TMI Tax Updates - e-Newsletter
August 6, 2021

Case Laws in this Newsletter:

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

Articles

1. Faceless penalty proceedings u.s. 271F - harassment due to authority not equipped and not having access to documents already available in portal of department.

   By: DEVKUMAR KOTHARI

2. Whether maintenance charge upto 7500 per month per unit are exempt from ITC reversal

   By: navnath padwal

News

1. Updating the Annual Aggregate Turnover (AATO) by taxpayers.

2. Advisory for Taxpayers regarding Blocking of E-Way Bill (EWB) generation facility resume after 15th August, 2021.

3. Grant of ₹ 685.80 crore released to Urban Local Bodies(ULBs)

Notifications

GST - States

1. G.O.Ms.No.209 - dated 4-8-2021 - Andhra Pradesh SGST

EXTENSION OF THE DUE DATE FOR FILING FORM GSTR-4 FOR FINANCIAL YEAR 2020-21 TO 31.07.2021.

2. G.O.Ms.No.208 - dated 3-8-2021 - Andhra Pradesh SGST

EXCLUSION OF GOVERNMENT DEPARTMENTS AND LOCAL AUTHORITIES FROM THE REQUIREMENT OF ISSUANCE OF e-INVOICE.

3. G.O.Ms.No.207 - dated 3-8-2021 - Andhra Pradesh SGST

Andhra Pradesh Goods and Services Tax (Fifth Amendment) Rules, 2021.

4. G.O.Ms.No.206 - dated 3-8-2021 - Andhra Pradesh SGST

Andhra Pradesh Goods and Services Tax (Fourth Amendment) Rules, 2021.

5. G.O.Ms.No.205 - dated 3-8-2021 - Andhra Pradesh SGST

Amendment in Notification G.O.Ms.No.291, dated 29-4-2019

6. S.O. 126 - dated 3-8-2021 - Bihar SGST

Corrigendum - Notification No. 05/2021-State Tax (Rate), dated the 14th June, 2021

7. G.O. (Ms) No. 103 - dated 28-7-2021 - Tamil Nadu SGST

Constitution of the Tamil Nadu Authority for Advance Ruling

Income Tax

8. 89/2021 - dated 4-8-2021 - IT

U/s 280A(1) of IT Act 1961, Central Government, in consultation with the Chief Justice of the High Court of Telangana designates Special Court in the Hyderabad

9. 88/2021 - dated 4-8-2021 - IT

U/s 280A(1) of IT Act 1961, Central Government, in consultation with the Chief Justice of the High Court of Meghalaya designates Special Court in the Shillong

10. 87/2021 - dated 4-8-2021 - IT

U/s 280A(1) of IT Act 1961, Central Government, in consultation with the Chief Justice of the High Court of Gujarat designates Special Court.

11. 86/2021 - dated 4-8-2021 - IT

U/s 10(46) of IT Act 1961 - Central Government notifies ‘Real Estate Regulatory Authority’ in respect of the specified income arising to that Authority

12. 85/2021 - dated 4-8-2021 - IT

U/s 10(46) of IT Act 1961 - Central Government notifies ‘National Council of Science Museums’, in respect of the specified income arising to the Council.

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/DDHS/DDHS_Div3/P/CIR/2021/611 - dated 4-8-2021

Requirement of minimum number and holding of unit holders for unlisted Infrastructure Investment Trusts (InvITs)

RBI

2. RBI/2021-22/77 DOR.CRE.REC.35/21.04.048/2021-22 - dated 4-8-2021

Guidelines for Implementation of the circular on Opening of Current Accounts by Banks

GST - States

3. Trade Circular No. 21 T of 2021 - dated 3-8-2021

Clarification regarding extension of limitation under GST Law in terms of Hon’ble Supreme Court’s Order dated 27.04.2021.

4. Circular No. 157/13-HGST/2021/GST-II - dated 3-8-2021

Clarification regarding extension of limitation under GST Law in terms of Hon’ble Supreme Court’s Order dated 27.04.2021.

FEMA

5. 08 - dated 5-8-2021

Exim Bank's Government of India supported Line of Credit (LoC) of USD 30.00 million to the Government of the Republic of Sierra Leone

Highlights / Catch Notes

GST

• Tamil Nadu Water Supply Agreement Exempt from Tax Under Entry 99, Notification No. 02/2017-CT (R.

  Case-Laws - AAAR : Classification of supply - oncession agreement entered into by the appellant with the Government of Tamilnadu and Tirupur Municipality - taxability of supply - Sale of water - Sewage treatment charges - it can be safely concluded that the supply of the appellant is of raw water, treated to become ‘potable water’ and nothing more. Once it is distinctly clear that the supply is of ‘water’ only, and NOT purified water, the same falling under the entry 99 of the notification no. 02/2017-CT (R) is qualified for the exemption. - AAAR
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• UHT Sterilized Flavoured Milk 'Britannia Winking Cow Thick Shake' Classified Under CTH 22029930 Per GRI Rule 1 Guidance.

  Case-Laws - AAAR : Classification of goods - UHT Sterilized Flavoured Milk supplied by the appellant as ‘Britannia Winking Cow Thick Shake’ in various flavours in tetra packs/bottles - In the case at hand, the classification is based on the Specific entry applicable to the product vide the Tariff heading read with the related HSN Explanatory Notes and the applicable Chapter Notes - the Explanatory Notes have been taken as a guidance only, which is permitted under the Explanation to Notification No.01/2017. Further the classification is squarely dealt with by the application of GRI Rule 1 and therefore there is no need to examine the applicability of Rule 3(a) or 3(b) as claimed by the appellant. - The goods are classifiable under CTH 22029930 as held by the Lower Authority - AAAR
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• Borewell Drilling for Agriculture Stays Under Tax Code 9954, Unaffected by Land Type Differences.

  Case-Laws - AAAR : Classification of supply of service - service in relation to agricultural operations directly in connection with raising of agricultural produce - Drilling of Borewells for supply of water for agricultural operations - The appellant himself has already classified his supply of services of borewell drilling under 9954 for the purpose of paying the tax; it defies logic as well as law that the same activity if done on agricultural land will be classifiable under a different heading 9986. - AAAR
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• Appellate Authority Confirms Air Springs Classified Under CTH 8708 for GST; Not Considered Base Metal Springs.

  Case-Laws - AAAR : Classification of goods - rate of GST - Air Springs” manufactured and supplied by the appellant - The product in hand is an air below the utility of which is to act as a ‘Shock absorbent’. It is not a spring classifiable under any of the Chapters mentioned, for the reason that the product is not an article of base metal or alloy of base metal - Thus, Air Springs manufactured by the appellant is classifiable under CTH 8708 as rightly held by the Lower Authority - AAAR
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• GST Rate for "KRISHNA" Ready-to-Prepare Mixes: 9% CGST and 9% SGST under CTH 2106.

  Case-Laws - AAR : Classification of goods - rate of GST - Applicable HSN Code - manufacture and sale of ready to prepare cook products like Dosai Mix, Idly Mix, Tiffen Mix, Sweet Mix, Health Mix, Porridge Mix in the name of “KRISHNA” - The classification of the products is CTH 2106 and the applicable rate of tax is 9% CGST and 9% SGST - AAR
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• Supply of Water Under GST: Raw Effluent Treatment and Sale Classified as Goods, Including De-mineralized Water for Industrial Use.

  Case-Laws - AAR : Classification of supply of outputs - sale of goods or not - water sold as Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container) - In the proposed Modus of purchase of ‘Raw effluent’, treat it on own account and supply the outputs at market rates, the classification of supply of outputs as sale of goods is correct. - The classification of Water recovered, which is de-mineralized water for Industrial use is classifiable under CTH 2201 as Waters - AAR
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• National Institute of Technology, Tiruchirappalli must deduct TDS u/s 51 of the CGST Act, 2017.

  Case-Laws - AAR : Deduction of tax (GST) at source (TDS) - Government Entity or not - National Institute of Technology, Tiruchirappalli (NITT) - The applicant is a Government Entity under GST Law. - he applicant is liable to deduct tax at source (TDS) under Section 51 of the CGST Act, 2017 read with Notification No. 50/2018-C.T - AAR
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Income Tax

• High Court Rejects Appeal on Depreciation for Non-Compete Fee; Focus on Intangible Assets u/s 32(1)(ii.

  Case-Laws - HC : Rectification of mistake u/s 254 - Depreciation on the non-compete fee denied - CIT(A) allowed the claim - ITAT rejected the claim - Whether AO has accepted the claim of the assessee - the words “similar business or commercial rights” have to necessarily result in an intangible asset against the entire world which can be asserted as such to qualify for depreciation under Section 32(1)(ii) - Merely because another appeal raising similar questions has been admitted by this Court, also does not persuade us to admit the present appeal as well only on this ground. - HC
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• CBI Inquiry Into May 31, 2021, Email Withdrawn After Tax Department Offers Unconditional Apology to Petitioner.

  Case-Laws - HC : Modification/recall of the order - Order whereby the Central Bureau of Investigation was directed to enquire as to whether the email dated 31st May, 2021 annexed by the petitioner as Annexure P-4 had been issued to the petitioner or not by the respondent and/or Tax Department - Keeping in view the the unconditional apology offered by the Department, the directions issued for CBI enquiry is recalled - HC
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• High Court Allows Writ Petition on MAT Assessment Reopening; No Failure in Disclosure u/s 115JB.

  Case-Laws - HC : Reopening of the assessment - MAT computation u/s 115JB - Scope of amendment - Even if, the amended provision as it stands amended, vide Finance Act, 2009 in the Income Tax Act, 1961, it cannot be said that there was a failure on the part of the petitioner to truly and fully disclose all material facts/informations required for assessment. The writ petition filed by the petitioner therefore deserves to be allowed - HC
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• Reassessment Invalid: No Evidence of Notice Service u/s 143(2) of Income Tax Act, Proceedings Deemed Void.

  Case-Laws - AT : Validity of reassessment proceedings - absence of evidence of service of notice u/s 143(2) - As regards participation in the reassessment proceedings by the assessee, nothing really turns on the same. When assumption of jurisdiction is illegal, as no valid notice under section 143(2) was issued and served on the assessee, mere participation by the assessee in the resultant proceedings cannot clothe it with legality. - AT
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• Section 56(2)(vii)(b) Not Applicable: Flat Exchange at Same Site Considered Non-New Booking, No Stamp Duty Change.

  Case-Laws - AT : Addition u/s 56(2)(vii)(b) - stamp duty value consideration - It was not a case of new booking but a case wherein the assessee had merely exchanged the flats at the same site to have better location. The area as well as sale consideration was the same and the new flats got substituted from the date of initial booking which is evident from the conduct of the parties.This being the case, the provisions of Sec. 56(2)(vii)(b) as applicable from 01/04/2014 could not have been applied by Ld. AO - AT
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• Assessee Successfully Challenges Disallowance of Residential Expenses, Proves Office Use with Documentation, No Refuting Evidence Found.

  Case-Laws - AT : Disallowance of expenses relating to residential premises - Society & electricity charges - Assessee has proved that a clearly demarcated part of the premise was used by her as the office which is duly supported by various documents on record. There is nothing on record to disprove this claim - AT
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• Taxpayer Relief Granted: CIT(A) Overturns AO's Additions of Sundry Creditors u/s 41(1) Due to Unserved Notice. (1.

  Case-Laws - AT : Addition of sundry creditors payable including expenses outstanding by AO u/s 41(1) on cessation of liability - notice u/sec 133(6) of the Act issued by the AO was returned unserved - the Ld.CIT(A) has considered the overall facts and relied on the judicial decisions and granted relief to the assessee rightly - AT
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Customs

• Apple HomePod imports classified under Customs Tariff Act 1975, section 85176290, for data transmission and voice conversion devices.

  Case-Laws - AAR : Classification of imported goods - Apple HomePod - The product in question answers to the description of six-digit entry 851762 which is meant for ‘Machines for reception, conversion and transmission or regeneration of voice, images, other data, including switching and routing apparatus’ and more specifically under the residuary sub-heading 85176290 - thus, Apple HomePods merit classification under sub-heading 85176290 of the first schedule to the Customs Tariff Act, 1975. - AAR
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• High Court Affirms Jurisdiction of Proper Officer to Issue Show Cause Notice in Customs Case; Jurisdiction Objection Rejected.

