Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
August 27, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Customs
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46/2021 - dated
25-8-2021
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ADD
Seeks to amend notification No.54/2016- Customs (ADD), dated the 29th November, 2016
GST - States
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23/2021-State Tax - dated
29-7-2021
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Chhattisgarh SGST
Amendment in Notification No. 13/2020–State Tax, dated the 31st March, 2020
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22/2021-State Tax - dated
29-7-2021
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Chhattisgarh SGST
Seeks to rationalize late fee for delay in filing of return in FORM GSTR-7
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21/2021-State Tax - dated
29-7-2021
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Chhattisgarh SGST
Amendment in Notification No. 73/2017–State Tax, dated the 30th December, 2017
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17/2021-State Tax - dated
29-7-2021
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Chhattisgarh SGST
Amendment in Notification No. 83/2020–State Tax, dated the 30th December, 2020
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05/2021 – State Tax (Rate) - dated
29-7-2021
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Chhattisgarh SGST
Seeks to provide the concessional rate of CGST on Covid-19 relief supplies, up to and inclusive of 30th September 2021
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04/2021 – State Tax (Rate) - dated
29-7-2021
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Chhattisgarh SGST
Amendment in Notification No. 11/2017—State -Tax (Rate), dated the 28th June, 2017
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26/2021-State Tax - dated
27-7-2021
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Himachal Pradesh SGST
Amendment in Notification No. 11/2021-State Tax dated the 14th June, 2021
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25/2021-State Tax - dated
27-7-2021
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Himachal Pradesh SGST
Amendment in Notification No. 21/2019-State Tax dated the 30th May, 2019
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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MAT credit on the difference between gross tax liability as per normal provisions and MAT provisions as claimed by assessee in ITR instead of base tax as per normal income and book profit u/s 115JB - CIT(A) has allowed relief to the assessee and has held that while allowing the MAT credit, it is gross Income Tax including Surcharge and Education Cess which is required to be considered. - Order of CIT(A) confirmed - AT
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Cash subsidy received from Madhya Pradesh Rajyasetu Nirman - the finding of the AO that assessee has not adjusted the amount of capital subsidy against the project expenses is devoid of any merit. - the assessee has incurred the expenses on the projects which were in the nature of BOT. Thus the assessee was entitled to amortize the expenses over the concession period of these projects - AT
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Whether entering into a lease transaction would amount to transfer? - the CIT(A) is right in its observation that a lease transaction would not amount to a transfer and merely because the lessor had claimed 100% depreciation on the said asset cannot make the asset as 'previously used' to disqualify the asset from claiming deduction - HC
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Refund of amount adjustment towards pre-deposit in excess of 20% - recovery proceedings while appeal is pending - this Court is of the view that the respondents are entitled to seek pre-deposit of only 20% of the disputed demand during the pendency of the appeals in accordance with paragraph 4(A) of the office memorandum dated 29th February, 2016, as amended by the office memorandum dated 25th August, 2017. - HC
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Addition in the income of the assessee by treating as income from other sources - Additions based on TDS form 26AS - As per the record, the assessee was not having any other income other than the LIC commission and post office commission and the TDS of the same has also been deducted on the said income which is reflected in Form 26AS, therefore, considering these peculiar facts and circumstances, we direct the A.O. to delete the addition - AT
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Disallowance of claim u/s 80IA - return of income was not filled as per provisions of section 139(1) - Since the assessee has made substantial compliance to claim the deduction under section 80IA of the Act. There are no findings of the assessing officer that assessee is not eligible to claim deduction under section 80IA of the Act. We noticed that there is sufficient compliance with the main requirements to claim the deduction under section 80IA of the Act. In view of the above discussion, the claim of the assessee cannot be denied on technicalities when the assessee is legally otherwise entitled for deduction. - AT
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Disallowance of provisions of section 36(1)(vii) - whether the loss on account of FDR's maintained with MMCBL, which was under liquidation, and written off of the same is eligible for deduction under the head business and profession? - the entries made in the assessee's books of account in that behalf were strictly in accordance with the guidelines issued by the RBI - Claim cannot be denied - AT
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Offences punishable u/s 276C(2) and 277 - assessee paid at a lesser amount than actually shown in the counter file of the income tax challan enclosed along with returns and extra digit was prefixed to the amount actually paid. - Since it is not in dispute that the aggregate amount of tax interest and penalty involved in the present case is less than ₹ 10,000/- as per the CBDT circular and the relevant para as noted above, the initiation of prosecution against the petitioners is liable to be quashed. - HC
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TDS Liability payment made by the LIC to its development officers? - Exempted Allowances u/s 10(14) - It appears that LIC devised a proforma for the development officer to fill up certifying the expenditure incurred by them for development of insurance business. A portion of the allowance thus granted was then treated as exempt under Section 10 (14) of the act. Way back on March 12th, 1997 the CBDT informed the Chairman LIC that such procedure was not in accordance with Section 10 (14) of the Act read with Rule 2 BB (i) of the IT Rules and that “unless an allowance is notified u/s 10 (14) (i) of the Act no portion of it can qualify for tax exemption.” - Liability confirmed - HC
Customs
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EPCG Scheme - failure to fulfill the conditions stipulated in the license - failure to submit the export obligation discharge certificate EODC issued by the licensing authority - The appellant has fulfilled the export obligation much prior the expiry of the time under the license issued to him. He also has produced the EODC before Commissioner (Appeals) proving that he has fulfilled the export obligation. The order ignoring the said EOC with an intent to confirm the recovery of duty waiver sought by the appellant at the time of imports is nothing but a forcible recovery. - AT
Service Tax
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SVLDRS - Refusing to issue the discharge certificate, on the ground that, petitioner has illegally sought transitional credit of the disputed Cenvat credit under the GST Act - Once the declarant had made payment of the estimated amount as per the statement in the form of SVLDRS-3 within the stipulated time, it was beyond the jurisdiction of the respondents to proceed with adjudication of the show-cause notice issued under the Central Excise Act with regard to the self same subject matter - HC
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Refund of CENVAT Credit - export of services - Period of limitation - Though the original authority has rendered a finding that the refund claim is hit by time-bar, such finding is not supported by any reasons and there is no discussion as to the computation made by him for arriving at the conclusion that the refund claim is hit by time-bar. As per notification itself, it can be seen that the refund claims are filed in each quarter. The contention of the learned AR that when computed from the first day of relevant quarter, the claim is beyond one year cannot be accepted since section 11B stipulates that the period of one year has to be computed from the relevant date and the relevant date is also explained in the said section. - AT
Central Excise
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Valuation - payment of duty on a lesser assessable value by not including the value of scrap generated during the course of manufacture and retained by themselves as consideration towards job charges - for determining the cost of production of the captively consumed goods, CAS-4 has to be applied which has been done by the appellant. - AT
Case Laws:
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GST
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2021 (8) TMI 1076
Rate of GST - course fee payable by candidates for the DNB course conducted under the auspices of the National Board of Examinations - enhancement in the quantum of fee - applied to all ongoing broad specialty, special specialty and fellowship courses, irrespective of the year of joining or not - HELD THAT:- Issue notice, returnable on 3 September 2021. Since an application for interim relief is made on behalf of the petitioners, further proceedings directed to be listed on 3 September 2021.
