the ambit of section 200(3) - Demand confirmed.
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• Addition u/s 56(2)(vii)(b)(ii) - applicability on stock in trade - the definition of property as provided u/s 56(2)(vii) will have application to the ‘property’ which is in the nature of a capital asset of the recipient and therefore would not apply to stock-in-trade, raw material and consumable stores of any business of such recipient
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• Revision u/s 263 - lack of enquiry - Deemed dividend u/s 2(22)(e) - AO had not only made the enquiry or verification to ascertain the applicability of section 2(22)(e) to the loan amounts received by the assessee from the other group companies, but a conscious decision was also taken by him in view the legal position as propounded by the Jurisdictional HC - revision set aside
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• Reassessment u/s 147 - proceedings after expiry of 6 years - direction by court or mere observation - AO applied the provisions of section 150, when the findings of the coordinate bench are not direction but observation - proceedings initiated u/s 147 beyond 6 years are void ab-initio as per the time limit prescribed u/s 149 - assessment order quashed
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• Addition of undisclosed income u/s 69B - purchase of share from its directors and their closely held companies - nothing on record would demonstrate any exchange / flow of funds, out of books, between the assessee and the sellers - in the absence of any evidences establishing receipts & payments outside regular books of accounts, the provisions of Section 69B could not be invoked - addition deleted
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• Fictitious loss by way of Client Code Modification (CCM) - unexplained expenditure - The transactions of were duly supported by bills/contract notes and also confirm by parties whose name appear in the data that the transactions are belonging to them only and there is nothing on record establishes any collusion/connivance of the assessee with the share broker - losses allowable
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• Disallowance of royalty - capital OR revenue expenditure - The ownership/ proprietary rights in the technical know-how continue to vest in lithe censor and the assessee is not authorised to transfer, assign or convey the know how/technical information to any third party - payment was for mere use of technical know-how, not resulting in any enduring benefit - revenue exp.
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• SCN u/s 24(1) of Benami Act - disposal of objection - the sphere and operation of Section 24 of the Benami Act and Section 147 of the IT Act are completely different,therefore, contention of passing a separate speaking order to the objections raised before passing final order cannot be accepted
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• Income from house property - ALV u/s 23(1) of property prior to Occupancy Certificate (OC) - the property was legally not occupiable and not occupied hence the contention that without waiting for OC, the entire period during which the Assessee could have let this property, tax on notional basis should be charged is fallacious - not taxable
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• TP adjustment - ALP of royalty - In the absence of empirical data, stating higher royalty was not justified only because it did not result in any tangible benefit to the Assessee was not be the right approach - ITAT direction to the TPO to adopt the percentage(5.6%) as has been accepted by DRP based on survey report of travel industry in subsequent year does not appear to be unreasonable - no substantial question of law arises
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• Unexplained purchase u/s 69C - alleged that purchase is not genuine and made from bogus biller/ accommodation entry provider - factual finding that no independent material to come to the conclusion that the purchases made by the assessee of gold and silver were either non genuine or that the same were made out of assessee’s known source and purchases were made through banking channel - no question of law arises
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• Re-opening of assessment u/s 147 - non disposal of objection neither by a separate order nor in the final assessment order which is very essential to decide the same before completing the assessment and against the spirit of the direction of the Hon’ble Supreme Court - CIT(A) has also not taken into consideration the objection filed by the assessee - remanded to AO
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• Genuineness of purchases - non compliance of notices u/s 133(6) - non of entities declared as Hawala/Bogus dealers by any of the authorities - assessee was able to produce overwhelming documents to substantiate the purchase - same can not be disallowed only on ground that notices u/s 133(6) were not responded to, which was also not within the control of the assessee - purchases allowed
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• Condonation of delay - revision u/s 264 - as the order u/s 143(1) came to be passed within this one year itself, writ petitioner had taken the first step to have income excluded /exempted qua said AY by filing a revised return which was rejected on the technical ground - this was first step qua section 264 application/petition well within the one year time frame - delay condoned
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• Cancellation/withdrawal of registration/approval u/s 12AA/10(23C)(vi) with retrospective effect - The AO while completing the assessment for AY 2010-11 after search found large scale diversion of funds and several improper actions in direct conflict to the terms of the Deed of Trust and conditions of registration/exemption and recommended to the competent authority to initiate proceedings for cancellation - it will take effect from the AY 2010-2011 and it is a mis-nomer that the orders are retrospective or retroactive
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• Notice of re-assessment u/s 148 - territorial jurisdiction of High Court - writ filed in Bombay whereas notice issued by AO in Hyderabad - any challenge to the orders of AO, CIT(A) or the Tribunal would lie before the High Court of Telangana - In the context of challenge to the notice of reassessment, this Court would apply the decisions of Bombay HC which would be wholly undesirable - petition is not entertained with liberty to move the appropriate HC
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• Merger of order passed u/s 254(2) with main order of Tribunal - set off of brought forward losses and unabsorbed depreciation - the order passed in the miscellaneous petition stood merged with the earlier order and the composite order being questioned before the Court and the challenge at the instance of the revenue having been rejected then appeal against main order is not maintainable
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Customs

• Service of notice - when a document to be served is sent by registered post to the proper address with prepaid postage its service is deemed to be effected at the time at which the letter would be delivered in the ordinary course of post, unless the contrary is proved.
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• CVD of 1% /2% of the Additional Duty of Customs on the imported coal - The adjudicating authority has committed a legal error while denying the benefit of reduced CVD on imported coal while placing reliance upon the Excise notification for manufacture of coal.
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Bill

• FINANCE (No. 2) BILL, 2019 - Clause by Clause
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State GST

• Deemed adoption of certain Circulars issued by CBIC in the state of Maharashtra
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Indian Laws

• Dishonor of Cheque - When the accused was not represented, without appointing any counsel as amicus curiae to defend the accused, the High Court ought not to have decided the criminal appeal on merits; more so, when the appellant-accused had the benefit of the acquittal.
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IBC

• Validity of Resolution Plan - closure of CD - Resolution Plan is against the object of the Code and the application u/s 10 was filed with intent of closure of the Corporate Debtor for a purpose other than for the resolution of insolvency, or liquidation is against the scope and intent of the ‘I&B Code’ is in violation of Section 30(2)(e) - part of the approved Plan relates to closure of the CD is is set aside and rest part is approved
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Service Tax

• Though the appellants were liable to pay service tax for rendering the services of ‘Renting of immovable property’ but because of the prevalent confusion, no malafide can be attributed to the appellants for not paying the same during the relevant period.
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• CENVAT Credit - Input Services Distributor - violation of rule 9 of CCR - only two limitations for distribution of credit by an ISD and in the case on hand, Revenue has not made out a case as to the non-satisfaction of the above two conditions.
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• Jurisdiction/power to conduct audit - to conduct audit Rule 5A of the Service Tax Rules on introduction of CGST Act, 2017 is an issue that requires detailed consideration - grant of interim relief at this stage would prevent the respondents from carrying out audit as permitted under Rule - no stay at this stage
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Central Excise

• Captive consumption/intermediate goods - sugar syrup - Since the department has not conducted any chemical test to arrive at the percentage of fructose content in the syrup, the contention that it merits classification under heading 1702 9090 or that it is marketable product cannot be accepted.
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• CENVAT Credit - input services - insurance policy - Credit of service tax paid on insurance policy is admissible when the policy covers the employees and family members of the employees
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Case Laws:

• GST

• 2019 (7) TMI 314
  Classification of supply of services - services of lodging and food exclusively to the students - composite supply or not - Whether or not services provided by the Appellant to the students of lodging and supply of food is a composite supply within the meaning of Section 2(30) of the GST Act? - HELD THAT:- In the instant case, the Appellant is claiming that it is an educational institution by itself, which appears to be erroneous in view of the clause 05 of the Memorandum of Understanding dated 01.04.2006 where it is specifically mentioned that the Appellant has to impart remedial classes to the week students at the instruction of the parents of the boarders /day boarders. In other words, the activity undertaken by the Appellant i.e., impart remedial classes. has nothing to do with activities undertaken by St Michael s School. Hence, the Appellant is having independent and separate identity - The Appellant, M/s. Sarj Educational Centre, clearly does not come under the definition of Educational Institution as envisaged in clause 2(y) of the Exemption Notification and thus serial no 66 of the Exemption Notification is not applicable. Whether supply of such service is eligible for exemption under Sl. No. 14 of Notification No. 12/2017-CT (Rate) dated 28/06/2017? - HELD THAT:- Composite Supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply as defined under Section 2(30) of the GST Act - In the instant case, the Applicant is engaged in supplying flood, laundry service, housekeeping service. etc. which are not naturally bundled with the lodging service. All these components are independent of each other and can be supplied separately It is also evident from the submission of the Appellant that they also provide lodging service without providing food and Day Boarders do not laundry services. Therefore, none of the Services are bundled together in a natural and there appears to be no principal Service. There is no infirmity in the ruling pronounced by the West Bengal Authority for Advance Ruling - Appeal dismissed.

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• 2019 (7) TMI 313
  Profiteering - HP V202b 19.5 inch Computer Monitor - benefit of reduction in the GST rate not passed on - contravention of provisions of section 171 of CGST Act - HELD THAT:- The Central Government, on the recommendation of the GST Council, had levied 28% GST on Computer Monitors exceeding 17 inches (S. No. 154 of Schedule-IV and Sl. No. 384 of Schedule-III), vide Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017. The GST rate on Computer Monitors exceeding 17 inches but not exceeding 20 inches (Sl. No. 154 of Schedule-IV and Sl. No. 384 of Schedule-III) was reduced from 28% to 18%, vide Notification No. 27/2017-Central Tax (Rate) dated 22.07.2017. Further the Central Government, on the recommendation of the GST council had reduced the GST rate on Computer Monitors of size ranging between 20 inches to 32 inches from 28% to 18%, vide Notification No. 24/2018 Central Tax (Rate) dated 31.12.2018, w.e.f. 01.01.2019. We find that there was no rate reduction in tax on the product Computer Monitor of 19.5 inch as has been alleged by the Applicant. We also find that the rate reduction from 28% to 18% vide Notification No. 24/2018 w.e.f. 01.01.2019 was only effective in the case of Computer Monitors of size ranging between 20 inches to 32 inches which is entirely different from the product in respect of which the above Applicant has alleged profiteering. However as per the facts mentioned above the allegation made by the Applicant is not correct since there was no reduction in the rate of tax during the relevant period (between December 2018 to March 2019) on the Computer Monitor of 19.5 inch . The Applicant has alleged profiteering by the Respondent during the period of January 2019 whereas no such rate reduction has been affected on the said product after 22.07.2017 - the allegation of the Applicant No. 1 is not sustainable - Application dismissed.

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• 2019 (7) TMI 274
  Seizure of goods alongwith vehicle - Section 129 of the Karnataka Goods and Services Tax Act, 2017 - HELD THAT:- In the appeal itself the petitioner could seek release of goods involved in the appeal. When the appeal is pending against the main order, the petitioner could not have filed writ petition for release of goods which are subject matter of appeal. Section 129 and 130 of the Act provides for release of goods on payment of fine. Petition dismissed.

