Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
August 20, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Central Excise
News
Notifications
Customs
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39/2021 - dated
19-8-2021
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Cus
Seeks to amend notification No. 57/2000-Customs dated 08.05.2000 providing for extension of last date of export by six months, for those cases where the last date of export falls between 01.02.2021 and 30.06.2021.
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68/2021 - dated
19-8-2021
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Cus (NT)
Supersession Notification No.65/2021-Customs(N.T.), dated 5th August, 2021
GST - States
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5/2021-State Tax (Rate) - dated
3-8-2021
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Himachal Pradesh SGST
Seeks to provide the concessional rate of HGST on Covid-19 relief supplies, up to and inclusive of 30th September 2021
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4/2021-State Tax (Rate) - dated
3-8-2021
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Himachal Pradesh SGST
Amendment in Notification No. 11/2017-State Tax (Rate) dated the 30th June, 2017,
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18/2021-State Tax - dated
27-7-2021
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Himachal Pradesh SGST
Amendment in Notification No. 13/2017-State Tax dated the 30th June, 2017
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17/2021-State Tax - dated
27-7-2021
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Himachal Pradesh SGST
Amendment in Notification No. 83/2020-State Tax, dated the 14th December, 2020,
Income Tax
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93/2021 - dated
18-8-2021
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IT
Income-tax (24th Amendment) Rules, 2021. - (a) Verification of ITR in certain cases of a company or firm, by prescribed person (b) Appearance by Authorised Representative in certain cases, in case of a company or LLP
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Classification of goods - product manufactured as ‘Lassi’ but named as ‘laban’ - be classified as Lassi under Description of Goods or otherwise? - Inferring from the manufacturing process submitted and the contents of the subject goods printed on its bottle, it is held that subject goods are Lassi. The goods ‘Lassi’ is described at Sr. No.26 of Notification No.2/2017-Central Tax (Rate) and is exempt from GST. - AAR
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Classification of goods - Agricultural manually hand operated Seed dressing, Coating and Treating drum - On examination of HSN 8436, the subheading 843680 covers: ‘other machinery’ and tariff item 84368090 covers ‘other’. The description of subject goods fit into this Chapter Heading 8436, precisely subheading 843680 and further precisely at Tariff item 84368090. - the subject HSN is reflected at entry 199 to Schedule II to the Notification No. 01/2017-CT [R] dated 28-6-17 - “Seed dressing, coating and treating drum” machine is classified at HSN 84368090 tariff item and liable to GST at 12%. - AAR
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Levy of IGST - services provided by the applicant to the entities located outside India - zero rated supply or not - As the services provided by the applicant are in the form of R&D activity undertaken on the sample goods provided by the recipient i.e. the sample goods have to be made physically available by the recipient to the applicant in order to enable the applicant to provide the services. Therefore, the place of supply of service in the present case will be the location where the services are actually performed. The place of supply of services is therefore, Gujarat. - The subject services do not merit to be covered under Section 13(2), IGST Act. - AAR
Income Tax
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Reopening of assessment u/s 147 - AO has reasons to believe that such payments which were not considered during the original assessment escaped assessment and therefore, notice u/s 148 was issued. Once a tangible new material is identified and such materials were not considered by the assessment officer while at the time of passing original assessment order, it is sufficient to reopen the assessment and it is for the petitioner to defend his case by availing the opportunities to be provided during the course of the reopening proceedings. - HC
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Reopening of assessment u/s 147 - notice issued to a non-existent company - Curable defect u/s 292B or not? - Respondents’ records would have indicated that Niraj Realtors ceased to exist and his predecessor/colleague has issued notice for the Assessment Year 2011-2012 alongwith the reasoning in the name of petitioner. - Therefore, the stand of respondent today that it was an error which could be corrected under Section 292B of the Act is not acceptable to this Court - HC
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Rectification of mistake u/s 254 - period of limitation - keeping in view factual matrix of the instant case, the MA ought to have been filed by assessee latest by 30.11.2016 viz. six months from the date new amended provision came into effect, as on the date of amendment on 01.06.2016, in the instant case, the unexpired limitation period under the old law was more than six month. The assessee has filed this MA on 20.01.2017 which is clearly time barred keeping in view amended provisions of Section 254(2), and hence this MA is not maintainable. - AT
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Exemption u/s 11 -proof of Charitable activity u/s 2(15) - assessee entered into franchise agreement - Merely because the assessee entered into franchise agreement with ZLL will not made the activity of the assessee non charitable. The predominant and sole purpose of the assessee’s activities are imparting of education after affiliation with the CBSE. In the light of the above we deem it appropriate to direct the CIT(E) to grant registration to the assessee from the date of application - AT
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Disallowance of expenditure u/s 40A(2) - In the absence of any comparable instance of rendering the similar services/supply of goods, it would not be permissible to disallow the expenditure u/s 40A(2). As the needful was not done by the Lower Authorities and on adhoc/estimate basis, the CIT Appeal has restricted the disallowance upto 20% - we restrict the disallowance upto 10% of the expenditure claimed by the Assessee - AT
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Application filled u/s 80G - Application denied alleging that activities of the SGPC are confined to Sikh Community only - Even religious activities of Sikh as an individual or as community are meant to extend benefits to the needy human being irrespective caste, creed and religion, which is clear from the Sikhs Maryada (Sikh RehatMaryada, 1945). The Sangat and Pangats are open to all. - Analyzing form any angel in our considered opinion, the Assessee is entitled to benefit under 80G (5)(iii) of the Income Tax Act, 1961, and it will go wrong to allege that the SGPC was constituted for the benefit of a particular religion. - AT
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Addition u/s 68 - So far as the two other donors are concerned, we find that both of them are agriculturist which is supported by their land holdings. The amounts of gifts are less than ₹ 1 Lacs in each of the cases which was below exemption limit of ₹ 2 Lacs. Therefore, there would be no obligation on the donors to file the return of income. The gifts are duly supported by the affidavits of the donors. - Additions deleted - AT
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Unexplained cash credit u/s 68 - xerox copies of bank passbooks of these persons has been found from the possession of the assessee and not the original passbooks - The compensation amount has duly been offered to tax by these persons in their return of income. This being so, the amount could not be held to be unexplained cash credit in the hands of the assessee. There is no material on record to prove that the assessee deposited its own money in these accounts and later on transferred it in the garb of booking amount or as loans. - AT
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Exemption u/s 11 - A.O. denied the claim of the assessee since the Form No. 10 was not furnished before filing the return of income under section 139 of the Act. Form No. 10 furnished by the assessee during the course of assessment proceedings before completion of the assessment should have been considered by the A.O. while considering the claim for benefit under section 11(2) of the Act. - AT
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Revision u/s 263 - unexplained cash deposit entries in bank account - The bank was not in possession of any document like cash book, vouchers, signed vouchers of debit and credit and journal for the dates i.e. from 30.06.2010 to 10.07.2010. In the absence of these documents it cannot be assumed that any cash was deposited by the assessee either in her own account or in the account of Saradjyot singh or the amount was debited and credited in her account. In our view the whole order of the PCIT is premised on conjectures and surmises without any cogent reliable evidence. - Pr. CIT cannot be permitted to blow hot and cold - AT
Customs
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Refund of the Extra Duty Deposit - Amount paid on imports during investigation when the Bills-of-Entry in question were provisionally assessed - denial of refund for want of challans - the appellant had submitted an indemnity bond for its above lapse and in any case, it is not the Revenue’s case that no payments of EDD in so far as the 16 Bills-of-Entry are concerned, were ever made - Matter restored back for re-adjudication - AT
Central Excise
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Valuation - inclusion of assessable value of freight collected in excess to the actual amount spent - the amount claimed by way of transportation charges and insurance cannot be considered for determining the value of the electric meters supplied. - AT
Case Laws:
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GST
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2021 (8) TMI 786
Classification of goods - job work on Diphenylmethoxy'N' N- diethylaminethanol HCI (Job work of pharmaceutical Drugs) - GST rate @ 18% or 12% is to be charged by the supplier? - applicability of CBIC clarification on Job work vide circular No.126/45/2019- GST dated 22.11.2019 - HELD THAT:- The subject activity merits to be covered at entry id of Heading 9988 at Sl. No. 26 of Notification No. 11/2017-CT (R) dated 28-6-17, as amended, as in subject matter, applicant supplies services by way of job-work on goods belonging to another registered person. GST is leviable at 12%.