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2021 (8) TMI 1074
Seeking refund of excess cash balance in the electronic cash ledger along with the applicable interest - applicability of N/N. 13/2017-Central Tax dated 28th June 2017 - HELD THAT:- Respondent nos.2 3 states that the Petitioner s refund application is being processed and shall be disposed of by way of a reasoned order in accordance with law within four weeks. The statement made by learned counsel for Respondent nos.2 3 is accepted by this Court and the said Respondents are held bound by the same - Petition disposed off.
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2021 (8) TMI 1073
Seeking directions to discharge statutory tax dues, or in alternate direct the respondent No.3 to provide installment facility to the petitioner to clear its tax liabilities - case of petitioner is that the operations of the petitioner were curtailed not only because of pandemic but also because of Government control - HELD THAT:- The prayer of learned Senior counsel for the petitioner is found to be a fair one. Consequently, this writ petition is disposed off with a direction to the respondent No.3 to decide the representation/letter (Annexure P-3) by passing a speaking order within a period of two weeks from the date of receipt of certified copy of this order.
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2021 (8) TMI 1069
Maintainability of petition - availability of alternative remedy of appeal - instead of filing appeal, present writ petitions are filed raising certain factual grounds as well as legal grounds with reference to the provisions of the TNGST Act - HELD THAT:- Perusal of the assessment orders impugned dated 15.02.2021 states that appeal against the order, if any, may be filed before the Deputy Commissioner (ST), GST Appeal, Coimbatore within a period of three months from the date of receipt of the order. The petitioner, instead of preferring an appeal before the competent appellate authority, has chosen to file these writ petitions claiming that the authorities have committed certain irregularity in appreciating the documents and objections submitted by the petitioner. This Court is of the considered opinion that when an appellate remedy is contemplated under the provisions of the TNGST Act, more specifically under Section 107, the petitioner has to exhaust the appellate remedy before approaching the court of law. High Court cannot adjudicate the disputed issues between the parties, which is to be done by the original authority as well as by the appellate authority with reference to the documents and evidences - High Court cannot dispense with the appellate remedy in a casual and mechanical manner. An aggrieved person need not be deprived of valuable right of appellate remedy for effective adjudication of facts and circumstances with reference documents. Power of judicial review of the High Court under Article 226 of the Constitution of India is to scrutinize the processes and the procedures adopted by the competent authorities for arriving a particular decision in accordance with law, but not the decision itself. Thus, the High Court cannot entertain an adjudicative process regarding the mixed question of fact and law with reference to the documents and evidences in original - adjudication before the appellate authority with reference to such disputed findings of the original authority would be of greater importance. The petitioner is at liberty to prefer an appeal in a prescribed format and by complying with the Act and Rules and in the event of filing any such appeal, the appellate authority competent shall dispose of the same on merits and in accordance with law as expeditiously as possible - Petition dismissed.
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2021 (8) TMI 1067
Violation of principles of natural justice - fair opportunity as well as sufficient time of hearing not provided - ex-parte assessment order passed - HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, we form an opinion that the order is bad in law. This is for two reasons- (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order of assessment passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences. Petition disposed off.
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Income Tax
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2021 (8) TMI 1065
MAT credit on the difference between gross tax liability as per normal provisions and MAT provisions as claimed by assessee in ITR instead of base tax as per normal income and book profit u/s 115JB - as per revenue explanation 2 to section 115JB was inserted to define the meaning of tax for the purpose of calculating book profit liable to tax u/s 115JB and it cannot be extended to section 115JAA or section 115JB of the Act - HELD THAT:- CIT(A) has allowed relief to the assessee and has held that while allowing the MAT credit, it is gross Income Tax including Surcharge and Education Cess which is required to be considered. - This issue is covered by the decision of SREI Infrastructure Finance Ltd [ 2016 (8) TMI 967 - CALCUTTA HIGH COURT] thereby confirming the set off of MAT Credit u/s 115JAA brought forward from earlier years against tax on total income including surcharge and education cess instead of adjusting the same from tax on total income before searching surcharge and education cess. The Hon ble Calcutta High Court relied upon the decision of the Hon ble Apex Court in case of CIT Vs. Tulsyan Nec Ltd. [ 2010 (12) TMI 23 - SUPREME COURT] . Thus, there is no need to interfere with the findings of the CIT(A). Hence, the appeal of the Revenue is dismissed.
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2021 (8) TMI 1053
TDS Liability payment made by the LIC to its development officers? - Exempted Allowances u/s 10(14) - Salary - Order u/s 201 - ITO (TDS) held that in respect of 12 development officers of LIC there was a short deduction and non-deduction of the tax in the sum for the Financial Year 1999-2000 and that the said amount had to be paid by LIC to the Central Government - HELD THAT:- After the aforesaid amendment to Section 10 (14) of the Act, the legal position, as explained in the CBDT circulars issued thereafter, is that the expenditure reimbursed by LIC would qualify for deduction under Section 10 (14) of the Act. If the expenditure is incurred by the Development Officer, he cannot claim deduction u/s 10 (14) of the Act. It appears that LIC devised a proforma for the development officer to fill up certifying the expenditure incurred by them for development of insurance business. A portion of the allowance thus granted was then treated as exempt under Section 10 (14) of the act. Way back on March 12th, 1997 the CBDT informed the Chairman LIC that such procedure was not in accordance with Section 10 (14) of the Act read with Rule 2 BB (i) of the IT Rules and that unless an allowance is notified u/s 10 (14) (i) of the Act no portion of it can qualify for tax exemption. The Court finds no ground made out for interference with the impugned orders of the ITO and the Commissioner.
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2021 (8) TMI 1052
Assessment order passed u/s 143(3) without giving Petitioner/assessee a meaningful opportunity of being heard - violation of priciples of Natural justice - HELD THAT:- This Court finds that the notices dated 10th February, 2020, 10th March, 2021 and 20th March, 2021 had been issued u/s 142(1) of the Act and not under Section 144B of the Act. Consequently, the statutory mandate as enshrined in Section 144B of the Act has not been complied with in the present instance. This Court also takes judicial notice of the fact that between 19th April, 2021 and 27th April, 2021 there was a complete lockdown in the city of Delhi. Accordingly, this Court is of the view that Petitioner has not been given an adequate and meaningful opportunity to respond to the draft assessment order cum show cause notice dated 20th April, 2021 and there has been a violation of principles of natural justice. Consequently, the impugned Assessment Order dated 27th April, 2021 passed under section 143(3) of the Act is set aside and the matter is remanded back to the Respondent for taking necessary steps in accordance with law. With the aforesaid directions, the present petition along with pending applications stands disposed of.
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2021 (8) TMI 1051
Refund of amount adjustment towards pre-deposit in excess of 20% - recovery proceedings while appeal is pending - HELD THAT:- This Court finds that in the present matters no order has been passed by the AO under Section 245 of the Act for adjustments of refunds. Moreover, there is no order by the Assessing Officer giving any special/particular reason as to why any amount in excess of 20% of the outstanding demand should be recovered from the petitioner-assessee at this stage in accordance with paragraph 4(B) of the office memorandum dated 29th February, 2016. Consequently, this Court is of the view that the respondents are entitled to seek pre-deposit of only 20% of the disputed demand during the pendency of the appeals in accordance with paragraph 4(A) of the office memorandum dated 29th February, 2016, as amended by the office memorandum dated 25th August, 2017. Accordingly, the respondent no.1 is directed to refund the amount adjusted in excess of 20% of the disputed demand for the Assessment Years 2015-16 and 2016-2017 within four weeks.
