Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
August 22, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
GST
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36/2019 - dated
20-8-2019
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CGST
Seeks to extend the date from which the facility of blocking and unblocking of e-way bill facility as per the provision of Rule 138E of CGST Rules, 2017 shall be brought into force to 21.11.2019
GST - States
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G.O.Ms.No. 366 - dated
19-8-2019
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Andhra Pradesh SGST
Andhra Pradesh Goods and Services Tax (Tenth Removal of Difficulties) Order, 2019
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G.O.Ms.No. 365 - dated
19-8-2019
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Andhra Pradesh SGST
To extend the due date for filing the quarterly statement in Form CMP- 08-certain amendment to the notification issued in G.O.Ms.No.301, Revenue (CT.II) department, dated: 16.05.2019.
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G.O.Ms.No. 364 - dated
19-8-2019
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Andhra Pradesh SGST
Andhra Pradesh Goods and Services Tax (Fifth Amendment) Rules, 2019
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G.O.Ms.No. 363 - dated
19-8-2019
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Andhra Pradesh SGST
Andhra Pradesh Goods and Services Tax (Fourth Amendment) Rules, 2019
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G.O.Ms.No. 362 - dated
19-8-2019
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Andhra Pradesh SGST
Registered Persons Supplying Online Information and Data Base Access or Retrieval Services From a Place Outside India to a Person In India-Not Required to File Annual Return
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G.O.Ms.No. 361 - dated
19-8-2019
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Andhra Pradesh SGST
Registered persons having aggregate turnover of up to 1.5 crore rupees - furnishing the details in Form GSTR-1 - prescribing the due date for quarter July - September
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G.O.Ms.No. 360 - dated
19-8-2019
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Andhra Pradesh SGST
Notifying the date from which provisions relating to restriction on E-Waybills for return non-filers shall come into force – further extension
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G.O.Ms.No. 359 - dated
19-8-2019
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Andhra Pradesh SGST
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, specified as class of persons who shall be entitled to claim refund of applicable state tax paid on inward supply of such goods.
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14/2019 - No. FD 47 CSL 2017 - dated
2-8-2019
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Karnataka SGST
Seeks to extend the last date for furnishing FORM GST CMP-08 for the quarter April -June 2019 till 31.08.2019.
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13/2019 No. FD 48 CSL 2017 - dated
31-7-2019
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Karnataka SGST
Seeks to exempt the hiring of Electric buses by local authorities from GST
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12/2019 No. FD 48 CSL 2017 - dated
31-7-2019
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Karnataka SGST
Which seeks to reduce the GST rate on Electric Vehicles, and charger or charging stations for Electric vehicles.
Money Laundering
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G.S.R.582(E) - dated
19-8-2019
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PMLA
Prevention of Money-laundering (Maintenance of Records) Third Amendment Rules, 2019.
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Condonation of delay u/s 100 of CGST Act - appeal against ruling of AAR - As per Section 100, the crucial words are "not exceeding thirty days" used in the proviso to sub-section (2), accordingly this Appellate Authority could entertain this appeal beyond the extended period under the proviso would render the phrase "not exceeding thirty days" wholly otiose - No principle of interpretation would justify such a result - delay not condoned
Income Tax
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Unexplained investment - Subsequent to the search proceedings the assessee surrendered income towards ‘bogus bills’ booked during various years - when investment made by the assessee was sourced from the cash that was received back by the assessee against the payments made towards ‘bogus purchases’ which is already offer to tax then a separate addition as regards the application of the said amount would not be justified
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Reassessment u/s 147 - original return filed was accepted without any scrutiny - the reasons so assigned would confirm that no tangible material was in possession of the AO which could constitute any reasons which led to a belief that any part of income chargeable to tax had escaped assessment rather it is in search of such tangible material that the proceedings had been reopened - not permissible - entire proceedings quashed
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Addition u/s 68 - transfer of equity share by way of gift - merely because the dematerialization request made by the assessee on 16/12/2007 it cannot be said that the share transfer did not happen on 23/1/2006 when the donee and the donor both confirmed the same along with the certificate of the company whose shares are transferred - no addition
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Jurisdiction u/s 153C - incriminating evidence found in search - bank certificate is not an incriminating document based on which the concluded assessment can be disturbed and in absence of any incriminating evidence leading to any unaccounted income unearthed during the course of search - no jurisdiction
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Penalty u/s 272A(2)(c) - non compliance of notice u/s 133(6) - Since there is no reasonable cause furnished by the assessee as mentioned u/s 273B for non furnishing of information sought by the ITO u/s 133(6) and total lack of co-operation on the part of the assessee - penalty confirmed.
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Rate of tax applicable to PE of foreign entity - DTAA between India and Japan - by virtue of Clause 24(2) of the said agreement and the statutory recognition thereof in Section 90(2), the PE of a Japanese entity(bank) in India could not have been charged tax at a rate higher than comparable Indian assessees carrying on the same activities - taxable @ applicable on Indian bank
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Disallowance of commission payment - when the assessee was unable to produce evidence to prove that services were rendered by them, to whom commission were paid - the revenue was under no obligation to prove the negative, the onus of proof being on the assessee - the tribunal has taken a very plausible view, payment are not allowable
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Revision u/s 263 - re-verification of unsecured loans and creditors - unless the CIT brings on record to show that the order of the AO is erroneous, as the same was passed without application of mind or the AO had made an incorrect assessment of fact or incorrect application of law, order passed u/s 263 relegating back the matter to the AO is unsustainable
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Reopening of assessment u/s 147 - Section 80(IB)(10)(d) will be applicable prospectively - there is no such condition to have completion certificate within four years from the local authority granting approval of the projects in question, the reassessment proceedings taken against the assessee are bad and against the settled principle of law - re-assessment rightly set aside
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Computation of long term capital gains - reference to DVO - FMV declared by assessee as on 01.04.1981 - no reference can be made u/s 55A in order to value the cost of acquisition of property as on 01.04.1981 at a figure lesser than the value declared by the assessee - directed to accept FMV declared by assessee
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Estimation of income - rejection of books of accounts - Once it has been found that the assessee has not voluntarily maintained its books of account, as required under the Act, the books of account have rightly been rejected and the net profit, which has been fixed at 8%, is quite reasonable - no substantial question of law arises
Customs
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Refund of SAD - sale invoices submitted has not been either printed or stamped with endorsement - when the price shown in the sale invoice is consolidated one and the duty paid on import had not been shown separately, there is no possibility of anyone taking credit of duty paid, even the buyers have categorically stated that they have not availed any credit on those invoices and this in a way comply with the conditions of the N/N. 102/2007 - refund allowable
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Confiscation of Import - requirement of BIS certificate - as evident from the documents produced on record goods are imported prior to 18/12/2018 when goods could be imported without insisting on BIS certificate - the authorities have completely ignored the saving clause of the Transition Policy and misinterpreted the exclusion clause in the transitional provisions - directed to immediately release the goods on payment of appropriate duty
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Direction to exclusive use of weighbridges installed by the petitioners - neither the circulars relied upon give any assurance nor Kolkata Port Trust authorities have any obligation that, the containers must be weighed at the weigh bridges installed by the petitioners, the containers, if weighed elsewhere, is acceptable by Custom - no such direction can be given.
Corporate Law
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Striking off the Company which was a Private Company, from the Register of Companies, indisputably does not absolve its erstwhile Directors who are liable as provided under Section 179 of the Income Tax Act, 1961 to pay the amount of Tax leviable in respect of income of any previous year. - Restoration of name of company not allowed.
State GST
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Clarification regarding filing of application for revocation of cancellation of registration in terms of Removal of Difficulty Order (ROD) number 05/2019-State Tax dated 08.05.2019
Central Excise
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Valuation - deduction of cash discount even if not availed - the expression “actually paid or payable for the goods when sold” means whatever is agreed to as price for the goods on the basis of value whether such price, has been paid in parts or has not been paid at all - deduction from the sale price allowed.