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2021 (8) TMI 785
Local Authority or not - levy of GST - procurement of security services received from any person other than body corporate under reverse charge mechanism - advertisement services or the service recipient of AJL is required pay GST under reverse charge mechanism - Deductor of tax or not - Local Authority or government entity/governmental authority? - applicability of sl. no. 3 of N/N. 12/2017 Central Tax (Rate), sl. no. 3 of N/N.09/2017 IGST (Rate) and N/N. 13/2017-Central tax (Rate) dated 28-06-2017. HELD THAT:- The funds of AJL has not been notified as local/ municipal funds by any Legislative Act passed by Gujarat legislature or by Gujarat Treasury Rules. Further, we do not find AMC to be the Central Government/ The State Government. We bear in mind that AJL has separate legal existence and is a legal person incorporated with Registrar of Companies with PAN no.AAGCA6478F. AJL is a Private limited Company and when Funds of any nature- be it local funds/ municipal funds or otherwise are granted to AJL, those funds in the hands of AJL become grants/ Revenue for AJL and unless the State Government notifies those grants or revenues now in the hands of AJL as a local/municipal fund, the grants/revenue of AJL does not merit to be termed local/municipal funds any longer - the AJL has neither been set up by an Act State Legislature nor been established by the State Government of Gujarat. Government is defined at section 2(53), CGST Act as Central Government and at Section 2(53) GGST as Government of Gujarat - there are no merit to consider AJL a Government authority/ Government entity. The applicant placed reliance on cases pertaining to different persons which have different constitution and establishment and are different from it in legality and as a person. Further as per law as stipulated in Section 103, CGST Act, Advance Rulings pronounced shall be binding only on the applicant who had sought it in respect of any matter referred to in Section 97(2) CGST Act for Advance Ruling and the concerned officer or the jurisdictional officer in respect of the applicant. The applicant without establishing that its revenues are notified as local/municipal funds by the competent authority cannot make a case by misplaced reliances on other Advance Rulings as per said section 97(2) CGST Act. Ahmedabad Janmarg ltd. is not a Local Authority - Ahmedabad Janmarg ltd is liable to pay GST on security services under RCM, as per relevant Notification - Ahmedabad Janmarg ltd is liable to pay GST on advertisement services supplied by it - Ahmedabad Janmarg ltd is not required to be registered as a Deductor under GST - Ahmedabad Janmarg ltd is not a Government Entity/ Governmental Authority.
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2021 (8) TMI 784
Classification of goods - product manufactured as Lassi but named as laban - be classified as Lassi under Description of Goods or otherwise? - taxable goods or exempt goods - HSN Code - rate of tax - HELD THAT:- Lassi is a fermented milk drink and its main ingredients are curd, water and spices. We have noted the manufacturing Process submitted by the applicant. On reading the contents of the subject goods displayed on the bottle of laban , we find following ingredients printed on the bottle: Pasteurized toned milk, spices, pudina, green chilli, ginger, salts, active culture, added nature identical flavour and stabilizer (INS440). Further, on the bottle of laban , it is noted that Dairy based fermented Drink is printed. Inferring from the manufacturing process submitted and the contents of the subject goods printed on its bottle, it is held that subject goods are Lassi. The goods Lassi is described at Sr. No.26 of Notification No.2/2017-Central Tax (Rate) dated 28-6-17 and is exempt from GST..
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2021 (8) TMI 783
Classification of services - composite supply of work contract service - development and construction of sports complex at Maninagar, Ahmedabad for the Ahmedabad Urban Development Authority - merit classification at Sr. No. 3(vi)(a) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 or otherwise? - HELD THAT:- The subject contract is for the construction of immovable property wherein transfer of property in goods is involved in the execution of subject contract. The subject supply is a composite supply of works contract service. The service recipient is AUDA. Its fund have not been notified by State Government Acts or Treasury Rules as local/municipal funds. There are no merit to term AUDA as local authority as per section 2(69) (c) CGST Act - AUDA is set up vide Section 22 of Gujarat Town Planning and Urban Development Act,1976 and entrusted, inter alia, with function of development plans and Town planning schemes, as per Article 243 W of our Constitution. We hold that AUDA is a Government Authority. The commercial uses of an already existing Sports complex at Bopal location as detailed in previous pages. We note the chargeable bookings and their rates, the non refundable nature of bookings too. With the plain reading of the inclusive definition of the word business in CGST Act as reproduced at paragraph 19.1 with the nature of commercial activities in which AUDA is involved as evidenced with the above illustration, with nothing to dissuade us from what is a glaring and clear illustration of activity of AUDA w.r.t. a sports facility already existing, We are of the strong opinion that subject proposed Sports Complex is not predominantly meant for use other than for commerce, industry, or any other business or profession - The Wording in a statute for business and at entry 3(vi)(a) of said Notification, when clear, plain and unambiguous and only one meaning can be inferred, we are bound to give effect to the said meaning.. We give due Regard to the clear meaning of words and matter should be governed wholly by the language of the notification. The explanation to said entry of the Notification wherein the term business shall not include any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities and does not cover Government Authority. We cannot allow any scope for intendment. Thus, the subject Supply does not merit to be entertained at subject Serial Number 3(vi)(a) of said NT (as amended from time to time).
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2021 (8) TMI 782
Classification of goods - Agricultural manually hand operated Seed dressing, Coating and Treating drum - classified under HSN 8201 or under HS code 84371000? - HELD THAT:- As per HSN Notes [Page No. XVI-8436-1], the other agricultural machinery includes seed dusting machines usually consisting of one or more hoppers feeding a revolving drum in which the seeds are coated with insecticidal or fungicidal powders. It is found that this Chapter Heading is more appropriate for classifying the subject goods as the function of subject goods is also similar wherein the said agricultural machinery has a drum in which seeds are coated and treated with chemicals before sowing. The said Chapter heading makes no different treatment between manual and power driven machines. On examination of HSN 8436, the subheading 843680 covers: other machinery and tariff item 84368090 covers other . The description of subject goods fit into this Chapter Heading 8436, precisely subheading 843680 and further precisely at Tariff item 84368090. There are no reason to examine HSN 8437 which covers MACHINES FOR CLEANING, SORTING OR GRADING SEED, GRAIN OR DRIED LEGUMINOUS VEGETABLES; MACHINERY USED IN THE MILLING INDUSTRY OR FOR THE WORKING OF CEREALS OR DRIED LEGUMINOUS VEGETABLES, OTHER THAN FARM-TYPE MACHINERY - this HSN for subject goods is dismissed. Thus, the subject HSN is reflected at entry 199 to Schedule II to the Notification No. 01/2017-CT [R] dated 28-6-17 - Seed dressing, coating and treating drum machine is classified at HSN 84368090 tariff item and liable to GST at 12%.