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• Income Tax

• 2019 (7) TMI 312
  TP adjustment - ALP determination - royalty payments to its Associated Enterprise (AE) - ITAT considered it reasonable to direct the TPO to allow the average royalty percentage at 5.6% (against 6% claimed by the Assessee) - HELD THAT:- Order of the TPO, relied upon by the counsel for the Revenue, does not make any reference to the prevalent practice in the travel industry which would give an indication as to the trend in the royalty payment. That could give reasonable indication whether the payment of royalty by the Assessee to its AE for the AY in question was unreasonable. In the absence of such empirical data, to merely conclude that the payment of higher royalty was not justified only because it did not result in any tangible benefit to the Assessee was not be the right approach. With the DRP having accepted the change in the average royalty percentage payment in the travel industry for the following AY at 5.6%, the direction issued by the ITAT to the TPO to adopt the same percentage for the AY in question does not appear to be unreasonable or give rise to any substantial question of law.

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• 2019 (7) TMI 311
  TP adjustment - exclusion of the company E-Infochips Bangalore Ltd. in the final set of comparables for the purposes of the transfer pricing (TP) exercise - HELD THAT:- What appears to have weighed with the ITAT in agreeing with the DRP to exclude the said comparable is its wide ranging clientele. As found to be providing hi-tech engineering consulting and product innovation services, not just to software developers but also to other sectors like aerospace, defence, healthcare, media and broadcast, medical devices, security and surveillance etc. The exclusion of the said comparable cannot, therefore, be said to be unjustified. Infinite Data Systems Private Limited exclusion ITAT has based its conclusions on a detailed analysis of the profile of the said comparable vis-a-vis the Assessee. Choice of comparables for the TP analysis has been explained by this Court in Rampgreen Solutions Pvt. Ltd. v. CIT, [ 2015 (8) TMI 931 - DELHI HIGH COURT ]. Even otherwise, the Court is not persuaded that the impugned order of the ITAT suffers from any serious error in law or gives rise to any substantial question of law.

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• 2019 (7) TMI 310
  Disallowance of expenditure on estimated basis - addition @12.5% on which TDS was not deducted and addition @ 8.12% on which TDS was deducted - HELD THAT:- Assessee was unable to produce the books of accounts which had been prepared by the Chartered Accountant ( CA ). CA, who was asked to appear before the AO, did not participate in the assessment proceedings. All that was available before the AO were the statement of bank accounts and some sketchy details from which no proper assessment could be made. However, the ITAT took a reasonable view of the matter and reduced the disallowance from 25% to 12.5%. The Court is unable to find any substantial question of law arising as far as the above issue is concerned. Reconciliation of income with TDS certificate HELD THAT: - As far as addition of ₹ 4.73 lacs is concerned, this became necessary as the Assessee was unable to explain the corresponding income in respect of which the TDS has been deducted. Even on this issue, the Court is unable to find any substantial question of law arising from the impugned order of the ITAT.

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• 2019 (7) TMI 309
  Assessment u/s 153A - no incriminating material had been found against the Assessee during the course of the search - HELD THAT:- CIT (Appeals) agreed with the Assessee on merits and quashed the assessment under Section 153-A of the IT Act. When the matter reached the ITAT at the instance of the Revenue, it dismissed the appeal following the decision of this Court in Commissioner of Income-tax (Central)-III v Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] The Court is informed by learned counsel for the Revenue that although the Revenue s appeal in the case of Commissioner of Income-tax (Central)- III v Kabul Chawla (supra) was dismissed by the Supreme Court on the ground of monetary limit of the tax effect involved, the correctness of the said judgment is in question in other appeals filed by the Revenue in the Supreme Court. Nevertheless, the Court is informed that there has been no stay of the operation of the judgment of this Court in Commissioner of Income-tax (Central)-III v Kabul Chawla (supra). No substantial question of law

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• 2019 (7) TMI 308
  Reopening of assessment u/s 147 - Accrual of income in India - whether Appellant has permanent establishment in India? - HELD THAT:- As decided in Honda Motor Co. Ltd. v Assistant Director of Income-tax, Noida [ 2018 (5) TMI 265 - SUPREME COURT] the proceedings against the Assessee were quashed and the appeal was allowed. The Supreme Court held that the notice for reassessment was based only on the allegations that the Appellant has permanent establishment in India , and that the reopening could not be on such basis once the arm s length procedure had been followed. It must be mentioned at this stage that as far as the impugned order in the present appeal is concerned, the ITAT has gone entirely by the fact that the Supreme Court has allowed the appeal of the Assessee after finding that the arm s length procedure had been followed. Therefore, the orders of the Assessing Officer ( AO ) attributing income to the Assessee s permanent establishment in India could not be sustained in law. Revenue appeal dismissed.

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• 2019 (7) TMI 307
  Reopening of assessment u/s 147 - reopening on the basis of search conducted on third party who was allegedly manipulating the scrips of M/s. Parikh Herbals Ltd. / Safal Herbs Ltd. - allegation that the petitioner has made a transaction of in alleged shares - no live nexus of assessee - HELD THAT:- As submitted based upon borrowed satisfaction on the part of the AO who has not applied his mind independently to reach to the conclusion that income chargeable to tax has escaped assessment. As submitted that the petitioner has traded on the BSE platform and the scrip in question is not banned and it is open for anyone to invest in the same. As submitted that there is no live nexus between Shri Shailesh Shah and Shri Jignesh Shah and the petitioner, without which, the Assessing Officer has no jurisdiction to reopen the assessment. Having regard to the submissions advanced by the learned advocate for the petitioner, issue Notice, returnable on 05.08.2019. By way of adinterim relief, the respondent is permitted to proceed further pursuant to the impugned notice; he, however, shall not frame the final assessment without the prior permission of this Court.

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• 2019 (7) TMI 306
  Income from house property - ALV u/s 23 (1) of property prior to Occupancy Certificate (OC) - HELD THAT:- Revenue appears to be raising a contention that since the Assessee in any case leased out the property with effect from 1st April, 2009 without waiting for OC, the entire period during which the Assessee could have let this property, tax on notional basis should be charged. In our opinion, this is fallacious contention. In plain terms, between 1st January, 2009 to 31st March, 2009, the property was legally not occupiable and not occupied. Charging of tax on notional rental basis and the question of interpretation of Section 23 (1) (a) did not arise at all. The issue perhaps arose because the Assessee computed the notional rental receipts for the said period of three months and claimed the vacancy allowance, which in our opinion was under mistaken belief of law. - Decided in favour of the Appellant

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• 2019 (7) TMI 305
  Unexplained purchase - alleged that purchase is not genuine and made from bogus biller/ accommodation entry provider - seller was declared defaulter by the Sales tax department - source of expenditure in purchasing the goods was explained - HELD THAT:- It can, thus, be seen that the Commissioner (Appeals) and the Tribunal concurrently came to the factual finding that the Department has no independent material to come to the conclusion that the purchases made by the assessee of gold and silver were either nongenuine or that the same were made out of assessee s known source. As noted by the Commissioner (Appeals), the purchases were made through banking channel. The Assessing Officer had not rejected the books of accounts of the assessee. - Being a pure question of fact, no question of law arises.

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• 2019 (7) TMI 304
  Notice of re-assessment u/s 148 - territorial jurisdiction of High Court - writ filed in Bombay whereas notice issued by AO in Hyderabad - assessee earlier assessed in Hyderabad - petitioner is a company under the laws of United Kingdom having its registered office in India is situated at Mumbai - mere place of filing of the return would also therefore not be decisive - HELD THAT:- The assessee is being assessed to tax consistently at Hyderabad. The assessee has a PAN card at such place. The assessee has never applied for transfer of PAN card. Admittedly, therefore against the assessments that may be made by the Deputy Commissioner of Income Tax, Hyderabad, appeals would lie before the Appellate Commissioner stationed there. Further appeal at the hands of the aggrieved party would lie before the Income Tax Appellate Tribunal, Telangana. Section 269 of the Act defines the High Court as to mean in relation to any State the High court for that State. Any challenge to the orders of Assessing Officer, Appellate Commissioner or the Tribunal in the present case would lie before the High Court of Telangana (previously High Court of Andhra Pradesh). The Assessing Officer and the Appellate Authorities therefore would be bound by the law propounded by the said High Court. If we entertain this petition merely because a small part of the cause of action may have arisen within the jurisdiction of this Court, we would be giving rise to possibility of different legal principles being applied in case of the same assessee on the same issue and possibly in relation to the same assessment year. Any appeal against the original assessment (if at all done) for the assessment year 2011-12 would be governed by the law laid down by Telangana High Court. In the context of challenge to the notice of reassessment, this Court would apply the decisions of Bombay High Court. This would be wholly undesirable. In case of Serious Fraud Investigation Office Vs. Rahul Modi and another [ 2019 (3) TMI 1411 - SUPREME COURT] the Supreme Court observed that in case of an offence which is triable by the Special Court established or designated for an area in which registered office of the company in relation to which the offence is committed, proper jurisdiction High Court would be the Court which has territorial jurisdiction over such Special Court. Under the circumstances, this petition is not entertained. It would be open for the petitioner to move the appropriate High Court for the same reliefs.

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• 2019 (7) TMI 303
  Condonation of delay - revision u/s 264 - filed beyond a period of one year from the date of assessment and was dismissed by the CIT, refusing to condone the delay - CIT has powers to condone the delay u/s 264(3) - issue relates to income earned outside India reported in return on wrong advice of auditor - original return was belatedly filed hence revise return was rejected by AO HELD THAT:- As would be evident from the chronicle of events which have been alluded to supra with specificity, it will be clear that one year time frame for filing application / petition u/s 264 expired on 22.10.2011, as the order of assessment u/s 143(1) came to be passed on 23.10.2010. Within this one year, i.e., on 05.08.2011 itself, writ petitioner had taken the first step to have his ₹ 19.84 lakhs excluded / exempted qua said AY by filing a revised return. This revised return was rejected u/s 139 (5) on the technical ground that original return was not filed in time. Therefore, this brings to light that writ petitioner has taken his first step qua section 264 application / petition well within the one year time frame. Thereafter, post rejection of revised return, writ petitioner did not go into slumber. Further, writ petitioner filed rectification, on which no orders were passed. Without passing orders on rectification, a demand notice was issued triggering a second rectification from writ petitioner which came to be dismissed. To be noted, a demand was made on 31.1.2018, second rectification request was filed by writ petitioner on 25.2.2018, second rectification having been dismissed / rejected on 2.7.2018, writ petitioner ultimately filed a petition / application u/s 264. There is one other aspect which has weighed in the mind of this Court for acceding to the prayer of writ petitioner unlike other cases / case laws, particularly Viswanathan Silk Centre [ 1991 (10) TMI 7 - MADRAS HIGH COURT] , as third respondent has said nothing on merits of the matter in case on hand. As section 264 petition / application has not been examined on merits, in the considered opinion of this court, by acceding to the prayer in the instant writ petition and directing third respondent to consider section 264 petition / application on merits, ends of justice would be met as it will ensure that writ petitioner's case is tested on merits. To be noted, the submission of writ petitioner that there are judgments (supporting writ petitioner's exemption plea) rendered by more than one Hon'ble High Court with regard to exemption u/s 5, which is the crux and gravamen of petitioner's section 264 petition / application in instant case, buttresses and bolsters writ petitioner's plea to have section 264 petition / application tested on merits. This Court is convinced that this is a case where the prayer of writ petitioner deserves to be acceded to. The matter is remitted back to third respondent to decide the writ petitioner's application / petition u/s 264 on merits.