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2021 (8) TMI 1050
Deduction u/s 80-IA - claim denied as assessee does not fulfil the conditions stipulated in sub-section (3) of Section 80-IA - HELD THAT:- Undertaking should not be formed by splitting up or the reconstruction of a business already in existence. There is no such allegation against the assessee. Thus, the assessee has fulfilled Condition No.1 as mentioned above. Whether entering into a lease transaction would amount to transfer? - The second condition is that the undertaking is not formed by the transfer to a new business of machinery or plant previously used for any purpose. It is not in dispute that the windmills have been leased out by the assessee-company. As decided in BAJAJ TEMPO LIMITED [ 1992 (4) TMI 4 - SUPREME COURT] lease cannot tantamount to transfer. One more condition, which is required to be fulfilled by the assessee, is that the undertaking is not a new business with plant or machinery previously used for any purpose. The question is as to how the words previously used have to be interpreted in the case on hand - the correct way to interpret the words previously used would mean actual physical use of the asset. There was nothing brought on record by the Assessing Officer that the asset was put to actual physical use for any purpose before the lease transaction and the inference drawn by the Assessing Officer is solely based upon the claim for depreciation made by the lessor. This, in our considered view, cannot be the correct way of interpretation of a beneficial provision, which provides for deduction in certain cases, where conditions are fulfilled and the object of granting such deduction was to promote industrial growth. Therefore, the CIT(A) is right in its observation that a lease transaction would not amount to a transfer and merely because the lessor had claimed 100% depreciation on the said asset cannot make the asset as 'previously used' to disqualify the asset from claiming deduction - we find that the Tribunal committed an error in reversing the order passed by the CIT(A). - Decided in favour of assessee.
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2021 (8) TMI 1049
Faceless Assessment Scheme u/s 144B - violation of principles of natural justice - HELD THAT:- Since in the present case no hearing had been granted before passing the impugned assessment order, there is a violation of principles of natural justice as well as mandatory procedure prescribed in Faceless Assessment Scheme and stipulated in Section 144B of the Act. The impugned assessment order dated 09thJune 2021 as well as demand notice and all proceedings initiated pursuant thereto for the assessment year 2018-19 are set aside and the matter is remanded back to the AO who shall grant an opportunity of hearing to the petitioner by way of Video Conferencing and thereafter pass a reasoned order in accordance with law. With the aforesaid directions, the present writ petition and pending application stand disposed of.
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2021 (8) TMI 1048
Validity of reopening of assessment - denial of natural justice - no opportunity to the petitioner to place all these materials and information provided - HELD THAT:- The petitioner assessee could able to establish that the materials which all are now relied upon were the materials already adjudicated and proceedings were dropped, this Court thought fit to provide an opportunity to the petitioner to place all these materials and informations to the Assessing Officer, by way of an additional objections and the said additional objections are to be considered by the Assessing Officer with reference to the documents and evidences and pass an additional order, disposing of the additional objections to be filed by the writ petitioner and thereafter, the Assessing Authority shall proceed further. The opportunity is granted in view of the fact that the materials produced by the petitioner seems to be impressive. This Court is further conscious about the fact that the opportunity, as contemplated pursuant to the directions of the Hon'ble Apex Court of India in GKN Drive shafts India Ltd. [ 2002 (11) TMI 7 - SUPREME COURT ] has already been given. However, in the present case, there was an omission on the part of the assessee to include certain vital materials in the objections and in the interest of justice, such an additional opportunity is given to the petitioner to submit additional objections and further, considering the peculiar facts and circumstances. Petitioner is at liberty to submit their additional objections, as well as documents, materials, statements, etc., within a period of two weeks from the date of receipt of a copy of this order
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2021 (8) TMI 1047
Offences punishable u/s 276C(2) and 277 - assessee paid at a lesser amount than actually shown in the counter file of the income tax challan enclosed along with returns and extra digit was prefixed to the amount actually paid. - petitioners have preferred this petition u/s 482 of Cr.P.C. seeking to quash the proceedings initiated against them - HELD THAT:- In the instant case, according to the complainant, the self assessment tax was paid at lesser amount than shown in the counterfoil of the income tax challan filed along with the return and the challan was materially altered after payment to show excess payment of ₹ 1,800/- by accused No.1 in the return filed by him. According to the circular in F.No.285/160/90/IT(INV)/190 dated 07.02.1991, wherein para 5 (iv) Clause 4 of the said circular which says section 276C(2) willful attempt to evade payment of taxes etc. Prosecution need not be initiated for an offence under this section if the aggregate amount of tax interest and penalty involved is less than ₹ 10,000/-. This limit would be ₹ 1,000/- for the corresponding provision under the Wealth Tax Act, 1957. Since it is not in dispute that the aggregate amount of tax interest and penalty involved in the present case is less than ₹ 10,000/- as per the above circular and the relevant para as noted above, the initiation of prosecution against the petitioners is liable to be quashed.
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2021 (8) TMI 1046
Deduction u/s 36(1)(viia)(c) - Denial of deduction assessee has not created any provision for bad and doubtful debts in the books of accounts - CIT(A), while deciding the issue in favour of the assessee, has given a categorical finding that assessee had created a provision in the books of account of bad and doubtful debts but with the nomenclature Reserve for bad and doubtful debts - HELD THAT:- We find that CIT(A) while allowing the appeal of the assessee has given a finding that though the assessee has created the provision in the books of accounts of ₹ 212.81 Crores but has claimed deduction only to the extent of ₹ 63.23 crores and since the Assessing Officer has already allowed the claim of deduction of ₹ 21.30 crores, there was no ground for addition of balance of ₹ 41.93 crores u/s 36(1)(viia)(c) of the Act. Before us, no fallacy in the findings of CIT(A) has been pointed out by the Revenue. - Decided against revenue.
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2021 (8) TMI 1045
Disallowance u/s 14A r.w.r 8D - assessee had submitted before the AO that no exempt income in the form of dividend has been earned by the assessee during the year under consideration - HELD THAT:- The aforesaid contention of the assessee has not controverted by the Revenue. We find that CIT(A) by following the decisions in the case of Chemnivest Ltd.[ 2015 (9) TMI 238 - DELHI HIGH COURT] , IL FS Energy Development Company Ltd. [ 2017 (8) TMI 732 - DELHI HIGH COURT] and the decision of Holcim India P. Ltd. [ 2014 (9) TMI 434 - DELHI HIGH COURT] held that when no dividend income has been received by the assessee, no disallowance u/s 14A of the Act is called for. As no fallacy in the findings of CIT(A) has been pointed out by the Revenue. Revenue has also not placed on record any contrary binding decision in its support. In view of the aforesaid facts, we find no reason to interfere to the order of CIT(A) and thus the appeal of the Revenue is dismissed.