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2021 (8) TMI 781
Levy of IGST - services provided by the applicant to the entities located outside India - zero rated supply or not - covered under Section 13(2) of the Integrated Goods and Services Tax Act, 2017 or not - Levy of CGST and SGST or IGST - HELD THAT:- On careful reading of the Service contract between the applicant and service receiver, applicant s submissions, even those during the personal hearing, it is found that goods were sent by Hilti Aktiengesellschaft (hereinafter referred to as recipient) to the applicant which are required to be made physically available to the applicant, so that applicant conducts various tests and RD activities on the said goods and prepare the results and supply the subject service to the recipient. We find this situation is covered at Section 13(3)(a) of IGST Act. Thus, as per said section 13(3)(a) of IGST Act, the place of supply of the following services shall be the location where the services are actually performed, i.e. location of the applicant. As the services provided by the applicant are in the form of R D activity undertaken on the sample goods provided by the recipient i.e. the sample goods have to be made physically available by the recipient to the applicant in order to enable the applicant to provide the services. Therefore, the place of supply of service in the present case will be the location where the services are actually performed. The place of supply of services is therefore, Gujarat. The subject services do not merit to be covered under Section 13(2), IGST Act - The subject services are liable to CGST and SGST.
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2021 (8) TMI 776
Provisional attachment of bank accounts - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The impugned order was passed by the learned Single Judge on 24.3.2021. The provisional orders of attachment were issued on 15.7.2020. Having regard to the provisions of S.83(2), as brought to our notice by the learned counsel for the 1st respondent and the date of Ext.P6 order, apart from the decisions referred to by the learned Single Judge in the order under challenge, we are not persuaded to interfere in this intra court appeal. In view of the difficulties expressed by the appellant, we grant liberty to the respondents in the writ petition to move appropriate applications before the learned Single Judge, in accordance with law - Appeal disposed off.
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Income Tax
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2021 (8) TMI 780
Reopening of assessment u/s 147 - survey u/s 133A was conducted in the business premises of the petitioner - HELD THAT:- Reasons for reopening would reveal that a survey u/s 133A was conducted in the business premises of the petitioner on 31.07.2009 and they found that huge cash payments were made and these cash payments were not taken into consideration at the time of scrutiny assessment and passing assessment order on 02.12.2010. AO has reasons to believe that such payments which were not considered during the original assessment escaped assessment and therefore, notice u/s 148 was issued. Once a tangible new material is identified and such materials were not considered by the assessment officer while at the time of passing original assessment order, it is sufficient to reopen the assessment and it is for the petitioner to defend his case by availing the opportunities to be provided during the course of the reopening proceedings. The petitioner has not made out any acceptable ground for the purpose of setting aside the impugned orders. Contrarily, the revenue could able to establish that the assessing officer has reasons to believe for reopening of assessment as the survey report under Section 133A was not considered at the time of passing of the original assessment order and further, huge cash transactions were identified during the survey. Thus, the petitioner is bound to cooperate for the completion of reopening proceedings, which is to be expedited. Accordingly, the writ petition is dismissed.
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2021 (8) TMI 777
Reopening of assessment u/s 147 - notice issued to a non-existent company - Curable defect u/s 292B or not? - HELD THAT:- The indisputable fact is respondent no.1 has invoked jurisdiction by issuing notice under Section 148 of the Act to an entity that had ceased to exist. This is notwithstanding the fact that respondent no.1 was aware that Niraj Realtors had ceased to exist. Respondent no.1, we say was aware because the notice under Section 148 of the Act was issued for the Assessment Year 2011-2012 in the name of petitioner for re-opening the assessment of Niraj Realtors We would have expected respondent no.1 to have atleast applied his mind and looked for documents which were already on file to see whether Niraj Realtors existed before issuing notice under Section 148 of the Act. Respondents records would have indicated that Niraj Realtors ceased to exist and his predecessor/colleague has issued notice for the Assessment Year 2011-2012 alongwith the reasoning in the name of petitioner. Therefore, the stand of respondent today that it was an error which could be corrected under Section 292B of the Act is not acceptable to this Court - Decided in favour of assessee.
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2021 (8) TMI 775
Rectification of mistake u/s 254 - period of limitation - scope of amendment - HELD THAT:- Under the new amended provision, by strict application the period of limitation in the instant case will expire on 31.08.2016 but by reasonable interpretation, the limitation in the such cases where the unexpired period under the old law was more than six months on the date of amendment, then the limitation under the new provision shall be calculated six months from the date amended provision came into effect, and in those cases, where the unexpired period of limitation under the old law is less than six months as on the date of amendment, then the said unexpired period shall be allowed under the new amended provision effective from 01.06.2016. Thus, keeping in view factual matrix of the instant case, the MA ought to have been filed by assessee latest by 30.11.2016 viz. six months from the date new amended provision came into effect, as on the date of amendment on 01.06.2016, in the instant case, the unexpired limitation period under the old law was more than six month. The assessee has filed this MA on 20.01.2017 which is clearly time barred keeping in view amended provisions of Section 254(2), and hence this MA is not maintainable.
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2021 (8) TMI 774
Unexplained cash deposits in bank account - HELD THAT:- The source of cash deposits in the bank account is not in doubt in the absence of any material to the contrary on record. Further the contention of the assessee that assessee is not paying any rent for the accommodation, his children being grown up and not being dependent on assessee, the younger child is stated to be serving in Air Force and is stated to be contributing to the expenses of his parents has not been proved to be false. We are of the view that the addition is uncalled for more so, when the assessee has fully explained the source of cash deposits. Considering the totality of aforesaid facts, we direct the deletion of addition - Appeal of assessee is allowed.
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2021 (8) TMI 773
Correct head of income - gain on sale of shares - involvement of assessee as a ' trader' OR 'investor' - capital gain or business income - HELD THAT:- During the previous, year, the assessee had made transaction in ten companies equity shares and mutual funds which includes HCL as well. The decision relied by the Ld. AR in case of Adar Poonawalla [ 2015 (1) TMI 1338 - ITAT PUNE] is apt in the present case as in that case as well the issue was relating to loss on account of sale of shares of HCL Technologies which was adjusted against Long Term Capital Gain. The contention of the Ld. DR that the shares were purchased through loan will not make any impact as the assessee s profile is that of investor and not that of trader which was not at all disputed by the Assessing Officer at any point of time. The transaction of sale and purchase of shares were also not held as non genuine by the AO at any point of time. Thus, the AO as well as the CIT(A) was not right making addition and confirming the same. Therefore, we direct the AO to re-compute the capital gain/loss on the sale of shares of HCL Technologies Ltd. thereby taking the same to be assessable under the head capital gains as per law. Hence, appeal of the assessee is allowed.
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2021 (8) TMI 772
Disallowance of ESOP expenses - CIT-A deleted the addition - HELD THAT:- CIT(A) has in her decision relied on the judgement of Hon ble Delhi High Court in LEMON TREE HOTELS LTD [ 2015 (11) TMI 404 - DELHI HIGH COURT] Tribunal in its order stated correctly that it was a benefit conferred on the employee. So far as the company is concerned, once the option was given and exercised by the employee, the liability in this behalf got ascertained. This was recognised by SEBI and the entire Employees Stock Option Plan was governed by guidelines issued by SEBl. On the facts thus found, the Tribunal held that it was not a case of contingent liability depending on the various factors on which the assessee had no control. The expenditure in this behalf was an ascertained liability, thus the expenditure incurred being on lines of the SEBI guidelines, there could be no interference in the relief granted by the Assessing Authority for the expenditure arising on account of Employees Stock Option Plan. This expenditure incurred as per SEBI guidelines and granted by the Officer could not be considered as erroneous one calling for exercise of jurisdiction under Section 263. For Employees Stock Option Plan is concerned, as rightly pointed out by the Tribunal, the assessee had to follow SEBI direction and by following such direction, the assessee claimed the ascertained amount as liability for deduction. We do not find that there exists any error to disturb the order of the Tribunal and in turn the Assessing Authority. - Decided in favour of assessee.