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Demand of Interest - CENVAT Credit - reversed the CENVAT credit wrongly availed much before the issuance of the show-cause notice - the CENVAT credit account which shows the credit of around ₹ 1 crore during the disputed period which clearly shows that the appellant has only availed the credit and has not utilized the same - not liable to pay interest under Rule 14 of the CCR
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Clandestine Removal - demand based on loose slips and scribbling pads recovered from the premises - slips maintained by a specific person performing a specific duty for which he is paid cannot be brushed aside simply for the reason they are not singed/authenticated - they have evidentiary value as no evader of tax leaves all evidences to prove his guilt and that there are ample evidences to prove the malfeasance of the assessee
Case Laws:
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GST
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2019 (8) TMI 901
Condonation of delay u/s 100 of CGST Act - appeal against ruling of AAR - classification of goods - Evacuated/Vacuum Tube Collectors (ETC/VTC) - classified under Chapter 84 of HSN - benefit of concessional rate as per Sl. No. 234 of Schedule - I under Notification, 01/2017 IGST Rate dated 28.06.2017 - HELD THAT:- On a plain reading of the provisions of Section 100 of the said Act, it is apparent that the same mandates that an appeal should be filed within 30 days from the date of communication of the advance ruling order that is sought to be challenged. However, in view of the proviso thereto, the Appellate Authority is empowered to allow the appeal to be presented within a further period of 30 days if it is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the initial period of 30 days. Thus, the Appellate Authority is empowered to extend the period for filing an appeal for a further period of 30 days only and not more than such period. Whether this Appellate Authority can entertain an appeal under Section 100 of the CGST Act beyond the period of 60 days does not require much debate and has been answered in the negative by the Supreme Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] . The Supreme Court in the said case interpreted Section 35 of the Central Excise Act, 1944 which is similar to Section 100 of the CGST Act and examined the question whether the Commissioner (Appeals) has the power to condone the delay beyond the period of 30 days from the date of expiry of the period of 60 days prescribed for filing the statutory appeal and also whether the High Court, in exercise of the power conferred under Article 226 of the Constitution of India, can condone the delay. It is evident that this Appellate Authority being a creature of the statue is empowered to condone a delay of only a period of 30 days after the expiry of the initial period for filing appeal. As far as the language of Section 100 of the CGST Act is concerned, the crucial words are not exceeding thirty days used in the proviso to sub-section (2). To hold that this Appellate Authority could entertain this appeal beyond the extended period under the proviso would render the phrase not exceeding thirty days wholly otiose. No principle of interpretation would justify such a result - we are not empowered to condone the delay of 145 days in filing this appeal. Since the appeal cannot be allowed to be presented on account of time limitation, the question of discussing the merits of the main issue in appeal which is the eligibility to concessional rate of GST on the product Evacuated Tube Collector, does not arise. Appeal dismissed on the grounds of time bar.
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Income Tax
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2019 (8) TMI 900
Settlement Commission applications u/s 245(D)(1) - whether or not the disclosure was full and true - Pr. CIT submitted a report u/s 245D(2B) nowhere directly or indirectly indicated that the income disclosed by the petitioner is not full and true? - Settlement Commission permited the CIT (DR) to raise objections to the admission of the application and more so in permitting him to go beyond the report - decision making process of the Settlement Commission - permitting the Principal Commissioner to supplement the report submitted by the Commissioner by way of oral submissions - permission to raise objection to the admission of the application and be heard before the assessee and too, to supplement an incomplete report on the basis of the material and evidences on record - preliminary report based on prima-facie findings recorded by the Principal Commissioner or Commissioner - HELD THAT:- This petition has become infructuous. Accordingly, the special leave petition is dismissed as having become infructuous.
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2019 (8) TMI 899
Estimation of profit - NP determination - Tribunal applying net profit rate at 8% u/s 44AD - rejection of books of accounts - gross turnover of the Appellant exceeded 1 crore and books of accounts were maintained as per section 44AB - HELD THAT:- From the perusal of the record, it reveals that the books of account of the assessee has been rejected and the authorities have rightly made the assessment enhancing the net profit @ 8%. Once, on finding of fact, it has been found that substantial amount has been spent by making payment in cash and that too, with vouchers having been self-made and not verifiable, admittedly, the appellant has not maintained the stock register and quantitative tally is not being made. Further, the assessee has also not shown the interest derived from FDR to the tune of ₹ 1,93,893/- as well as the lease rent of ₹ 1,52,590/- so received from leasing out of JCB machines. Once it has been found that the assessee has not voluntarily maintained its books of account, as required under the Act, the books of account have rightly been rejected and the net profit, which has been fixed at 8%, is quite reasonable. Moreover, all the authorities below have rejected the contention of the appellant. At this stage, no substantial question of law arises in the present appeal. - Decided against assessee.
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2019 (8) TMI 898
Reopening of assessment u/s 147 - deduction u/s 80IB(10) denied - Section 80- IB(10) which is substituted w.e.f. 1.4.2005 is not applicable to the project approve before 01.04.2004 - whether any condition that the project in question should be completed and obtained completion certificate with the period of four years? - HELD THAT:- In view of the observation in M/S. SARKAR BUILDERS [ 2015 (5) TMI 555 - SUPREME COURT] we are of the opinion that the projects which were approved prior to 1.4.2005 the applicability of Section 80IB(10) (d), of the Act is not permitted. In other words, Section 80(IB)(10)(d) of the Act will be applicable prospectively and not retrospectively. Once it has come on record by fact finding Authority also that there is no such condition to have completion certificate within four years from the local authority granting approval of the projects in question, the reassessment proceedings taken against the assessee are bad and against the settled principle of law. Therefore, the Tribunal has rightly set aside the re-assessment proceeding and directed the assessing authority to grant benefit of Section 80IB(10) to the assessee. - Decided in favour of assessee
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2019 (8) TMI 897
Revision u/s 263 - SCN issued by CIT regarding genuineness credit worthiness of investment in share capital, unsecured loans, creditors and expenses - objection filed by assessee was accepted by CIT except unsecured loans and creditors - HELD THAT:- In the present case, the CIT himself while relying upon the reply submitted by the assessee had partially accepted the claim as far as investment in share capital was concerned but it did not accept the documentary evidence and reply submitted by the assessee before the AO as far as unsecured loans and creditors are concerned. AO after issuing notice and raising certain queries to the assessee passed the assessment order which cannot be called as erroneous. After the notice was issued by the AO raising 28 queries from the assessee, which was also replied by him along with the documentary evidence in regard to each of the query, thus the assessment order passed u/s 143(3) would not render the same as erroneous and prejudicial to the interest of Revenue, unless the Commissioner exercising power u/s 263 brings on record to show that the order of the AO is erroneous, as the same was passed without application of mind or the AO had made an incorrect assessment of fact or incorrect application of law, but the same not being the case, and the CIT relying upon the reply and the documentary evidence submitted by the assessee granted partial relief, as such the order dated 09.02.2012 passed u/s 263 relegating back the matter to the AO as regards unsecured loans and creditors is unsustainable. Thus it is abundantly clear that the order passed by the AO was neither erroneous nor prejudicial to the interest of the Revenue. - Decided in favour of assessee.
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2019 (8) TMI 896
Disallowance of commission - burden of proof - whether the persons disclosed by the appellant assessee rendered services to them and were paid commission? - evidence that the expenditure was wholly and exclusively incurred for the purpose of business - HELD THAT:- We are of the opinion that the tribunal has taken a very plausible view. It has inter alia recorded that the assessee was unable to produce evidence to prove its case. In our view, the revenue was under no obligation to prove the negative, the onus of proof being on the assessee. Mr. Murarka filed a compilation to show that his client had produced evidence before the lower adjudication authority but it was not considered by them. We have not even looked into the compilation for the reason that we do not find any foundation for this case recorded in the order of the tribunal. In other words, not even submissions in this direction appeared to have been made before the tribunal. Hence, no such submission was recorded.