  Case-Laws - HC : Jurisdiction to Issue Show Cause Notice (SCN) - Proper officer - In fact, absence of jurisdiction to issue a show-cause notice if raised even after an assessment order is passed, such objection regarding jurisdiction of the authority if found in the affirmative would vitiate the whole proceedings including the assessment orders or orders passed on an appeal and other orders of the superior authorities. Accordingly, the contention regarding jurisdiction as raised by the second respondent is liable to be rejected. - HC
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IBC

• CIRP Petition Dismissed: Respondent Not a 'Corporate Person' Under Insolvency Code, Sections 2 and 3(7) Explained.

  Case-Laws - AT : Initiation of CIRP - petition was dismissed on the ground that the Respondent is not a body corporate - Even if best case of the Appellant is accepted, the Society which will be deemed to be a body corporate is for the purposes as mentioned in Section 18, and not Company incorporated as such - Section 2 read with Section 3 (7) does not spell out that the Respondents Companies in these Appeals are ‘Corporate Persons’ under the ‘I&B Code’ to whom provisions for ‘I&B Code’ would apply. - AT
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• Court Denies Appeal for Liquidation; Awaits CoC Decision on Resolution Plan Despite Timeline Issues.

  Case-Laws - AT : Approval of Resolution Plan - liquidation - There are no reason to admit the Appeal in the facts of the matter. Although the CoC did not strictly follow the time frame given by the Adjudicating Authority and displeasure was expressed, when Adjudicating Authority exercised discretion not to pass order of liquidation and wait, we will not interfere in the discretion. When the Resolution Plan is on the verge of being accepted or rejected by the CoC it would not make much difference if little time is extended. - AT
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Service Tax

• Show Cause Notice Valid: Issued Within Amended 18-Month Limit u/s 73(1) of Finance Act. Demand Period Confirmed.

  Case-Laws - AT : Period of limitation - Relevant date - There is no dispute that the relevant date in the present case is 25.11.2012. Prior to this date on 28.05.2012, section 73(1) of the Finance Act was amended and it was provided that the Central Excise Officer could issue a notice within eighteen months from the relevant date. The show cause notice was issued on 08.05.2014, which would be within eighteen months from 25.11.2012 - Commissioner (Appeals), therefore, committed no illegality in holding that the demand for the period 01.04.2012 to 30.06.2012 was within the statutory period of eighteen months from the relevant date. - AT
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• Court Rules in Favor of Refund Claims for Service Tax on Exempt Long-term Leases Over 30 Years by State Government.

  Case-Laws - AT : Refund of service tax paid - service provided by the State Government or KINFRA by way of providing long term lease exceeding 30 years or more which was exempt from service tax - In view of the facts that now the appellants have produced sufficient documents to prove the payment of service tax, there are no justification for rejection of the refund claims - AT
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• Penalty Overturned: Proper CENVAT Credit Management Nullifies Interest and Penalty Demands by Authorities.

  Case-Laws - AT : Levy of penalty - Since there was no wrong utilization of CENVAT credit and the appellant has reversed the proportionate credit attributable to trading prior to its utilization and therefore the demand of interest and imposition of penalty is not sustainable. - AT
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Case Laws:

• GST

• 2021 (8) TMI 194
  Classification of supply - supply of goods or supply of services - intra-state supply - concession agreement entered into by the appellant with the Government of Tamilnadu and Tirupur Municipality - taxability of supply - Sale of water - Sewage treatment charges - Consultancy Services such Detailed Project Report (DPR), Project Management Consultancy (PMC) and any other infrastructure related consultancy to TCMC / GoTN - Interest on receivable on delayed payments - Disconnection Charges - Reconnection charges - Cheque Bouncing charges - Permanent disconnection charges - Service provided to Customer on New Connection works-Concept of No Loss No Gain, New Connection Shifting and other works. HELD THAT:- Section 2.4 of the agreement provides for royalty payment by the appellant to the Government of Tamilnadu, one of the parties to the agreement, for the abstraction of such volume of raw water from time to time. Once royalty is charged and collected for the abstraction right, the raw water abstracted becomes the property of the appellant. It is also seen from the agreement that potable water is the output after treatment of the raw water by the appellant, and which is the only supply made by the appellant to all the purchasers, viz., TM, wayside villages and Industrial units (definitions in pg. 15 16). The water treatment, etc., are activities done by the appellant on his own account only to achieve the quality standards of the potable water as per the agreement with one of the purchasers, Tirupur Municipality. It is clearly mentioned throughout the agreement that potable water is only supplied to all the purchasers of the appellant irrespective of whether they are villages, industrial units or the municipality or whether the use is domestic or non-domestic. The only differential treatment based on end use and end-users (purchasers) is only with respect to the price of the potable water charged by the appellant. There is no differentiation with respect to the nature of the supply made in the agreement in its entirety. In fact, the definitions of raw water , potable water purchasers Water charges in Page nos. 15,16, 17 and 21 of the concession agreement categorically pronounce that the supply to all the purchasers including industrial units, municipality and villages and for both domestic and non-domestic use, is of raw water treated to performance standards, which is otherwise called as potable water . Therefore, it is clear from the agreement that the supply of appellants is only potable water. Whether the water supplied by the appellant is exempted under si. No. 99 of N/N. 02/2017-CT(R) and its equivalent SGST notification published vide TamilNadu GO Ms. No. 63 dated 29/6/2017? - HELD THAT:- Since purified water is excluded from the exemption entry, the point of contention appears to be that since the raw water is treated to various processes to make it potable, whether these processes make the raw water as a purified water or it remains as Water treated to make it fit as potable water - Distilled water is the most common form of pure water. However, potable water has only one meaning, water fit for human and animal consumption and has dissolved minerals. Infact, from the performance standards spelt out in Schedule C of the agreement, the quality of potable water would itself indicate that it does not attain the nature and quality of a purified water on any count. Therefore, it can be safely concluded that the supply of the appellant is of raw water, treated to become potable water and nothing more. Once it is distinctly clear that the supply is of water only, and NOT purified water, the same falling under the entry 99 of the notification no. 02/2017-CT (R) is qualified for the exemption. Appeal disposed off.

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• 2021 (8) TMI 193
  Classification of goods - UHT Sterilized Flavoured Milk supplied by the appellant as Britannia Winking Cow Thick Shake in various flavours in tetra packs/bottles - classifiable under Chapter 4, Tariff Heading 0402 or alternatively, Tariff Heading 0404? - HELD THAT:- In the case at hand, as per the label, the Milk constituent is Standardised Milk or Toned Milk which are not Full Cream Milk or Skimmed Milk as per the definitions. The Chapter Note 1 clarifies the nature of Milk covered under the expression Milk which is limited only to Full cream Milk or partially or completely Skimmed Milk . This shows that the other types of Milk are excluded for the purposes of this Tariff heading. In the products at hand, the percentage composition of Standardised Milk or Toned Milk is 80 to 90% and the products are not of Full Cream Milk or Skimmed Milk and therefore are undoubtedly excluded from the purview of Tariff Heading 0402. Therefore, irrespective of the contentions that the product remains a Milk even with added flavours until it is consumed, it is clearly established that the Milk referred to in this Tariff heading and that of the appellant are not the same and the products in hand are not covered under CTH 0402. The products in hand are products of Standardized/Toned Milk which are UTH sterilized and added with flavours, sugar, water, stabilizers, regulators, etc These are not Full cream milk or partially or completely skimmed milk and therefore not covered as Milk under CTH 0402. Further, the products do not lack any natural constituents and further no natural milk constituents are added to it and therefore, are not covered under CTH 0404 also - there are no infirmity in the findings of the lower authority that the product in hand do not fall under Chapter 4 of the Customs Tariff, though the product is categorized under Dairy products and analogues under FSSAI Regulation 2011. NDDB being a nodal agency in the Dairy products and the Flavoured Milk is categorized as Beverage as can be seen above. The process mentioned under Flavoured Milk , above is the one followed by the appellant in the case at hand. Further, Beverage as per the dictionary definition is any type of drink except water . Thus, it becomes evident that the product in hand is a Beverage. In the case at hand, the classification is based on the Specific entry applicable to the product vide the Tariff heading read with the related HSN Explanatory Notes and the applicable Chapter Notes - the Explanatory Notes have been taken as a guidance only, which is permitted under the Explanation to Notification No.01/2017. Further the classification is squarely dealt with by the application of GRI Rule 1 and therefore there is no need to examine the applicability of Rule 3(a) or 3(b) as claimed by the appellant. The UHT Sterilized Flavoured Milk marketed under the brand name Britannia Winkin Cow Thick Shake by the appellant is not classifiable under the Tariff heading 0402 /0404 but classifiable under CTH 22029930 as held by the Lower Authority - appeal disposed off.

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• 2021 (8) TMI 192
  Classification of supply of service - service in relation to agricultural operations directly in connection with raising of agricultural produce - Drilling of Borewells for supply of water for agricultural operations like cultivation including seeding, planting and ploughing - Letting out compressors for pumping of water from the borewells to the agricultural fields - applicability of entry SI.No.54 of N/N. 12/2017-CT (Rate) dated 28.06.2017. HELD THAT:- It is noted that the appellant while undertaking the borewell drilling activity for industries etc., (other than on agricultural lands), it is classified under SAC 995434 leviable to appropriate rate of GST. However, while undertaking the same activity on agricultural lands, the appellant seeks whether the same would fall under SAC 9986 so as to be eligible to fall within the ambit of sl.no.54 of N/N. 12/2017 and further buttresses his arguments with case laws and evidences to show that the activity is indeed done in agricultural lands and the practice in service tax era, etc. Without going into the merits of the main argument of the appellant regarding the activity undertaken is by way of agricultural operations relating to production of any agricultural produce, etc., prima facie, in the scheme of things of GST, no two classifications can be adopted for a single activity based on end use or where it is rendered, etc. The appellant himself has already classified his supply of services of borewell drilling under 9954 for the purpose of paying the tax; it defies logic as well as law that the same activity if done on agricultural land will be classifiable under a different heading 9986 - since the same equipment is used for the drilling activities, whether on agricultural lands or for industries, etc., it would not be possible for the tax administration to identify whether the driller is exclusively undertaking agricultural drilling only thereby leading to evasion of tax only. There are no reason to interfere with the order of the Advance Ruling Authority in this matter - appeal disposed off.

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• 2021 (8) TMI 191
  Classification of supply of service - service in relation to agricultural operations directly in connection with raising of agricultural produce - Drilling of Borewells for supply of water for agricultural operations like cultivation including seeding, planting and ploughing - Letting out compressors for pumping of water from the borewells to the agricultural fields - applicability of entry SI.No.54 of N/N. 12/2017-CT (Rate) dated 28.06.2017. HELD THAT:- It is noted that the appellant while undertaking the borewell drilling activity for industries etc., (other than on agricultural lands), it is classified under SAC 995434 leviable to appropriate rate of GST. However, while undertaking the same activity on agricultural lands, the appellant seeks whether the same would fall under SAC 9986 so as to be eligible to fall within the ambit of sl.no.54 of notfn. No. 12/2017 and further buttresses his arguments with case laws and evidences to show that the activity is indeed done in agricultural lands and the practice in service tax era, etc. Without going into the merits of the main argument of the appellant regarding the activity undertaken is by way of agricultural operations relating to production of any agricultural produce, etc., prima facie, in the scheme of things of GST, no two classifications can be adopted for a single activity based on end use or where it is rendered, etc. The appellant himself has already classified his supply of services of borewell drilling under 9954 for the purpose of paying the tax; it defies logic as well as law that the same activity if done on agricultural land will be classifiable under a different heading 9986 - since the same equipment is used for the drilling activities, whether on agricultural lands or for industries, etc., it would not be possible for the tax administration to identify whether the driller is exclusively undertaking agricultural drilling only thereby leading to evasion of tax only. There are no reason to interfere with the order of the Advance Ruling Authority in this matter - appeal disposed off.