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• 2019 (7) TMI 302
  Section under which assessment order was passed - validity of corrigendum that the assessment passed u/s 144 - assessee contested that assessment was completed u/s 143(3) r/w. 153(A) - HELD THAT:- The assessee failed to comply with the notice u/s 142(1) dated 12.02.2013. The summon which followed the notice u/s 131 was also ignored. The assessee having filed his return of income on 09.11.2011 failed to comply with the terms of the notice issued u/s 143(2). In such contingency, the AO after taking note of the particulars available on record, seized the documents and statements recorded during the course of search completed the assessment. This has been clearly brought out in paragraph 4 of the assessment order. Therefore, we are of the clear view that the assessment for the year under consideration were u/s 144 and mentioning of Section 143(3) in the preamble of the assessment order is an error which is apparent on the face of the order and requires to be rectified. Therefore, the corrigendum dated 22.01.2015 is legal and valid. Cancellation of registration u/s 12AA with retrospective effect - withdrawal of approval granted u/s 10(23C)(vi) with retrospective effect - order of cancellation was passed based on recommendation made by AO while making assessment of AY 2010-2011 - HELD THAT:- Admittedly, the business premises of the assessee was subjected to search during the assessment year 2010-2011. The AO while completing the assessment found large scale diversion of funds and several improper actions on the part of the assessee in direct conflict to the terms of the Deed of Trust and conditions of registration/exemption. Therefore, it was recommended to the competent authority to initiate proceedings for cancellation of the exemption/registration. The matter was decided after due opportunity to the assessee and speaking orders have been passed and obviously these orders will take effect from the assessment year 2010-2011 and it is a mis-nomer to state that the orders are retrospective or retroactive. The lis which was the subject matter is for the assessment year 2010-2011 and though the orders of cancellation of the exemption/registration was passed on 18.11.2014 and 07.12.2016 they would take effect from the assessment year 2010-2011 during which year the cause of action arose. In an appeal u/s 260A, we are not required to go into the facts nor or we are entitled to re-adjudicate the factual details in the absence of any perversity or illegality. Yet since the learned counsels had advanced arguments on those lines, we perused the orders dated 18.11.2014 and 07.12.2016, from which we find that there are substantial documentary evidence and other details which clearly show that the assessee Trust has violated all the conditions and they are not entitled for any approval u/s 10(23C)(vi) or a registration u/s 12AA. Hence, both the grounds raised by the learned counsel for the assessee has to necessarily fail. The AO pointed out that the assessee has violated its own objectives by diverting substantial portion of its funds by and to the Managing Trustee without truly recording in the books of accounts maintained by it and as these funds were diverted outside its books of accounts the audit report furnished does not reflect the true and correct affairs of the assessee. After referring to the facts discovered during the course of search coupled with the admission of the Managing Trustee and the officers incharge of the accounts in their deposition, the AO held that such a contumacious conduct in running the affairs of the Trust to go against the basic tenets of the Trust and Trusteeship warrants cancellation of the approval. All these factual findings are perfectly justified and consequently, approved. - the substantial questions of law are answered against the assessee

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• 2019 (7) TMI 301
  Merger of order passed u/s 254(2) with main order of Tribunal - set off of brought forward losses and unabsorbed depreciation - against capital gains arising from sale of a business undertaking - AO held that unabsorbed depreciation cannot be said set off as against capital gain u/s 32(2) - applicability of Section 72 - CIT(A) allowed the appeal - order of appeal was upheld bu Tribunal despite he mooved a MA stating that it has not considered adjustment of business loan against capital gain, same was allowed. against that MA tribunal filed appeal which was approved by HC in judgment reported in 2008 (3) TMI 328 - MADRAS HIGH COURT on the ground that no question of law much less a substantial question of law is involved. HELD THAT:- The Revenue cannot prosecute the present case as the order passed in the miscellaneous petition stood merged with the earlier order and the composite order being questioned before the Court and the challenge at the instance of the revenue having been rejected in 2008 (3) TMI 328 - MADRAS HIGH COURT , the present appeal should also fail. Accordingly the appeal is dismissed on the ground that there is no substantial question of law involved in the case as also for the reasons set out.

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• 2019 (7) TMI 300
  Dismissal of appeal on account of non-service of notice to assessee - treatment to payment made by the assessee in respect of obtaining information on distribution of net work - revenue or capital expenditure - HELD THAT:- When the case was heard by the Division Bench on 03.01.2013, an order was passed giving four weeks time to the appellant/revenue to comply with the defects stated by the Registry, i.e., the non-service of notice on the respondent, failing which, the tax case appeal stands dismissed automatically without further reference to this Court. Till date, the respondent has not been served. In the light of the order dated 03.01.2013, we have no option except to dismiss the appeal for non-service of notice to the respondent. In the light of the order dated 03.01.2013, we grant liberty to the appellant/Revenue to restore this appeal by filing a restoration petition after obtaining correct address of the respondent and if such petition is filed, the Registry is directed to number the restoration petition without insisting upon the condone delay petition.

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• 2019 (7) TMI 299
  Disallowance u/s 14A - HELD THAT:- Without going into the merits of the disallowance, we find that the assessee has disclosed exempt dividend income of ₹ 20,995/- u/s 10(33) of the Act. In the light of the decision of JOINT INVESTMENTS PVT LTD VERSUS COMMISSIONER OF INCOME TAX [ 2015 (3) TMI 155 - DELHI HIGH COURT] we direct the Assessing Officer to restrict the disallowance to the extent of exempt income. Ground No. 1, with all its sub-grounds is partly allowed. Disallowance of expenses relating to gift to its employees - HELD THAT:- Assessing Officer has himself accepted that 50% of the gift as eligible expenditure and, therefore, we fail to understand why balance 50% has been disallowed. Moreover, there is no dispute that the assessee has paid FBT @ 50%. Now it is a settled position of law that no disallowance can be made once expenses are exigble to FBT. Our view is supported by the decision of the co-ordinate bench in the case of BG Shirke Construction Technology [P] Ltd Vs. CIT [ 2012 (10) TMI 435 - ITAT PUNE] Treatment of rental income as income from other sources - receipts from its factory building at Gurgaon - whether leave and licence agreement is not similar to lease rental agreement - HELD THAT:- There is no dispute that the factory building owned by the assessee was let out to M/s Anand Engines Component Ltd., for which the assessee earned rental income of ₹ 47.26 lakhs. Whether there existed leave and licence agreement and not rental agreement would not change the colour of receipts in the hands of the assessee. The undeniable fact is that the assessee has earned rental income from letting out its property and the same has to be taxed under the head income from house property eligible for deduction as per the provisions of section 24. We, accordingly, direct the AO to tax rental income under the head income from house property as per provisions of law MAT credit claimed - HELD THAT:- MAT credit has to be allowed to the assessee as per the provisions of law and after considering the provisions and the assessment history of the assessee. We, accordingly, direct the AO to allow MAT credit as per provisions of law after considering the provisions and the assessment history of the assessee. Ground allowed for statistical purposes. Deduction u/s 80IC - scheme of amalgamation conceived - amalgamation of other company in assessee company and change in name - HELD THAT:- There is no dispute that the manufacturing unit at Parwanoo was eligible for deduction u/s 80IC the same always belonged to the assessee, previously known as M/s Purolator India Ltd. Provisions of section 80IA(12) of the Act have been wrongly applied by the AO because the said provision is applicable where any undertaking which is entitled to the deduction u/s 80IA is transferred before expiry of the period specified therein to another India company in a scheme of amalgamation or demerger, whereas the facts of the case in hand show that the manufacturing unit at Parwanoo, HP continued to belong to the assessee and it is only M/s Mahle Filter systems [India] Ltd which amalgamated with the assessee M/s Purolator India Ltd and only the name has been changed to M/s Mahle Filter systems [India] Ltd. Accordingly, even consequent to the amalgamation, the unit at Parwanoo was still owned and managed by the assessee in the same manner as it was managed prior to amalgamation. - deduction allowed Computation of deduction u/s 80IC - other Income - derived from - direct nexus with the eligible business- HELD THAT:- Rental income and income on fixed deposits was offered to tax under the head Income from other sources . Other items of income are inevitably linked and have direct nexus to the industrial undertaking. Therefore, these incomes are eligible for benefit of deduction u/s 80IC . We, therefore, do not find any reason to interfere with the findings of the CIT(A). Ground No.2 is dismissed. Enhancement of deduction claimed u/s 80IC - allocation of expenditure - HELD THAT:- As extracted charts as part of the annual audited accounts of the assessee it can be seen from the above chart that the head office has allocated the expenditure to three units based on their ratio of sale. Therefore, the findings of the Assessing Officer are ill-founded. We, accordingly decline to interfere with the findings of the CIT(A). Accordingly, Ground No. 3 stands dismissed. Disallowance on account of royalty payments - expenditure is related to carry on business and is for efficient running of business for better profitability - capital OR revenue expenditure - HELD THAT:- The undisputed fact is that by virtue of agreement with its AEs, the assessee has only acquired limited rights to use the information for the purpose of production of products in India. There is also no dispute that the assessee merely acquired a right to use technical information provided by the owners of the technical know-how. The ownership/proprietary rights in the technical know-how continue to vest in lithe censor and the assessee is not authorised to transfer, assign or convey the know how/technical information to any third party and therefore, the assessee acquired a limited right to use and exploit the know-how. In our considered opinion, payment of royalty was for mere use of technical know-how, not resulting in any enduring benefit in the capital field, the same has to be allowed as revenue expenditure.

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• 2019 (7) TMI 298
  Levy of penalty u/s 271(1)(c) - defective notice - HELD THAT:- Levy of penalty u/s 271(1)(c) to be bad in law as it did not specify in which limb of Section 271(1)(c) the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. The entire penalty proceedings are, therefore, vitiated and no penalty is leviable. On this score itself similar view is taken by in the case of CIT vs. M/s. SSAs Emerald [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] . This decision is confirmed by the Hon ble Supreme Court [ 2016 (8) TMI 1145 - SC ORDER] . In this view of the matter, the orders of the authorities below are set aside and penalty is cancelled. - Decided in favour of assessee.