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2019 (8) TMI 895
Rate of tax applicable to PE of foreign entity - rate @65% OR rate applicable to a domestic company - DTAA between India and Japan - HELD THAT:- By virtue of Section 90(2), since there is a double taxation avoidance agreement between India and Japan, the provisions of the Act shall apply to a permanent establishment of a Japanese entity in India to the extent they are more beneficial to that assessee'. Also, in terms of the mandate of clause 24(2) of the agreement, the taxation on a permanent establishment - - in the other Contracting State shall not be less favourably levied - - than the taxation levied on enterprise carrying on the same activities. By virtue of Clause 24(2) of the said agreement and the statutory recognition thereof in Section 90(2), the permanent establishment of a Japanese entity in India could not have been charged tax at a rate higher than comparable Indian assessees carrying on the same activities. The stand taken in the Tribunal s order cannot be appreciated or accepted since a similar clause in the double taxation avoidance agreement between India and the Netherlands was interpreted by the Central Board for Direct Taxes and a circular issued thereupon. The Tribunal held, in the present case, that since there was no similar circular, the benefit as available to a permanent establishment of ABN Amro Bank in India could not be extended to this assessee. When there is no dispute that there is a double taxation avoidance agreement in place between India and the country of origin of the assessee in the present case and when such agreement contains a lucid clause as apparent from Article 24(2) thereof quoted above and when Section 90 recognises such an agreement and creates a special status for the relevant permanent establishments, there was no room for either the Commissioner to wait for any dictat from the high command of the CBDT or for the Tribunal to demonstrate similar servile conduct in not appropriately interpreting and giving effect to the clear words of the agreement between the two countries. Tribunal was incorrect in holding that the rate of tax applicable to the assessee was 65%. The Tribunal ought to have held that the rate applicable to the assessee was such rate as applicable to a domestic company carrying on similar activities. In the light of such answer, the two other questions need not be addressed since paragraph 8 of the order admitting the reference recognised that the answer to the first question would cover the entire matter.
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2019 (8) TMI 894
Reopening of assessment u/s 147 - validity of reasons to believe - original return filed was accepted without any scrutiny - HELD THAT:- A plain look at the reasons so assigned would confirm that no tangible material was in possession of the AO which could constitute any reasons which led to a belief that any part of income chargeable to tax had escaped assessment rather it is in search of such tangible material that the proceedings had been reopened. Income Tax Officer fairly mentions in the reasons so supplied that the assessee had not produced certain evidences in support of agricultural income and in absence of which the claim towards agricultural income could not be substantiated. We completely fail to appreciate as to how such admission by the AO regarding absence of material, could lead to a formation of belief that the disclosure was incorrect and chargeable to tax u/s147. In view of the position settled by the Supreme Court in the case of Kelvinator of India [ 2010 (1) TMI 11 - SUPREME COURT] after taking note of the transitory change in Section 147, the legal position as to the prerequisites for such exercise, has not undergone a change and which is that, there had to be tangible material at the disposal of the AO for reopening of such proceedings and which power cannot be exercised for initiating a roving enquiry. There was no tangible material in possession of the AO for formation of belief of escaped income chargeable to tax. In view of the clear fact situation available on the record where such reopening is simply founded on the advisory dated 10.03.2016 issued by the department and where the reasons so present for the formation of belief is not resting on any tangible material, in possession of AO as confirmed from the discussions above, in our opinion, the entire exercise is illegal and dehors the provisions of Section 147/148. Since the entire exercise is held de hors the statutory prescriptions, we do not consider it necessary to express our opinion on the expanded scope of Explanation 3 attached to Section 147 and leave it open for discussion in an appropriate case. - Decided in favour of assessee.
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2019 (8) TMI 893
Jurisdiction u/s 153C - satisfaction note based on bank balance certificate found in search is a incriminating evidence - bank account was already disclosed in return - HELD THAT:- It is not the case of the revenue that such bank account is not disclosed by the assessee to the income tax department. Is the contention of the revenue is upheld, then it would imply that any document found during the course of search on other person belonging to the 3rd person, whether it contains any details of unaccounted income of 3rd person or not, the concluded assessment of the 3rd person will be disturbed and any addition can be made in the hands of 3rd person even if, in the seized document no reference of unaccounted income is found. Thus, such a view, will render the distinction between concluded assessment and abetted assessment meaningless. Thus, we cannot uphold the view of the revenue. We do not have any hesitation in holding that the impugned bank certificate is not an incriminating document based on which the concluded assessment in the case of the assessee can be disturbed. We hold that no addition can be made in the hands of the assessee in absence of any incriminating evidence leading to any unaccounted income unearthed during the course of search. Accordingly, ground number 1 3 of the appeal of the assessee is allowed. Addition u/s 68 - transfer of equity share by way of gift - gifted share still appearing in balance sheet of donor - HELD THAT:- Merely because the affidavit is not on the non-judicial stamp paper, the learned CIT A has rejected the affidavit of the donor. Even for a minute, it is believed that the affidavit of the donor is not proper, the content of the affidavit needs to be looked into in view of the overwhelming evidence produced by the assessee, which supports the affidavit. Rejecting an evidence on technical grounds by the learned CIT(A) to uphold the addition in the hands of the assessee cannot be approved. With respect to the payment of sale transfer stamps paid by the appellant of INR 5 7500/ on the share transfer forms, the learned CIT(A) found that no such withdrawal/drawings are found in the books of the donor. That may be the case of any addition if at all in the hands of the donor and not in the hands of the Donee. With respect to the dematerialization of the shares, CIT(A) unnecessarily referred to the correspondence of dematerialization, wherein the company itself who shares are transferred is confirming the date of the transfer producing the share transfer deed as well as confirming the same by way of a separate letter. Thus merely because the dematerialization request made by the assessee on 16/12/2007 it cannot be said that the share transfer did not happen on 23/1/2006 when the donee and the donor both confirmed the same along with the certificate of the company whose shares are transferred. It is also not the case of the revenue about the fact that donor was not having the shares. Thus, the lower authorities have wrongly made the addition of ₹ 28261091/ in the hands of the assessee u/s 68.
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2019 (8) TMI 892
Penalty u/s 272A(2)(c) r.w.s. 274 - non furnishing of information sought by the ITO(intelligence) u/s 133(6) - HELD THAT:- Assessee has not offered any valid reason for not furnishing the information called for u/s 133(6). Many of the notices issued by the ITO (Intelligence) were never responded to by the assessee. In many instances the AO has mentioned that when they had approached, the assessee Society, for seeking information u/s 133(6) of the Act there was total lack of co-operation on the part of the assessee society as well as threat (reference order imposing penalty u/s 272A(2)(c) in appeals [ 2018 (1) TMI 548 - ITAT COCHIN] . Since there is no reasonable cause furnished by the assessee as mentioned u/s 273B for non furnishing of information sought by the ITO(intelligence) u/s 133(6) that the order imposing penalty cannot be quashed.- Decided against assessee.