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• 2021 (8) TMI 190
  Classification of goods - rate of GST - Air Springs manufactured and supplied by the appellant - classifiable under Tariff heading 40169990 as opposed to Tariff heading 8708 9900 and attract GST at the rate of 18%? - HELD THAT:- The product is composed of a rubber bellow which includes rubber and fabric composite, beadwire, griddle hoop, crimped top plate, piston and a bumper. The material composition is approximately 60% metal and 40% rubber. It is stated that the product works on the pneumatic system principle and the vulcanized rubber component gives the key functionality of the product, a critical component of the air suspension and lift axle systems in trucks, trailers and buses. Pre-GST, the appellant had classified this product under CETH 4016 and after the introduction of GST from 1st July 2017, they have started classifying under CTH 8708 for the purposes of GST. In the case at hand, it is stated that the Air Springs functions on the Pneumatic principles, i.e., the fluid used to balance is air . Air when pumped in and out of the bellow when connected in the system acts as a shock absorber and provides the suspension by its reaction force. The product, Air Spring assembly manufactured by the appellant consists of a bellow made of vulcanised soft rubber coated with fabric sheet sealed with bottom Bead Plate Top Bead Plate and also has Bead Wire, Girdle hoop, Piston and a Rubber Bumper. The fabric in the bellow wall restricts radial expansion so that the air pressure developed by the air flowing into the air spring causes it to expand axially and the rubber essentially provides the enclosure for the fluid, i.e., air. It has been opined by the Certified Chartered Engineer that the essential characteristics is derived from the vulcanised rubber. The commercial identity of the product is that the product is a critical component of the air suspension and lift axle system in trucks, trailers and buses as has been stated by the appellant. It is also pertinent to note that the product is suitable for use solely or primarily with the articles of Chapter 8701 to 8705. The appellant has also claimed that the HSN Explanatory Notes to Section XVII specifically excludes Springs from the scope of Parts and Accessories under CTH 8708. The relevant note seeks to exclude Parts of General use- springs (including leaf springs for vehicles) such goods of base metal fall in Chapter 73 to 76 and 78 to 81, and similar goods of Plastics fall in Chapter 39 . The product in hand is an air below the utility of which is to act as a Shock absorbent . It is not a spring classifiable under any of the Chapters mentioned, for the reason that the product is not an article of base metal or alloy of base metal - The product is made of fabric coated soft vulcanized rubber trimmed with the base plate and designed to give its full utility when used in axles of the Motor Vehicles to absorb shock and provide the required suspension and this claim is not valid. Thus, Air Springs manufactured by the appellant is classifiable under CTH 8708 as rightly held by the Lower Authority - appeal disposed off.

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• 2021 (8) TMI 189
  Classification of goods - rate of GST - Applicable HSN Code - manufacture and sale of ready to prepare cook products like Dosai Mix, Idly Mix, Tiffen Mix, Sweet Mix, Health Mix, Porridge Mix in the name of KRISHNA - products fall under the headings CTH 1901 and CTH 2106 or under CTH 1106 and CTH 2302? HELD THAT:- CTH 1901 covers Flour , not only of the cereal covered under Chapter 11 but also of vegetable origin of any chapter; the preparation may be in the form of powders, granules, doughs or other solid forms such as strips or discs or in liquid form but the cocoa content should be NIL or less than 40% and should not have been specified or included elsewhere; these preparations are used by simply mixing with or boiling in water, or for making culinary preparations; the products covered under this heading may also constitute intermediate preparation for the food industry. CTH 2106 covers those food preparations for use either directly or after processing such as cooking for human consumption and such food preparations should not be covered by any other heading of the Tariff, The heading includes preparations consisting of chemicals (salts) with food stuffs (flour, sugar, milk powder, etc) for incorporation in food preparations either as ingredient or to improve some of the characteristics of the product. CTH 2302 covers by products of the milling industry which do not comply with the requirements of Chapter Note 11(2)(A) and sifting residues. CTH 1106 covers flours of dried leguminous vegetable and lentils if they are obtained only by milling of these raw materials through the process specified therein and no further processing has taken place and no addition of other substances with a view for their use as food preparations - In the case at hand, none of the products are entirely made of flours of products falling under Chapter 7 or 8 of the Tariff. CTH 1901 covers preparation in the form of powders, granules, etc of cereal covered under Chapter 11 of vegetable origin of any chapter, which are used by simply mixing with or boiling in water, or for making culinary preparations or may constitute intermediate preparation for the food industry and not elsewhere specified or included - In the case at hand the products are not usable by simply mixing with or boiling in water and require to be further processed/cooked for human consumption. The products in hand are more of in the nature of products meant for preparatory to cook food for human consumption and per-se not a preparation which can be used by mixing with water or boiling in water and therefore, the products do not merit classification under CTH 1901 - where the products wherein the major ingredients are mix of cereal flours and mix of gram flours respectively, which are preparations in the form of powder of cereal vegetable origin do not fall under this category of products as these products cannot be said to be used by simply mixing with or boiling in water but required further processing and be cooked. CTH 2302 covers products of milling industry which do not comply with the requirements of Note 2(A) to Chapter 11 - In the case at hand, the applicant has not furnished any test report and further has stated during hearing, no such tests were conducted and therefore, we do not agree to take the arguments without any evidentiary proof and hold none of the products merit classification under Chapter 23 and more specifically under CTH 2302 as claimed by the applicant. In this connection, it is pertinent to note that the State Jurisdiction Officer, who has the administrative control over the applicant has not favoured the classification under Chapter 23. The residual category to be examined is CTH 2106 under which the applicant classifies these products. CTH 2106 covers food preparations for use either directly or after processing such as cooking and the product must not be covered under any other heading, i.e., it is residuary heading for the products which is not specifically classified elsewhere in the Tariff and covers all the food preparations for use for human consumption - In the case at hand, all the products are a mix of various ingredients which do not find merit to be classified based on the major constituent of the product as all the ingredients are equally important for the product. Further, all the products are marketed and known in common parlance as the preparatory product for Dosai, Idli, Tiffin, Porridge, etc and is not identified based on the major ingredient (based on the percentage of constitution) alone, contained in the said product - It is pertinent to note that the applicant does sell individual Cereal flours /Gram flours classifying under Chapter 11 as seen from the entries in the invoices furnished by them. Therefore, the products being food preparations and not classifiable specifically under any of the Tariff headings based on the major constituents or other criteria handed by the rules of Interpretation. All the products for which classification is sought before us are classifiable under CTH 2106. Applicable rate of tax under GST - HELD THAT:- In the case at hand, the products are all food preparations in the form of powder. The Dosai Mixes and Idli Mixes are packed and sold as mixes which is to be mixed with water/boiled water/curd to make it as batter and the product sold is a powder and not batter. Therefore the entry at 100A of Schedule-I is not applicable to the applicant s products. All the 49 products for which the ruling is sought is classifiable under CTH 2106 and the applicable rate is 9% CGST and 9%SGST as provided at SI.No. 23 of Schedule -III of the Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 as amended and entry S.No. 23 of Schedule-Ill of Notification No. II (2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended The classification of the products is CTH 2106 and the applicable rate of tax is 18% GST as per entry no. 23 of Schedule-Ill of Notification No. 11(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended and the same, item-wise: (a). The following Dosai Mix goods under CTH 2106 taxable at 18% are Krishna Rava Dosai Mixes, Krishna Special Rava Dosai Mixes, Krishna Ragirava Dosai Mix 200gms, Sola Dosai Mix 500gms, Kambu Dosai Mix 500gms, Ragi Dosa Mix 500gm, Multigrain Dosai Mix 200gm, Horse Gram Dosai Mix 200gm and Green Leaf Dosai Mix 200gm. (b). The following Idli Mixes goods under CTH 2106 taxable at 18% are Kanchipuram Idly Mix 200gms, Oats Idly Mix 200gm, Masala Idly Mix 200gm, Wheat Rava Idly Mix (Box)200gm, Rava Idly Mix 200 / 500gm, Ragi and Bajra Idly Mix 500gm and Rice Idly Mix 500 gm. (c). The following Tiffin Mixes goods under CTH 2106 taxable at 18% are Adai Mavoo Mix 200gm and 500gm, Millet Adai Mix 200gm, Kitchadi Mix 200gm and 500gm, Parota Mix 200gm and 500gm, Venpongal Mix 200gm, Uzhunthakali Mavoo 200gm, Kesari Mix 200gm, Pavasam Mix 200gm and 500gm, Vadai Mavoo 200gm, Masai Vadai Mavoo 200gm, Pattanam Pakoda Mix 200gm, Ready Idiyappam, Baiii Mix 200gm and 500gm, Wheat Khara Bath Mix 200gm, Rice Upma Mix 200gm and Fenugreek Kaxhi Mix 200gm. (d). The following Tiffin Mixes goods under CTH 2106 taxable at 18% are Health Mavoo Mix 200gms, 500gm, Sprouted Roased Health Mix 200gm and 300gm, Sprouted Roased Health Mix (Badam) box 200gm and Sprouted Roased Health Mix (Chaco) box 200gm. (e). The following Porridge Mixes goods under CTH 2106 taxable at 18% are Baira Porridge Mix 500gm, Jowar Porridge Mix 500gm, Ragi Porridge Mix 500gm, Horse Gram Porridge Mix 200gm, Greengram Porridge Mix 200gm, Multigrain Porridge Mix 200gm, Little Rice Foxtail Rice Porridge Mix 100gm, Red Rice Baira Porridge Mix 100gm, Red Hand Grinded Rice Porridge Mix 100gm, Yellow Corn Rice Porridge Mix 100gm, Kodu Rice Sorghum Porridge Mix 100gm, Rice Dhall Porridge Mix 100gm and Samba Wheat Barnyard Rice Porridge Mix 100gm.

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• 2021 (8) TMI 188
  Classification of supply of outputs - sale of goods or not - water sold as Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container) - to be classified under Heading 2201 - effluent purchased from dyeing - classified as other wastes from chemical or allied industries (3825 69 00) is correct or not - method of arriving value for effluent using the net realization price method - comparable products and cost can be worked out or not. Scope of Advance Ruling - classification of effluent purchased - method of arriving value for purchase of effluent - HELD THAT:- It is evident that an applicant can seek an Advance Ruling only in relation to supply of goods or services or both undertaken or proposed to be undertaken by them. Further, as per Section 103(1) of the GST Act, the ruling is binding only on the applicant and the concerned officer or the jurisdictional officer of the applicant - In the case at hand, the applicant has sought ruling on the classification of the effluent purchased by them and also ruling is sought on the method of arriving value for purchase of effluent. These questions are raised as recipient of the goods and not supplier of such goods. Accordingly, this questions are not liable for admission, the fact of which was already stated during the Hearing. Classification of supply of outputs - sale of goods or not - HELD THAT:- It is evident that the applicant after entering into a contract for purchase of the Raw effluent proposes to treat the same. The process carried out in the plant is that the raw effluent received from the member dyeing units is treated/ processed through four phases for Zero Liquid Discharge system (ZLD) - the applicant proposes to purchase the Raw effluents , treat them on their own account and sell the resultant products at market rates. Therefore, in this modus of operation, the classification of the supply of outputs as sale of goods is correct. Classification of water sold as Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container) - to be classified under Heading 2201 - HELD THAT:- It is seen from the process description that three stage RO system is designed to get overall recovery 80% of product water by removal of dissolved inorganic salts. All the three stages are loaded with Sea Water (SW) membranes. 80% of water is restored. From the Analytical report of the recovered water dated 13.02.2021 furnished by the applicant it is seen that the TDS is 216 and it contains chlorides, Sulphates, Bicarbonates and the pH is 6.50 - it is clear that the recovered, reusable water obtained by the process of Reverse Osmosis is sold for Industrial process utilization. The water is partly de-mineralized in nature. Therefore while the CTH applicable is 2201 as stated by the applicant. The Description of the product do not fit the Description of Goods , Water(other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralised and water sold in sealed container) given under Sl.No.99 of Notrification No. 02/2017-C. T. (Rate) dated 28.06.2017.