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2021 (8) TMI 1044
Assessment u/s. 143(3) - Addition towards long term capital gain, short term capital gain, agricultural income and addition u/s. 69 - admitting of additional evidences - HELD THAT:- As demonstrated from the material fact reported in the remand report by the AO that proper verification could not be carried out in the case of the assessee while framing assessment u/s.143(3) of the act since either the case or the AO has been remained in transit due to restructuring process of the department. The decision of CIT(A) for not admitting the additional evidences is not justified therefore we observe that it is appropriate to restore issues to the file of AO for deciding afresh after examination and verification of the additional evidences furnished by the assessee after providing due opportunity to the assessee. Appeal of the assessee is allowed for statistical purposes.
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2021 (8) TMI 1043
Disallowance of provisions of section 36(1)(vii) - whether the loss on account of FDR's maintained with MMCBL, which was under liquidation, and written off of the same is eligible for deduction under the head business and profession? - HELD THAT:- It is pertinent to observe that the MMC Bank was sick bank and the amount of FDs deposited by the assessee-bank with MMC Bank has not received by the assessee bank. We also note that activities of the assessee-bank in parking surplus fund in the scheduled banks were in accordance with the guidelines of the RBI in this behalf. It was also not in dispute that Reserve Bank of India vide letter dated 12.2.2010 has advised all UCBS having exposure to MMC Bank to have full provisions against their exposure to the said bank as on 31.3.2011. In the instant case, the entries made in the assessee's books of account in that behalf were strictly in accordance with the guidelines issued by the RBI. Consequently, the assessee bank has written off the loss on account of FDR deposited with the MMC Bank. It is demonstrated by the assessee that as per the bye-laws of the assessee-bank from the Profit loss Appropriation account, Depreciation Investment fund has been created. The Investment Depreciation has been debited in P L account, which has been claimed as bad debt. See case of Kalupur Commercial Co-op. Bank Ltd. [ 2019 (10) TMI 1068 - ITAT AHMEDABAD] - Decided against revenue.
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2021 (8) TMI 1042
Deduction u/s 80P(2)(a)(i) - HELD THAT:- In the assessee's case, mutuality principles have failed as substantial business is being carried out with the general public or nominal members and also in view of the assessee being registered as Souharda Co-operative Society and not as Co-operative Society and taking into account the byelaws and the nature of business carried out by the assessee, the society is not eligible for deduction u/s 80P of the Income tax Act, 1961. As against this, the assessee is in appeal before us. We have heard both the parties and perused the material on record. The Hon ble Supreme Court in the case of Mavilayi Service Cooperative Bank Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] has held that the expression Members is not defined in the Income-tax Act. Hence, it is necessary to construe the expression Members in section 80P(2)(a)(i) of the Act in the light of definition of that expression as contained in the concerned co-operative societies Act. In view of this, the facts are to be examined in the light of principles laid down by the Hon ble Supreme Court in Mavilayi Service Cooperative Bank Ltd. (supra). Accordingly, we remit this issue of deduction u/s. 80P(2)(a)(i) of the Act to the file of Assessing Officer to examine the same afresh in the light of the above judgment. Appeal of the assessee is allowed for statistical purposes.
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2021 (8) TMI 1041
Disallowance of claim u/s 80IA - return of income was not filled as per provisions of section 139 (1) of the Act - Assessee filed the return of income on 29.03.2014 i.e. after the due date i.e. 31.10.2013 (extended date) of filing of audited return of income u/s 139(1), had lapsed - HELD THAT:-We note that essential documents, such as, audited accounts, the tax audit report along with report in Form No. 3CCB for claiming of deduction under section 80IA of the Act were available before the assessing officer. Audited accounts contain the net profit earned by the assessee. Tax audit report contains the information relating to compliance of income tax and Form No. 3CCB contains the information for claiming of deduction under section 80IA - to examine the genuineness of claim of deduction under section 80IA the relevant details and documents were available before the assessing officer - assessee has made substantial compliance. We note that assessee company was facing genuine difficulty, as the assessee company was unable to make the payment of self- assessment tax We note that essential documents, such as, audited accounts, the tax audit report along with report in Form No. 3CCB for claiming of deduction under section 80IA of the Act were available before the assessing officer. Audited accounts contain the net profit earned by the assessee. Tax audit report contains the information relating to compliance of income tax and Form No. 3CCB contains the information for claiming of deduction under section 80IA of the Act. Therefore, to examine the genuineness of claim of deduction under section 80IA the relevant details and documents were available before the assessing officer. Hence, we note that assessee has made substantial compliance. We note that assessee company was facing genuine difficulty, as the assessee company was unable to make the payment of self- assessment tax. Since the assessee has made substantial compliance to claim the deduction under section 80IA of the Act. There are no findings of the assessing officer that assessee is not eligible to claim deduction under section 80IA of the Act. We noticed that there is sufficient compliance with the main requirements to claim the deduction under section 80IA of the Act. In view of the above discussion, the claim of the assessee cannot be denied on technicalities when the assessee is legally otherwise entitled for deduction. As decided in S. VENKATAIAH [ 2012 (6) TMI 40 - ITAT HYDERABAD] claim of the assessee cannot be denied on technicalities when the assessee is legally otherwise entitled for deduction - we direct the assessing officer to allow deduction under section 80IA - Decided in favour of assessee.
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2021 (8) TMI 1040
Addition in the income of the assessee by treating as income from other sources - Additions based on TDS form 26AS - addition of commission income under the head 'business/profession' - as per the assessee, the said amount was earned by the assessee on account of commission and the same has been reflected in Form 26AS - HELD THAT:- We are of the view that the ld. CIT(A) was not justified in dismissing the appeal of the assessee and in case, the additions confirmed by the ld. CIT(A) are sustained then in that eventuality, the same tantamount to double addition and not permissible under the law. As per the record, the assessee was not having any other income other than the LIC commission and post office commission and the TDS of the same has also been deducted on the said income which is reflected in Form 26AS, therefore, considering these peculiar facts and circumstances, we direct the A.O. to delete the addition.- Appeal of the assessee stands allowed.
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2021 (8) TMI 1039
Levy penalty u/s. 271(1)(c) - furnishing of inaccurate particulars of income - disallowance was made on ad hoc and estimated basis being 15% - HELD THAT:- Admittedly, there was no addition made by the authorities below on estimated basis. In fact all the expenses claimed by the assessee against impugned short term capital gain were treated as bogus and therefore 100% expenses were disallowed. However, the ITAT in the own case of the assessee in quantum proceedings [ 2019 (9) TMI 948 - ITAT AHMEDABAD] has restricted the disallowance to the tune of 15%. As per the earlier decision, there remains no ambiguity that addition were reduced by the ITAT to extent of 15% which is purely on estimated basis and balance amount to the tune of 85% has been treated as genuine. Thus it can be inferred that there was no deliberate act on the part of the assessee to furnish inaccurate particulars of income. In our considered view there cannot be any penalty in the hands of the assessee. For this preposition we draw strength from the judgment of Hon'ble Gujarat High Court in the case of Ramesh Chandra A Shah [ 2016 (8) TMI 1389 - GUJARAT HIGH COURT] We also draw support and guidance from the order of this Tribunal in the case of Maradia Copper Extrusion(P) Ltd [ 2017 (4) TMI 249 - ITAT AHMEDABAD] - We are of the view that the assessee cannot be visited with the penalty u/s. 271(1)(c) of the Act as the penalty was levied on the income determined on estimated basis. Hence the ground of appeal of the assessee is allowed.