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2019 (8) TMI 891
Reopening of assessment u/s.147 - addition u/s.68 - AR contended that reopening is time barred because the notice u/s.143(2) of the Act was issued beyond six months from the prescribed period - HELD THAT:- Notice u/s.147/148 of the Act was issued on 31.03.2014, which was duly served on the assessee on 03.04.2017 and the assessee stated by way of written submission on 03.04.2017 stated that the original return filed on 11.10.2010 may be treated as return filed in response to notice u/s.147/148 of the Act. Therefore, the return would be deemed to be filed in the financial year 2017-2018. The AO can issue notice within six months from the end of the financial year in which the return has been filed. In the present case, the AO issued notice u/s.143(2) of the Act on 22.11.2017 which is under limitation period and the reassessment has also been completed on 29.12.2017, which is under the limitation period and the reassessment has also been completed on 29.12.2017, which is under the time limit as prescribed u/s.153 of the Act. Therefore, this ground of assessee is rejected. CIT(A) has passed the ex-parte order without giving reasonable opportunity of hearing and violated the provisions of natural justice - We noted from the order of CIT(A) that he has issued notice to the assessee for compliance but it is clear from the order of CIT(A) that the assessee has not complied the notice issued by the CIT(A) even reasonable opportunity has been given to him. Therefore, the CIT(A) has contested the issue on the basis of material before him. Accordingly, the ground of assessee is also rejected. Proper approval has not been obtained from the appropriate authority before initiating the proceedings u/s.147/148 - we perused the copy of ITNS-10 which is placed at paper book at page 41 42 at column Sl. No.12 13 which is blank and this form has been certified by Manish Verma, ITO Ward-2(1), Patna without dated. We also noted from the ITNS -10, which is filed by the CITDR that column No.12 13 has duly been filled by the appropriate authority. We are in agreement with the contention of ld. DR that the proposal copy for approval might have been given to the assessee as certified copy which was kept in the file of the AO at the time of sending for approval as one office copy. Therefore, this argument of the ld. AR of the assessee is also rejected. Reassessment is not sustainable as there is a difference in figure in reasons recorded and in the findings recorded by the AO - we are of opinion, that if there is any difference of figure mentioned in the reasons recorded and the findings recorded by the AO, that will not amount to non-sustainability of the reassessment proceedings. Accordingly, we reject this ground of assessee. Reasons for issuing notices - In this case, the Assessing Officer has given the reasons to the assessee for reopening of the assessment and after considering the objection to the reopening of assessment, has disposed of the objection of the assessee to the initiation of proceedings by way of speaking order passed which has been incorporated in the assessment order. Therefore, the conditions precedent in the decision of Hon ble Supreme Court in the case of GKN Driveshafts [ 2002 (11) TMI 7 - SUPREME COURT] has been complied with by the Assessing Officer. We also find that the CIT(A) has given a categorical finding with regards to the reopening of assessment and referred various judicial pronouncements on this issue and rejected the ground of initiation of assessment proceedings. We, therefore, uphold the same and dismiss this part of ground of appeal of the assessee. Addition u/s 68 - Mere confirmation or the fact that the money has been received through the banking channel is not sufficient enough to establish the creditworthiness of these shareholders. It is not a case of establishing the source of source but at least basic documentation to establish the creditworthiness of these shareholders should have been brought on record which assessee has failed in the instant case. Whether share subscribers have their own profit making apparatus and were involved in any tangible business activity or were they merely rotated money, which was coming through the bank accounts. These are some of the questions which remain unanswered in the present case. creditworthiness of the share applicants, in the present case in hand, have not been proved by the assessee, therefore, we do not find any error in the findings recorded by the CIT(A) and, hence, the same are upheld and appeal of the assessee is dismissed.
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2019 (8) TMI 890
Bogus loss from client code modification - HELD THAT:- As decided in SUMATI KUMAR LUNIA VERSUS I.T.O WARD 36 (4) , KOLKATA [ 2019 (2) TMI 1683 - ITAT KOLKATA] in order to find out whether the transaction is genuine or ingenuine, it is neither the expedience or correctness of the decision nor the business expertise of the person to be considered. It is to be considered on the basis of the materials that there was no such transaction and that these share transactions were paper transactions. The suffering of loss could not be a factor for such purpose. The impugned loss claimed by assessee is genuine loss in the above facts and circumstances of the case and therefore eligible for deduction. Accordingly, AO is directed. This ground of assessee's appeal is allowed. As put up a specific query to the department as to whether assessee s broker carried out the relevant client code modification as per prescribed rules or not. There is no such violation pointed out during the course of hearing before me. Therefore, adopt the above detailed discussion mutatis mutandis to delete the impugned addition - Decided in favour of assessee. Bogus LTCG - Unexplained cash credits - sale proceeds derived from sale of shares in M/s GCM Securities Pvt. Ltd and Kappac Pharma Ltd. as unexplained - HELD THAT:- There can hardly be any dispute that assessee has placed on record his supportive documentary evidence comprising of relevant purchase bills of shares allotment, certified copies, contract notes, brokerage details etc. We put up a specific query as to whether any of entry operators searched or survey has quoted these assessees names or not before the departmental authorities. There is no such material in the case file indicating such as statement. In Smt. Sangita Jhunjhunwala vs. ITO [ 2019 (1) TMI 298 - ITAT KOLKATA] has deleted similar bogus LTCG coming to Revenue s arguments that department had searched / surveyed various entry operators alleged to have engaged in giving bogus LTCG regarding very scrip, as put a specific question to Mr. Bhattacherjee as to whether any of the said entry operators had ever quoted assessee s name or not. The replies is received in negative. Coupled with this, there is no substance in Revenue s argument that similar addition(s) stand affirmed in various judicial precedents (supra) for the reason that sec. 68 addition is a factual issue requiring the taxpayer to prove the identity, genuineness and creditworthiness of the relevant sum credited. All these assessees have placed sufficient materials on record indicating them to have derived the impugned LTCG form sale of shares This tribunal s yet another decision in Canara Bank vs. JCIT [ 2017 (11) TMI 1425 - ITAT BANGALORE] holds that the estopple principle does not apply in income tax proceedings. We therefore reject Revenue s arguments in support of impugned addition - Decided in favour of assessee.
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2019 (8) TMI 889
Unexplained investment - expenditure towards construction/furnishing of Hotel Courtyard Marriot - addition based on seized documents - Subsequent to the search proceedings the assessee company surrendered an amount of ₹ 4,41,26,298/-towards bogus bills booked during various years - HELD THAT:- A perusal of the seized annexure viz. Annexure A2 Page 13 (copy placed on record) clearly reveals that the source of the balance investment of ₹ 1,88,04,000/- made by the assessee towards construction/furnishing of the Hotel Courtyard Marriot, was from the cash that was received back by the assessee against the payments made towards bogus purchases . In fact, we are in agreement with the contention advanced by the ld. A.R, that inadvertently the remaining part of the seized document viz. Annexure A2 Page 13 had remained omitted to be considered by the CIT(A). As observed by us hereinabove, a perusal of the seized document, to the extent, the same is relevant in context of the investment of ₹ 1,88,04,000/- made by the assessee towards construction/furnishing of Hotel Courtyard Marriot We are of the considered view, that as the investment made by the assessee towards construction/furnishing of Hotel Courtyard Marriot, viz. (i). electrical fittings: ₹ 79,80,001/-; and (ii). furniture and fittings: ₹ 1,08,24,000/-, therein aggregating to ₹ 1,88,04,000/- was sourced from the cash that was received back by the assessee against the payments made towards bogus purchases , therefore, in the backdrop of the declaration of the bogus purchases of ₹ 4,41,26,298/- made by the assessee, a separate addition as regards the application of the said amount would not be justified. - Decided in favour of assessee.
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2019 (8) TMI 888
TP Adjustment - comparable selection - HELD THAT:- Assessee has prayed for exclusion of five comparables and inclusion of three comparables. A perusal of the impugned order shows that the Ld. CIT (A) has not properly considered the objections/submissions of the assessee on a number of comparables and has also passed a non-speaking order in respect of some of the comparables. The Ld. Sr. DR has been fair to accept that the issues need a reexamination by the Ld. First Appellate Authority. Therefore, we deem it appropriate to restore the adjudication on the exclusion and inclusion of the above mentioned eight comparables to the file of the Ld. CIT (A). It is restored accordingly with a direction to the Ld. CIT (A) to adjudicate the issue after providing reasonable opportunity to the assessee in this regard. Issue of working capital adjustment and risk adjustment is also restored to the file of the Ld. CIT (A). It is restored accordingly with a direction to the Ld. CIT (A) to adjudicate the issues after providing reasonable opportunity to the assessee in this regard.
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2019 (8) TMI 863
Monetary limit - low tax effect - HELD THAT:- The tax effect being below the stipulated monetary limit in terms of the CBDT Circular No. 17 of 2019, F. No. 2791 Misc. 142/2007-ITJ (Pt.) passed by the Government of India, Ministry of Finance dated 8th August, 2019, the appeal is treated as not pressed and is disposed of as such.
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Customs
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2019 (8) TMI 887
Direction to exclusive use of weighbridges installed by the petitioners - installation of weighbridges by the Customs Cargo Service Providers at their facilities preferably near entry/exit gates and that, all containers must be weighed - C.B.E.C. issued the instructions/directions dated August 18, 2011 - sometime in 2016, the petitioner observed that, Direct Port Delivery (DPD) and Direct Port Entry (DPE) containers passing through Kolkata Dock were not being weighed at the weighbridges of the petitioner - HELD THAT:- Essentially, the petitioners have sought the relief that, the respondents should not permit any DPD and DPE containers to pass through Kolkata dock of the Kolkata Port without the same being weighed at the weighbridges installed by the petitioners. The circulars that the petitioners have relied upon require weighment of the containers. The circulars do not require that, the containers must be weighed at the weigh bridges installed by the petitioners. The containers, if weighed elsewhere, is acceptable by Custom. Customs authorities have not taken stand that, the containers must be weighed at the weighbridges of the petitioners - There is no privity of contract between the petitioners and the Kolkata Port Trust authorities. The petitioners are occupying land, taken on lease by HSCL from the Kolkata Port Trust authorities. There is nothing on record to suggest that, Kolkata Port Trust authorities had permitted HSCL to put the petitioners into possession of any part or portion of the lease area. There is no obligation on the part of Kolkata Port Trust authorities to ensure that, all DPD and DPE containers passing through Kolkata dock of Kolkata Port Trust must be weighed at the weighbridges installed by the petitioners. There is no merits in the petition - petition dismissed.