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• 2021 (8) TMI 187
  Deduction of tax (GST) at source (TDS) - Government Entity or not - National Institute of Technology, Tiruchirappalli (NITT) - reverse charge mechanism - supply of services - Sl.No. 3, 3A of N/N. 12/2017 - Composite supply of works contract provided to the applicant - Sl.No.3 (vi) of N/N. 11/2017 dated 28.06.2017. HELD THAT:- The applicant, National Institute of Technology, Tiruchirappalli( NITT) was started as a joint co-operative venture of the Government of India Government of Tamil Nadu in 1964 with a view to catering to the needs of man-power in technology for the country. NITT is covered under the National Institute of Technology Act, 2007. In the course of discharging the functions as per the NIT, 2007, the applicant engages suppliers to provide certain services like pure labour services and supply of composite services. It is apparent from the above that as per Section 9(3), the provisions of the Act is applicable to recipient as if he is the person liable for paying the tax in relation to supply of such goods or services or both and the provisions of Advance Ruling is applicable to an applicant only with regard to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant - advance ruling cannot be sought by a person who is a recipient of the supply of goods or services, when the ruling sought relates to the classification/taxability of such supply received by them. However, the expression, unless the context otherwise requires read with Section 9(3) provides for admission of application from service recipients in cases where the question relates to determination of the liability to pay tax on any goods or services. The applicant institute was originally established in the year 1964 as a society registered with the Registrar of Societies, Tamilnadu under the auspices of the Ministry of Human Resources Development with the Minister of HRD being the Chairman, Board members will be Education Secretary of Ministry of HRD, Principal Advisor, Planning commission, Secretary, Chairman, UGC, Department of Science Technology. Director General of CSIR will be the educational advisor and financial advisor will be from Ministry of HRD, two representatives from Industry will be nominated by the Central Government. The NIT Act, 2007 enacted wherefrom the applicant becomes an entity set up by an Act of Parliament in as much as the said Act in S.3 (c) defines corresponding institute as that specified in Column 3 of the schedule i.e., National Institute of Technology, Tiruchirapalli, a society registered under the Tamilnadu Societies Registration Act, 1975 and Institute under the Act specified in Column 3 of the Schedule i.e, National Institute of Technology, Tiruchirapalli - the institute initially and also after the enactment of the NIT Act, has been receiving funds from the central Government by way of fund which substantiates the requirement of more than 90% financial participation from the central or state Government. Thus the NITT satisfies the conditions prescribed to be held as Government entity under the CGST Act, 2017. Whether the applicant is liable to deduct Tax, as per section 51 of the CGST Act, 2017? - HELD THAT:- The applicant is liable to deduct tax at source (TDS) under Section 51 of the CGST Act, 2017 read with N/N. 50/2018-C.T dt.13.09.2018. Whether the applicant is liable to discharge tax on reverse charge basis on supply of services as per Section 9 (3) of the CGST Act, 2017? - HELD THAT:- The applicant has not submitted the list of all the service providers along with their constitution as called for during the hearing and thereafter. Thus, the applicant has not furnished the list of providers of security services other than the one mentioned above. Hence in respect of security services being received from a body corporate the applicant is found not to be liable under RCM to pay tax as per the documentary evidences submitted by them. Application not admitted.

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• Income Tax

• 2021 (8) TMI 198
  Reopening of assessment u/s 147 - extension of time limit granted under The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 as ultra vires and respondents cannot unilaterally extend the time period for issuing reopening notices u/s 148 - HELD THAT:- There are various other petitions which have been filed and the Court has been pleased to direct notice to respondents and Attorney General for India and one of the lead matter is Tata Communications Transformation Services Limited V/s. Assistant Commissioner of Income Tax 14 (1) 2, Mumbai and others 2021 (8) TMI 195 - BOMBAY HIGH COURT The petitions listed above also require to be considered. Therefore, petitions admitted. Rule made returnable on 13th September 2021. Till next date, no further action be taken on the impugned notices/circulars qua petitioners.

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• 2021 (8) TMI 197
  Reopening of assessment u/s 147 - Assessment time barred - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia in Section 149 - HELD THAT:- Notices u/s 148 of the Act stood expired and, therefore, any action u/s 148 would have been time barred by virtue of the proviso to Section 149(1) of the Act. They submit that by virtue of introduction of Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the time limit for taking action u/s 148 has been extended till 30th June, 2021. According to them, the impugned notifications only provide that as the time limit for issuing notice under Section 148A of the Act has been extended by deemed fiction, the procedure to be followed till 30th June, 2021 would be the old procedure mentioned under the Act. In support of their submission, they also rely upon Section 6 of the General Clauses Act, 1897. This Court is of the prima facie view that the impugned notification is contrary to settled principle of statutory interpretation, namely, that any action taken post the amendment of a procedural section would have to abide by the new procedures stipulated in the amended Act. This Court is of the prima facie view that by virtue of a notification, which is a delegated legislation, the date for implementation of statutory provision, as stipulated in the Act, cannot be varied or changed. Following the interim orders passed by the learned predecessor Division Bench in Mon Mohan Kohli vs. Assistant Commissioner of Income Tax Anr. , 2021 (8) TMI 196 - DELHI HIGH COURT as well as similar interim order passed by the Bombay High Court, this Court directs that there shall be a stay of the operation of the impugned notices.

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• 2021 (8) TMI 196
  Reopening of assessment u/s 147 - Assessment time barred - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia in Section 149 - HELD THAT:- We may note that somewhat similar issues have also arisen before this court, in other petitions, as well. Given the fact that the department is contesting the very same issue in the Bombay High Court as well, wherein, an interim stay has been granted qua the proceedings before that Court, in the fitness of things, in our view, a similar direction needs to be issued in this matter, especially having regard to the fact that the matter pertains to AY 2003-2004. Accordingly, issue notice.

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• 2021 (8) TMI 195
  Reopening of assessment u/s 147 - extension of time limit granted under The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 as ultra vires and respondents cannot unilaterally extend the time period for issuing reopening notices u/s 148 - HELD THAT:- When, effectively, the earlier provisions of various sections, inter alia, of 147, 148 etc. as were before 01/04/2021 stand substituted, in the circumstances, impugned notice dated 21/05/2021, which purports to invoke section 3(1) of The Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Act, 2020 and the notifications thereunder, is based on the non-existent earlier provisions of the Income Tax Act, 1961 (since been substituted under the provisions of Finance Act, 2021) and such a notice cannot be issued and the authority is not empowered to issue the same. He refers to grounds G to N in the petition and contends that section 3 of The Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Act, 2020 and the Notification No.20/2021 dated 31st March, 2021, Notification No.38/2021 dated 27 th April, 2021, Explanation to clause (A)(a) of Notification No.20/2021 and Explanation to clause (A)(b) of Notification No.30/2021 are ultra-vires the Income Tax Act, The Finance Act, 2020 and are unconstitutional, posing challenge to them urges for striking them down. Issue notice to respondents and Attorney General of India. Respondents waives service of notice and seeks time of four weeks to file reply. Stand over to 02/08/2021.

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• 2021 (8) TMI 185
  Rectification of mistake u/s 254 - Depreciation on the non-compete fee denied - CIT(A) allowed the claim - ITAT rejected the claim - Whether AO has accepted the claim of the assessee - HELD THAT:- AO did not go into the question as to whether the noncompete fee can be treated as an intangible asset , whereby the appellant would be entitled to claim of depreciation under Section 32(1)(ii) of the Act, or not. The claim of the appellant of depreciation was in fact rejected by the Assessing Officer. Therefore, there was no occasion for the respondent to have challenged the said order. In appeal, the CIT(A) went ahead and directed the Assessing Officer to allow the claim of depreciation on the non-compete fee treating the same to be an intangible asset . It therefore, cannot be said that the issue of claim of depreciation on non-compete fee stood concluded before the Assessing Officer and/or the learned ITAT has exceeded its jurisdiction in considering the same. As decided in SHARP BUSINESS SYSTEM VERSUS COMMISSIONER OF INCOME-TAX - III [ 2012 (11) TMI 324 - DELHI HIGH COURT] every species of right spelt-out expressly by the Statute - i.e. of the intellectual property right and other advantages such as know-how, franchise, license etc. and even those considered by the Courts, such as goodwill can be said to be alienable. Such is not the case with an agreement not to compete which is purely personal. As a consequence, it is held that the contentions of the assessee are without merit; this question too is answered against the appellant and in favour of the Revenue.For the above reasons, this Court is of the opinion that the words similar business or commercial rights have to necessarily result in an intangible asset against the entire world which can be asserted as such to qualify for depreciation under Section 32(1)(ii) Merely because another appeal raising similar questions has been admitted by this Court, also does not persuade us to admit the present appeal as well only on this ground. - Decided in favour of revenue.

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• 2021 (8) TMI 184
  Withholding of the tax deducted at source (TDS) - petitioner prays for a direction to the respondent nos.1 and 2 for issuing a fresh certificate u/s 197 directing withholding of NIL TDS in terms of Article 8 of the Double Taxation Avoidance Agreement entered between India and the United Kingdom ( DTAA ) - HELD THAT:- The Impugned speaking order has been reproduced hereinabove. Apart from stating that the petitioner may have other sources of income, the Impugned Order does not reflect compliance with Rule 28AA of the Income Tax Rules, 1962. None of the considerations mentioned in Rule 28AA appear to have been considered by the respondent in passing the impugned speaking order . This Court in Manpowergroup Services India Pvt. Ltd. [ 2020 (12) TMI 934 - DELHI HIGH COURT] as held that the Assessing Officer cannot ignore the mandate of Rule 28AA of the Rules and proceed on any other basis, as the Government is bound to follow the rules and standards they themselves have set on the pain of their action being invalidated. In absence of following the said mandate, the Impugned Order passed is liable to be quashed. In the present case as well, it is not evident from the Impugned Order whether the Assessing Officer has followed the mandate of Rule 28AA of the Rules. In fact, on a specific query in this regard, the learned counsel for the respondents could not deny this position of non-compliance. Therefore, the Impugned Order and the certificate issued are liable to be quashed on this ground. We may also take note of the judgment of this Court in Lufthansa Cargo AG [ 2019 (11) TMI 759 - DELHI HIGH COURT] wherein under similar circumstances, this Court had held that where an order discloses non-application of mind to germane and relevant considerations including the previous assessment orders and the certificates issued under Section 197 of the Act, the order passed shall be arbitrary and liable to be set aside. Impugned speaking order and the Certificate dated 02.06.2021 are quashed. The respondents are directed to pass a fresh order in accordance with law. In the meantime, until a fresh certificate is issued by the respondents, the petitioner s receipts of payment shall abide by the withholding tax certificates for the preceding period at the rate of 0.01%.

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• 2021 (8) TMI 182
  Modification/recall of the order - Order whereby the Central Bureau of Investigation was directed to enquire as to whether the email dated 31st May, 2021 annexed by the petitioner as Annexure P-4 had been issued to the petitioner or not by the respondent and/or Tax Department - HELD THAT:- Keeping in view the aforesaid, the unconditional apology offered by the respondent is accepted by this Court and the allegations against the petitioner that he had had prima facie committed penal offences under Section 191, 192 and 196 of the IPC are deleted. Consequently, the order dated 16th July, 2021 directing the Central Bureau of Investigation to enquire as to whether the email dated 31st May, 2021 had been issued to the petitioner by the respondent-Tax Department is recalled - Application disposed off.