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2021 (8) TMI 770
Disallowance u/s. 14A - no reason has been furnished for non-allocation of common management expenses, therefore, the Assessing Officer has determined the amount of expenditure in accordance in the provision of section 14A(2) r.w.r. 8D - HELD THAT:- Respectfully following the decision of the Co-ordinate Bench of the ITAT, we restrict the disallowance on account of administrative expenditure incurred towards earning exempt income to the extent of ₹ 14 lacs as against of disallowance of ₹ 46,54,415/- determined by the Assessing Officer after applying the finding of the ITAT decision as cited above wherein comparatively such disallowance was restricted to ₹ 7 lacs considering the disallowance amount of ₹ 20,57,946/- computed by the Assessing Officer on similar facts and circumstances in assessment year 2010-11 by the Assessing Officer. The Assessing Officer is directed to allow deduction of suo-moto disallowance already made by the assessee. Therefore, this ground of appeal of the assessee is partly allowed. Allocation of expenses between the eligible and non-eligible units in view of deduction claimed under the provision of section 80IC - on the basis of allocation of rate of 58.69%, the Assessing Officer has computed an amount of ₹ 27,89,536/- being 58.69% of the financial expenses to 80IC unit - HELD THAT:- During the course appellate proceedings the ld. counsel has neither disproved the findings of the lower authorities nor brought any material on record in contrary to the finding of the lower authority. Therefore, we do not find merit in this ground of appeal of the assessee and the same is dismissed. Disallowance u/s. 36(1)(va) - assessee has not deposited the employee s contribution to ESIC in the employee s account in the relevant fund on or before the due date - HELD THAT:- We consider that the Hon ble Jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] has held that when the employer has not credited the sum received by it as employees contribution to employees account in relevant fund on or before the due date as prescribed in explanation to section 36(i)(va) the assessee shall not be entitled to deduction. In view of the above, facts and judicial findings, we uphold the decision of ld. CIT(A). Disallowance u/s 14A - assessee has suo moto made the addition - HELD THAT:- The assessee has furnished tax audit report and relevant annexure of account indicating that investment was made in tax free bonds in earlier years and claimed it has not made any new investment during the year - we are of the view that disallowance of administrative expenditure incurred towards earning exempt income to the extent of ₹ 15 lacs is appropriate as against disallowance of ₹ 56,04,892/- determined by the Assessing Officer after applying the findings of Assessing Officer elaborated on similar issue at para 7 of this order. The Assessing Officer is directed to allow deduction of suo-moto disallowance already made by the assessee. Disallowance u/s. 14A in the book profit while computing book profit - HELD THAT:- The Special Bench of the Delhi ITAT in the case of ACIT vs. Vireet Investment Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] has held that expenses incurred to earn exempt income not to be added for computing book profit u/s. 115JB of the Act. Therefore, we allow these additional grounds of appeals of the assessee.
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2021 (8) TMI 769
Addition u/s 56(2)(viib) - consideration for issue of shares exceeds the fair market value of the shares - HELD THAT:- In the instant case, the assessee has issued the shares at fair market value computed in accordance with Rule 11UA(a) of the IT Rules 1962 and no fault has been found in the method applied by the assessee and the lower authorities have made the addition u/s 56(2)(viib) purely on presumptions and surmises. Therefore, in our considered opinion, such action of the lower authorities being not in accordance with law is unsustainable. I, therefore, set aside the order of the CIT(A) and direct the AO to delete the addition. The grounds raised by the assessee on this issue as per grounds of appeal no. 3 to 5 are accordingly allowed. Addition u/s 68 - assessee received share capital and share premium from various parties - HELD THAT:- For explaining any cash credit as genuine, the onus is always on the assessee to substantiate with evidence to the satisfaction of the Assessing Officer regarding the identity and creditworthiness of the creditors/share applicants and the genuineness of the transactions. In the instant case, the assessee has failed to discharge the same in respect of the above two parties. Although some details were furnished before the Assessing Officer, they did not respond to the notice issued u/s 133(6) nor the assessee produced them before the Assessing Officer. Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue relating to the share applicants in respect of M/s Best Buildmart Pvt. Ltd. and Shri Lekh Nath Pandey to the file of the Assessing Officer with a direction to give one more opportunity to the assessee to substantiate with evidence to his satisfaction regarding the identity and creditworthiness of the above two share applicants and genuineness of the transaction. The Assessing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee.Appeal filed by the assessee allowed for statistical purpose.
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2021 (8) TMI 768
Benefit of section 80IA(4)(iii) - independent and distinct units - DR submitted that the Hon ble High Court has directed that the assessee would be entitled to tax exemption only in accordance with law and the CIT(A) without examining whether the assessee is operating more than three independent units, had allowed the appeals of the assessee - HELD THAT:- Hon ble High Court has restored the approval dated 13.04.2016 in [ 2015 (11) TMI 1735 - KARNATAKA HIGH COURT] and held no condition imposed in the non-automatic route has been violated. It was held by the Hon ble High Court that the conditions enumerated in section 6(f) of IPS 2002 is only applicable to automatic route. The Hon ble High Court further held that the assessee has established 16 independent and distinct units allocated to TCS and this is evident from the documentary evidence that are placed on record, such as certificate issued by the Joint Director, District Industrial Centre, Certificate from the Department of Information Technology, Biotechnology and Science and Technology, Government of Karnataka,etc. The judgment of the single Bench of the Hon ble jurisdictional High Court was confirmed by the Division Bench of the Hon ble High Court in [ 2019 (8) TMI 1597 - KARNATAKA HIGH COURT] . Since the Hon ble High Court has categorically held that there is no violation of the condition imposed and has restored the approval dated 13.04.2016 and has further found that the assessee is having independent and distinct 16 units, i.e., let out to TCS, we hold that the CIT(A) is justified in directing the A.O. to grant deduction u/s 80IA(4)(iii) - Decided against revenue.
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2021 (8) TMI 767
Exemption u/s 11 - CIT(E) has rejected the application for registration u/s 12AA - proof of Charitable activity u/s 2(15) - assessee entered into franchise agreement - HELD THAT:- From the perusal of the order passed by the CIT exemption it is clear that the CIT exemption has denied the registration to the assessee society on the basis of the franchise agreement entered between the assessee and that of the Zee Learn Ltd. however the running of the school, duly affiliated with the central board of secondary education, has not been denied by the CIT exemption, while rejecting the application for registration of the assessee. Running of the school after affiliation with the CBSE Board, is a charitable activities within the four corners of section 2(15) of the Act and the assessee is entitled to the registration u/s 12AA - AO at the time of assessment is duty bound to examine the permissibility of the franchise fees paid by the assessee to ZLL within the four corners of law. In our considered opinion merely because the assessee entered into franchise agreement with ZLL will not made the activity of the assessee non charitable. The predominant and sole purpose of the assessee s activities are imparting of education after affiliation with the CBSE. In the light of the above we deem it appropriate to direct the CIT(E) to grant registration to the assessee from the date of application. - Decided in favour of assessee.