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2021 (8) TMI 1038
Income from house property - determination of ALV - HELD THAT:- Determination of ALV in respect of the property in question and the assessees are co-owner of the said property, therefore to maintain the rule of consistency and following the earlier decision of this Tribunal [ 2021 (3) TMI 719 - ITAT ALLAHABAD] , the issue is set aside to the record of the Assessing Officer for re-adjudication of the same after giving an appropriate opportunity of hearing to the assessee and then determined the ALV strictly in accordance with section 23(1) of the Income Tax Act. Appeal allowed for statistical purposes.
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2021 (8) TMI 1037
Re-characterizing the transactions of issue of debentures/CCD to the issue of equity - HELD THAT:- We in agreement that the facts and circumstances of these grounds are similar to those of the A.Y. 2014-15. The cross appeals for the preceding year were simultaneously heard. In fact, no fresh arguments were advanced for the year under consideration and both the sides adopted their respective arguments made for the immediately preceding year. We have discussed this issue in our separate order passed for the assessment year 2014-15[ 2021 (8) TMI 979 - ITAT PUNE] - Following the same, we accord our imprimatur to the ld. CIT(A)'s view on reversing the AO's action of re-characterizing the transactions of issue of debentures/CCD to the issue of equity. We also remit the matter of re-determination of the ALP of the transaction to the file of AO/TPO. In view of the remission of the matter for re-determination of the ALP, the assessee's grievance has become infructuous. TP Adjustment - direction of the ld. CIT(A) to treat Marg Limited as a comparable company - HELD THAT:- We find from the Annual report of this company, there is no separate segmental information available regarding the stream of income from projects/operations. Since the income from the stream of leasing is also a part of the income from projects and no separate segmental details qua the income from projects stream are available, we are unable to approve the inclusion of this company in the list of comparables. Overturning the impugned order, we direct to exclude it from the list of comparables. Disallowance u/s. 43CA - HELD THAT:- Where the difference between the stamp value and sale consideration is up to ten per cent, such a difference is liable to be ignored and cannot be brought within the ken of section 43CA(1). Adverting to the facts of the instant case, we find that the difference between the stamp value and the sale consideration is 7.24%. Such a difference, being less than 10%, is liable to be ignored in terms of the amended proviso to section 43CA of the Act. We, therefore, direct to delete the addition sustained in the first appeal. Interest on debentures/CCDs to its AE - assessee contended that the interest cost was taken to work-in-progress and not claimed as deduction - HELD THAT:- The amount of capitalized interest on debentures/CCDs to the work in progress for the assessment year 2013-14, as is in excess of its ALP freshly determined by the AO/TPO, should be disallowed proportionately in the years in which the work-in-progress containing the amount of such interest standing as on 31-03-2013, is reversed on the sale of flats/plots. Seeking deduction of Education Cess and Secondary and Higher Secondary Cess amounting to ₹ 26,66,359/- while computing the total income of the assessee company - HELD THAT:- This ground is similar to the additional ground raised for the assessment year 2014-15 wherein a direction has been given to the AO for ascertaining the correct amount of education cess and then allowing a deduction for it, after allowing opportunity of hearing to the assessee. Same view is followed for the year under consideration and the AO is also directed accordingly.
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2021 (8) TMI 1036
Unexplained cash deposits - assessee has made huge cash deposits, to the tune of ₹ 86,83,000/- into his bank account with various banks and assessee was asked to explain sources - HELD THAT:- Undisputedly the assessee is an employee of Toddy Co-operative Society, Nizamabad and he has also submitted an affidavit of the President of the Society stating that the deposits are from the receipts of the society and such an affidavit also has not been doubted by the revenue. In such circumstances, we are of the opinion that the CIT(A) ought to have called for a report from the AO, who in turn, could have given an opportunity to assessee and also verified whether sales were recorded in books of accounts of the Society and assessee's contentions that deposits are made out of sales of the society. Hence, for this limited purpose of verification of the contentions of the assessee that the deposits are from the sales of Nizamabad Toddy Co-Op Society, we deem it fit and proper to remand the issue back to the file of the AO for de novo consideration in accordance with law. Assessee's appeal is treated as allowed for statistical purposes.
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2021 (8) TMI 1035
Nature of Cash subsidy received from Madhya Pradesh Rajyasetu Nirman - Reduction from the project cost - Amortization of expenditure - DR submitted that the amount of cash subsidy should have been offered to tax instead of showing it in the balance sheet under the head Capital Reserve it is because the amount of cash subsidy directly relates to the project of the assessee - HELD THAT:- Firstly subsidy was received by the assessee in the earlier years and therefore if at all it was to be subjected to tax then it should have been done in the year in which it was received - amount of subsidy received by the assessee in the earlier years cannot be added to the income of the year under consideration. Secondly, the assessee has incurred the expenses with respect to the projects as discussed above on actual basis which is evident from the financial statement of the assessee. Likewise, the assessee for the purpose of income tax has amortized the project expenses over the concession period of projects after reducing the subsidy amount of ₹ 83.80 crores received by it in the earlier years. Admittedly, the amount of capital subsidy received by the assessee in the earlier years was shown under the head capital reserve in the financial statements prepared under the Companies Act - assessee, while amortizing the project expenses has adjusted the amount of subsidy in the profit and loss account. This fact can also be verified from the financial statement of the assessee which are placed on record. Accordingly we hold that the finding of the AO that assessee has not adjusted the amount of capital subsidy against the project expenses is devoid of any merit. At the time of hearing, the learned DR has also not brought anything on record contrary to the finding of the learned CIT(A). Undoubtedly, the assessee has incurred the expenses on the projects which were in the nature of BOT. Thus the assessee was entitled to amortize the expenses over the concession period of these projects. Decided against revenue.
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2021 (8) TMI 1034
Disallowance of claim for depreciation as regards the opening W.D.V of the fixed assets, viz. civil work of factory building - HELD THAT:- As observed by us hereinabove, the CIT(A) for A.Y 2009-10 had allowed the assessee s claim for depreciation in so far the same pertained to the civil work of factory building executed by M/s Teracon Construction (I) Pvt. Ltd. was concerned. On further appeal by the revenue, the Tribunal vide its order for A.Y 2009-10 [ 2017 (11) TMI 1965 - ITAT MUMBAI] had restored the issue as regards the disallowance of the assessee s claim for depreciation to the file of the A.O, which as observed by the CIT(A) was pending on the date of passing of his order. Nothing has been brought to our notice by the ld. Authorized representatives for either of the party to show that the set-aside assessment consequent to the directions of the Tribunal had thereafter been framed by the A.O. Backed by the aforesaid facts, we concur with the view taken by the CIT(A) that now when the very basis for making of the disallowance by the A.O while framing the assessment for A.Y. 2009-10, as on date, does no more survive any more, therefore, the disallowance of the assessee s claim for depreciation on fixed assets, viz. civil work of factory building executed by M/s Teracon Construction (I) Pvt. Ltd. for the year under consideration i.e A.Y 2012-13 also cannot be sustained. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Admittedly, as the facts and the issue pertaining to the disallowance of the interest expenditure U/rule 8D(2)(ii) during the year under consideration remains the same as were there before the Tribunal in the assessee s own case for A.Y. 2009-10, therefore, we respectfully follow the view therein taken and vacate the disallowance of the interest expenditure. As pursuant to the judgment of Maxopp Investment Ltd. Vs. CIT [ 2018 (3) TMI 805 - SUPREME COURT] as the dominant purpose for which the investment into shares is made by an assessee may not be relevant, therefore, the claim of the assessee that no administrative expenses could be attributed qua the investments made by the assessee in its wholly owned subsidiary company cannot be accepted. But then, as it is a matter of fact borne from the record that the assessee had during the year under consideration not received any exempt dividend income, therefore, on the said count we herein conclude that no disallowance under Sec. 14A was called for in its hands. Accordingly, we in terms of our aforesaid observations modify the view taken by the CIT(A) but at the same time concur with him that no disallowance under Sec. 14A was warranted in the case of the assessee for the year under consideration.