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2019 (8) TMI 886
Confiscation - Import of Galvanised Iron (GI) Wires and other items - BIS certificate for the item not produced - Since the importer has not produced the BIS certificate for the item, the goods appeared to be in violation of Foreign Trade Policy rendering the goods liable for confiscation under Customs Act, 1962 - Principles of natural justice - HELD THAT:- Both the authorities have completely failed to follow the principles of natural justice in passing the orders. The original authority issued the show-cause notice in a hurry on 28/05/2019 and the same was served on the appellant at 5pm on the same day and the appellant was directed to file reply next day before 10 to 12AM and further the copies of the relied upon documents in show-cause notice were not furnished with the show-cause notice and when the appellant filed its letter dt. 29/05/2019 requesting the original authority to issue the copies and sought a week s time for personal hearing and to reply to the show-cause notice, the same was not considered and no personal hearing was granted and original order was passed confiscating the goods and imposition of penalty. The entire procedure followed by the original authority appears to be in gross violation of the principle of natural justice. The appellant is covered by the transitional provisions as contained in Foreign Trade Policy. In this case, the appellant made advance payment on 29/10/2018 and 13/11/2018 as evident from the documents produced on record and imported the goods prior to 18/12/2018 which is the date up to which the goods could be imported without insisting on BIS certificate. Both the authorities have completely ignored the saving clause of the Transition Policy and misinterpreted the exclusion clause in the transitional provisions as provided in the FTP 2015-2010. The impugned order is totally illegal and has been passed arbitrarily without following the basic principles of natural justice and on merit also, the appellant is covered by the transition provision as covered under FTP - the original authority directed to immediately release the goods on payment of appropriate duty - appeal allowed - decided in favor of appellant.
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2019 (8) TMI 885
Smuggling - Gold - non-production of documents relating to the gold - HELD THAT:- The Investigating Officer had not verified the party M/s.XEHAAN Capital Services, who has sold the goods to M/s.Prerak Gems. It is seen that Respondents produced the documents which are required to be verified by the Investigating Officers, which they failed to do so. There is no reason to interfere with the order of the Commissioner(Appeals) and the same is sustained - appeal dismissed - decided against Revenue.
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2019 (8) TMI 884
Refund of SAD - refund claim rejected on the ground that the sale invoices submitted with the claim has not been either printed or stamped with endorsement that in respect of the goods covered therein, no credit of additional duty of customs paid as per sub section (5) of Section 3 of the Customs Tariff Act shall be admissible - condition 2(b) of the N/N. 102/2007-Cus. - HELD THAT:- The appellant had produced the copies of the invoices generated from the computer which contains the required endorsement as provided under condition 2(b) of N/N. 102/2007. Further, the price shown in the sale invoice was a consolidated one and therefore nobody would be able to avail any credit either. Further, the appellant had produced the letters from the buyers who have categorically stated that they have not availed any credit on those invoices. When the price shown in the sale invoice is consolidated one and the duty paid on import had not been shown separately, there is no possibility of anyone taking credit of duty paid and this in a way comply with the conditions of the N/N. 102/2007. Appeal allowed - decided in favor of appellant.
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2019 (8) TMI 883
Refund of SAD - Refund rejected on the ground that the appellant had not paid any Sales Tax/VAT on the sale of the imported goods - HELD THAT:- This issue is no more res integra and has been settled by various decisions of the Tribunal including the decision of this Tribunal in the appellant s own case VALLABHDAS AND CO. BALAKRISHNA SALES CORPORATION VERSUS COMMISSIONER OF CUSTOMS COCHIN [ 2017 (5) TMI 1371 - CESTAT BANGALORE ] wherein the Tribunal has allowed all the appeals by relying upon the earlier decisions of the Tribunal - also the N/N. 34/1998 has been subsequently rescinded by N/N. 58/1998-Cus. dated 01.08.1998. It was held that NIL rate of VAT in terms of the notification issued under Kerala Finance Act 2001 is to be considered as appropriate sales tax / VAT. Accordingly, the condition prescribed in Notification No. 102/2007 is satisfied and the appellant will be eligible for the refund of the SAD paid at the time of input. Appeal allowed - decided in favor of appellant.
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Corporate Laws
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2019 (8) TMI 882
Restoration of name of Company in the Registrar of Companies - Section 252(3) of the Companies Act, 2013 - HELD THAT:- The proof in regard to possession of assets by the Company and owing of any liabilities by it as also in regard to factum of any income from legitimate sources assessable to Income Tax being abysmally absent, no fault can be found in regard to striking off the Company by ROC under FTE which has been duly notified in the Gazette of India . Plea in this regard emanating from the Revenue is without substance and cannot be countenanced. Same is true about the plea of Revenue being a Creditor within the meaning of Section 252(3) of the Companies Act, 2013, when admittedly it had not raised any demand or passed any assessment order prior to passing of the order of striking off the Company from the Register of Companies by ROC. Striking off the Company which was a Private Company, from the Register of Companies, indisputably does not absolve its erstwhile Directors who are liable as provided under Section 179 of the Income Tax Act, 1961 to pay the amount of Tax leviable in respect of income of any previous year. Why, in presence of such mechanism within the legal framework available to Revenue, insistence is on restoration of Company without laying any proof of its being possessed of any assets and liabilities and without any evidence of the Company being in operation, is a question that can be best answered, though has not been answered by the Revenue. Appeal dismissed.
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2019 (8) TMI 881
Restoration of the name of the Company which has been struck off by the Registrar of Companies, West Bengal - Section 252(1) of the Companies Act, 2013 - HELD THAT:- It is noted that the Company is having regular operations and have got substantial revenue therefrom. Hence, it can be safely concluded that the Company is in operation. This fact is also corroborated by the various licences/Bank statements as well as the copies of Income Tax returns submitted by the Appellant. However, no plausible reasoning has been given for non-filing of returns which set Office of the Registrar of Companies into action for striking off the name of the Company, nor the Company gave reply to the notice issued by the Registrar of Companies - Hence, it is a fit case for imposing cost of ₹ 25,000/- for each year of default so that such recurrence can be avoided and a culture of compliance of statutory requirement in time, is brought in. The Registrar of Companies, the respondent herein, is ordered to restore the original status of the Appellant Company as if the name of the company has not been struck off from the Register of Companies with resultant and consequential actions like changing status of Company from 'strike off' to Active; activating DIN Nos. etc. - Appeal disposed off.
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2019 (8) TMI 880
Sanction of Scheme of Amalgamation - Section 230 to 232 of the Companies Act, 2013 - It has been stated in the Company Petition that the present Scheme of Arrangement does not contain or provide for Corporate Debt Restructuring - HELD THAT:- The Scheme of Amalgamation mentioned in this Petition being Annexure A hereto be sanctioned by this Hon'ble Tribunal to be binding with effect from 31st day of March, 2018 on VIVEK TRADE INVESTMENT PRIVATE LIMITED with UNISTAR RESOURCES AND TRADES PRIVATE LIMITED and their shareholders and all concerned - All the properties, rights and interest of VIVEK TRADE INVESTMENT PRIVATE LIMITED be transferred to and vested in without further act or deed in UNISTAR RESOURCES AND TRADES PRIVATE LIMITED and accordingly the same shall pursuant to Section 232 of the Companies Act, 2013 and read with Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 be transferred to and vested in UNISTAR RESOURCES AND TRADES PRIVATE LIMITED for all the estate and interest of VIVEK TRADE INVESTMENT PRIVATE LIMITED but subject nevertheless to all charges, now affecting the same. Petition disposed off.