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2021 (8) TMI 766
Exemption u/s 11 - Rejection of its application seeking registration u/s 12AA - HELD THAT:- There was no hard and fast rule as to what was the specific percentage being adopted for the purpose of substantially financed till the insertion of Rule 2BBB inserted w.e.f. AY 12/12/2014. We understand that the issue before the CIT(E) was regarding grant of registration u/s 12AA and that of 10(23C) (iiiab). As such, the scope of enquiry before grant of registration u/s 12AA was limited to the objects being charitable in nature and activities were genuine. Once the objects have been accepted to be educational, the Commissioner is required to see that the activities are genuine and in consonance with the objects at the time of grant of registration as in case of CIT v Shri Shirdi Sai Darbar Charitable Trust [ 2017 (4) TMI 123 - PUNJAB AND HARYANA HIGH COURT] and in case of CIT V Red Rose School [ 2007 (2) TMI 575 - ALLAHABAD HIGH COURT] . In the case at hand, the assessee was claiming exemption u/s 10(23C)(iiiab) and had applied for registration u/s 12A as it was expecting a decline in Government grants. The assessee is free to avail registration under any alternative provision if more than one alternative were available, so it decided to apply for registration u/s 12A under the provisions of law as per principle approved in case of CIT v Beant College of Engineering Technology , [ 2019 (5) TMI 631 - PUNJAB AND HARYANA HIGH COURT] and same preposition followed by in case of Arya Shiksha Mandal KMV Campus v CIT [ 2017 (3) TMI 1765 - ITAT AMRITSAR] We hold that the order under appeal is unsustainable and thus reversed. CIT(E) is directed to grant registration to the appellant forthwith, preferably within one month time of furnishing copy of this order.
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2021 (8) TMI 765
Disallowance of expenditure u/s 40A(2) - Payment to sister concern towards consultancy and technical services - HELD THAT:- We come to the conclusion that this essential aspect has been missed by both the Authorities. CIT Appeal had wrongly and in a pro rata manner, had sustained the 20% of the expenditure claimed by the Assessee. There was no reason for coming to the conclusion for sustaining 20% of the disallowance. No fair market value of the services or goods has been brought on record by the Lower Authorities. It is undisputed that the Assessing Officer had allowed the similar expenditure for the assessment yea₹ 2015-16, 2017-18 and 2018-19. Further, we are of the opinion that in the absence of any comparable instance of rendering the similar services/supply of goods, it would not be permissible to disallow the expenditure u/s 40A(2). As the needful was not done by the Lower Authorities and on adhoc/estimate basis, the CIT Appeal has restricted the disallowance upto 20%. When the comparable fair market value have not been brought on record by the Lower Authorities, we further grant the benefit of another 10% to the Assessee. Thus, we restrict the disallowance upto 10% of the expenditure claimed by the Assessee by making the payment of M/s Oxbridge International Private Limited for both the assessment years. In the result, both the Appeals are partly allowed.
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2021 (8) TMI 764
Exemption u/s 11 - registration u/s 12AA(1)(b)(ii) denied - A.R. contended that all the details required by the CIT(E), could have been furnished before him provided the assessee has been granted sufficient opportunity of being heard by way of communicating to the appellant - HELD THAT:- In view of principles of natural justice as above, we find it deem fit to restore the matter back to the file of the CIT(Exemption) to examine the issue of grant of registration u/s 12AA of the act, afresh, as per amended provisions of law, after taking into consideration the material evidence and after affording sufficient opportunity of being heard to the assessee trust. Accordingly, the case is restored to the CIT, for afresh consideration and examination of the application of assessee under section 12A(a).
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2021 (8) TMI 763
Application filled u/s 80G - Application denied alleging that activities of the SGPC are confined to Sikh Community only - Assessee S.G.P.C.' never made a claim for registration u/s 12AA since the income has been claimed to be exempt undersection 10(23BBA) - activities of the SGPC are confined to Sikh Community only - only objection of the Ld. Lower Authority was that the Assessee was created for the maintenance and administration of the Shikhs Shrine. - HELD THAT:- Assessee trust are primarily doing religious activities for the benefit of the Sikh's religion, as we are deciding that the activities of Assessee are not meant for the benefit of the Sikhs community only, and there is a difference between managing the property and doing the religious activity. Therefore, in our view, there is no requirement for deciding with the issue of registration u/s 12AA of the Income Tax Act for the year under consideration as this was not a reason for denying the registration u/s 80G(5)(iii) of the Act. However, in terms of amendment provision 2020. The assessee is required to apply for registration u/s 12AA of the Act. As the predominant purpose and object of the Assessee are to manage the property, do charitable activities by way of imparting / running educational institutions, organizing lunger, medical camp, hospital etc.; therefore, the activities of the Assessee could not be termed as being done only for the benefit of particular community/ religion hence the Assessee was entitled to the benefit of 80G (5) and would not be religious activities as the its total expenditure incurred on the religious activities was less than 5% during these years. As mentioned herein above even religious activities of Sikh as an individual or as community are meant to extend benefits to the needy human being irrespective caste, creed and religion, which is clear from the Sikhs Maryada (Sikh RehatMaryada, 1945). The Sangat and Pangats are open to all. As every philanthropic or charitable work cannot continue without the contribution from the members of the community/ society , with a view to give impetus to charitable work by the SGPC, it was provided in Sikhs RehatMaryada, which is equally applicable to all Sikhs( Amritdhari or Sahj Dhari both) , to regard as poor men mouth as offering box of Guru and it is old age tradition in India more particularly in Hindus/Sikhs to contribute 10% of the earning for the charitable purposes. The basic concept of charity is to do charity without disclosing identity and knowing who would benefit from the said Charity. Analyzing form any angel in our considered opinion, the Assessee is entitled to benefit under 80G (5)(iii) of the Income Tax Act, 1961, and it will go wrong to allege that the SGPC was constituted for the benefit of a particular religion. Our views mentioned above are supported by the decisions of the Hon ble Supreme Court in the matter of Dawoodi Bohara Jamat [ 2014 (3) TMI 652 - SUPREME COURT] - Thus we are of the view that Assessee is entitled to the registration u/s 80G(5)(iii) from the date of application. - Decided in favour of assessee.
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2021 (8) TMI 762
Exemption u/s 11 - registration u/s 12AA denied - A.R. contended that all the details required by the learned CIT, has been furnished before him but same was not taken on record - HELD THAT:- We deem it fit case to be remand back to the ld. CIT(E) who is empowered under the Act to examine the documents (already on record) mentioned hereinabove and other new facts brought before us with supporting documents in order to justify that whether the assessee was involved in its own capacity of doing the charitable activity - To arrive at his satisfaction, the CIT(E) would be examining the activities of the appellant Trust afresh and see that the assessee was involved in carried out of any charitable activities. CIT(E) shall grant a reasonable opportunity of being heard to the assessee and an opportunity to file any other documents which are necessary in support of its claim. We note that the observation made herein above said paragraph shall not be treated as an expression on the merits of the case or facts. The ld. CIT(E) shall decide the matter afresh that without being influence of the observation made by us while remanding the matter back to his file/desk. Assessee appeal is treated allowed for statistical purposes.