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• 2019 (7) TMI 297
  Penalty u/s 271(1)(c) - tax payable as per book profit u/s 115JB - penalty levied in respect of addition under normal provision of Act - HELD THAT:- No penalty is leviable when income is assessed under the provisions of section 115JB of the Act and penalty is levied on the additions made under normal provisions of the Act. AO has made certain additions while computing the book profit u/s 115JB of the Act. Thus, it can be seen that the assessment is ultimately framed u/s 115JB of the Act whereas the penalty has been levied on the additions made for computing the income u/s 143(3) of the Act. This issue is now well settled in favour of the assessee and against the revenue by the decision of the Hon'ble High Court of Delhi in the case of Nalwa Sons Investment Ltd [ 2010 (8) TMI 40 - DELHI HIGH COURT] - appeal of the assessee is allowed

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• 2019 (7) TMI 296
  TP Adjustment - comparable selection - HELD THAT:- Assessee being resident corporate assessee is stated to be engaged in the business of providing IT enabled services (ITeS) to Griffin Group entities in finance/accounts related services such as invoicing, refunds processing and other services such as ticketing, reservations etc. - Thus companies thus companies functionally dissimilar with that of assessee need to be deselected from final list. Working capital adjustment from PLI of comparable entity in terms of Rule 10B(3) - HELD THAT:- The Ld. DRP has denied the same by observing that no working capital adjustment was made by the assessee in its TP study report and secondly, it was observed that fees for services is not impacted in the same manner by credit period offered or received as is the case with sale of goods. Although Ld. AR has pleaded for this adjustment on the strength of certain judicial pronouncements, however, no convincing case has been made out before us so as to justify the grant of aforesaid adjustment. This ground stands dismissed. Transfer pricing adjustment of the book profits u/s 115JB - HELD THAT:- We direct lower authorities to exclude Transfer Pricing adjustment, if any, while computing Book Profits u/s 115JB. Accordingly, this ground stands allowed. SEE OWENS CORNING (INDIA) P. LTD. VERSUS DCIT CIR 7 (1) , MUMBAI [ 2016 (5) TMI 1098 - ITAT MUMBAI] and M/S. CASH EDGE INDIA (PVT.) LTD. VERSUS W ITO, WARD 5 (3) , NEW DELHI [ 2016 (1) TMI 598 - ITAT DELHI]

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• 2019 (7) TMI 295
  Reopening of assessment u/s 148 - no failure on the part of the assessee to disclose material facts during original assessment proceedings - notice u/s 143(2) has been issued prior to disposing off the objections - suppression of profit and obtaining fictitious loss by way of Client Code Modification (CCM) by the brokers in large number of commodity transaction - HELD THAT:- Subsequent to completion of assessment u/s 143(3), Ld. AO was clinched with tangible information from investigation wing which suggested possible escapement of income in the hands of the assessee. Nothing more was required and Ld. AO was not required to carry out detailed investigation so as to reach a conclusive finding that the income, in fact, escaped in the hands of the assessee. Therefore, we are not convinced with these submissions. Further. we find that there was no bar under law for issue of notice u/s 143(2) prior to disposal of assessee s objections and the disposal-off of the objections was not pre-requisite for the issue of notice u/s 143(2). Fictitious loss by way of Client Code Modification (CCM) - unexplained expenditure - CCM is a facility granted by stock exchanges / SEBI to brokers so as to take care of the punching errors which take place during trading hours - HELD THAT:- The transactions of the assessee s were duly supported by bills / contract notes. The assessee placed on record confirmation of few parties whose name appear in the data provided to the assessee wherein they have confirmed the transactions as belonging to them only. No evidence has been brought on record to establish that any of the party disown the transactions. The assessee maintained that the data did not pertain to the assessee which has not been rebutted by AO. No nexus of the said data has been established with the losses suffered by the assessee. Nothing on record establishes any collusion / connivance of the assessee with the share broker. It is trite law that additions could not be made merely on the basis of presumption, conjectures or surmises without bringing on record any concrete material to dislodge the assessee s claim. Therefore, the allegations as levelled byAO, in our opinion, are without any cogent or supporting evidences and therefore, the same could not be sustained in the eyes of law. - Decided in favour of assessee.

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• 2019 (7) TMI 294
  Genuineness of purchases - non compliance of notices u/s 133(6) by the suppliers - purchases was capitalised in book - disallowing depreciation claimed @15% - exclusion of balance from written down value [WDV] of the fixed assets - HELD THAT:- We find that the assessee had filed plethora of documents to substantiate the purchases. It is noted that the three suppliers under question were corporate entities who were duly registered under respective State Sales Tax / VAT, had registration under Excise Laws / Service Tax. The material was purchased by the assessee against C Form. The assessee has obtained certain services from these entities and made the payment thereof after deduction of appropriate tax at source u/s 194 C / 194J. All the payments were through banking channels. The confirmation of account as well as reconciliation of balances was available on record. Further, similar purchases made by the assessee in subsequent AY 2009-10 has been accepted. The assessee erected approx. 610 new Towers during the year which was uniquely identifiable and the same could not have been achieved without actual purchase of the material. he assessee has placed on record the Income Tax Return as well as VAT returns for impugned AY 2008-09 in respect of Aster Teleservices Pvt. Ltd. which demonstrate that the entity was very well in existence. The assessee also made an effort to procure similar documents from official liquidator of another entity namely R.N. Infrastructure Pvt. Ltd. Nothing on record suggest that the above entities, in any manner, have been declared as Hawala / Bogus dealers by any of the authorities. The totality of all these facts demonstrate that the assessee was able to produce overwhelming documents to substantiate the purchase as pitied against the revenue s stand that notices u/s 133(6) were not responded to. However, we find that even the response to notice u/s 133(6) was not within the control of the assessee and the same were to be replied to by the third party suppliers. The factual matrix as well as documentary evidences, in our opinion, was tilted more in favor of the assessee. - appeal of revenue stands dismissed

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• 2019 (7) TMI 293
  Addition of undisclosed income u/s 69B - difference between market price per share and shares acquired - addition u/s 56(2)(viia) though not invoked by AO - share were purchased from directors - HELD THAT:- Nothing on record would demonstrate any exchange / flow of funds, out of books, between the assessee and the sellers. It is trite law that no additions could be made merely on the basis of assumptions, conjectures or surmises. We find that the primary onus to substantiate the transactions was duly fulfilled by the assessee and the same had shifted to revenue to dislodge assessee s claim. In our opinion, nothing has been brought on record by Ld. AO to prove that any excess price was paid by the assessee to the sellers. Therefore, in the absence of any evidences establishing receipts payments outside regular books of accounts, the provisions of Section 69B could not be invoked. So far as the submissions made by Ld. CIT-DR is concerned, we find that, firstly the aforesaid provisions of Section 56(2)(viia) has not been invoked by Ld.AO and secondly, these provisions do not apply in case of receipts of shares for inadequate consideration by the assessee, of a company not being a company in which the public are substantially interested [as defined in Section 2(18)]. However, we find that shares being transacted by the assessee are not of a private company but of a public listed company which is evident from the fact that Ld. AO proceeded to tax the difference of listed price and the acquisition price u/s 69B. Therefore, the said provisions, in our opinion, do not apply to the factual matrix. Accrual of benefit to the assessee u/s 28(iv) - HELD THAT:- We again find that the provisions of Section 28(iv) have not been invoked by Ld. AO to make the impugned additions. Secondly, the allegations of Ld. AO stem from the suspicion that the assessee has paid the differential amount of ₹ 28/- per share to the seller. Under these circumstances, nothing would suggest that the assessee has received certain benefit during the course of its business so as to attract the provisions of Section 28(iv) since it is not the case of Ld. AO that the assessee had received certain benefit by way of purchase of shares of higher value at lower prices. - ground of revenue s appeal stands dismissed. Disallowance u/s 14A - HELD THAT:- We find that it is undisputed fact that the assessee has not earned any exempt income during the year. This being, so no disallowance u/r 8D(2)(iii) would be warranted. So far as the disallowance u/r 8D(2)(i) is concerned, we find that the aforesaid payment of ₹ 0.50 Lacs has been paid by the assessee to SEBI for certain statutory compliances. These payments, being more in the nature of statutory mandatory payments, could not be said to be incurred in relations to making-off of investments. - ground of revenue s appeal stands dismissed. Set off of losses - disallowance of interest u/s 36(1)(iii) - assessee alternatively submitted that borrowed funds had direct nexus with investment in debenture since the moneys were borrowed hence allowable u/s 57(iii) - HELD THAT:- it emerges that the assessee s alternative claim of deduction u/s 57(iii) has been accepted by Ld. first appellate authority and the same has attained finality in view of the fact that the revenue is not in further appeal before us. Therefore, in the given situation, once the claim was accepted u/s 57(iii), the Ld. CIT(A), in our opinion, was not justified in not allowing the inter-head set-off of losses under the head Income from other sources against business income, which otherwise was allowable to the assessee in terms of Section 71(1). Therefore, Ld. AO is directed to allow set-off of losses under the head Income from other sources against business income. The assessee s appeal stands allowed

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• 2019 (7) TMI 292
  Re-opening of assessment u/s 147 - non disposal of objection raised by appellant regarding jurisdiction of reopening such as reasons to belief, barred by limitation, no failure on the part of the Appellant to fully and truly disclose material facts etc.- HELD THAT:- We find that assessee has filed the Objection letter dated 15.4.2013 before the AO stating therein There is no escapement under assessment completed. The initiation of proceedings u/s. 147 are unwarranted. which shows that the AO has not decided the objection neither by a separate order nor in the final assessment order dated 21.3.2014, which is very essential to decide the same before completing the assessment and against the spirit of the direction of the Hon ble Supreme Court of India laid down in the decision of the GKN Driveshafts (India) Ltd. vs. ITO a [ 2002 (11) TMI 7 - SUPREME COURT] and also Ld. CIT(A) has not taken into consideration the objection filed by the assessee against the reasons to believe stated by the AO. Therefore, in the interest of justice, we are remitting back the issues in dispute to the file of the AO with the directions to first decide the objection of the Assessee and then decide the issues in dispute, afresh, after giving adequate opportunity of being heard to the assessee.

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• 2019 (7) TMI 291
  Income accrued in India - royalty from Brew Operators agreement - chargeable to tax in the hands of the assessee u/s. 9 (i) (vi) b of the IT Act as well as article 12 of Indo-US-DTAA - HELD THAT:- Respectfully following the order of the Tribunal in assessee s own case for A. Y 2014-15 [ 2019 (2) TMI 1656 - ITAT DELHI] and in absence of any distinguishable feature brought to our notice by the ld. DR against the order of the Tribunal, we hold that the royalty from BREW Operator Agreement is not chargeable to tax in the hands of the assessee u/s 9(1)(vi) as well as Article 12 of the Indo-US-DTAA. Following similar reasonings, we also hold that the CIT(A) is not justified in upholding the action of the Assessing Officer in bringing to tax the royalty from Test Tools Agreement. The grounds raised by the assessee are accordingly allowed.