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2021 (8) TMI 1033
Stay of demand - recovery of outstanding demand stayed subject to deposit of ₹ 50 crores on or before 31.03.2016 - HELD THAT:- The appeal filed by the assessee could not be heard and was adjourned from time to time, the stay already granted was extended by the Tribunal.It would be relevant to mention here that the assessee filed extension of stay the co-ordinate bench vide order dated 04.09.2019 [ 2019 (9) TMI 1579 - ITAT MUMBAI] extended the stay for a period of six months subject to further deposit of ₹ 25 crores in two equal instalments of ₹ 12.50 crores each to be deposited by the end of September, 2019 and October 2019, respectively. The assessee challenged further demand of ₹ 25 crores as a condition for extension of stay before the Hon ble High Court. The counsel for the Revenue conceded before the Hon ble High Court that unless permitted by the Court, respondent (Department) shall not insist on the petitioner (Assessee) to deposit such amount as directed by the Tribunal. The Hon ble High Court [ 2019 (12) TMI 1535 - BOMBAY HIGH COURT] admitted the Writ Petition and in view of concession by the by the Revenue s Counsel directed that the condition imposed by the Tribunal for further deposit of ₹ 25 crores shall not be forced. The aforesaid writ petition is still pending for final adjudication. Now, the assessee has filed present stay application seeking extension of stay. After having examined the documents on record, we are of considered view that the stay already granted to the assessee deserves to be extended for a further period of six months from today or till the disposal of appeal, whichever is earlier.
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2021 (8) TMI 1032
Disallowance u/s 40(a)(ia) - provision for payment of gratuity - only reason for disallowance of assessee s claim of deduction is due to non approval of the gratuity scheme - HELD THAT:- When, it is fact on record that assessee has applied for approval of the gratuity scheme in the year 2007, non approval of the said scheme even after more than 14 years is undesirable and has resulted in undue harassment to the assessee. Due to no fault of the assessee the deduction otherwise allowable has been denied As relying on case Narasu s Spinning Mills [ 2015 (12) TMI 1553 - ITAT CHENNAI] , M/S. VERIZON DATA SERVICES INDIA PVT. LTD [ 2015 (10) TMI 316 - ITAT CHENNAI] , JAIPUR THAR GRAMIN BANK [ 2016 (11) TMI 794 - RAJASTHAN HIGH COURT] and JAIPUR THAR GRAMIN BANK [ 2016 (11) TMI 794 - RAJASTHAN HIGH COURT] No disallowance of deduction claimed towards provision made for gratuity fund can be made even during the pendency of assessee s application for approval of the gratuity scheme. In the facts of the present appeal, as earlier discussed, there has been inordinate and unacceptable delay in disposing of assessee s application seeking approval of the gratuity scheme. Pertinently, while completing the assessment for assessment years 2011-12 and 2014-15 in assessee s own case, the AO himself has allowed deduction claimed towards provision created for gratuity, though, assessee s application seeking approval of the gratuity scheme is still pending. Thus, considering the overall facts and circumstances of the case in the light of the ratio laid down in the decisions cited before us, we are of the view that the assessee is eligible to claim deduction of the contribution make towards the gratuity fund of the employees. Accordingly, we delete the impugned disallowance. Assessee Grounds are allowed.
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2021 (8) TMI 1031
Recovery proceedings - contention of petitioner is that, even while the petitioner's appeal, against the assessment order passed by AO under Section 143(3) is pending consideration before CIT(A) a substantial amount has been recovered from the petitioner, which is, an act, contrary to the Office Memorandum issued by the Central Board of Direct Taxes that prescribes payment of 20% of the disputed demand if the demand is contested before CIT(A) - HELD THAT:- As pursuant to the assessment order, dated 28.12.2017, which concerns the assessment year (AY) 2015-2016, against the total demand amounting to ₹ 3,37,95,120/-, ₹ 2,92,09,436/- has been recovered till now. Mr. Salil states that the amount recovered, in percentage terms, is 86.43%. Accordingly, issue notice to the respondents. Mr. Sunil Agarwal accepts notice on behalf of the respondents/revenue,he says that he will revert with instructions. In case instructions are received to resist the writ petition, a counter-affidavit will be filed before the next date of hearing.
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2021 (8) TMI 1030
Income from house property - Leasing out the property to its sister concern at a rent lesser than the market rent - AO including the sub-lease income of Fazlani Exports Pvt. Ltd., in respect of sub-lease of Rational House property to M/s. Goldman Sachs on the ground that Fazlani Exports Pvt. Ltd sub-leased aforesaid property at higher rent and treating as Sham Transaction - HELD THAT:- The entire transaction of assessee leasing out the property to its sister concern at a rent lesser than the market rent, cannot be construed as a sham transaction. However, in this recalled proceedings, we have to adjudicate the applicability of the decision of Hon ble Jurisdictional High Court in the case of CIT vs Akshay Textile Trading Agencies Pvt Ltd [ 2007 (10) TMI 251 - BOMBAY HIGH COURT] which was admittedly relied upon by the ld AR as held no case of revenue that transaction was sham hence annual value of the property is the value received by the owner from the tenant irrespective whether tenant on sub-letting has received higher rent - ITAT was justified in holding that the annual letting value has to be determined on basis of annual rent received by the assessee and not what has been received by its tenants from the ultimate users - Decided in favour of assessee.
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Customs
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2021 (8) TMI 1070
Maintainability of appeal - appropriate forum - question having a relation to the rate of duty of customs or to the value of goods for the purposes of assessment - Section 130 of the Customs Act, 1962 - HELD THAT:- In view of Section 130 of the Customs Act, no appeal lies before the High Court in respect of any question having relation to the rate of duty of customs or to the value of goods for the purposes of assessment. However, an appeal will lie before the Supreme Court on such issues, more specifically, under sub section (b) to Section 130E of the Act. This being the legal position, the writ petition filed before this Court is not maintainable and the petitioner is at liberty to approach the appropriate Court for the purpose of redressal of their grievances. Petition dismissed.