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2019 (8) TMI 879
Restoration of Company in the Register of Companies maintained by the Registrar of Companies, West Bengal - Section 252 (3) of the Companies Act, 2013 - HELD THAT:- The Company has got unsecured long term and short term loans which have been invested in the real estate properties and shares since beginning and the same status, more or less, has continued till 31 st March, 2018 - The company has also provided us the copy of bank statement as Annexure A-7 and Copies of Income Tax Return marked as Annexure 6. The above facts lead us to a conclusion that the Company made investment in properties in the initial period itself which is continuing. It is also pertinent to mention that investment in such properties is of a significant value and in case the Company is struck off, it may cause irreparable loss and disposal of such properties may be legally difficult - we do not find any merit in the contention of the appellant that they came to know the status of the Company being struck off only when statements were being submitted online as ROC has clearly mentioned that the Company and Directors were made aware of the action being taken by ROC under Section 248 of the Companies Act, 2013. The ROC, Kolkata is directed to restore the original status of the Applicant Company namely M/s. Jindal Nirman Private Limited as if the name of the company had not been struck off from the Register of Companies with resultant and consequential actions like changing status from 'STRUCK OFF' to 'ACTIVE; activating DIN No. of the Director, applicant, etc. - appeal disposed off.
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Insolvency & Bankruptcy
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2019 (8) TMI 878
Corporate Insolvency Resolution Process - claim initiated by the creditor before CIRP application by other creditors - claim including future liability - liability of consortium partners - According to the Appellant, the Corporate Debtor time to time, defaulted in paying its share against calls raised by the Appellant during the period March 2016 to February 2017 - Operational creditors. HELD THAT:- From I B Code , it is clear that on initiation of Corporate Insolvency Resolution Process (after admission), the public announcement of the Corporate Insolvency Resolution Process is made under Section 15. Thereafter, the Interim Resolution Professional is empowered under Section 18(1) (b) to receive and collate all the claims submitted by creditors - The aforesaid claim(s) relates to the debt payable to a creditor(s) before initiation of the Corporate Insolvency Resolution Process and do not relate to any amount payable during the Corporate Insolvency Resolution Process . For the reason merely on the ground that the future claim has not been collated by the Resolution Professional , the Appellant- Bharat Petroresources Limited cannot assail the order of approval of plan (dated 25th July, 2018) passed under Section 31 of the I B Code - The Operational Creditors and the Financial Creditors having given almost same treatment, no interference is called for on the ground that Gail (India) Limited has not been treated as Operational Creditor . Application disposed off.
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2019 (8) TMI 877
Approval of Revised Resolution Plan - revised plan has not been approved by the Committee of Creditors - whether a case has been made out to exclude any period for the purpose of counting 270 days of the Corporate Insolvency Resolution Process ? - HELD THAT:- In absence of any extraordinary situation and the fact that more than 270 days have already been passed, we find no ground to exclude any period. Further, once a plan is approved by the Adjudicating Authority under Section 31, if it is not implemented, that cannot be a ground to exclude any period - If a plan is approved under Section 31 within 180 days or much before completion of 270 days, one may request the Adjudicating Authority to allow the Committee of Creditors to consider the other Resolution Plans , if the Resolution Applicant is not ineligible and such plans were not rejected on merit but were not approved because best of the plan was approved by the Committee of Creditors . However, we are not inclined to decide such issue in view of the provisions of Section 33(3) and mandate under Section 12 of the I B Code . In the present case, it is argued that none of the persons interests are prejudicially affected because of contravention, made any application to the Adjudicating Authority for liquidation order under sub-section (3) of Section 33, therefore, according to the counsel for the Committee of Creditors and the Resolution Professional , no order could have been passed under Section 33(3) of the I B Code - in case where the Resolution Plan earlier approved within a reasonable period of 180 days or much before completion of 270 days, one may request the Adjudicating Authority to allow the Resolution Professional / Committee of Creditors to consider the pending Resolution Plan (s) or to call for fresh Resolution Plan / Revised Resolution Plan , in absence of any application under Section 33(3) filed by any person whose interest is prejudicially affected by contravention of the plan by the Corporate Debtor . In the present case, more than 270 days have been completed much earlier and no case is made out to exclude any period, we hold that the Adjudicating Authority has no other option but to pass order of liquidation. The I B Code is silent on the issue as to whether the Adjudicating Authority has any jurisdiction to pass any order referring the matter to the Central Government or the Insolvency and Bankruptcy Board of India for action under Section 74(3) of the I B Code or under any of the provisions for punishment as prescribed under Chapter VII of Part II of the I B Code - From sub-section (2) of Section 236, it is clear that no Special Court can take cognizance of any offence punishable under the I B Code , including punishment prescribed under Section 74(3) of Chapter VII of Part II, save on a compliant made by the Insolvency and Bankruptcy Board of India or the Central Government or any person authorised by the Central Government in this behalf. It is the Adjudicating Authority who is required to refer such matter to the Insolvency and Bankruptcy Board of India or the Central Government to take up the matter to the Special Court if on investigation, if any case of offence under Chapter VII, including Section 74(3) is made out - we are not inclined to give any direction as was sought for by the Committee of Creditors nor inclined to exclude any period calling for fresh Resolution Plan . More than 270 days having passed, the Adjudicating Authority will pass appropriate order of liquidation, which will be in accordance with law. The impugned order dated 13th February, 2019 so far it relates to grant of liberty to the Resolution Professional and the Committee of Creditors to move before the Insolvency and Bankruptcy Board of India or the Central Government is set aside - Appeal disposed off.
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2019 (8) TMI 876
Admissibility of petition - Initiation of Corporate Insolvency Resolution Process - Corporate Debtor - section 9 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The parties have settled the matter prior to the constitution of the Committee of Creditors and in view of the decision of the Hon ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [ 2019 (1) TMI 1508 - SUPREME COURT ] and in exercise of inherent powers under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016, we set aside the impugned order dated 23rd April, 2019 and allow the respondent (Operational Creditor) to withdraw the application under Section 9 of the I B Code. The application preferred by the Respondent under Section 9 of the I B Code is disposed of as withdrawn. The Adjudicating Authority will now close the proceeding - Appeal allowed.
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2019 (8) TMI 875
Premature cancellation of Fixed Deposit - transfer of proceeds of the Fixed Deposit Receipts into the account known as the Trust and Retention Account with the Central Bank of India - HELD THAT:- The Resolution Professional given the view that the principles of the bankers general lien, Section 171 of the Contract Act, 1872 and agreed terms of the Corporate Guarantee , the Appellant was not entitled to stake its claim over the said FDRs to the tune of ₹ 3,58,09,820/- after the demand/invocation. It was submitted that the Appellant has exercised its right having control over the property (FDRs). Claim of the Appellant as Financial Creditor - HELD THAT:- The Appellant having invoked the guarantee, this Appellate Tribunal in interim order dated 25th May, 2018 allowed the Appellant to attend the meeting of the Committee of Creditors subject to the decision of both the appeals. However, the Appellant was not given a right of voting with the condition that if the resolution plan approved in the meantime that shall be subject to the decision of these Appeals. The impugned order need not interfered with - appeal disposed off.
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2019 (8) TMI 874
Admissibility of petition - initiation of Corporate Insolvency Resolution Process - Corporate debtor - scope of 'Operational Debt' - section 9 of Insolvency Bankruptcy Code, 2016 - HELD THAT:- The debt in hand pertains to liquidated damages and is not an Operational Debt within the meaning of Section 5(21) of the Code. The Liquidated damages are the damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach, such as in this case, non-performance. The liquidated damages can be crystallised only after adjudication from a court of law. Its reasonableness is also decided by a court of law. on the other hand, the insolvency proceedings are not the appropriate forum to decide the reasonability of the liquidated damages or to file claim for damages. Hence, the damages claimed in the present case cannot be adjudicated as the same is the subject matter of a civil suit. Liquidated damages are not an actionable claim, until and unless adjudicated. This is the first reason for not considering the liquidated damages as operational debt - Liquidated damages are provided in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. As against that, the meaning of Operational Debt is a claim in respect of goods supplied, or services rendered as defined in section 5(21) of the Code. Therefore, it can be concluded that the impugned claim of damages, neither ascertainable nor crystallised, hence out of the ambits of the Operational Debt. This petition stands outside the scope of the Code and Section 9 thereof - appeal dismissed on maintainability.