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• 2021 (8) TMI 181
  Reopening of assessment u/s 147 - Writ questioning the validity of the order of disposal passed by the respondents, rejecting the objections filed by the writ petitioner on re-opening of assessment initiated under Section 147/148 - HELD THAT:- This Court is of an opinion that Section 147, the conditions stipulated for re-opening of assessment as well as the scope of Section 133A are unambiguously portrays the powers of the authority to secure informations by conducting survey and such informations provided by way of an audit objections would be a cause for re-opening of assessment under Section 147/148 of the Act. Each provision under Chapter XIV procedure cannot be separated as far as the Income Tax Act is concerned. Each Section has got linkage with one another as far as the procedures to be followed by the authorities competent as well as the rights of an assessee to defend their case. A balancing procedures as contemplated, undoubtedly are to be followed scrupulously by the authorities. Under these circumstances, sources cannot be questioned by the assessee. The very purpose and object of the wider scope provided under Section 147 is to ensure that in the presence of contra materials made available to the AO, a re-opening of assessment is made and persons evaded tax are brought under the network. In the present case, the objections raised regarding the reasons were dealt with by the respondents. Further, the other issues regarding change of opinion is also considered - AO has spelt out certain reasons, which provided a cause for re-opening of assessment and such reasons are sufficient enough and, if the petitioner / assessee is not convinced, it is left open to him to defend the case during reassessment proceedings. In the present case, the Directives issued by the Hon ble Supreme Court of India in the case of GKN Driveshafts (India) Ltd., Vs. Income Tax Officer and others [ 2002 (11) TMI 7 - SUPREME COURT] was followed. The assessee also availed the opportunity and the reasons furnished as well as the objections submitted by the assessee were considered by the authorities. It is relevant to note that each and every objection filed by the petitioner was elaborately considered and all the grounds raised are also met with by the assessing authority relying on the principles laid down by the Constitutional Courts - Under these circumstances, this Court is of the considered opinion that the petitioner has to defend their case by participating in the process of reassessment.

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• 2021 (8) TMI 177
  Reopening of assessment u/s 147 - Non considering of objections by AO - HELD THAT:- No reasons having been assigned so far as the issues raised by the writ applicant with regard to the alleged transaction is concerned. We are of the view that, the AO failed to take note of the various objections filed against the reasons recorded - order of disposing off the objections does not reflect proper application of mind to the objections raised by the writ applicant and it could not be said that the objections having been disposed off by passing a reasoned order. In view of the judgment of the Apex Court in the case of GKN Divershaft (India) Ltd. Vs. Income tax Officer Ors. [ 2002 (11) TMI 7 - SUPREME COURT] while disposing off the objections against the notice issued under Section 148 of the Act, it is an obligatory on the part of the Assessing Officer to deal with the issues raised therein and pass speaking order. We are conscious that, disposing off the objections raised by the assessee against the reasons recorded before issuance of notice under Section 148 of the Act, though not part of the statutory requirement, as prescribed under the Act, however, same is guided by the directions issued by the Apex Court.

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• 2021 (8) TMI 176
  Reopening of the assessment - MAT computation u/s 115JB - Scope of amendment - HELD THAT:- The amended provision was amended retrospectively and is deemed to have been in force all along during the period commencing from 1st April of 2017.Though the provisions stands amended with retrospective effect, it cannot be said that the petitioner had failed true and full disclosure of all material facts that were required for completing the assessment. The petitioner has taken a bonafide stand that the amount debited in Profit and Loss Account towards provisions of bad and doubtful debts were not be included under Section 115JB of the IT Act. This was scrutinized and the assessment order came to be passed on 10.12.2008. Even if, the amended provision as it stands amended, vide Finance Act, 2009 in the Income Tax Act, 1961, it cannot be said that there was a failure on the part of the petitioner to truly and fully disclose all material facts/informations required for assessment. The writ petition filed by the petitioner therefore deserves to be allowed and is accordingly allowed.

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• 2021 (8) TMI 175
  Revision u/s 264 - Deduction u/s 80JJAA - HELD THAT:- In this case, the 2nd respondent has not given to benefit while reassessing the income of the petitioner while passing order on 29.12.2008. It is precisely for dealing with situations like this, powers have been vested with superior officers like the respondent under Section 264 of the Income Tax Act, 1961. Though, orders have to be passed subject to provisions of the Act, the intention of the legislative is not whittle down or deny benefit which are legitimately available to an assessee. Failure to file return within the period u/s 139 of the Income Tax Act, 1961 for the purpose of claiming benefit of deduction under Section 80 AAJJ of the Income Tax Act, 1961, is a more procedural formality. In my view, denial of substantive benefit cannot be justified since the assessment itself was reopened by the 2nd respondent and the assessment already made on 29.12.2006 was put to jeopardy. If an assessee is entitled to benefit, technical failure on the part of an assessee to claim the benefit in time, should not come in the grant of substantial benefit/benefits that was/were otherwise available under the Income Tax Act, 1961 but for such technical failure. The petitioner would be entitled to the benefit of Section 80JJAA of the Income Tax Act, 1961. The 1st respondent ought to have allowed the application filed by the petitioner under Section 264 of the Income Tax Act, 1961. The petitioner is entitled to partial relief at this stage. Accordingly, the impugned order is set aside by condoning the delay in filing the return. The 2nd respondent is therefore directed to pass appropriate orders on merits in accordance with law, ignoring the delay on the part of the petitioner in filing the returns under Section 139(5) of the Income Tax Act and/or failure to furnish the report of an accountant.2nd respondent shall pass a speaking order within a period of three months from the date of receipt of a copy of this order

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• 2021 (8) TMI 172
  Addition as sundry creditors - AR submitted that during the remand proceeding on demand of Assessing Officer, the assessee furnished complete address along with PAN details of sundry creditors - HELD THAT:- As during the remand proceedings the assessee has furnished complete address along with PAN details of Sundry Creditors. During the assessment proceedings as well as the confirmations u/s 133(6) was received directly from Sundry Creditors along with details of ITR of Sundry Creditors from the respective words of the Income Tax. Thus, the identity, creditworthiness was established and through the details filed before the Assessing Officer as well as CIT(A). The assessee has demonstrated the genuineness of the creditors. Therefore, the CIT(A) was not right in confirming the addition that of Sundry Creditors. Addition of advances from customers the remand report has not disputed the confirmations received from the creditors and the advances obtain was a genuine loan from the customers - HELD THAT:- Assessee has establish genuineness of all the transactions, identity of creditors and source of the funds received. Assessing Officer has totally ignored all these facts while filing the remand report on the contrary he has acknowledged that to establish genuineness, identity and creditworthiness. The assessee has filed the documents which are relevant to these three factors - CIT(A) has ignored the evidences and simply confirm the additions. Thus, the record shows that the assessee has establish genuineness of all the transactions, identity of the customers from whom the addition has been taken and also the source of funds received for obtaining these additions. Therefore, Ground No. 2 is allowed. Credit balance in current account of ICICI Bank - HELD THAT:- Bank has confirmed the said credit balance with the letter before the Authorities and the same is confirmed by the Assessing Officer in his remand report dated 18/7/2012. Thus, the credit balance in current account has been established by the assessee to the proper evidences. Gold Shortage - HELD THAT:- As assessee has given the details of the gold transactions and the same was clarified by the Directors of the assessee. It was not disputed by the Assessing Officer in his remand report dated 16/7/2012. Therefore, the finding given by the CIT(A) is contrary finding to that of the evidences brought on record by the assessee. Hence, Ground No. 4 is allowed

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• 2021 (8) TMI 167
  Denying deduction u/s. 80IB(10) - denial of deduction to sale of one flat in B Wing - eligible units in terms of order of proportionate deduction - CIT(A) held the project in B Wing is incomplete and denied deduction in respect of profits earned on Flat No. 002 in B Wing - HELD THAT:- Housing project undertaken by the assessee, consists of A and B Wings totaling to 48 and 20 flats, respectively. In the year under consideration, the assessee claimed deduction in respect of two flats in A Wing and one flat in B Wing. Therefore, we find force in the arguments of ld. AR the assessee is entitled to claim deduction in respect of Flat Nos. 904 and 1001 in A Wing and 002 in B Wing which are covered by the Completion Certificate Part-1 issued by the Compete Authority Municipal Corporation of Pune. DR did not bring on record any evidence showing these flats are not covered by the Part-1 Completion Certificate issued by the Pune Municipal Corporation vide order dated 23-03-2011. Thus, we hold that the assessee is entitled to claim deduction u/s. 80IB(10) of the Act against the Flat Nos. 904, 1001 and 002 in A and B Wings, respectively as eligible units in terms of order of proportionate deduction as laid down by this Tribunal in assessee s own case for A.Y. 2012-13. Thus, the order of CIT(A) is not justified and sole ground raised by the assessee is allowed.

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• 2021 (8) TMI 164
  Revision u/s 263 - exemption u/s 11 of the Act in respect of anonymous donations denied - Denial of natural justice as argued - CIT(E) noticed that the AO has not completed the assessment as per the provisions of section 13(7) - Also AO has not charged the interest under section 234A and B - HELD THAT:- There is no dispute that except the show cause notice dated 21.02.2018, the CIT(E) has not issued any other notice to the assessee and further the impugned order was passed on the very date when the case was first time fixed for hearing. The assessee was not given an opportunity to explain the cause and reasons for non-appearance on 28th February, 2018. Hence, in the facts and circumstances of the case, we are of the considered opinion that the assessee was not given any effective and proper opportunity of hearing before passing the impugned revision order by the CIT(E). Hence in the interest of justice, we set aside the impugned revision order passed by the CIT(E) under section 263 and remand the matter to the record of the CIT(E) for deciding the same afresh after giving an appropriate opportunity of hearing to the assessee. Though the assessee has raised various objections against the jurisdiction invoked by the CIT(E) however, since these objections could not be raised before and considered by the CIT(E) while passing the impugned ex parte order therefore, the same may be raised before the CIT(E) in the set aside proceedings and after considering the same, the CIT(E) shall pass afresh orders - Appeal of the assessee is allowed for statistical purposes.

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• 2021 (8) TMI 162
  Validity of reassessment proceedings - absence of evidence of service of notice under section 143(2) - appellant has submitted that the Ld. AO has erred in commencing and subsequently completing the reassessment without issuing the mandatory notice u/s 143(2) - HELD THAT:- Issuance and service of a valid notice assuming jurisdiction under section 147 is not a matter of inference or assumption, it is to be established by the evidence on record. Clearly, that evidence is missing. Quite to the contrary, the contradictions in the proceedings sheet show that no such valid notice was even issued. Even in the assessment order, there is a mention of notice under section 142(1), but there is not even a mention of issuance of notice under section 143(2). It is not really necessary to deal with the judicial precedents cited by DR which admittedly are on the basis of certain foundational facts which are missing in this case, i.e. evidence substantiating issuance of a lawful notice under section 143(2). We are, therefore, of the view that the issues raised by the learned Departmental Representative lack legally sustainable merits. We reject the plea of the revenue. Admission of additional ground of appeal before the learned CIT(A) - The issue raised was an important question of law and merely because a reference to some facts was required, admission of this ground by the CIT(A) could not have been declined. The proceedings before the CIT(A) are a mere continuation of the assessment proceedings and there is no bar is raising any issue, requiring further examination of facts, before the CIT(A). We, therefore find no substance in this plea of the learned Departmental Representative either. As regards participation in the reassessment proceedings by the assessee, nothing really turns on the same. When assumption of jurisdiction is illegal, as no valid notice under section 143(2) was issued and served on the assessee, mere participation by the assessee in the resultant proceedings cannot clothe it with legality. CIT(A) rightly notes in his impugned order, issuance and service of notice under section 143(2) is a foundational requirement for assessment under section 143(3) r.w.s. 147, and, in the absence of the same and notwithstanding the fact that the assessee may have participated in the related assessment proceedings, the reassessment order cannot have legal sanctity. - Decided against revenue.

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• 2021 (8) TMI 161
  Reopening of assessment u/s 147 - certain information stated to be received from Sales Tax Department - HELD THAT:- A plain reading of reasons provided would overtly show that the AO merely wanted to make enquiry to find out the correctness of so-called information claimed to have been received from the Sales Tax Department and quantify the amount of escaped income at a later stage. The bona fide belief towards escapement of income which is a mandatory pre-requisite is clearly absent in the present case. In the absence of such belief, the entire action of the AO is a complete non-starter and thus requires to be struck down. There are long line of judicial precedents delivered both by the Jurisdictional High Court as well as other High Courts for the proposition that re-assessment notice for mere verification or for conducting a fishing enquiry is not permissible in law notwithstanding that the return of income was not subjected the scrutiny under s. 143(3) of the Act. The action of the AO for invoking jurisdiction is thus inconsistent with the mandate of law and therefore requires to be quashed. It is well settled by plethora of judicial precedents, including Pr. CIT vs. Manzil Dineshkumar Shah [ 2018 (5) TMI 1176 - GUJARAT HIGH COURT] the SLP against which has been dismissed [ 2019 (1) TMI 1284 - SC ORDER] that reopening is not permissible merely to seek investigation of facts collected without holding at least prima facie belief towards escapement of income based on relevant material. The conditions set out for invocation of Section 147 of the Act have not been met in the instant case. Hence, the notice issued under section 148 of the Act is not backed by authority of law and consequently bad in law. The assessment under section 147 of the Act as a sequel to the illegal notice under section 148 of the Act is therefore a nullity and requires to be quashed. - Decided against revenue.