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2021 (8) TMI 1066
EPCG Scheme - failure to fulfill the conditions stipulated in the license - failure to submit the export obligation discharge certificate EODC issued by the licensing authority - HELD THAT:- Once EODC had been issued undisputedly appellants have fulfilled the export obligation arising out of the license issued under Notification No.97/2004 well before the stipulated time (in year 2011 itself). Undisputedly the discharge certificate thereof was duly applied with however, could not be issued within 30 days of fulfilling the export obligation accordingly could not be produced within the limit prescribed in the Notification. Delay in issuance of said certificate is also not on account of appellant s fault. Fact still remains is that since, the only ground on which the demand was confirmed is non-submission of EODC despite that the same was submitted by the appellant prior the order under challenge was passed showing that he has fulfilled the export obligation within the time. In the present case, it is also not in dispute that the petitioner has fulfilled the export obligation substantially and wherever there is little short fall, the petitioner has sought regularization and issuance of EODC by offering to pay customs duty proportionately to that extent. The fact that there is delay in regularization and issuance of EODC by the DGFT, is very much apparent and also it has not been disputed by the department, the customs authorities cannot penalize the petitioner by resorting to coercive action. The appellant has fulfilled the export obligation much prior the expiry of the time under the license issued to him. He also has produced the EODC before Commissioner (Appeals) proving that he has fulfilled the export obligation. The order ignoring the said EOC with an intent to confirm the recovery of duty waiver sought by the appellant at the time of imports is nothing but a forcible recovery. The law has been settled that once EODC is issued, the Department cannot recover the amount of duty waiver - the appellant otherwise has duly fulfilled the Export Obligations, that too, well in time. The delay in issuance of EODC was also not on account of appellant s fault and the same was duly communicated in writing to the Department, even to the original adjudicating authority. The certificate as such was produced before Commissioner (Appeals). Appeal allowed.
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2021 (8) TMI 1062
Application for early hearing - dispute underlying in the above appeal stands settled under Resolution Plan and nothing survives - HELD THAT:- Taking note of the fact that the NCLT has approved the resolution plan in the insolvency proceedings in regard to the company, we are of the view that the appeal does not survive any more. Appeal disposed off.
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Corporate Laws
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2021 (8) TMI 1059
Sanction of Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013, and other applicable provisions of the Companies Act, 2013 R/w. Companies (CAA) Rules, 2016 - HELD THAT:- The instant Petition has been filed u/s 230 and 232 of Companies Act, 2013 R/w. extant provisions of Rules, after duly following pre-requisite as prescribed under the extant provisions of Companies Act, 2013 and the Rules made thereunder. In terms of sub-section (3) of Section 232 of Companies, the Tribunal is empowered to sanction the scheme of amalgamation, if it is satisfied that sub-section (1) and (2) of the above section, however, subject to filing a Certificate by the Company's Auditor with Tribunal to the effect that the accounting treatment, if any, proposed in the Scheme of Amalgamation is in conformity with the Accounting Standards prescribed under Section 133, etc. The Scheme in question is framed in the larger interest of all stake holders of the Company, by keeping in mind, the principle of ease of doing business. And the Scheme was put to notice to all stake holders and broadly consented by all Shareholders and Creditors of the Company. There are no investigations stated to be pending against the Companies. The Scheme in question is a 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. It covers all the issues relating to legal proceedings, continuation of contracts, deeds, therefore, the Scheme in question is prima facie eligible to be sanctioned, however, subject to compliance of various undertakings as mentioned in the Scheme and to follow/comply with various observations made by the Statutory Authorities as detailed supra. It also appears to be fair, reasonable and it is not detrimental against the Members or Creditors or contrary to public policy. The scheme is allowed to be sanctioned - application allowed.
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2021 (8) TMI 1057
Sanction of Scheme of Amalgamation - Section 230(6) read with Section 232(3) of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding, convening and dispensation of various meetings issued - directions regarding issuance of notices also issued. The scheme is approved - application allowed.
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2021 (8) TMI 1056
Sanction of Scheme of Amalgamation - Section 230(1) read with Section 232(1) of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding, convening and dispensation of various meetings issued - directions regrding issuance of notices also issued. The scheme is approved - application allowed.
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2021 (8) TMI 1055
Sanction of Scheme of Amalgamation - Section 230(1) read with Section 232(1) of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding, convening and 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 1058
Seeking a direction upon the RP to include its claim of ₹ 9.02 crore, and, pending disposal of the application, direct that no Resolution Plan be considered or approved - Joint Venture agreement - HELD THAT:- Since it was an ongoing project and final accounts could not have been drawn up either at the stage of invitation of claims or the stage of approval of the resolution plan, the RP would have been well advised to make provision for a contingency in case the corporate debtor owed any dues to the applicant after finalization of accounts - there was a gross error of judgment on the part of the Resolution Professional, who is also a qualified Chartered Accountant, in not doing so. What compounds the problem is the same Resolution Professional has acknowledged the liability in the books of accounts of the corporate debtor while functioning as RP. Therefore, it does not stand to reason as to how this claim could not be included with the dues payable to the Operational Creditors. Here again is a case where immediately after the RP refused to accept the claim, the applicant knocked on the doors of this Adjudicating Authority seeking a determination of the claim of the applicant even before the approval of the Resolution Plan. While both matters i.e., this application as well as the application for approval of the resolution plan were heard and reserved for orders together, the erstwhile Bench approved the Resolution Plan alone while posting this application for hearing once again on 24.03.2020. No reason has been adduced in that order as to why this particular application was also not decided. The RP is hereby directed to draw up final accounts between the corporate debtor and the Joint Venture and include any claim payable to the applicant, in the list of operational creditors and also make payments under the resolution plan - Application disposed off.
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2021 (8) TMI 1054
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor under the garb of settlement is trying to delay the proceedings before this Tribunal. The Corporate Debtor has not denied that the amount is due and payable to the Operational Creditor, hence the default on the part of the Corporate Debtor is proved beyond any reasonable doubt. The Petition as filed by the Operational Creditor is required to be admitted under Section 9(5) of the IBC, 2016 - application admitted - moratorium declared.
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Service Tax
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2021 (8) TMI 1072
SVLDRS - Refusing to issue the discharge certificate on the ground that, petitioner has illegally sought transitional credit of the disputed Cenvat credit under the GST Act - CENVAT Credit - GTA services - C F Agency services - sales to customers on for destination basis from its factory and depots - period from 2014 to June, 2017 - HELD THAT:- Once the declarant had made payment of the estimated amount as per the statement in the form of SVLDRS-3 within the stipulated time, it was beyond the jurisdiction of the respondents to proceed with adjudication of the show-cause notice issued under the Central Excise Act with regard to the self same subject matter and pass impugned order-in-original, dated 12.10.2020. However, it is the matter of adjudication whether availing of Scheme would attach legitimacy to the Cenvat credit on GTA and C F Agency services to the tune of ₹ 17,34,56,893/- and the same would be eligible for the purpose of transition under Section 140 of the GST Act. With regard to the issue of the 1st respondent Designated Committee refusing to issue discharge certificate under Sub-section (8) of Section 127 of the Finance Act, there is nothing in the Scheme which empowers the said respondent to refuse issuance of the discharge certificate on the basis of any subsequent event apart from the fact of discovery of false statement relating to any material particular in the declaration. Availing of transitional credit by the petitioner under the GST Act on the Cenvat credit for GTA and C F Agency services under the Central Excise Act is a subsequent and separate transaction from the declaration made by him under the Scheme and the adjudication of such claim cannot be said to be barred in law or without jurisdiction. Impugned order set aside - petition allowed.