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Central Excise
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2019 (8) TMI 873
Restoration of appeal - condonation of delay - section 35(G) of the Excise Act, 1944 - HELD THAT:- An appeal under section 35(G) of the Excise Act, 1944 will lie instead of a Writ Petition under Article 226/227 of Constitution which definitely would have, had the application for condonation of delay was dismissed on merit, eventually leading dismissal of appeal being barred by time - The petitioner has the remedy seeking restoration of the appeal and the application for condonation which has been dismissed for want of prosecution. In case of Balaji Steel Re-Rolling Mills Vs. Commissioner of Central Excise and Customs [ 2014 (11) TMI 531 - SUPREME COURT] , wherein it is held that the provisions of the Act enjoins upon the Tribunal to pass order on the appeal confirming, modifying or annulling the decision or order appealed against or may remand the matter. It does not give any power to the Tribunal to dismiss the appeal for default or for want of prosecution in case the appellant is not present when the appeal is taken up for hearing. The matter is relegated to the Tribunal for decision in appeal on merit after affording an opportunity of hearing to the parties - Petition disposed off.
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2019 (8) TMI 872
Clandestine Removal - demand based on loose slips and scribbling pads recovered from the premises of the appellants - main case of the department is based on assumptions and presumptions and not corroborated with evidences - HELD THAT:- The entire case is made on evidence contained in the slips/documents recovered from the appellant or the third parties. We find that learned Commissioner has given detailed findings on going through the File No. 61 and 62 (notebook). The findings of the Commissioner are contained in paras 45 to 74 of the impugned order. We find that learned Commissioner has analysed the evidence available to come to the conclusion on the quantity of evasion alleged to have been made by the appellants - Learned Commissioner however confirmed the demand for the period February to March 2003 along with a period August 2004 to September 2004 for the reason that the scribblings are under the name of Shri. Muthu and a payment voucher was recovered containing the signature of the payer and the payee. This is but one example to show that learned Commissioner has been meticulous in scrutiny of the documents and arriving at the quantity alleged to have been removed clandestinely. Slips maintained by a specific person performing a specific duty for which he is paid cannot be brushed aside simply for the reason they are not singed/authenticated. These are not like the scribblings of a school kid who notes down something whenever he is not interested in the class. Therefore, we find that they have evidentiary value as long as they are recovered from the persons/premises of the appellants or from the persons/premises with whom they have transaction. We find that learned Commissioner has rightly held that it is sufficient to prove that the default in compliance has occurred; no evader of tax leaves all evidences to prove his guilt and that there are ample evidences to prove the malfeasance of the assessee. Retraction of statements - HELD THAT:- The retraction of the statement by Shri. Latheef at a later date has no relevance. Similarly, as the evidences albeit in bits and pieces corroborate the clandestine removals of the appellants, we find that non-recording of statements of Shri. Muthu or Shri. Sagidas does not vitiate the proceedings. As these are employees/contractors of the appellants their cross-examination would have not served any further purpose as there is every chance that they may be tutored at a later date by their employer. As there was sufficient evidence as discussed by the Commissioner, the above infirmities do not come in a way of the conclusions drawn. Time Limitation - HELD THAT:- As observed by the learned Commissioner, the duty evasion resorted to by the appellants could only be unearthed after investigation of DGCEI. Therefore, extended period in terms of proviso to Section 11A is attracted. We remand the case back to the original authority for computing the quantity alleged to have been clandestinely removed after taking into account the actual quantity already accounted for by the appellants as per their submissions mentioned in Para 4.8 above. The appellants are directed to submit all the evidence, to prove the actual quantity accounted by them and the quantity received by them on job-work/conversion basis from others, within four weeks of receipt of this order - Appeal allowed by way of remand.
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2019 (8) TMI 871
Clandestine removal - it was alleged that appellant have received the inputs manufactured by M/s Lauls Limited without any cover of invoice of manufacturer and without payment of duty - various statements recorded during the course of investigation and on the basis of the conclusion drawn by the DGCEI that M/s Lauls Limited is manufacturing M.S. Ingots and clearing the same without payment of duty - HELD THAT:- Revenue has failed to bring any corroborative evidence on record except the statement recorded during the course of investigation. Merely admission by way of statement without corroborative evidence cannot result to prove the allegation of clandestine removal of goods - on the said basis demand cannot be confirmed. As held by this Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE, DELHI-I, M/S KUBER TOBACCO INDIA LTD, SHRI DHANPAT SINGHEE, DIRECTOR, SHRI CHATAR SINGH BAID, SHRI VIKAS MALU VERSUS M/S KUBER TOBACCO INDIA LTD, COMMISSIONER OF CENTRAL EXCISE, DELHI-I [ 2016 (4) TMI 622 - CESTAT NEW DELHI] wherein it has been held that the statement recorded during the course of investigation is to be testified by the adjudicating authority in terms of Section 9D of the Central Excise Act, 1994 and thereafter same is allowed to be cross examined to the assessee. But none of the said act has been done by the adjudicating authority in this case. The charge clandestine clearance has not been established by the Revenue with tangible evidence - Appeal allowed - decided in favor of appellant.
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2019 (8) TMI 870
Clandestine manufacture ad removal - suppression of production of clandestine removal of goods without issue of any invoice - shortage of stock - allegation based on differences between stock statement submitted with the bank and statutory record - no corroborative evidences - opportunity of cross-examination not granted - HELD THAT:- In the case of BEEKAYLON SYNTHETICS VERSUS COMMISSIONER OF C. EX., SURAT/MUMBAI [ 2003 (8) TMI 108 - CESTAT, NEW DELHI ] , time and again the Tribunal observed that bank statement by itself cannot be the basis for holding that there was undervaluation for clandestine removal - thus, on the basis of differences between the stock statement furnished to the bank and statutory record cannot be the reason to allege the clandestine removal of goods in the absence of any corroborative evidence - Further, no opportunity of cross-examination was granted to the appellant to adduce evidence - demand of duty not sustainable. CENVAT Credit - denial on the ground of non payment for procurement of the input - Rule 3 of Cenvat Credit Rules, 2004 - HELD THAT:- In terms of Rule 3 of Cenvat Credit Rules, 2004 an assessee is entitled to avail cenvat credit on receipt of the inputs. It is immaterial where assessee paid the amount to supplier of the inputs or not - Merely, the appellant did not pay amount towards supply of inputs to the appellant and in the absence of any contrary evidence, the cenvat credit cannot be denied to the appellant. The penalties imposed on all the appellants are also set aside. Appeal allowed - decided in favor of appellant.
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2019 (8) TMI 869
Valuation - cash discount which is declared on the invoice even though in some cases the discount was not availed by the buyer and the same was not passed on - HELD THAT:- On the identical issue this bench has passed an order in the case of JK PAPER LTD. VERSUS C.C.E S.T., SURAT-II [ 2019 (2) TMI 1239 - CESTAT AHMEDABAD ] referring the decision of Hon ble Supreme Court in the case of Purolator India Ltd. [ 2015 (8) TMI 1014 - SUPREME COURT ] dealing with the same issue taken a view that transaction value has to be written alongwith expression for delivery at the time or place of deliveries. Therefore, value of excisable goods even on the basis of transaction value is only to be taken i.e. at the time of clearance of goods from assesee s factory or depo. An expression actually paid or payable for the goods when sold means whatever is agreed to as price for the goods on the basis of value whether such price, has been paid in parts or has not been paid at all. Hence, cash discount which is not at or prior to clearance of goods being contained in agreement of sale between assessee and buyers must, therefore, be deducted from sale price in order to know the value of excisable goods at time. Hence, cash discount was deductible. - appeal allowed - decided in favor of appellant.