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2021 (8) TMI 758
Addition u/s 68 - assessee received gifts from his brother-in-law - assessee filed gift deed and evidence of land holding in support of donor s agricultural income - HELD THAT:- We find that the mother of the assessee has declared income of ₹ 1.78 Lacs during the year as miscellaneous income. However, upon perusal of her Balance Sheet as on 31/03/2014, as placed on record, it could be seen that she has capital balance of ₹ 1287.32 Lacs which has been invested in various forms. This capital balance is arrived at after reducing Gifts of ₹ 4.94 Lacs and withdrawals of ₹ 10.47 Lacs. The source of gift, in our opinion, could not solely be the current year s income particularly in view of the fact that the mother of the assessee was on old lady and living in a joint family. There is no adverse material to disprove the gifts. Therefore, the conclusion drawn by Ld. CIT(A) could not be sustained and we are inclined to delete the addition. So far as the two other donors are concerned, we find that both of them are agriculturist which is supported by their land holdings. The amounts of gifts are less than ₹ 1 Lacs in each of the cases which was below exemption limit of ₹ 2 Lacs. Therefore, there would be no obligation on the donors to file the return of income. The gifts are duly supported by the affidavits of the donors. The details of agricultural land have been well enumerated in their respective affidavits. Regarding allegation of immediate cash deposit, the donors being agriculturist working in remote village would receive the proceeds of agriculture in cash. The cash deposit need not match with harvesting season since there is no such requirement under law. Therefore, these two additions would stand deleted. Low Household Drawings - HELD THAT:- Drawings made by the mother as well as gifts given by her are duly supported by her Balance Sheet as on 31/03/2014. It could be seen that she has capital balance of ₹ 1287.32 Lacs which has been invested in various forms. This capital balance is arrived at after reducing Gifts of ₹ 4.94 Lacs and withdrawals of ₹ 10.47 Lacs. The assessee s drawings in all the earlier years are less than ₹ 2 Lacs which is evident from detail of household expenses as placed on record for various years. This being the case, this addition is not sustainable and hence, we delete the same. Interest on Unsecured Loans - HELD THAT:- Upon perusal of appellate order for AY 2013-14 as placed on record, we find that the adjudication of this addition has been held to be academic in nature in view of the fact that the assessee s legal ground was allowed. The department could not prefer any further appeal due to low tax effect. Thus, there are no concrete findings on the issue of quantum additions of unsecured loans. Since, this issue has attained finality in AY 2013-14 in assessee s favor, the consequential addition of interest, as made in this year, stand deleted. This ground stand allowed. Sundry Creditors - assessee submitted that the sundry creditors were for the business covered u/s 44AD, therefore, the assessee was not required to maintain books of accounts and the name, address PAN of the creditors was not available - HELD THAT:- We find that in terms of Sec.44AD, the income is computed on presumptive basis and there is no need to maintain books of accounts. Therefore, the impugned addition, as made u/s 41(1), in our considered opinion, could not be sustained in the eyes of law. By deleting the same, we allow this ground of appeal
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2021 (8) TMI 756
Unexplained cash credit u/s 68 - in bank accounts, certain cash deposits have been found - HELD THAT:- A perusal of the seized material would reveal that xerox copies of bank passbooks of these persons has been found from the possession of the assessee and not the original passbooks as alleged by Ld. AO. In these bank accounts, certain cash deposits have been found which has been assumed to be assessee s own money and accordingly, the loans have been added as unexplained cash credit. It could be gathered that these were merely booking advances received through banking channels. The bookings have subsequently been cancelled and the amounts have been refunded to these persons along with compensation. The compensation amount has duly been offered to tax by these persons in their return of income. This being so, the amount could not be held to be unexplained cash credit in the hands of the assessee. There is no material on record to prove that the assessee deposited its own money in these accounts and later on transferred it in the garb of booking amount or as loans. Moreover, the passbooks are not in respect of assessee s own bank account rather the accounts are third-party bank accounts. No explanation has been sought by Ld. AO from any of these persons and no enquiry whatsoever is shown to have been done in the assessment order to sustain the addition. It is trite law that no addition could be made merely on the basis of assumptions and presumptions. Hence, we are inclined to delete this addition. This ground stands allowed. Parking charges addition - Certain loose papers were seized which revealed the details of parking lot allotted by the assessee in the projects to various customers - HELD THAT:- Loose papers were merely a dumb document and nothing could be conclusively inferred upon perusal of the same. The explanation of the assessee was a plausible one and we concur that merely on the basis of this paper, the addition could not be sustained. So far as the statement of Shri Kulvinder Singh Narula is concerned, we find that he has filed another affidavit dated 21/01/2020 wherein it has been admitted by him that the earlier statement was taken under undue pressure and the fact of having paid cash towards parking was not true. Thus, the statement of this person could not be relied upon and the same alone was not sufficient enough to make the additions particularly in the background of the fact that the assessee filed affidavit of 5 more flat owners wherein these persons have denied having paid any cash to the assessee. It is pertinent to note that no independent enquiry has been conducted by Ld. AO from any flat owners to corroborate the additions. This being so, the impugned addition could not be sustained.
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2021 (8) TMI 754
Long Term Capital Gain (LTCG) on sale of property u/s 50C - Whether provisions of section 50C are not applicable in respect of transfer of reversionary rights in respect of the sale transaction with M/s Yash and Yashika Mercantile (P) ltd.- HELD THAT:- Transaction of transfer of reversionary rights in a property by an assessee would not attract the provision of Sec. 50C. We, finding ourselves in agreement with the view taken by the coordinate benches of the Tribunal, viz. the order in the case of DCIT Vs. Tejinder Singh,[ 2012 (3) TMI 47 - ITAT, KOLKATA] and in the case of ITO, Ward-10(2), Hyderabad Vs. Ms. D. Anitha [ 2015 (4) TMI 723 - ITAT HYDERABAD] , thus, find no infirmity in the view taken by the CIT(A) and uphold the same. The Grounds of appeal Nos. 1 2 raised by the revenue are dismissed. Addition 70% of the sale value of the properties sold as the cost of acquisition (without subjecting the same to any indexation) for computing the LTCG on transfer of the properties under consideration - HELD THAT:- CIT(A) had rightly directed the A.O to take 70% of the sale value of the property as the indexed cost of acquisition for computing LTCG in the hands of the assessee, we uphold the same. The Ground of appeal No. 3 is dismissed.
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2021 (8) TMI 753
Exemption u/s 11 - application of capital expenditure out of the fund accumulated u/s. 11(2) - HELD THAT:- Assessee furnished a chart first time before this Bench of the Tribunal and claimed that the figures taken in this chart are from the record which is available with the department and that the wrong figures were considered by the A.O. which were wrongly mentioned in form No. 10 due to oversight. Since the chart furnished by the assessee has the direct bearing on the issue under consideration and the then counsel for the assessee had also furnished an affidavit stating therein that the figures were wrongly mentioned. We therefore deem it appropriate to set aside this issue back to the file of the A.O. to be adjudicated afresh after considering the aforesaid chart furnished by the assessee and claim of the assessee to be considered after proper verification of the figures mentioned in the chart vis-a-vis. the record already available with the department. Submissions of the Form No. 10 during the course of assessment proceedings which was not considered by the A.O . - HELD THAT:- In the present case it is not in dispute that as per section 11(2) of the Act read with Rule 17 of the Income Tax Rules, as mandated with effect from A.Y. 2016-17 the assessee was required to e-file Form No. 10 by due date mentioned under section 139 of the Act. However, in the present case the assessee filed Form No. 10 on 17/11/2018 i.e. during the course of assessment proceedings. The A.O. denied the claim of the assessee since the Form No. 10 was not furnished before filing the return of income under section 139 of the Act. Form No. 10 furnished by the assessee during the course of assessment proceedings before completion of the assessment should have been considered by the A.O. while considering the claim for benefit under section 11(2) of the Act. We order accordingly.