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• 2021 (8) TMI 160
  Addition u/s 56(2)(vii)(b) - stamp duty value consideration - stamp duty value on the date of registration of the property different from the stamp duty value at the time of agreement entered into during financial year - assessee argued that agreements with respect to purchase of properties were entered into earlier years. - HELD THAT:- The undisputed position that emerges is that the assessee initially booked two flats during financial year 2007-08 and paid booking amount to the builders. The booking was duly supported by the allotment letters and the booking amount was paid through banking channels at the time of booking. Later on during financial year 2011-12, after visiting the site, the assessee requested for change of location of flats having same area and same consideration which was acceded to by the builder. Accordingly, new allotment letters were issued by the builders which bear the requisite particulars viz. flat nos. consideration, area, fact of possession etc. These facts have been confirmed by the builder also in reply to summons issued by Ld. AO. It was not a case of new booking but a case wherein the assessee had merely exchanged the flats at the same site to have better location. The area as well as sale consideration was the same and the new flats got substituted from the date of initial booking which is evident from the conduct of the parties.This being the case, the provisions of Sec. 56(2)(vii)(b) as applicable from 01/04/2014 could not have been applied by Ld. AO Proviso to this sub-section provides that where the date of agreement fixing the amount of consideration for the transfer of immoveable property and the date of registration are not the same then the stamp duty value prevailing on the date of agreement may be taken for the purpose of this sub-clause. The said proviso would, alternatively, be applicable to the fact of the case since the consideration has been paid by the assessee though banking channels in terms of requirements of second proviso. Nevertheless, since the provisions of Sec. 56(2)(vii)(b) has been held to be not applicable, the additions made by Ld. AO invoking the said provisions would be unsustainable in law as held by Ranchi Tribunal in Bajrang Lal Naredi [ 2020 (1) TMI 1359 - ITAT, RANCHI] Thus the additions as made by Ld. AO could not be sustained in law. By deleting the entire addition, we allow ground nos.1 2 of assessee s appeal

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• 2021 (8) TMI 159
  Disallowance of expenses relating to residential premises - allowable business expenses or personal expenses - whether said premises was not utilized by the assessee for carrying out her professional activities? - CIT-A deleted the addition - HELD THAT:- The assessee is a creative artist. The assessee was engaged as Choreographer and film producer. For the said purpose, the assessee would require creative space from where she could carry out professional engagements. It could be appreciated that as a Choreographer and a film producer, the assessee would need work space to practice dance moves and also for story sessions and other meetings. In this year, except for this space, she has not claimed any other office set-up The proportionate expenses relating to office in all the earlier years were allowed to the assessee. To meet expanding professional demands and to meet the need for bigger house, the assessee moved to new duplex apartment. The said premises were stated to be similarly used by the assessee for office-cum-residence purposes. The assessee was having 6 units out of which 2 units are stated to be used for professional purposes. The assessee has claimed proportionate expenses relating to these two units. These units form part of the opening block of asset in this year. As per the scheme of the Act, under the concept of block of asset, the assets would lose individual identity and depreciation on asset is allowed on block concept notwithstanding the fact that few of the assets were not used for business / professional purposes. As long as the assets remain part of the block and are not parted with by the assessee, the same remain part of the block of asset and depreciation is allowable to the assessee. Since the depreciation on the block has been allowed to the assessee in earlier years, the same could not be denied to the assessee in this year since individual assets have lost their specific identity. The case laws as cited by Ld. CIT(A) in the impugned order support this view and are quite applicable to the facts of the case. Hence, Ld. CIT(A), in our considered opinion, has clinched the issue in correct perspective. Also as per the requirement of Sec.32, to be eligible to claim depreciation, the assessee must own the asset and the asset must be used for the purpose of business or profession. The assessee, in our opinion, has satisfied, both these conditions since building as well as furniture was owned by the assessee and the same was used for the purpose of profession. The assessee has claimed depreciation proportionately on that part only which has been used for the purpose of profession. Therefore, the deprecation claim on building and furniture would be an allowable allowance u/s 32. We order so. The grounds, thus raised by revenue, stand dismissed. Interest claim u/s 36(1)(iii) - The interest paid on capital borrowed for acquisition of an asset after the date on which the asset is first put to use is also allowed as deduction. The assessee has borrowed loan from Standard Chartered Bank for acquisition of the said property at Oberoi Sky Heights. The interest paid on such loan has been bifurcated between residential portion and office portion and interest paid relating to office portion has been claimed as deduction. It was the submissions of the assessee that office has been acquired for the purpose of her profession and therefore, loan is borrowed for the purpose of profession. Further, the unit was put to use during financial year 2011-12 relevant to Assessment Year 2012-13. Therefore, proviso to Sec.36(1)(iii) would not apply and whole of the interest would be an allowable deduction u/s 36(1)(iii). Society electricity charges - The society charges monthly compensation for providing various services. The appellant has bifurcated and claimed society charges relating to units used as office. Similarly, electricity charges relating to units used as office are claimed as deduction. The said claim is under section 37(1) which provide that any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head Profits and gains of business or profession . Assessee fulfils the prescribed conditions of Sec.37(1). More so, the rule of consistency would debar the Ld. AO to adopt different view, facts remaining the same. The usage of units for professional use was accepted in earlier years and similar expenditure claimed in that year was duly allowed to the assessee. Moreover, the assessee has already produced sufficient documentary evidences in the shape of copy of Service Tax Registration Certificate, copies of commercial contracts entered into with producers / third parties, professional fees / sales invoices raised by the assessee on third parties etc. Assessee has proved that a clearly demarcated part of the premise was used by her as the office which is duly supported by various documents on record. There is nothing on record to disprove this claim. Therefore, we are of the considered opinion that the assessee has well substantiated her claim. - Decided against revenue.

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• 2021 (8) TMI 156
  TDS u/s 194J - consultation expenses incurred - Addition u/s. 40(a)(ia) - HELD THAT:- Amount of the subject matter of disallowance is not in dispute, which is Rs. 3,98,932/-. - The question is whether entire amount has to be disallowed or only 30% thereof has to be disallowed. Though the Finance Act of 2014 made an amendment to section 40(a)(ia) of the Act w.e.f. 01.04.2015, but in the decisions relied by the assessee, various Benches of Tribunals including Delhi Benches of Tribunal consistently held that such amendment is curative in nature. In R.H. International [ 2019 (5) TMI 616 - ITAT DELHI] it is clearly held that disallowance u/s. 40(A)(ia) of the Act has to be restricted only to 30% of the expenses paid as against 100% because the amended provision made to section 40(a)(ia) by Finance (No 2) Act, 2014 is curative in nature and the same should be applied retrospectively. Inasmuch as no contrary decision is available with us, we are of the considered opinion that such a view consistently taken by the Tribunals has to be followed. With this view of the matter, we direct the Assessing Officer to restrict the disallowance to 30% of the amount paid in respect of which TDS should have been made. We accordingly, allow ground No. 1 partially. Disallowance of salary to the employees - HELD THAT:- As seen from the impugned order that in respect of some of these employees, payments were made by way of cheques. We find some substance in the argument of the ld. AR that ICICI Bank might have refused to reimburse the entire so called salary expenses said to have been incurred by the assessee, but since the business of the assessee is a different one, if really, the assessee incurred such expenses, it cannot be disallowed. For this purpose, the verification at the end of the authorities below is not complete and they based their findings on surmises and conjectures. After hearing both the sides, we are of the considered opinion that in the present scenario, no purpose worth would be served by remanding the matter to the file of Assessing Officer to undertake the fresh exercise in this regard. Instead, we are of the considered opinion that ends of justice would be met by making disallowance of 25% in respect of salary expense of these 42 persons. We, therefore, direct the Assessing Officer to disallow 25% out of the disallowance - Decided partly in favour of assessee.

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• 2021 (8) TMI 153
  Addition of sundry creditors payable including expenses outstanding by AO u/s 41(1) on cessation of liability - notice u/sec 133(6) of the Act issued by the AO was returned unserved and the parties have not filed confirmation of outstanding balances and also few parties have denied having made any transaction with the assessee - CIT-A deleted the addition - HELD THAT:- On perusal of the assessment order find that the assessee in the A.Y.2016-17 has written back the sundry creditors in the profit and loss account. When the question was raised to the Ld.DR on written back of sundry creditors balance the Ld.DR relied on the findings of the Assessing officer. The Ld.AR of the assessee submitted that the sundry creditors are not disputed nor fictitious and the Ld.CIT(A) has considered the overall facts and relied on the judicial decisions and granted relief to the assessee. We find that the CIT(A) has passed an elaborate order covering various facts, system of accounting, provisions of law and the judicial decisions and passed a reasoned order. Accordingly, we do not find any infirmity in the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue

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• 2021 (8) TMI 152
  Revision u/s 263 - Deduction u/s 80P - assessee had received interest income on bank deposits and other income during the relevant assessment year and this income was not offered by the assessee for taxation - HELD THAT:- We notice that assessee made the investment in various banks including Co-operative Bank and earned the interest income and other income.We notice that assessee had claimed income u/s 80P(2)(a) of the Act and constantly AO was allowing the deductions in the previous assessment years from 2011-12 to this assessment year. As brought to our notice the respective decisions of Guttigedarara Credit Co-operative Society Ltd 2015 (7) TMI 874 - KARNATAKA HIGH COURT] allowed the claim of the assessee on interest earned by them on the investments made in banks as deductible u/s 80P and these decisions were passed on 28.10.2014 and 09.06.2015. The issue of claiming interest on bank deposits by Co-operative Societies are already settled in favour of the assessee, now the Ld. Pr. CIT raising such settled issued u/s 263 in this assessment year with the findings that AO has not made inquiries in these transactions. In our view revisiting the settled issue and this issue was considered by the AO and passed the relevant assessment order by relying based on the submissions of the assessee that this interest was allowed in the previous assessment years and covered by the Hon ble High Court order which cannot be considered as erroneous in so far as it is prejudicial to the interest of the revenue. Therefore, revisions u/s 263 in the case of the assessee is bad legal precedent. Accordingly, grounds raised by the assessee in this regard are allowed.

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• 2021 (8) TMI 150
  Correct head of income - income received from renting of terrace - Income from Other Sources or Income from House Property - AO disallowing claim for deduction under Section 24(a) of the Act, and bringing the same to tax under the head Income from Other Sources - HELD THAT:- After hearing both the parties, we find that this issue is now settled by the decisions of the Co ordinate Bench of the Tribunal in Mahalaxmi Sheela Premises CHS Ltd. v/s ITO [ 2011 (8) TMI 1229 - ITAT MUMBAI] wherein it has been held that the income on account of hoarding and display from terrace is liable to be taxed as income from house property. Assessee s appeal is allowed.

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• 2021 (8) TMI 149
  Addition of High material consumption declared by the assessee - HELD THAT:- As per reasoning contained in his order, the Ld. CIT(Appeals) deleted the addition made by the Assessing Officer. However, we observe the submission of the assessee of the Assessing Officer s order wherein the assessee itself has stated that there was an error in making excess provision and the subsequent justification given by the assessee thereof, this issue requires factual verification - further from the observation of the Ld. CIT(Appeal), he has also raised doubts regarding the claim of the assessee and that they were not properly explained before the AO - We have observed in the open Court before the parties that the matter needs to be verified by conducting detailed enquiry and examination on facts. We set aside the order of the Ld. CIT(Appeals) and restore the matter to the file of Assessing Officer to re-adjudicate the issue while complying with the principles of natural justice as indicated hereinabove. Appeal of the Revenue is allowed for statistical purposes.