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2021 (8) TMI 1063
Classification of services - Manpower Supply Service or not - independent contractors undertaking production with their work force - scenario upto period 2012 - HELD THAT:- The issue was analysed in the appeals filed earlier by these appellants and the Tribunal in BHAGYASHREE ENTERPRISES, SONAWANE INDUSTRIAL VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [ 2017 (3) TMI 786 - CESTAT MUMBAI] holding that the activity undertaken by the appellants cannot fall under the category of manpower supply service. The demand for the period prior to 2012 cannot sustain and requires to be set aside - Appeal allowed - decided in favor of appellant.
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2021 (8) TMI 1061
Refund of CENVAT Credit - export of services - eligibility to avail credit of service tax before registering the premises - HELD THAT:- In the present case, the refund claim is filed for refund of the credit availed on service tax paid on input services. Though the ld. AR has contended that one year has to be computed from the relevant date, it is not submitted as to which is the relevant date for computation of one year. Section 11B of the Central Excise Act defines relevant date in the context of payment of Central Excise duty and not in the context of service tax. In respect of export of services, para 3(b) of the Appendix to N/N. 5/2006-CE (NT) requires an application for refund of CENVAT credit must filed along with a copy of the invoice and a certificate from the bank certifying realization of export proceeds. Therefore, it is impossible to file a refund claim before realization of export proceeds. Therefore, in the case of export of services, the relevant date would be the date of realization of consideration. Though the original authority has rendered a finding that the refund claim is hit by time-bar, such finding is not supported by any reasons and there is no discussion as to the computation made by him for arriving at the conclusion that the refund claim is hit by time-bar. As per notification itself, it can be seen that the refund claims are filed in each quarter. The contention of the learned AR that when computed from the first day of relevant quarter, the claim is beyond one year cannot be accepted since section 11B stipulates that the period of one year has to be computed from the relevant date and the relevant date is also explained in the said section. There are no reason for holding that the claim is barred by limitation. The Commissioner (Appeals) has rightly sanctioned the refund to the assessee - appeal dismissed - decided against Revenue.
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Central Excise
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2021 (8) TMI 1075
Evasion of duty - levy of penalty - secured creditor and the debts were transferred to the respondent Bank - HELD THAT:- It is not possible for the appellant to plead that they have crown debt which would take precedence over a secured liability and fairly, the learned Additional Solicitor General does not even seek to contend it - there is no need to go into other issues sought to be raised by either of the parties before us or through the impugned judgment but suffice to say that the respondent Bank cannot be prevented from exercising its rights as a secured creditor on the pretext that there is a debt to the Excise Department arising from the confiscation order dated 25.02.2006. On realization of the dues of the Bank, if amounts are still left, those amounts can be utilized to satisfy the dues of the Excise Department and naturally, if there are still amounts left, the debtor would be the beneficiary of the same - Appeal dismissed.
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2021 (8) TMI 1064
Valuation - payment of duty on a lesser assessable value by not including the value of scrap generated during the course of manufacture and retained by themselves as consideration towards job charges - contravention of Rule 6 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and the provisions of Rule 4, 6 and 8 of the Central Excise Rules, 2002 - HELD THAT:- The decision of the Tribunal in COMMISSIONER VERSUS P.R. ROLLING MILLS PVT. LTD. [ 2010 (9) TMI 1072 - SC ORDER] was affirmed by the Hon'ble Supreme Court as reported in 2010 (260) ELT A84 (SC). Similar issue was decided in the case of COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS CADBURY INDIA LTD. [ 2006 (8) TMI 2 - SUPREME COURT] . In the said decision, it was held that for determining the cost of production of the captively consumed goods, CAS-4 has to be applied which has been done by the appellant. Appeal allowed.
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2021 (8) TMI 1060
CENVAT Credit - denial of credit on the premise as per N/N. 02/14-CE (N.T.) dt.20.1.2014, the appellants were not entitled to avail credit prior to the N/N. 01/10-CE dt.6.2.2010 - extended period of limitation - HELD THAT:- Similarly placed assessee was allowed the credit although against those orders, the appeals have been filed by the Revenue before the Commissioner (Appeals), in that circumstance, when the Revenue is having divergent views on the issue, the extended period of limitation is not applicable - Admittedly, in this case, the show cause notice has been issued by invoking the extended period of limitation. The denial of credit is barred by limitation - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2021 (8) TMI 1071
Jurisdiction of impugned orders - wrongful interpretation of provisions of the Central Sales Tax Act - Section 6(2) of the CST Act - HELD THAT:- The power of judicial review conferred under Article 226 of the Constitution of India is to scrutinize the processes, through which, an adjudication is made and a decision is taken by the competent authority in consonance with the provisions of the Statute, but not the decision itself. This being the scope of judicial review in a writ proceedings, the aggrieved person at the first instance must be allowed to exhaust the Appellate remedy, which will be of much assistance even for an aggrieved person to discuss about certain business transactions and accounting details before the authority, who is well versed with such matters. The Courts are admitting writ petitions on one point, which may be convincing. However, there are many other points on facts are to be adjudicated. Keeping a writ petition pending for a longer period and not allowing a litigant to get a final decision in such matters would undoubtedly cause prejudice and hardship both to the litigant as well as the Revenue. Therefore, in such matters, where Appellate remedy is contemplated, High Court is expected to be cautious in admitting the matters in a routine manner - admitting a writ petition at one point and keep it pending for a prolonged period, then the prolongevity of the litigation would cause prejudice to the interest of the assessee and also to the Revenue as well. All the circumstances should be waived even at the admission stage by the High Courts. It is not as if, certain factual disputes can be adjudicated in a writ proceedings. Such an attempt by the High Court even may end in futile at the final hearing. This Court is of an opinion that in the present case, the petitioner has to prefer an appeal both in the interest of justice as well as in the interest of the parties to the lis on hand. Accordingly, the petitioner is at liberty to prefer an appeal before the competent Appellate authority within a period of four weeks from the date of receipt of a copy of this order in a prescribed format and by complying with the provisions of the Act and the Rules - Petition disposed off.
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2021 (8) TMI 1068
Time Limitation - Validity of assessment order - whether delay can be condoned beyond the period under Section 62 of the KVAT Act or not? - rectification of mistakes apparent on the order of reassessment to the petitioner transactions - HELD THAT:- Section 62 makes it very clear that an appeal has to be preferred within a period of 30 days from the date of order of assessment. In the present case, undisputedly, the appeal was not preferred within 30 days from the date of the order of assessment served upon the appellant. Clause 3 provides the Appellate Authority to admit the appeal by condoning the period upto 180 days. In the present case, the appeal was preferred certainly after 30+180 days. There was again a delay of more than 36 days and in those circumstances the Tribunal has also dismissed the appeal. The statute does not provide for condoning the delay beyond 180 days, and therefore, once the statute does not provide for condoning the delay, the Tribunal was justified in dismissing the appeal. In the considered opinion of this Court, there can be no extension of limitation even by the Second Appellate Authority and by the First Appellate Authority keeping in view Section 62(3) of the KVAT Act beyond the period of 180 days - appeal dismissed.
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