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2021 (8) TMI 750
Revision u/s 263 - unexplained cash deposit entries in bank account - reopening of assessment u/s 147 - HELD THAT:- As provision of banking book s evidence 1891, it is clear that once certified documents were given by the Branch Manager/Chief Manager of the Bank while discharging its duty in pursuance to the notice issued by any authority, then the said information is admissible in the eyes of law and no further corroboration is required. In our considered opinion, AO had made adequate inquiry u/s 148 before passing the said order. We have gone through the order passed by the PCIT and we found that the PCIT had failed to bring one record the material/evidence which shows that the assessee had deposited the cash in her bank account. From the perusal of the various letters written by the bank to the revenue, it is abundantly clear that no cash was deposited by the assessee in her bank account. These documents and other correspondence clearly shows that the AO had made sufficient enquiry to find out whether the cash was deposited in the bank account of the assessee or not. After due satisfaction, that no cash was deposited in assessee s bank account, the assessment order was passed without making any addition. The bank was not in possession of any document like cash book, vouchers, signed vouchers of debit and credit and journal for the dates i.e. from 30.06.2010 to 10.07.2010. In the absence of these documents it cannot be assumed that any cash was deposited by the assessee either in her own account or in the account of Saradjyot singh or the amount was debited and credited in her account. In our view the whole order of the PCIT is premised on conjectures and surmises without any cogent reliable evidence. The bank had written various letters confirming that no cash was deposited in the account of the assessee at any point of time relevant to issue in hand. Therefore the invocation of power u/s 263, was without any basis. The observation on the PCIT that the documents furnished by the Bank in response to the notice of AO were not required to be corroborated with the statement of the Chief Manager for the reason that the documents issued under the Bankers Book Evidence Act 1891 are admissible in law - whole case of reopening was hinges on, the cash deposit in the bank account of the assessee, the above said fact was denied by the bank in the documents submitted to the assessing officer in response to the notice issued by the assessing officer to the bank. Pr. CIT cannot be permitted to blow hot and cold, on the one hand, the Pr. CIT is holding that order of AO was erroneous as documents issued by the Bank were required to be corroborated Chief Manager and on the other hand Himself is not making enquiry/ examining the officials of the Bank to ascertain the true facts by denying the summoning of the officials of the Bank on the request of the assessee. In our considered opinion the Principle CIT had failed to bring on record any piece of evidence or documents which shows that the cash was deposited in the account of the assessee on the date mentioned in the reasons for reopening of the assessment. Once the certified copy of the cash book, bank account, vouchers and other documents were produced before the AO and PCIT, which clearly shows that no cash was deposited in the Bank account than, in our view, the finding recorded by the Pr. CIT, was not correct as the same was not borne out of the record. PCIT had failed to establish the fulfillment of twin conditions as mentioned herein above before invoking the jurisdiction u/s 263 of the Income Tax Act. Pr. CIT has failed to bring on record how the order passed by the Assessing Officer was prejudicial to the interest of the Revenue and further how it was erroneous. Note sheet of the assessment proceeding of AO clearly shows enough evidence of making the inquiries from the assessee as well as from the Bank and examination of the other relevant documents.The order passed by the Assessing Officer though was short, however elobrate enquiries were made by him before writing the order and dropping the proceedings under section 148, as sufficient material was brought on record , which shows that no cash was deposited in the Bank account - AO had examined complete record of the Bank, the cash book, the Bank statement of the assessee as well as that of Sh. Saradjot Singh and thereafter AO had chosen not to make any addition on account of above said amount. In the light of the above and respectively following the decision in the Matter of C.I.T. Vs. Gabriel India Ltd. [ 1993 (4) TMI 55 - BOMBAY HIGH COURT] we are of the opinion that the proceeding u/s 263 of the Act at the level of Pr. CIT were not called for and accordingly the action initiated u/s 263 was without any merit and accordingly we quash the same.Appeal of the assessee is allowed.
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Customs
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2021 (8) TMI 771
Refund of the Extra Duty Deposit - Amount paid on imports during investigation when the Bills-of-Entry in question were provisionally assessed - denial of refund for want of challans - HELD THAT:- It is the settled position of law that EDD is made pending investigation by the SVB, for the Bills-of-Entry which are provisionally assessed. Admittedly, most of the deposits/EDDs were made between 2011 and 2013, as could be seen from the table at page 1 paragraph 1 of the Order-in-Original dated 15.05.2019 containing the Challan Numbers as well as the date of the Challans reflecting the deposit. The obvious and the only possible conclusion is that the EDDs were made, following which the final assessments on the various Bills-of-Entry came to be passed. It is also the settled position of law that as regards EDD is concerned, the same is not a Duty and hence, provisions of Section 27 of the Customs Act, 1962 are not applicable. The law is well settled, as held by various judicial fora including the Hon ble jurisdictional High Court that refund of EDD should be made automatically upon the conclusion of final assessment without waiting for any application and hence, the denial of refund for want of challans which were not questioned while finalizing the assessment is no ground to deny - In the case on hand, the refund has been denied on the grounds that the RD challans have not been furnished as evidence for the payment of EDD with respect to 16 Bills-of-Entry (serial numbers 43 to 58 of the table at paragraph 1, page 4 of the impugned Order-in-Appeal) and for this reason alone, they were not considered for sanctioning refund. It is also on record that the appellant had submitted an indemnity bond for its above lapse and in any case, it is not the Revenue s case that no payments of EDD in so far as the 16 Bills-of-Entry are concerned, were ever made. The issue in so far as the 16 Bills-of-Entry are concerned, requires a relook by the Adjudicating Authority, who shall afford reasonable opportunities to the appellant to offer all such supporting documentary evidences as may be prescribed under various C.B.E.C. Circulars/Notifications, which are also binding on the Adjudicating Authority, and then, pass an appropriate order in accordance with law - Appeal allowed by way of remand.
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Corporate Laws
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2021 (8) TMI 757
Seeking to sanction the Scheme of Arrangement - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- It is a settled position of law that any Scheme of Arrangement or Amalgamation/demerger, under the extant provisions of Companies Act, would not contemplate to waive any liability or legal action for any violation of provisions of Companies Act, so as to prevent Statutory Authorities from initiating any action against violation of provisions of Companies Act, in respect of the Companies involved, in accordance with law. In the instant case also, the Petitioner No. 2 would inherit all the responsibilities. The Tribunal, in the instant proceedings, cannot examine every alleged violation committed by the Petitioner Companies, since the issue here is only to sanction of the Scheme, subject to compliance of extant provisions of Companies Act and to make them to comply all terms and conditions as mentioned in the proposed Schezne in question, and other consequential actions, after sanction of the Scheme - the Scheme in question is comprehensive one complying with the provisions of Sections 230 to 232 of the Companies Act, 2013 and the Rules made thereunder and the Petition/Application is filed in accordance with law. The scheme is sanctioned - application allowed.
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2021 (8) TMI 755
Sanction of Scheme of Amalgamation - Sections 230-232 and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- The meetings of the equity shareholders, unsecured creditors of all the Applicant Companies are dispensed with as their consent by way of affidavits have been received. The Applicant Companies do not have any secured creditors and hence, there is nothing to call and convene their meeting. However, Rule 8 of the Rules requires the notice of the meetings to be sent to the statutory authorities in Form CAA 3. Since the calling and convening of the meetings are being dispensed with, the applicants shall have to make a specific prayer while moving the second motion petition to issue the notice to the statutory authorities. The First Motion Application stands allowed.
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2021 (8) TMI 749
Sanction of Scheme of Amalgamation - Section 230(1) read with Section 232(1) of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding and convening of various meetings issued - directions regarding issuance of various notices also issued. The scheme is approved - application allowed.
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2021 (8) TMI 748
Scheme of Amalgamation for amalgamation - Section 230(1) read with Section 232(1) of the Companies Act, 2013 - HELD THAT:- Directions regarding holding, convening as well as dispensation of various meetings issued - directions regarding issuance of notices also issued. The scheme is approved - application allowed.