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2019 (8) TMI 868
Demand of Interest and penalty - CENVAT Credit - common input services used for trading and manufacturing activities of the company - Rule 6(3(A)) of CCR, 2004 - HELD THAT:- The appellant has reversed the CENVAT credit wrongly availed much before the issuance of the show-cause notice and the same has also been appropriated in the original order. Further, the appellant has also produced on record, the CENVAT credit account which shows the credit of around ₹ 1 crore during the disputed period which clearly shows that the appellant has only availed the credit and has not utilized the same and therefore in view of the decision of Hon ble Karnataka High Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [ 2011 (4) TMI 969 - KARNATAKA HIGH COURT] , they are not liable to pay the interest. For the purpose of verification of the excess credit reversed by the appellant, the original authority is directed to verify from the records regarding the allegation of the appellant regarding the excess reversal of CENVAT credit - appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2019 (8) TMI 867
Recovery of arrears of Entertainment tax - attachment of property - mortgage of the immovable property after conditional release by the Court - HELD THAT:- In the light of the fact that writ petitioner has shown her bona fides not only by offering to furnish bank guarantee and keep the same alive as per directions of this Court, but has also deposited the entire bank guarantee sum in bank account of her son from which bank guarantee is to be issued - Writ petitioner shall furnish a bank guarantee for the entire sum of ₹ 7,11,000/- through the bank account of writ petitioner's son viz., R.Swethaprakash, with SB Account No.2836201000178, Canara Bank Krishnagiri Branch, in which according to the writ petitioner ₹ 7,00,000/- has already been deposited on 01.08.2019 for this purpose - petition disposed off.
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2019 (8) TMI 866
Refund of the excess input tax credit - while processing refund application dept proposed to retrieve a total input tax credit along with interest and on the basis of the revised assessment finalization - Single Judge had considered the prima facie merit of the contentions raised by the appellant, however, the appellant was relegated to avail the statutory remedy - HELD THAT:- We cannot hold that the approach of the learned Judge is in any manner illegal, erroneous or improper. There exists no merit to reverse such a finding, in exercise of the appellate jurisdiction. At the same time, we take note of the observations contained in the impugned judgment to the extent of the learned Single Judge finding a strong prima facie case in favour of the appellant. Therefore we are of the opinion that, considering the special circumstances prevailing, interest of justice could be achieved by directing consideration of the appeal itself by the statutory appellate authority on an expeditious basis and till then to direct deferment of collection and recovery of the disputed amounts. We grant two weeks time from today to the appellant to file statutory appeals against Ext.P6 P6 (a) orders. If the appeals are filed within the time stipulated, the statutory appellate authority shall consider the same as appeals filed within the time stipulated; and shall proceed to dispose of the appeals after affording opportunity of hearing to the parties concerned, at the earliest, at any rate, within a period of 2 months from the date of receipt of such appeals. Till the disposal of the appeals as directed above, realization of the disputed amount in Ext.P6 shall be kept in abeyance. Appeal disposed off.
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2019 (8) TMI 862
Recovery of alleged arrears of Entertainment Tax - Attachment and auction of property - HELD THAT:- There is no tax arrears, that they have paid the entire entertainment tax and that writ petitioner has not received any notice or communication prior to the impugned communication dated 08.07.2019, the impugned communication shall be kept in abeyance till the next listing as encumbrance regarding auction of immovable property of writ petitioner can cause an irreversible situation - Likewise, writ petitioner or any one claiming under writ petitioner shall not deal with the immovable property that is subject matter of impugned communication till the next listing in any manner. List this matter on 13.08.2019.
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Indian Laws
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2019 (8) TMI 865
Confiscation of vehicle - illicit liquor - bore country made pistol - bore live cartridges - power on the authorised officers of the Excise Department and the competent Police Officers to investigate into the offences punishable under the Act - Sections 60 and 72 of the United Provinces Excise Act, 1910 - Section 5 of the Criminal Procedure Code, 1973 - HELD THAT:- The confiscation of a vehicle found in illicit transportation of the liquor is an offence which can be investigated by an Excise Officer as well as by a Police Officer. But the exclusive power of confiscation is vested with the Collector in terms of sub-section (2) of Section 72 of the Act. The sale proceeds of seized things or Animal which are subject to speedy wear and tear or natural decay, if sold, are required to be paid to the person found entitled thereto in terms of sub-sections (4) and (8) of Section 72 of the Act - Sub-section (9) of Section 72 of the Act clarifies that no order of confiscation made by the Collector shall prevent the infliction of any punishment to which the person affected thereby may be liable under this Act. Thus, the punishment consequent to the prosecution is distinct from the order of confiscation passed by the Collector. The Collector has exclusive jurisdiction to confiscate the vehicles and in case the seized things are subject to speedy wear and tear or natural decay, he may order to sell the same in the manner prescribed under sub-section (3) of Section 72 of the Act. Sub-section (4) deals with distribution of sale proceeds when the seized thing is sold which is subject to wear and tear and natural decay or when it is expedient in public interest to do so. Subsection (8) of Section 72 of the Act deals with a situation where a prosecution of an offence is instituted in relation to which confiscation was ordered, the thing or animal shall be disposed of subject to the provisions of sub-section (4) of Section 72 of the Act in accordance with the order of the Court. The order of the Court in sub-section (8) of Section 72 of the Act is after conclusion of the prosecution which is different from the seized things which are subject to speedy wear and tear or natural decay as contemplated by sub-section (3) of Section 72 of the Act. There is no error in the order passed by the High Court which may warrant interference in the present appeal - Since the High Court has decided the matter only on the question of jurisdiction of the Collector to order confiscation, the matter is remitted back to the High Court to exercise power of judicial review over the order of confiscation passed by the Collector and as affirmed by the District Judge. Appeal allowed by way of remand.
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2019 (8) TMI 864
Maintainability of suit - Jurisdiction - civil suit filed before the High Court of Delhi - demand for payment of property tax - Whether a civil suit is maintainable in disputes pertaining to payment of tax under the Delhi Municipal Corporation Act, 1957? HELD THAT:- Section 9 of the Code of Civil Procedure, 1908 confers jurisdiction on the Civil Courts to try all suits, excepting those which are either expressly or impliedly barred. Chapter VIII of the Act deals with levy of taxes that can be imposed by the Corporation. Property tax is dealt with in Sections 114 to Section 135 of the Act - There is an inherent right to approach a civil court. The bar on a civil court s jurisdiction is not to be readily or lightly inferred. The jurisdiction of civil courts can be excluded by an express provision of law or a clear intendment in such law. Section 17 of the Madhya Bharat Sales Tax Act, 1950 barred the jurisdiction of any court in matters pertaining to assessments made under the Act. The recovery of Sales Tax under the said Act was the subject matter of civil suits filed by the asessees. The State objected to the maintainability of the civil suits on the ground that jurisdiction of civil court was barred - A perusal of the relevant provisions of the Act would show that there is no express bar on the jurisdiction of Courts. However, Section 169 of the Act provides for an appeal to the Municipal Taxation Tribunal. Section 171 of the Act provides that the order of the Municipal Taxation Tribunal in the appeal filed by the Assessee shall be final. According to the Corporation, the aforementioned Sections, read together, create a bar on the jurisdiction of civil courts. Resolving the dispute about the maintainability of a civil suit against the order passed by the revisional authority, this Court held that the suit was not maintainable. In the said case, the submission on behalf of the Assessee was that the right to second appeal to the District Court as per the provisions of the Act was coupled with an onerous condition i.e. deposit of the entire amount of property tax. Hence, it was pleaded that the remedy provided under the Act was not adequate. This Court rejected the said submission by holding that the alternate remedy provided by a statute not being an adequate or efficacious remedy, is not a ground for maintaining a civil suit. However, this Court was of the opinion that a Writ Petition under Article 226 is maintainable if the remedy provided in the statute is not efficacious. There is also no pleading with regard to non-compliance of any fundamental provisions of the statute. It is settled law that jurisdiction of the civil courts cannot be completely taken away in spite of either an express or implied bar. The civil courts shall have jurisdiction to examine a matter in which there is an allegation of non-compliance of the provisions of the statute or any of the fundamental principles of judicial procedure. A plain reading of the plaint would suggest that the order impugned in the suit is at the most an erroneous order. No jurisdictional error is pleaded in the plaint - the question of maintainability of the suit does not arise. In the absence of any pleadings in the plaint, the High Court ought not to have remanded the matter back to the learned Single Judge - Appeal allowed - decided in favor of appellant.
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