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• 2021 (8) TMI 148
  Penalty levied u/s 271C - Penalty for failure to deduct tax at source - assessee has claimed interest expenses only for the year under consideration after deducting the TDS u/s 194A but failed to deposit the same in the account of government exchequer - HELD THAT:- There remains no ambiguity that the assessee has not failed to deduct the TDS on the expenses as discussed - DR at the time of hearing has also not brought anything on record against the arguments advanced by the assessee with respect to deduction of TDS on the expenses as discussed above. Accordingly we reached to the conclusion that the assessee has deducted the TDS on the expenses as discussed above but failed to deposit the same in the account of Government exchequer account within the specified time. Thus in such a situation, the penalty u/s 271C of the Act is not attracted. We also note that the judgments relied by the authorities below in reaching to the conclusion that the assessee is subject to the penalty under the provisions of section 271C of the Act have been reversed by the subsequent judgment in the case of Lakshadweep development Corporation Ltd [ 2019 (3) TMI 333 - KERALA HIGH COURT] The assessee cannot be visited with the penalty under the provisions of section 271C of the Act on account of failure on his part to deposit the amount of TDS deducted on the expenses as discussed above within the time specified under the statute. Accordingly the assessee succeeds in its grounds of appeal - Appeal filed by the assessee is allowed.

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• 2021 (8) TMI 147
  Estimation of income - bogus purchases - HELD THAT:- Undisputedly, the assessee has failed to substantiate genuineness of purchases made from alleged hawala operators. At the same time the sales turnover declared by the assessee has been accepted by the Assessing Officer. In such like transactions it is only the profit element embedded in such transactions that can be taxed, entire bogus purchases cannot be disallowed [Ref: PCIT vs. Paramshakti Distributors Pvt. Ltd. [ 2019 (7) TMI 838 - BOMBAY HIGH COURT] - G.P rate declared by the assessee on regular transactions is 11.32%. The ld.Authorized Representative of the assessee has conceded that the disallowance on bogus purchases may be restricted to 12.5% in line with the disallowance made in previous assessment years - we deem it appropriate to restrict the disallowance on account of bogus purchases @ 12.5%. The ground No.1 of the appeal is partly allowed in the terms aforesaid. Disallowance of business expenditure - AO has made adhoc disallowance of 30% to 40% in respect of various expenditure claimed by the assessee - disallowance of business expenditure was made by the Assessing Officer on the ground that no supporting evidences were filed by the assessee - CIT(A) restricted the disallowance to 20% - HELD THAT:- A perusal of the assessment order shows that the Assessing Officer has disallowed business expenditure on mere estimation. The Assessing Officer made flat disallowance of 30% on all business expenditure claimed by the assessee and disallowance of 40% was made in respect of conveyance and travelling expenditure. The manner of making disallowance by the Assessing Officer indicates that Assessing Officer has not examined the books or the relevant documents. The disallowance has been made merely on surmises and conjectures, without pointing short comings in the books and supporting documents maintained by the assessee. The CIT(A) has reduced disallowance to 20% again on estimations. We find no cogent reason to sustain disallowance in respect of business expenditure, accordingly, the same is directed to be deleted.

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• Customs

• 2021 (8) TMI 186
  Classification of imported goods - Apple HomePod - to be classified under Customs Tariff Heading (CTH) 8517.62.90? - HELD THAT:- The device in question is capable of receiving voice commands, covert such voice commands into text to perform multiple tasks, e.g., stream music from the internet or another Apple device, retrieve information available in the net like weather, traffic, news, sports updates etc., regenerate such information back to the user in the form of music/speech, and also act as a home automation device to control reconditioners, locks, lights etc., it is clear that the product in question has multiple facets, and therefore, its classification would depend upon identifying the essential character of the device. The product consists of an Apple designed A8 chip, a six-microphone array, a seven-tweeter array, and a high excursion woofer enclosed in a seamless mesh fabric. The device works wirelessly through Wi-Fi or Bluetooth and as already noted it can play music directly from the internet or from another Apple device through AirPlay 2. The primary mode of interacting with the device is voice commands, though it is possible to play, pause and raise volume by tapping the top of the device. The home automation functions of the device to control a wide range of accessories is carried out via a hardware certification platfonn and a database system that makes possible integrate, configure, and communicate between a wide variety of products. The control of such devices is also done through Siri via voice commands. The product in question answers to the description of six-digit entry 851762 which is meant for Machines for reception, conversion and transmission or regeneration of voice, images, other data, including switching and routing apparatus and more specifically under the residuary sub-heading 85176290 - thus, Apple HomePods merit classification under sub-heading 85176290 of the first schedule to the Customs Tariff Act, 1975.

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• 2021 (8) TMI 178
  Jurisdiction to Issue Show Cause Notice (SCN) - Proper officer - Valuation of imported goods - flavours and fragrances - rejection of transaction value - re-determination of assessable value - principles of res-judicata - Objection to Jurisdiction raised at a belated stage - Alternate Remedy - Suppression of Material Fact - Applicability of judgment in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [ 2021 (3) TMI 384 - SUPREME COURT] . Objection to Jurisdiction raised at a belated stage - HELD THAT:- It is to be noticed that the point of jurisdiction which goes to the root of the matter could be raised at any stage of the proceedings, which is a settled position of law. In fact, absence of jurisdiction to issue a show-cause notice if raised even after an assessment order is passed, such objection regarding jurisdiction of the authority if found in the affirmative would vitiate the whole proceedings including the assessment orders or orders passed on an appeal and other orders of the superior authorities. Accordingly, the contention regarding jurisdiction as raised by the second respondent is liable to be rejected. Alternate Remedy - HELD THAT:- The Apex Court in the case of M/s.Canon India Private Limited has unequivocally dealt with the point of jurisdiction of the Officers of DRI in the context of proper officer and in light of the unequivocal findings made there is no necessity for any re-adjudication of such an issue and accordingly, the question of relegating the party to avail of the statutory remedy would not arise. Res Judicata - HELD THAT:- The dispute on hand in the present case however is one that relates to valuation and not as regards to the tariff applicable and that comes out clearly from the contents of the show-cause notice dated 07.01.2008 and this position regarding distinct nature of dispute of the show-cause notice relating to the judgment of the Supreme Court in the case of GIAVUDAN INDIAN PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, BANGALORE [ 2009 (12) TMI 786 - CESTAT BANGALORE] as well as the present dispute is clear even on a bare perusal of the material on record and does not involve any complicated factual enquiry necessitating relegation of the parties to the remedy of appeal. Accordingly, the question of res judicata would not be a bar to the adjudication of the present proceedings nor does it necessitate the relegating authority to avail of the statutory remedy of appeal. Suppression of Material Fact - HELD THAT:- The question of appropriateness of valuation is still to be adjudicated and the matter is now reopened by setting aside the impugned order reserving liberty to issue fresh notice. Accordingly, any finding regarding misleading declaration made would be impermissible as it would amount to prejudging the issue on hand. The other grounds made out by the respondent No.2 as regards the petitioner not revealing the other litigations pending with the Department is liable to be rejected, in light of the discussion made while dealing with the issue of res judicata. Applicability of judgment in M/s.Canon India Private Limited - HELD THAT:- In the present case, applying the law laid down in the case of M /s.Canon India Private Limited clearly, the proceedings that have been initiated by issuance of a show cause notice dated 07.01.2008 by the Additional Director General, DRI is also liable to be set aside in light of the law laid down by the Apex Court. While judgment of High Court of Madras in the case of COMMISSIONER OF CUSTOMS (AIR) VERSUS M/S. PREMIER TOURS TRAVELS (CHENNAI) PVT LTD. CUSTOMS EXCISE SERVICE TAX APPELLATE TRIBUNAL, SOUTH ZONAL BENCH, CHENNAI [ 2021 (2) TMI 659 - MADRAS HIGH COURT] where identical contentions were raised and the consideration of such aspect has been relegated to be decided in the appeal, however this Court does not find any reason to take the same view, in light of the clear findings in the case of M/s.Canon India Private Limited which does not leave any scope for further adjudication and the law laid down by the Apex Court ought to enure to the benefit of the petitioners. The Order-in-original in both the writ petitions are set aside while holding specifically that the show cause notice at Annexure-B dated 07.01.2008 is one that is not issued by the proper officer - petition allowed.

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• Corporate Laws

• 2021 (8) TMI 155
  Seeking for restoration of the name of the Appellant Company in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana - Section 252 of the Companies Act, 2013 - HELD THAT:- It is observed that the company has not filed its Financial Statements since its incorporation. Further, the Balance Sheets of the Appellant Company annexed since Financial Year 2013-14 to 2015-16 depict NIL Revenue from its operations - Furthermore, the Appellant Company has failed to produce any Income Tax return for any of the Assessment Years. That as per Section 139(1) of the Income Tax Act., it is mandatory for every Company to file its Income Tax Returns. Although the Balance Sheet of the Appellant Company for the year 2016-17 reflects revenue from operations to the tune of Rs. 5,77,334, as pointed out by the RoC the same is not accompanied with Auditors Report. Further, when we peruse the Bank Statements of the Appellant Company for the year 2016-17, it is observed that entries of the said period do not seem to be arising out of its business operations - That the Balance Sheet filed for the year 2017-18 and the GST Certificate dated 17.07.2018 shall have no relevance for consideration since the same pertain to the post-strike off period. The Appellant Company has failed to establish that it was in operation, carrying out its business, or it is just to restore the name of the Company in the register of RoC - this Bench is not inclined to interfere with the striking off action taken by the RoC against the Appellant Company under Section 248(5) of the Companies Act 2013. Appeal dismissed.

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• 2021 (8) TMI 151
  Direction to convening of Annual General Meeting (AGM) - period of limitation for all proceedings - condonation of delay or not - HELD THAT:- It is true that the Hon ble Supreme Court in Suo Moto Writ Petition (Civil) No(s). 3/2020 dated 23.03.2020 [ 2020 (5) TMI 418 - SC ORDER] ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed . What is to be seen is that the respondent Nos. 2 3 have not contended that they were prevented from filing the appeal or unable to file the appeal for the last more than one year due to any compelling reasons. On the other hand, they filed the CA No. 12 of 2021 before this Tribunal. The contention that till the expiry of the limitation period for filing the appeal, no order against which the appeal is proposed to be filed, can sought to be implemented/executed and that the party who suffered the said order cannot be committed for contempt for non-implementation/non-compliance of the said order is unsustainable. The order passed by a Court/Tribunal is executable/implementable from the date of its passing - The conduct of the respondent Nos. 2 3 in not complying with the orders of this Tribunal for more than one year is not bonafide. On the other hand, it is contemptuous. It is to be seen that the Government of India, Ministry of Corporate Affairs has issued various Circulars from time to time clarifying procedure for holding the extraordinary general meetings and AGMs through video conferencing or other audio visual means in view of Covid-19 situation prevailing in the country from time to time. One such circular is General Circular No. 20/2020 dated 05.05.2020, in terms of the same, companies can hold their AGMs through video conferencing after following the procedure mentioned therein. The respondent Nos. 1 to 3 shall comply/implement the order by convening/holding and conducting the Annual General Meeting within 30 days from the date of receipt of this order either through physical mode or through video conferencing or other audio visual means in terms of the Circulars issued from time to time by the Ministry of Corporate Affairs and shall file the compliance report before the next date of hearing - List the matter on 06.09.2021.