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• 2019 (7) TMI 290
  Levy of fees u/s 234E - delay in filing TDS statement in Form 26QB - applicabilty of 194IA - allotment letter cannot be treated as transfer of immovable property - imposing fee u/s 234E has become appealable before CIT(A) w.e.f. 1st June 2015 - applicability of section 234E on TDS statements or to a single TDS statement - HELD THAT:- It is patent and obvious that the assessee and the seller of the flats have treated the transaction of sale of flats as a transaction coming within the purview of section 194IA. In any case of the matter, the deductee has not expressed any reservation with regard to the applicability of section 194IA to the subject transaction. Therefore, the assessee being a deductor cannot plead inapplicability of the aforesaid provision. In fact, in our view, the contention of inapplicability of section 194IA is redundant and is not available to be taken by the assessee. Once the assessee has proceeded to deduct tax at source u/s 194IA of the Act, all legal consequences arising in pursuance thereto would automatically follow. Validity of Section 234E -The Court in Rashmikant Kundalia Anr. v/s Union of India, 2015 (2) TMI 412 - BOMBAY HIGH COURT] has held, the fee charged under section 234E is nothing but a privilege and a special service to the deductor allowing him to file TDS returns / statements beyond the time prescribed by the Act and the Rules. The Court has held that on payment of the fee under section 234E, the deductor is allowed to file the TDS returns/statements beyond the prescribed time so that it can be regularized. Applicability of Section 234E on filing of Form no.26QB - No doubt, the provision contained u/s 234E of the Act makes it clear that it will be applicable if the deductor fails to deliver the TDS statement within the time prescribed in u/s 200(3). Whereas, section 200(3) makes it clear that furnishing of TDS statement in the prescribed form, manner and time applies to all TDS provisions including section 194IA contained under Chapter XVII. Therefore, assessee s claim that since the challan cum statement is generated on a single date, therefore, it will not come within the purview of section 200(3) of the Act, is unacceptable. Thus, we are of the view that the TDS statements in Form no.26QB also comes within the ambit of section 200(3). All the transactions relating to purchase of flats should be taken as a single transaction - At this stage, it will be relevant to observe, clause (c) of sub section (1) of section 200A contemplates that while processing the TDS return, fee u/s 234E shall be computed. Thus, use of word shall in the aforesaid provision makes it mandatory on the part of the Assessing Officer to levy fee u/s 234E. Since, the assessee has filed separate TDS statements u/s 200(3) read with rule 26QB, there is no error on the part of the Assessing Officer in computing fee under section 234E of the Act while processing such statements. Appeal against levy of fee u/s 234E - As regards the contention of the learned Authorised Representative that appeal against levy of fee u/s 234E of the Act is maintainable before the learned CIT(A), we find merit in the same. However, it will not make much difference as learned Commissioner (Appeals) has decided the issue on merit. Grounds are dismissed.

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• 2019 (7) TMI 289
  Penalty u/s 271(1)(c) - disallowance of expenses which was not capitalized to plant and machinery - recording of satisfaction - notice is either for furnishing of inaccurate particulars of income or for concealment of income - HELD THAT:- It is a settled law that while levying penalty for concealment, the AO has to record satisfaction and thereafter come to a finding in respect of one of the limbs, which is specified u/s 271(1)(c). The first step is to record satisfaction while completing the assessment as to whether the assessee had concealed its income or furnished inaccurate particulars of income. Thereafter, notice u/s 274 r.w.s 271(1)(c) is to be issued to the assessee. The AO thereafter has to levy penalty u/s 271(1)(c) for non-satisfaction of either of the limbs. While completing the assessment, the AO has to come to a finding as to whether the assessee has concealed its income or furnished inaccurate particulars of income. The Hon ble Bombay High Court in CIT Vs. Shri Samson Perinchery [ 2017 (1) TMI 1292 - BOMBAY HIGH COURT] has held that where initiation of penalty is one limb and the levy of penalty is on other limb, then in the absence of proper show cause notice to the assessee, there is no merit in levy of penalty. In the present case, as noted hereinabove, it is seen that the AO has not recorded any satisfaction in the assessment order but had levied penalty for furnishing of inaccurate particulars of income as well as for concealment of income i.e., for both the limbs. - appeal of the assessee is allowed

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• 2019 (7) TMI 288
  Reopening of assessment u/s 147 - proceedings u/s 147 after expiry of 6 years - direction by court or mere observation - HELD THAT:- AO has initiated proceedings u/s 147 after expiry of 6 years and had not brought on record any failure on the part of the assessee. AO applied the provisions of section 150, when the findings of the coordinate bench are not direction but observation. Therefore, in our considered opinion, the proceedings initiated u/s 147 beyond 6 years are void ab-initio as the notice u/s 148 cannot be issued after the expiry of 6 years as per the time limit prescribed u/s 149 of the Act. In this case, AO issued the notice after expiry of 6 years and initiated the proceedings only after the observations made by the ITAT in its order. As stated earlier, the section 150 is also not attracted in this case. Therefore, the proceedings were initiated for reopening after period of limitation u/s 149 is void. - Appeal of the assessee is allowed.

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• 2019 (7) TMI 287
  Revision u/s 263 - lack of enquiry - receipt of unsecured loan from group companies - applicability of section 2(22)(e) - Deemed dividend - HELD THAT:- AO is not only expected to be aware of such legal position but is also duty-bound to apply the same while completing the assessments, especially when it is propounded by the Hon ble Jurisdictional High Court. In the present case, the AO thus had not only made the enquiry or verification as required in the facts of the case to ascertain the applicability of section 2(22) (e) to the loan amounts received by the assessee from the other group companies, but a conscious decision was also taken by him keeping in view the legal position that section 2(22)(e) was not applicable to the loan amounts in question received by the assessee during the years under consideration from the other Group Companies. There was thus no error in the orders of the AO for the years under consideration passed under section 153A/143(3) as alleged by the Principal CIT and the revision of the same under section 263 by the Principal CIT was not called for. In that view of the matter, we set aside the impugned orders passed by the Principal CIT u/s 263 and restore that of the AO passed under section 153A/143(3). - Decided in favour of assessee.

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• 2019 (7) TMI 286
  Addition u/s 56(2)(vii)(b)(ii) - suppression of purchase price of land in the hands of the assessee - applicability on stock in trade - HELD THAT :- The provisions of section 56(2)(vii) were introduced as a counter evasion mechanism to prevent laundering of unaccounted income. The provisions were intended to extent the tax net to such transactions in kind. The intent is not to tax the transactions entered into in the normal course of business or trade, the profits of which are taxable under specific head of income. Therefore, the definition of property has been amended to provide that section 56(2)(vii) will have application to the property which is in the nature of a capital asset of the recipient and therefore would not apply to stock-in-trade, raw material and consumable stores of any business of such recipient. However, a property is defined in a very specific way, which includes agricultural and non-agricultural land or both. It appears that the lower authorities have not properly appreciated the relevant provisions of the Act with regard to the land purchased by the assessee, which is part of stock-in-trade. In the substantial interest of justice, we restore the matter back to the file of the AO for deciding the matter afresh after giving due opportunity of hearing to the assessee. - Appeal of assessee is allowed for statistical purpose.

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• 2019 (7) TMI 285
  Dismissal of appeal for non -prosecution - recalling of order - non appearance by assessee - assessee was not in receipt of notice of hearing - HELD THAT:- AR brought to our notice that the assessee was not in receipt of the communication fixing the date of hearing on 26-06-2018. The assessee could not appear before this Tribunal on the said date of hearing (26-06-2018). We note since the assessee was not in receipt of notice of hearing, either the assessee or its ld. A/R could not appear before this Tribunal on 26-06-2018. Since the ld.AR did not appear, the assessee cannot be penalised. Therefore, for the ends of justice, we recall the order dt. 26-06-2018 and direct the registry to fix the appeals for fresh hearing on 26-12-2018.

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• 2019 (7) TMI 273
  Disallowance u/s 80-IA - entitlement to set off interest paid on borrowed funds from interest income earned held to be taxable under the head income from other sources under Section 57(iii) - Method of accounting adopted by the assessee with regard to the goods which were lying at the port which had not been exported - HELD THAT:- SLP dismissed.

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• 2019 (7) TMI 272
  Allowability of business loss on the purchase of Shares on account of diminution value in the Shares - said loss to the extent of about 50% of the purchase value of the Shares by the Assessee Company was deducted by the Appellant/Assessee claiming it as business loss to the Assessee Company - HELD THAT:- Special Leave Petition dismissed.

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• 2019 (7) TMI 271
  Assessment u/s 153C - Additions on the account of alleged unaccounted cash receipt - project completion method of accounting - Method of accounting, regularly followed by the Assessee - HELD THAT:- We see no reason to interfere with the impugned order passed by the High Court. Accordingly, the special leave petition is dismissed. However, there shall be liberty to the petitioner to proceed for recovery of amount under claim to be taxable in the Assessment Year 2006-07 u/s 153(6) of the Income Tax Act, 1961.

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• 2019 (7) TMI 270
  Undisclosed investments - Additions based on balance-sheet submitted to the Bank for obtaining loan - Block assessment u/s 158BC - Block Period - undisclosed income detected under four separate heads of under-invoicing, undisclosed sales, investments in unaccounted purchases, and interest income - HELD THAT: - SLP dismissed

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• 2019 (7) TMI 269
  Penalty u/s 271(1)(c) - Depreciation on IPRs - assessment u/s 153A - mere fact that the claim of depreciation was withdrawn in his statement under Section 132(4) during the search would not give rise to the penalty - HELD THAT:- The special leave petitions are dismissed.

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• 2019 (7) TMI 268
  Stay of demand - protection against collection and recovery - appeals as expeditiously as possible and during pendency of these Appeals, the petitioner/appellant shall not be called upon to make payment of any sum - HELD THAT:- The special leave petitions are dismissed.

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• 2019 (7) TMI 267
  Deduction of TDS on salary u/s 192 - Nuns, Sisters, Missionaries and Fathers are bound by the Canon Law for their vows of poverty to the Christ and that they cannot be taxed in respect of the Grant-in-Aid or salary received from the State Government by respective school or educational institutions - whether no income tax can be deducted at source from the salaries and other monetary benefits paid to these persons - religious denomination under Article 26 of the Constitution of India - Diversion of income at source - Religious binding character of the Nuns and Missionaries to make over even their salary receipts to the Institution, Church or Diocese amounts to diversion of income at source, by overriding title in favour of the Institution, Church or Diocese towards such religious obligations - HELD THAT:- Issue notice. In the meanwhile, status quo with regard to payment of tax, as on today, shall be maintained by the parties. List the matters on 7th August, 2019.

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• 2019 (7) TMI 266
  Reopening of assessment - proof of payment of recognized expenditure - eligibility of reasons to believe - assessment beyond period of four years from the end of relevant assessment year - HELD THAT:- We are not inclined to entertain this Special Leave Petition under Article 136 of the Constitution of India. The Special Leave Petition is accordingly dismissed.

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• 2019 (7) TMI 265
  Best judgment assessment - Admission of additional evidence - Whether in the absence of any ground against admission of additional evidence, Tribunal was right in law in holding that the CIT(A) was not entitled to consider the evidence of payment to the commission agent? - HELD THAT:- We are not inclined to entertain these Special Leave Petitions under Article 136 of the Constitution of India. Special Leave Petitions are accordingly dismissed.

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• 2019 (7) TMI 264
  Rectification of mistake - earlier ITAT dismissed the revenue appeal and cross objection of the assessee - Revenue went to HC, wherein HC restored the matter before ITAT - Status of the cross objection - doctrine of merger - validity of reassessment proceeding - HELD THAT:- SLP dismissed.