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Insolvency & Bankruptcy
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2021 (8) TMI 778
Jurisdiction - person below the rank of Inspector - Interpretation of statute - Section 17 of the Prevention of Corruption Act, 1988 - Rejection of application seeking permission for Sub Inspector Amit Kumar to assist the main Investigating Officer in conducting investigation - fraudulent diversion of huge amount of bank funds - rights and contentions to challenge the entire investigation in appropriate proceedings - whether a person below the rank of Inspector can assist the main Investigating Officer in conducting investigation? - HELD THAT:-The provision of section 17 of the Prevention of Corruption Act, 1988, corresponds to Section 5A of the Prevention of Corruption Act, 1947, which came up for consideration in HN. RISHBUD VERSUS STATE OF DELHI [ 1954 (12) TMI 20 - SUPREME COURT] . The Supreme Court after considering the Scheme of Cr.P.C. observed that it was permissible for an officer in charge of a Police Station to get the investigation conducted from a subordinate officer provided that the responsibility of all such steps remains with the officer in charge of Police Station and that the subordinate officer reports all the steps taken by him to the officer in charge. The Trial Court by passing the impugned order not only failed to appreciate the mandate of Section 17 of the PC Act, 1988 but also failed in its duty to follow the import of above referred exposition of law. The Special Judge is empowered under Section 17 of the PC Act, 1988 to permit an officer below the requisite rank to assist the Investigating Officer in conducting investigation provided the steps taken by him are under direct supervision of the Investigation Officer who remains in control of the investigation and shall be responsible for all the steps that are taken by the subordinate officer. The present petition is allowed.
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2021 (8) TMI 761
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - compliance with mandatory requirement u/s 9(3)(b) of IBC or not - existence of debt and dispute or not - HELD THAT:- This bench notes that there are pre-existing disputes between the Petitioner and the Corporate Debtor. This bench notes that in this Petition, several invoices have been annexed and to explain the same, excel sheet has been annexed by the respondent. This file contains two sheets, the 1st excel sheet provides explanation in a tabular excel format of all the customers who have booked units in the said project with the involvement of the Operational Creditor. This excel sheet also provides information regarding each customer to verify whether the bookings have been done through the Operational Creditor or not. From the above, it is clear that most of the customers have booked the flats from different sources viz. with a reference of his friend, though newspaper etc. and not through the Petitioner. In view of this, this bench is of the view that no brokerage arises in the flat bookings relating to the customers who have booked flat from the sources other than brokerage. It is therefore clear to the bench that the Corporate Debtor had raised dispute before the Demand Notice was raised by the Petitioner. The Corporate Debtor had clearly intimated in its email dated 01.03.2017 about the dispute between the parties and also that no amount was payable to the Operational Creditor. Petition dismissed.
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2021 (8) TMI 760
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- The petitioners being the debenture holders, their claims squarely falls within the definition Financial Debt . When once the debt and default are established and the debt is shown to be within limitation, this Bench has no alternative except to admit the Company Petition. All the contentions raised by the Corporate Debtor are beyond the scope of this petition as per settled law. There are no valid grounds warranting the rejection of the Company Petition as the debt and default are clearly established and the debt is also within limitation. The petitioner has also suggested the name of proposed Interim Resolution Professional in part-3 of the Petition along with his consent letter in Form-2. Thus, the present Company Petition satisfies all the necessary requirements for admission. Petition admitted - moratorium declared.
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PMLA
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2021 (8) TMI 779
Money Laundering - proceeds of crime - power of Directorate of Enforcement to declare any property acquired by proceeds of crime - Section 5(4) of the PMLA, 2002 - HELD THAT:- A person who is interested relating to any immovable property or is claiming or is entitled to claim any interest in the property would be free to enjoy the said immovable property even if the same is attached. If the property is confiscated by the Central Government, such claimant with legitimate interest in the property or who may have suffered a quantifiable loss as a result of offence of money laundering may move appropriate application for restoration of such confiscated property or a part thereof - so far as interested person or any claimant is concerned, they did not have any locus to challenge the attachment order at all. While the statute protects them in some way but they have no say in respect to attachment which is essentially against the person who has procured the property by proceeds of crime. If such subsequent purchaser or interested person as explained under Section 5(4) is allowed to challenge the attachment, it would not only create a chaotic situation but it can be a method of subterfuge litigation by the main accused in getting himself let off in case relating to money laundering. The present petition filed by the interested persons to challenge the attachment order is found to be not maintainable as they did not have any locus standi to the said aspect - petition dismissed.
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Central Excise
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2021 (8) TMI 759
Valuation - inclusion of assessable value of freight collected in excess to the actual amount spent - HELD THAT:- In the instant case, it is a fact that the price of transportation contracted is not always in excess of the actual amount spent on transportation. Sometimes it is less and other times it is more. However, the demand has been raised by selecting entries where the amount collected is higher than the actual amount spent. In the instant case too a perusal of the contracts produced shows that it contains separate clauses for the cost of goods sold and the cost of transportation. Also, the representative contract produced by them in respect of Rajasthan Rajya Vidyut Prasaran Nigam Limited in para 5 thereof contains details of various tests to be conducted by the buyer. The tests include Stage Inspection, Routine Tests, Type Tests, Test for Nitrogen Inspection, Fire Prevention and Extinguishing System. The dispatch of goods is also subject to approval of buyer after testing. The dispatch instruction prescribes in para 7 of the contract prescribe the manner in which the dispatch clearance will be granted by the buyer. Following the decision in case of COMMISSIONER OF CENTRAL EXCISE, NOIDA VERSUS M/S. ACCURATE METERS LTD. [ 2009 (3) TMI 1 - SUPREME COURT] and ASHOK TRANSFORMERS P LTD. VERSUS C.C.E. S.T. -SURAT-I [ 2019 (11) TMI 831 - CESTAT AHMEDABAD] , demand set aside. Appeal allowed - decided in favor of appellant.
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2021 (8) TMI 752
CENVAT Credit - renting of immovable property service - input services of renting have been received undisputedly in the second unit which is the job worker of Unit-I - April, 2012 to February, 2015 - HELD THAT:- The input services of renting have been received undisputedly in the second unit which is the job worker of Unit-I. Further, Assistant Commissioner of Central Excise of the Division by letter dated 18 April, 2013 have granted permission under Rule 4(6) of CCR, 2004 for removal of final products from the premises of job worker Unit-II. Thus, Unit-II is an extended arm of the Unit-I - the appellant is eligible for taking credit of input service tax paid on rent etc. relating to their Unit-II. Hon ble High Court in the case of COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, AURANGABAD VERSUS ENDURANCE TECHNOLOGY PVT LTD [ 2015 (6) TMI 82 - BOMBAY HIGH COURT] have held that the assessee manufacturing unit is entitled to take Cenvat credit of service tax received at their windmill set up for generation of electricity, which is located several kilometres away from the manufacturing unit. Appeal allowed - decided in favor of appellant.
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2021 (8) TMI 751
Maintainability of appeal - compliance with the minimum amount of pre-deposit or not - Refund claim - Circular No.984/08/2014-CX dated 16.09.2014 - HELD THAT:- There is no ambiguity on reading Section 35 FF read with Section 35 F. The full amount of pre-deposit, even if it is more than the prescribed limit, has to be refunded by the Department along with interest. Further, the interest has to be granted from the date of deposit till the date of granting refund @ 12% p.a. (as held by the Division Bench of this Tribunal in Parle Agro). The Revenue is directed to grant further refund of the balance amount along with interest on full amount @12% from the date of deposit till the date of granting refund, after making adjustments for the interest already granted - this appeal is allowed.
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