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• 2019 (7) TMI 241
  Deduction of TDS on salary u/s 192 - Nuns, Sisters, Missionaries and Fathers are bound by the Canon Law for their vows of poverty to the Christ and that they cannot be taxed in respect of the Grant-in-Aid or salary received from the State Government by respective school or educational institutions - Ld. Single Judge held that Assessee Institutions and the Missionaries, discussing the Canon Law in detail and held that no income tax can be deducted at source from the salaries and other monetary benefits paid to these persons - religious denomination under Article 26 of the Constitution of India - right to practice a religion as guaranteed under Articles 25 and 26 of the Constitution of India - Diversion of income at source - Religious binding character of the Nuns and Missionaries to make over even their salary receipts to the Institution, Church or Diocese amounts to diversion of income at source, by overriding title in favour of the Institution, Church or Diocese towards such religious obligations - HELD THAT:- Learned ASG appearing for the respondents seeks four weeks time to file an affidavit. Rejoinder, if any, be filed within two weeks thereafter. List the matter on 7th August, 2019 for final disposal. In the meantime, status quo, as on today, shall be maintained by the parties.

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• Benami Property

• 2019 (7) TMI 275
  Show cause notice u/s 24(1) of Benami Act - disposal of objection by passing speaking order before passing final order - Benami transaction - attachment orders - show cause as to why the property in question not be treated as benami property within the meaning of Section 2(9)(C) of the Benami Act? - HELD THAT :- The contention and reliance upon the judgment of GKN DRIVESHAFTS (INDIA) LTD. VERSUS ITO [ 2002 (11) TMI 7 - SUPREME COURT] is made by contending that Section 24(1) of the Benami Act and Section 147 are adopting the same language and therefore, are parimateria. The Court is unable to accept such contention as the sphere and operation of Section 24 of the Benami Act and Section 147 are completely different. Section 24 of the Benami Act and the subsequent provisions are for the purpose of coming to conclusion as to whether the property in question is to be treated as benami property whereas operation of Section 147 and the subsequent provisions, viz. Sections 148 to 153 would be operating while the process for assessing or reassessing of the income is undertaken by the concerned officer. Therefore, contention of passing a separate speaking order to the objections raised cannot be accepted. When the petitioner filed reply to the show cause notice on 18.04.2019, there is nothing in such reply which can be termed to be objection of preliminary nature which would be required to be dealt with before passing final order. The only objection that comes near to the contention raised by learned Advocate for the petitioner is non-supply of the documents. This, in the opinion of the Court, is also an objection on merits which can be and should be dealt with in the final order and therefore, subsequent communication dated 30.04.2019 appears to be an afterthought to prevent respondent No.1 from proceeding any further as per the provisions of the Benami Act and hence, the Court is not inclined to entertain this petition.

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• Customs

• 2019 (7) TMI 263
  Refund of Drawback, Interest on Drawback and Refund of CVD - re-export of goods - HELD THAT:- The authority concerned should undertake the necessary process of sanctioning and taking the final decision with regard to the ground of refund of interest on CVD as well as on drawback, at the earliest. The respondent No.3 is directed to complete the process and take an appropriate decision in this regard within a period of four weeks from the date of the receipt of the order. The ultimate decision should be communicated in writing, to the writ-applicant - application disposed off.

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• 2019 (7) TMI 262
  Service of notice - proof of service of notice - section 153 of Customs Act - HELD THAT:- In the precise context of the provision of section 153 of the said Act, the Division Bench of the Madras High Court in P. BHOORMAL TIRUPATI VERSUS ADDITIONAL COLLECTOR OF CUSTOMS, MADRAS [ 1973 (8) TMI 45 - HIGH COURT OF JUDICATURE AT MADRAS] has held that section 153 of the said Act only requires that the notice shall be served by sending it by registered post to the person for whom it is intended, it does not require that effective service should be effected upon the person receiving it. Read with section 27 of the General Clauses Act, it becomes clear that when a document to be served is sent by registered post to the proper address with prepaid postage its service is deemed to be effected at the time at which the letter would be delivered in the ordinary course of post, unless the contrary is proved. We are unable to accept the Petitioners' contention that there has been no proper service as contemplated under section 153 of the said Act. Petition dismissed.

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• 2019 (7) TMI 250
  Payment of CVD at exempt rate and CENVAT credit - CVD of 1% /2% of the Additional Duty of Customs on the imported coal - benefit of N/N. 12/2012-Cus dated 17.03.2012 - Department has denied the payment of CVD on exempted rate and the availment of cenvat credit thereupon relying upon the S.No. 67 of Excise Notification No. 12/2012 dated 17.03.2012 - HELD THAT:- The Customs Notification is applicable to the imported coal whereas the Excise Notification is applicable to the domestically manufactured goods. The condition No. 25 of Excise Notification which denies availment of cenvat credit on imports of coal manufactured by the supplier of coal, as has been taken the basis in the Order-in-original, shall therefore be applicable for domestically manufactured goods only and not on the imported coal. Perusal of Excise notification No. 67 further reveal that no such condition is applicable in case of import of coal. Whether under Customs notification against S.No. 67 i.e. while importing the coal, the appellants were entitled to avail the cenvat credit on the amount of CVD paid? - HELD THAT:- The said rule itself clarifies that the cenvat credit of duty of excise is not allowed to be taken when paid on any goods specified under S.No. 67 and 128 of Excise Notification No. 12/2012 dated 17.3.2012. Admittedly, the notification relied upon by the department for denying the impugned benefit to the appellant is Customs Notification No. 12/2012 dated 17.3.2012. The restriction of Rule 3 is not applicable to the said notification - Hon ble Supreme Court in the case of SRF Ltd. vs. CC Chennai [2015 (318) ELT 607(SC)] has held that Excise Notification No. 12/2012 is applicable only in respect of any digged or manufactured coal and not in respect of imported coal. The import whereof is allowed to have exempted rate of CVD vide Customs Notification No. 12/2012 Cus. The adjudicating authority has committed a legal error while denying the benefit of reduced CVD on imported coal while placing reliance upon the Excise notification for manufacture of coal - appeal allowed - decided in favor of appellant.

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• Insolvency & Bankruptcy

• 2019 (7) TMI 284
  Validity of Resolution Plan - a unique plan which provides no revival of the corporate debtor but to close it by discharging its debts to all stakeholders inclusive of its staff and workmen - Corporate Applicant - grievance of the Appellant- Industrial Services is that the suits were filed by the Corporate Debtor during the period of Moratorium against the Industrial Services and, therefore, the same cannot be taken into consideration to deny the admissible dues payable to the Industrial Services - (Operational Creditor) - whether the plan in question is in conformity with Section 30(2) (e) of the I B Code and achieves the Objects of the I B Code ? HELD THAT:- Resolution Plan has been prepared for ensuring settlement of dues of the creditors on receipt of fund as proposed in payment Schedule of the Resolution Plan Supervision implementation of the resolution plan will be done by the Board of Directors of the Company as going concern - Though during the Resolution Process , and thereafter, the Resolution Applicant is required to ensure that the company remains as a going concern but contrary to the provisions of the I B Code , closure of the Corporate Debtor has been proposed and approved by the Adjudicating Authority. In SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [ 2019 (1) TMI 1508 - SUPREME COURT] the Hon ble Supreme Court noticed the Preamble of the Code and held that the primary focus of the legislation is to ensure revival and continuation of the Corporate Debtor by protecting the Corporate Debtor from its own management and from a corporate s death by liquidation. As the Resolution Plan is against the object of the Code and the application under Section 10 was filed with intent of closure of the Corporate Debtor for a purpose other than for the resolution of insolvency, or liquidation, we hold that the part of the Resolution Plan which relates to closure of the Corporate Debtor / Corporate Applicant being against the scope and intent of the I B Code is in violation of Section 30(2)(e) of the I B Code - the part of the approved Resolution Plan in so far as it relates to closure of the Corporate Debtor / Corporate Applicant but uphold the rest part of the Resolution Plan , as approved is set aside. The case is remitted to the Adjudicating Authority, Kolkata Bench, to make necessary correction in the Resolution Plan by asking the Corporate Debtor to delete the portion of the plan which proposes closure of the Company - appeal allowed by way of remand.

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• 2019 (7) TMI 283
  Initiation of Corporate Insolvency Resolution Process - Corporate Debtor - financial creditor - Section 7 of the Insolvency and Bankruptcy Code, 2016 - default of debt - HELD THAT:- In the instant case, the petitioner-financial creditor adduced abundant evidence to show the default which has been committed by the respondent-corporate debtor and the same has not been disputed. The respondent-corporate debtor is also stated to have executed the balance confirmation letters dated 21.08.2017 are at Annexure I/31 (colly). There is no denial of the balance confirmation letters in the reply. The balance outstanding amount as on 08.10.2018 has also been stated in the tabulated information in the synopsis of the case - No discrepancy in the calculation has been pointed out but in any event if there is any such discrepancy it is for the Interim Resolution Professional or Resolution Professional as the case may be to look into the same after the insolvency resolution process is initiated. There is a presumption of correctness attached to the entries in the books of accounts. The petitioner bank has thus, shown that the corporate debtor was in default in making payment of the outstanding balance at the time, the petition was filed. The petitioner bank has been able to prove the requirement of clause (a) of Subsection (3) of Section 7 of the Code - As per clause (b) of Section 7(3) of the Code, the financial creditor is bound to propose the name of the Resolution Professional to be appointed as Interim Resolution Professional. Petition admitted - moratorium declared in terms of sub-section (1) of Section 14 of the code.

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• 2019 (7) TMI 282
  Admissibility of petition - Initiation of Corporate Insolvency Resolution Process - existence of Debt - HELD THAT:- The cheque issued by the corporate debtor on 9th February, 2018 shows that the comparison chart by the appellant is merely an eyewash to mislead that there was no debt payable. It is not clear as to why the corporate debtor issued cheques if there was no debt . The bank receipt of ₹ 8 Lakhs was shown on 9th February, 2018 and the bank receipt for Rs. Five Lakhs on 23rd February, 2018. The other cheques were dishonoured. In view of such facts, we do not accept the stand taken by the appellant-shareholder that there was no debt due and payable. We accordingly dismiss the appeal. No cost. - Appeal dismissed.

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• Service Tax

• 2019 (7) TMI 281
  Alternative remedy of appeal - Recovery of Service Tax - HELD THAT:- Mr.Dwivedi, learned counsel for the Revenue states that the challenge to order of the Tribunal in COMMISSIONER, SERVICE TAX, DELHI-III, NEW DELHI VERSUS M/S. BHARUCH DAHEJ RAILWAY COMPANY LTD., M/S. KRISHNAPATNAM RAILWAY COMPANY LTD. [ 2019 (4) TMI 26 - CESTAT NEW DELHI ] is under active consideration of the Revenue. Mr.Dwivedi on instructions states that if an adjournment of four weeks is given, he will be in a position to inform the court whether the order dated 25th March, 2019 of the Tribunal in respect of M/s.Bharuch Dahej Railway Co. Ltd. has been accepted by the Revenue or not. This petition is adjourned to 1st August, 2019.

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• 2019 (7) TMI 280
  Jurisdiction - power to conduct audit - Rule 5A of the Service Tax Rules, 1994 read with Section 174(2)(e) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The issue of the saving of Rule 5A(2) of Service Tax Rules, 1992 on introduction of CGST Act, 2017 is an issue that requires detailed consideration. This would be appropriately done at the final hearing. Thus, granting of interim relief at this stage would tantamount to granting final relief at the stage of admission. Moreover, the balance of convenience is against the petitioner. The Respondents seeks to carry out audit in terms of Rule 5A of Service Tax Rules, 1994 and Section 174 of the CGST Act for the period prior to the introduction of CGST Act. Grant of interim relief at this stage would prevent the respondents from carrying out audit as permitted under Rule 5A of Service Tax Rules, 1994 and Section 174(2)(e) of the CGST Act.

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• 2019 (7) TMI 261
  Imposition of penalty - service tax with interest paid before issuance of SCN - Suppression of facts or not - HELD THAT:- In the present case, the service tax along interest has been paid before the issuance of the show-cause notice. Further the appellant has not suppressed any facts with intent to evade payment of tax - the imposition of penalties under Section 77 78 is not sustainable in law - appeal allowed - decided in favor of appellant.

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• 2019 (7) TMI 260
  Recovery of Service tax - appellants are registered for providing the services under the category of Authorised Service Station - GTA Service - non-payment of service tax - reverse charge mechanism - HELD THAT:- The liability to pay the service tax under reversed charged mechanism arises only when the services are received from the goods transport agency that to when such agency has issued a consignment note - In the present case, admittedly and apparently, there is no consignment note. The liability has been confirmed on the basis of mention of charges being paid by the appellant as freight as per their balance sheet - No question arises for considering as to whether mere payment of freight to a transporter amounts to receiving a goods transport agency service when the aforesaid definition clearly specifies that such service has to be received from a transport agency only and not merely from the transporter. The issuance of consignment note is also mandatory for the purpose. Mere payment of freight to a transporter who is otherwise not an agency does not amount to receiving goods transport agency services. Accordingly, the appellant cannot be made liable under reversed charged mechanism to pay the service tax for receiving the transportation services - liability under reversed charged mechanism for receiving the GTA services by the appellant has wrongly been confirmed by the Adjudicating Authority - demand set aside. Renting of immovable property services - HELD THAT:- The period in demand admittedly is with effect from 2005-06 to 2009-10. The Adjudicating Authority below committed no error while dropping this demand for the period prior to year 2007 as this service was brought into the tax net vide a Notification of the year 2007. With respect to the remaining period the demand has been challenged for the Show Cause Notice being barred by time. Though the appellants were liable to pay service tax for rendering the services of Renting of immovable property but because of the prevalent confusion, no malafide can be attributed to the appellants for not paying the same during the relevant period. Accordingly, the Department has committed an error while permitting the invokablity of extended period for time for issuance of the Show Cause Notice for the period 2005-06 to 2009-10 on 19th May, 2011 - However, this demand for the period with effect from May, 2009 till 2010 is sustainable as a liability of the appellant. The appellant has already deposit the ₹ 30,628/-, accordingly, order for adjustment for appropriation of the said amount for the said liability for the year 2009-10. Penalty - HELD THAT:- There was no reason for the Department to impose penalty on the appellant. Appeal allowed - decided in favor of appellant.

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• 2019 (7) TMI 259
  CENVAT Credit - capital goods - whether the credit of duty paid on the capital goods is admissible to the Appellants and whether the service tax to the extent of utilisation of said credit is recoverable from the appellants? - HELD THAT:- None of these submissions have been recorded in the impugned order - It is not clear whether any such submissions have been made by the Appellant during the course of hearing. Even, if it is assumed that these submissions were not raised earlier, then also learned Counsel for the Appellant is entitle to raise them at this stage since these are legal submissions. The matter should be remanded back to the learned commissioner to decide it afresh after taking into consideration - Appeal allowed by way of remand.

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• 2019 (7) TMI 258
  Technical inspection and certification services - reverse charge mechanism - section 66A of Finance Act, 1994 - HELD THAT:- It is only a technical inspection of certifying agency that was intended to be the object of the tax and that service had to be rendered in relation to such technical inspection and certification - Notwithstanding the fact that the local suppliers released payments to the appellant only upon the issue of certificates, the service does not involve any information and nor does it contain technical information that required some expertise. Furthermore, the final inspection report prepared by the appellant, and relied upon in the show cause notice, were also retained by the appellant in their records indicating that these are not the material form of the services rendered. The decision of the Tribunal in M/S. AT CO. VERSUS C.S.T. DELHI [2016 (12) TMI 929 - CESTAT NEW DELHI ] , has laid down the principle that mere inspection, or certification, which does not have to fall back on any expertise of scientific or technical knowledge would not find coverage within this taxable service. We also take note that the role of the appellant in the entire transaction is to act as the agent of the overseas entity for the limited purpose of approving the shipments on the basis of certain specifications indicated by the overseas customers. The levy of tax on an activity that does not fall within the scope of section 65(105)(zzh) of Finance Act, 1994 cannot be approved. The matter remanded back to the original authority to decide on the merits of the demand taking note of our adjurements on the legality of levy under each of the services and for ascertainment of the tax on any consideration that remains sustainable thereafter - appeal allowed by way of remand.

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• 2019 (7) TMI 257
  CENVAT Credit - Input Services Distributor - violation of rule 9 of CCR - manner of distribution of credit by an ISD - HELD THAT:- The two conditions are to be satisfied by an ISD and it is therefore, for the Revenue to give a finding as to the violation, if any, of any or both the conditions of Rule7. In the absence of any such specific findings, there cannot be any denial of the Cenvat credit distributed for consumption at the units. In the case on hand, without causing any investigation or enquiry as to the claim of the appellant, the adjudicating authority has doubted the availment of service tax credit by the ISD itself despite a clear pleading that the jurisdictional Commissionerate has accepted. Admittedly, the assessee-appellant has only sought for the consumption of credit that was claimed to be available with the appellant s ISD which was explained to have been passed on. So, in the absence of any disputes as to the eligibility of credits availed by the ISD, the same cannot be questioned at the receiver s end, who only sought for consumption of the same. What transpires from the above is clear, that there are only two limitations for distribution of credit by an ISD and in the case on hand, Revenue has not made out a case as to the non-satisfaction of the above two conditions. Consequently, there being no deficiency as to the eligibility of the ISD for distribution, no denial could be made in the hands of the recipient who has only consumed the same. The disallowance as well as the impugned order cannot sustain - Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2019 (7) TMI 279
  CENVAT Credit - input services - insurance policy - admissibility of when the policy covers the employees and family members of the employees - HELD THAT:- The issue decided in the case of THE COMMISSIONER OF CGST CENTRAL EXCISE NAVI MUMBAI COMMISSIONERATE VERSUS TOYO ENGINEERING INDIA LTD. [ 2019 (6) TMI 1144 - BOMBAY HIGH COURT] where it was held that credit is allowed. Appeal dismissed - decided against Revenue.

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• 2019 (7) TMI 256
  CENVAT Credit - input services - GTA Service used for the purpose of outward transportation of goods up to the customer s place - place of removal - HELD THAT:- Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [ 2018 (2) TMI 117 - SUPREME COURT] holding that GTA Service used for the purpose of outward transportation of goods up to the customer s place was not covered within the ambit of amended Rule 2(l) of the CCR, 2004 and also charged applicable interest and levied applicable penalty. Penalty - HELD THAT:- Revenue has not challenged the findings of the First Appellate Authority in the impugned orders as to the deletion of penalty and hence, no interference is called for on this. It is for the Adjudicating Authority to re-examine the facts afresh - Appeal allowed by way of remand.

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• 2019 (7) TMI 255
  CENVAT Credit - inputs - MS plates which has been used in repair or maintenance of Heavy Earth Moving Machinery (HEMMs) used in the coal mines - denial on account of nexus with output - HELD THAT:- There is no dispute that the subject goods MS plates has been used for repair or maintenance of HEMMs used in the coal mines of the appellant. The definition of term input as defined in the CCR, 2004, includes all goods used in the factory of production unless specifically excluded therefrom. Neither of the exclusion clauses provided in the definition of term input under Rule 2(k) is attracted in the instant case. In the instant case, the subject inputs have not been used for construction of any building or structure/foundation for support of capital goods, but for repair and maintenance of coal handling plant and HEMM s. The usage of subject goods is very integral to the mining activity itself without which mining cannot be done - the use of goods in question in the repair and maintenance of coal handling plant and HEMM s is indispensible, in absence of which mining activity cannot be undertaken. Therefore, usage of subject goods bears a direct nexus with the mining activity and by no stretch of imagination it can be said that they have no relation with production of coal, which is the final product. The appellant is legally entitled to avail the benefit of credit on goods used in the repair and maintenance of plant machinery which is used in the coal production process - Credit allowed - appeal allowed - decided in favor of appellant.

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• 2019 (7) TMI 254
  SSI Exemption - use of brand names - manufacture of PVC soles by the appellant - HELD THAT:- The brand names, have been used by the appellant is eligible for SSI exemption under Notification No. 3/2003 available to the appellant. The said Final Order relied upon the decision of Hon ble Delhi High Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS MINIMAX INDUSTRIES [ 2011 (1) TMI 782 - DELHI HIGH COURT] and following the same accordingly, SSI benefit is available to the appellant. Benefit of N/N. 4/2006 - Manufacture of PVC granules from old and used plastic materials - HELD THAT:- The denial of exemption Notification No. 4/2006 (supra) is incorrect as the notification nowhere says that addition of some other material would disentitle the exemption notification in this regard. We find that the CBEC vide its Circular No. 52/94 dated 1.9.1994 has clarified the issue which favours appellant. Penalty - HELD THAT:- As the demand against the main appellant is not sustainable there is no question of imposition of penalty on the other appellant and hence the same is also being set aside. Appeal allowed - decided in favor of appellant.

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• 2019 (7) TMI 253
  CENVAT Credit - input services - outdoor catering service - whether the appellant is eligible for credit of outdoor catering services after 01.04.2011? - HELD THAT:- The appellant is not eligible for the credit on outdoor catering services to the tune of ₹ 18,39,016/-. Therefore, recredit taken by the appellant is not correct and on this score, the demand raised is legal and proper. Penalty - HELD THAT:- The issue of eligibility of credit on outdoor catering services being interpretational issue, the appellant cannot be saddled with intention to evade payment of duty - the penalty imposed is set aside. Appeal allowed in part.

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• 2019 (7) TMI 252
  Demand of interest on the differential duty on account of price escalation clause - price escalation clause - design, loading, supply and unloading on FOR destination basis including transport of materials etc. - HELD THAT:- The issue whether assessee is liable to pay interest on the differential duty on account of price escalation clause, stands covered in favour of the revenue by the decision of the Hon ble Apex Court in M/S. STEEL AUTHORITY OF INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [ 2019 (5) TMI 657 - SUPREME COURT] where it was held that Undoubtedly, the amended provisions of Section 11A empowered recovery of duty even in a case where the classification list has been approved earlier and it would operate from the date of removal and not from the date on which show cause was issued. Appeal dismissed - decided against appellant.

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• 2019 (7) TMI 251
  Valuation - inclusion of cost of transportation from factory to depot in assessable value - place of removal - section 4(3)(c) of Central Excise Act - changes in the definition of place of removal during the relevant period in dispute - HELD THAT:- The issue has been settled in the case of ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [ 2006 (9) TMI 181 - SUPREME COURT] where it was held that The bills of lading show that the port of discharge was Mumbai Port/JNPT/Dharamtar. In the bill of entry, the FOB price, freight and insurance were shown separately in U.S. dollars. Since Dharamtar was also shown as the port of discharge, the freight charges paid by the buyer to the shippers included the charges for freight not only upto BFL but also to Dharamtar. Appeal allowed - decided in favor of appellant.

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• 2019 (7) TMI 249
  Excisability - Waste/scrap/by-product - gum/ wax/ fatty oils etc. - benefit of N/N. 89/1995-CE - whether the fatty acids/ wax/ gums, etc., which arise while crude vegetable oil is refined should be considered as waste or as by-product? - HELD THAT:- The matter has been decided by the Larger Bench of the Tribunal in M/S RICELA HEALTH FOODS LTD., M/S J.V.L. AGRO INDUSTRIAL LTD., M/S KISSAN FATS LIMITED VERSUS CCE, CHANDIGARH, ALLAHABAD [ 2018 (2) TMI 1395 - CESTAT NEW DELHI] and it has been held that these products are not intentionally manufactured but only arise during the process of refining of crude vegetable oil and therefore should be considered as waste and they are entitled to the benefit of exemption N/N. 89/1995-CE. Demand not sustainable - appeal allowed - decided in favor of appellant.

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• 2019 (7) TMI 248
  Captive consumption/intermediate goods - sugar syrup -benefit of N/N. 67/1995-CE dated 16.03.1995 - Classification of the goods - It is the case of the department that the sugar syrup is marketable product and merits classification under 1702 9090 of CETA, 1985 - HELD THAT:- However, on going through the said Chapter heading the sugar syrup ought to contain at least 50% by way of fructose. In the present case, though the department alleges that sugar syrup is classifiable under 1702 9090 there is no evidence adduced by the department as to what is the fructose content in the said syrup. In M/S RISHI BAKERS PVT. LTD., SHRI PRAKASH CHAND TALREJA, DIRECTOR, M/S RAMAKRISHNA BAKERS PVT. LTD., SHRI RAJIV TALREJA, DIRECTOR, M/S SWATI BISCUIT MANUFACTURING CO., SHRI OM PRAKASH SHYAMDASANI, PARTNER VERSUS CCE ST, KANPUR [ 2015 (4) TMI 893 - CESTAT NEW DELHI] on similar set of facts the contention of the department that sugar syrup falls under heading 1702 9090 and that the said item is marketable was not accepted by the Tribunal. In the said decision, the Tribunal held that marketability of the product has been perceived by the department on the basis of marketability of invert sugar syrup. Since the department has not conducted any chemical test to arrive at the percentage of fructose content in the syrup, the contention that it merits classification under heading 1702 9090 or that it is marketable product cannot be accepted. In the present case, the department having not conducted any tests to prove the fructose content of the sugar syrup, the above decision would apply to hold that the sugar syrup manufactured by appellants is not a marketable commodity. Appeal allowed - decided in favor of appellant.

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• 2019 (7) TMI 247
  Recovery of CENVAT Credit - export of inputs or capital goods, as such after availment of credit - Rule 3(5) of the CENVAT Credit Rules, 2004 - Rule 14 of the CENVAT Credit Rules read with Section 11A(1) of the Central Excise Act, 1944 - HELD THAT:- Since the legislature had intentionally included Section 51 to given an overriding effect to the SEZ Act, wherever it is inconsistent with any other law for the time being in force, the exemptions provided under Section 26(3) cannot be denied to a transfer of inputs in the DTA to a unit in the SEZ - Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2019 (7) TMI 278
  Rectification petition - relevant date of issuance of revision petition - Section 84 of TNVAT Act - date of rectification petition under Section 84 of TNVAT Act has been shown as 11.01.2018. Learned counsel for writ petitioner at the hearing, on instructions submits that this is a typographical error and that the date of rectification petition is 03.04.2019 - HELD THAT:- This writ petition is being disposed of with a direction to the sole respondent to dispose of the rectification petition dated 03.04.2019 filed by the writ petitioner within three weeks from the date of receipt of a copy of this order. Petition disposed off.

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• 2019 (7) TMI 277
  Concessional rate of tax - purchase of High Speed Diesel Oil for use in generation and distribution of electricity and other forms of power - 'C' forms not downloaded - HELD THAT:- There is no disputation or disagreement that the instant writ petitions clearly fall within the four corners of M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) [ 2018 (10) TMI 1529 - MADRAS HIGH COURT] where it was held that The respondents are directed to permit these petitioners to download 'C ' forms, as has been done in the past for the purpose of purchasing petroleum products against the issuance of 'C' declaration forms. It follows as a natural sequitur that prayers in the instant writ petitions deserve to be acceded to and therefore instant writ petitions stand allowed - Consequently, necessary action has to be taken by the Revenue/Department/Respondents forthwith which in any case shall not be more than 5 working days from the date of receipt of a copy of this order. Petition allowed.

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• 2019 (7) TMI 276
  Concessional rate of tax - production of 'C' Forms - assessment year i.e., 2006-2007 - HELD THAT:- Considering that there was floods, deluge, disruption of normal life in November-December of 2015, this Court is inclined to set aside the impugned order and give an opportunity to the writ petitioner to produce the C Forms - Personal hearing is fixed on 15.07.2019 (Monday) at Half Past 11 (11.30 a.m) in the office of the sole respondent - If the writ petitioner does not avail aforementioned opportunity of personal hearing on 15.07.2019, the impugned order will stand revived. Petition disposed off.

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• 2019 (7) TMI 246
  Validity of revised assessment order - section 27 of TNVAT Act - it is the specific and emphatic case of learned counsel for writ petitioner that no personal hearing has been granted, though the writ petitioner asked for the same - principles of natural justice - HELD THAT:- The impugned orders do not mention that an opportunity of personal hearing was given and the writ petitioner has not availed the same. As the impugned orders are silent on the same, the same cannot be improved by way of counter affidavit. There is no other material before this Court to demonstrate that notice regarding personal hearing has been sent to the writ petitioner and the writ petitioner has not availed the same. The Circular No.7/2014 (BB1/3589/2014) dated 03.02.2014 which is regarding personal hearing which says in a recommendatory tone that personal hearing shall invariably be afforded to dealers irrespective of whether they are opt for the same or not as respondent in its discretion has considered it necessary to give personal hearing (obviously owing to facts of this case) to the writ petitioner, it is a fit case to remit the matter. Impugned order are set aside, solely on the ground that personal hearing not been granted - The writ petitioner, on instructions, undertakes to avail the personal hearing on the aforesaid date, time and venue and reiterate the objections already sent without expanding the scope of the matter any further - petition disposed off.

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• 2019 (7) TMI 245
  Validity of Deemed assessment - It is the case of the writ petitioner that writ petitioner was filing monthly Returns under Section 21 of TNVAT Act and there was deemed assessment under Section 22(2) of the TNVAT Act - writ petitioner submitted that respondent has accepted the proposal of the Enforcement Wing, without making an independent assessment - principles of natural justice - HELD THAT:- Circular, being Circular No.7/2014 (BB1/3589/2014) dated 3rd February, 2014 issued by the Principal Secretary / Commissioner of Commercial Taxes which says in a recommendatory tone that personal hearing shall invariably be afforded to dealers irrespective of whether they are opt for the same or not as respondent in its discretion has considered it necessary to give personal hearing. Violation of principle laid down in the case of NARASUS ROLLER FLOUR MILLS VERSUS THE COMMERCIAL TAX OFFICER [ 2015 (4) TMI 361 - MADRAS HIGH COURT] - HELD THAT:- Learned Revenue Counsel adverting to the counter submitted that the writ petitioner in any event had not produced TDS Certificates and therefore it cannot be gainsaid that Narasus principle has been violated. Deduction of TDS - HELD THAT:- Writ petitioner, on instructions, submitted that the TDS Certificates are now available and if personal hearing is granted, writ petitioner will be able to produce the TDS Certificates relevant to the aforesaid seven assessment years. Petition allowed by way of remand.

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• 2019 (7) TMI 244
  Validity of assessment order - it is a case of writ petitioner that he was filing monthly returns and there was deemed assessment under Section 22(2) of TNVAT Act - failure to report purchase - HELD THAT:- This leads this Court to the inevitable sequitur that JKM principle now governing the field and the procedure of making assessment with regard to a dealer by relying on Annexure-II being sale particulars of dealer's sellers without adhering to requisite norms is incorrect besides being unsafe. The writ petitioner is entitled to have the impugned order set aside on the ground that it is not inconformity with the order passed in the earlier round of litigation as besides being in violation of M/S. JKM GRAPHICS SOLUTIONS PRIVATE LIMITED VERSUS THE COMMERCIAL TAX OFFICER [ 2017 (3) TMI 536 - MADRAS HIGH COURT]. Petition disposed off.

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• 2019 (7) TMI 243
  Principles of Natural Justice - It is the specific case of the writ petitioner that the respondent should have sent a response rescheduling/refixing the personal hearing - validity of assessment order - TNVAT Act - Circular No.7/2014 - HELD THAT:- In the light of paragraph 3(a)(i) of the aforesaid circular, which is admittedly binding on the respondent, this Court is unable to accept this submission as it is imperative that the respondent should have responded to the request for adjournment, which was made well within the 15 days stipulated in Paragraph 3(a)(i) of the circular. Therefore, the inevitable sequitur that follows is that there was no personal hearing, there is violation of NJP. The impugned orders are set aside solely on the ground of violation of NJP i.e., personal hearing, which is a prescribed procedure, not being given - petition allowed by way of remand.

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• Indian Laws

• 2019 (7) TMI 242
  Dishonor of Cheque - cheque was returned due to insufficient funds and not as time barred cheque - Section 138 of the Negotiable Instruments Act - HELD THAT:- Admittedly, the appellant-accused did not appear in the criminal appeal before the High Court. When the accused has not entered appearance in the High Court, in our view, the High Court should have issued second notice to the appellant-accused or the High Court Legal Services Committee to appoint an advocate or the High Court could have taken the assistance of amicus curiae. When the accused was not represented, without appointing any counsel as amicus curiae to defend the accused, the High Court ought not to have decided the criminal appeal on merits; more so, when the appellant-accused had the benefit of the acquittal. The High Court erred in reversing the acquittal without affording any opportunity to the appellant-accused or by appointing an amicus curiae to argue the matter on his behalf. The matter is remitted to the Madurai Bench of Madras High Court to consider the matter afresh.

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