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• Insolvency & Bankruptcy

• 2021 (8) TMI 171
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Financial Debt or not - HELD THAT:- Certain essential conditions are required to be satisfied by a Financial Creditor seeking to invoke the provisions of CIRP as against the Corporate Debtor. Following essential conditions are required to be satisfied by a Financial Creditor:- (i) There must be disbursal of loan amount, (ii) Such disbursal should be made for a consideration for time value of money, and When the debt (Whole or any part or instalment) become due and payable and is not paid by the Corporate Debtor means committed default. In the present case, it is an admitted fact that financial Creditor transferred Rs. 6.10 Crs. through RTGS between 16.02.2017 to 22.02.2017 to the Corporate Debtor s bank account. This fact is corroborated by the bank entries filed by the Financial Creditor and the Corporate Debtor has not denied that the Corporate Debtor has not received such amount - the aforesaid amount has been disbursed by the Financial Creditor to the Corporate Debtor. However, there is no written agreement between the parties to show that the disbursement of such amount is a loan transaction. Whether such amount is disbursed for a consideration for time value of money? - HELD THAT:- The Financial Contract as per the Rule 3(1) (d) is must between the corporate Debtor and the Financial Creditor for setting out the terms of a Financial Debt including the tenure of the Debt, interest payable and the date of repayment. In the absence of such Financial Contract, the Financial Creditor has failed to satisfy that when the debt and interest become due and payable. Whether the Corporate Debtor failed to pay (Whole or any part or instalment of the debt) when the debt become due and payable? - HELD THAT:- Financial Creditor has not filed any writing to show that when the debt become due and payable. As per the Financial Creditor the debt in question is payable on demand. From the notice and the Application, it is not clear that on which date the demand was made and the loan and interest become due and payable - Section 7 (3) (a) of the IBC, provides that the Financial Creditor shall along with the Application is a required to furnish, a record of default recorded with the information utility or such other record or evidence of default as may be specified. The Financial Creditor has not filed any evidence of default along with the application under section 7 of IBC. - Respondent No. 1 (Financial Creditor) failed to establish when the debt become due and payable and the Corporate Debtor has committed default. The IBC recognizes that for the success of Insolvency regime the real nature of transaction has to be unearthed in order to prevent any person from taking undue benefit of its provisions to the detriment of the rights of legitimate creditors. It means, while admitting the Application under Section 7 of the IBC, it is the duty of the Adjudicating Authority to investigate the real nature of the transaction in order to prevent any person from taking undue benefit of its provisions to the detriment of the rights of legitimate creditors - the Adjudicating Authority is obliged to investigate the nature of the transaction and should be very cautious in admitting the Application in order to prevent taking undue benefit of provisions of IBC to detriment of the rights of legitimate creditors as well as to protect the Corporate Debtor from being dragged into CIRP with malafide. Thus, Ld. Adjudicating Authority has erroneously admitted the Application under Section 7 of the IBC, whereas, the Financial Creditor has failed to establish that the transaction in question is a Financial Debt and due and payable and the Corporate Debtor has committed default - orders passed by the Adjudicating Authority initiating CIRP against the Corporate Debtor and appointing IRP and all other orders pursuant to impugned order and actions are declared illegal and are set aside.

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• 2021 (8) TMI 165
  Initiation of CIRP - petition was dismissed on the ground that the Respondent is not a body corporate - existence of debt and default or not - best case claimed by the Appellant is that the Respondents are Societies registered under the 1860 Act which after coming into force of A.P. Act under Section 18 read with Section 32 of the A.P. Act should be deemed to be a body corporate under the Special Act. HELD THAT:- Section 3(7) defines corporate person and even if this definition is considered, the Respondents are not Companies defined in clause 2(20) of the Companies Act, 2013 or limited liability partnership as defined under the Limited Liability Partnership Act, 2008 or any other person incorporated with limited liability under any law for the time being in force. Even if the Appellant was to say that the Respondents should be treated as body corporate under Section 18 of the A.P. Act, nothing is shown that Respondents Societies are persons incorporated or that the incorporation is with limited liability - reading Section 2 which prescribes the entities and individuals to which the I B Code applies when considered with definition of corporate person under Section 3(7) of the I B Code , the Respondents i.e. Societies cannot be said to be corporate persons to whom the provisions of the Code applies. A committee or any officer of the society authorized in that behalf by the bye-laws may sue or be sued in its name. Authorization means to give right or authority to a particular person to act on behalf of the society to sue or be sued. To sue means initiating or defending any legal proceedings in accordance with the provisions of the CPC. What appears from reading of Section 18 of the A.P. Act is that the registration of a Society shall render it a body corporate by the name under which it was registered having perpetual succession and a common seal. Thus, although the Society is not incorporated and it is registered, it is rendered a body corporate which can have perpetual succession and have a common seal. Section 18 makes it clear that as the Society will be rendered body corporate, it shall be entitled to acquire, hold and dispose of property, to enter into contracts, to institute and defend suits and other legal proceedings and to do all other things necessary for the furtherance of the aim for which it was constituted. The Learned Counsel for the Respondents has rightly submitted that even if best case of the Appellant is accepted, the Society which will be deemed to be a body corporate is for the purposes as mentioned in Section 18, and not Company incorporated as such - Section 2 read with Section 3 (7) does not spell out that the Respondents Companies in these Appeals are Corporate Persons under the I B Code to whom provisions for I B Code would apply. There are no substance in these Appeals - appeal dismissed.

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• 2021 (8) TMI 163
  Approval of Resolution Plan - liquidation not required when all requirements of Resolution fulfilled - HELD THAT:- Keeping in view the main objective of Insolvency and Bankruptcy Code that all efforts should be made for resolution of the Corporate Debtor in the present matter when we have a Resolution Plan approved by the CoC, we do not think that orders of liquidation should be passed without considering the Resolution Plan already approved by the CoC. There are no reason to admit the Appeal in the facts of the matter. Although the CoC did not strictly follow the time frame given by the Adjudicating Authority and displeasure was expressed, when Adjudicating Authority exercised discretion not to pass order of liquidation and wait, we will not interfere in the discretion. When the Resolution Plan is on the verge of being accepted or rejected by the CoC it would not make much difference if little time is extended. The appeal is not required to be interfered with the impugned order - Adjudicating Authority may consider the Resolution Plan as has been placed before it in terms of provisions of law on its own merits - appeal disposed off.

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• 2021 (8) TMI 158
  Seeking approval of Resolution Plan - Section 30(6) and Section 31 of the Insolvency and Bankruptcy Code, 2016 (hereafter referred to as Code) read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- In view of the discussion that the resolution plan, as approved by the CoC, is in accordance with the sub-section 2 of Section 30 read with Section 31 of the Code and as the Resolution Applicant is not disqualified under Section 29A of the Code; we hereby approve the Resolution Plan under sub-section (1) of Section 31 of the Code - It is hereby declared that the Resolution Plan is binding on the corporate debtor, members, employees of the corporate debtor, creditors of the corporate debtor and other stakeholders involved in the Resolution Plan - It is also declared that the moratorium order passed by this bench under Section 14 of the Code shall cease to have effect. Application allowed.

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• 2021 (8) TMI 157
  Direction for fixation of fees of the applicant/IRP for the period from 19.10.2019 till 07.01.2020 - seeking to decide about the person liable to pay the said fee of the IRP and also to decide the person who will pay the expenses incurred during the CIRP period - HELD THAT:- The expenses of Rs. 83,032/- made during 19/09/2019 to 17.10.2019 and the fee for the IRP as Rs. 1,25,000/- (approved and ratified) were paid to the IRP. Further the fee of the IRP has already been ratified by the CoC for Rs. 1,25,000/- per month plus applicable taxes and the expenses of Rs. 97,028/- made during 17.10.2019 to 11.12.2019 were ratified in the 3rd CoC meeting dated 13.12.2019. The IRP has also placed on records documents for expense of Rs. 88,474/- made during 12.12.2019 to 07.01.2020 however, the same could not be ratified as the CIRP was set aside and CoC meeting could not be conducted for the same. The Applicant who has filed the application under Section 7 or 9 of the Code i.e. Respondent No. 3 in the present application is liable to bear all the expenses as explained in sub-regulation 4 of Regulation 33, and he can get the amount reimbursed by the Committee of Creditors i.e. Respondent No. 1. Hence, the IRP shall be paid his profession fee i.e. Rs. 1,25,000/- per month plus taxes and all expenses from 17.10.2019 to 07.01.2020. Application is allowed and disposed of.

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• 2021 (8) TMI 154
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Quantum of minimum amount of default - existence of debt and dispute or not - HELD THAT:- The Notification regarding the enhancement of minimum amount of default to Rs. one crore for the purpose of Section 4 was issued by the Ministry of Corporate Affair on 24th March, 2020 and the amount defaulted by the Corporate Debtor as well as the filing of captioned petition is much earlier to the coming into effect of notification dated 24th March, 2020. Since any notifications issued by the Government are generally prospective in nature unless specifically expressed, hence the said notification is not applicable to the present case. Furthermore, the debt was acknowledged by the corporate debtor by signing the Settlement agreement dated 29th November 2018 annexed as Annexure A-8 with the petition. Application admitted - moratorium declared.

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• Service Tax

• 2021 (8) TMI 173
  Period of limitation - Relevant date - Renting of immovable properties - Demand with the statutory interest for the period 01.04.2012 to 30.06.2012 - recovery of service tax under section 73(1) of the Finance Act - HELD THAT:- Section 73(1) of the Finance Act deals with recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded - section 73(1) was amended w.e.f. 2805.2012 and the period of one year from the relevant date was amended to eighteen months from the relevant date . There is no dispute that the relevant date in the present case is 25.11.2012. Prior to this date on 28.05.2012, section 73(1) of the Finance Act was amended and it was provided that the Central Excise Officer could issue a notice within eighteen months from the relevant date. The show cause notice was issued on 08.05.2014, which would be within eighteen months from 25.11.2012 - Commissioner (Appeals), therefore, committed no illegality in holding that the demand for the period 01.04.2012 to 30.06.2012 was within the statutory period of eighteen months from the relevant date. There is, therefore, no illegality in the impugned order - appeal dismissed - decided against appellant.

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• 2021 (8) TMI 169
  Refund of service tax paid - service provided by the State Government or KINFRA by way of providing long term lease exceeding 30 years or more which was exempt from service tax - time limitation - refund rejected on the ground that the application for refund did not meet the requirements under Section 11B of the Central Excise Act, 1944 as made applicable to Finance Act, 1944 vide Section 83 of the Act - HELD THAT:- The appellants filed refund claims which arose as a consequence of introduction of Section 104 of the Finance Act w.e.f. 31.03.2017. Further, N/N. 41/2016 dated 22.09.2016 has exempted taxable service provided by the State Government Industrial Development Corporation/Undertakings to industrial units by way of granting long term lease on industrial plot from so much of service tax leviable thereon under Section 66B of the said Act, as is leviable on the one-time upfront amount payable for such lease. Vide Section 104 (1), exemption was provided from said services for the period from 01.06.2007 to 21.09.2016 and it was provided that the refund claim should be filed within a period of six months from the date from which Finance Act, 2017 is promulgated and come into force. In the present case, the appellants filed the refund claims within time and the only ground for which the refunds were rejected by the Original Authority and upheld by the Appellate Authority is that the appellants did not produce sufficient documents in the form of invoices/bills showing that they have paid the service tax to KINFRA. During the pendency of the appeals, the appellants filed various invoices/bills issued by KINFRA showing the payment of service tax by the appellant for which the refund claims have been filed by the appellant. Further, KINFRA has also issued a certificate dated 02.02.2021 certifying that they have not availed any CENVAT credit on the service tax paid by the appellants. Further, these bills/invoices issued by KINFRA clearly show the payment of service tax by the appellant to KINFRA and KINFRA in turn has paid the same to the Government. Though these invoices/bills were not produced before the Original Authority but various Challans issued by KINFRA were produced along with worksheets showing the payment of service tax to KINFRA by the appellants. In view of the facts that now the appellants have produced sufficient documents to prove the payment of service tax, there are no justification for rejection of the refund claims - appeal allowed - decided in favor of appellant.

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• 2021 (8) TMI 166
  Extended period of limitation - reversal of CENVAT Credit - case of appellant is that the appellant did not utilize the CENVAT credit and the proportionate credit attributable to trading was reversed prior to utilization and therefore, the demand of interest and imposition of penalty is not sustainable - suppression of facts or not - HELD THAT:- The Department was very well aware of the trading activity carried out by the appellant because the details of trading was furnished by the appellant during the relevant period on the basis of which the demand has been raised. The appellant has been regularly filed half-yearly service tax Returns in Form ST-3 with the Department during the relevant period. This Tribunal for the subsequent period has allowed the appeals of the appellant on the ground of limitation by holding that extended period cannot be invoked when there is no suppression of fact with intent to evade duty. Further, the period involved in all the eight appeals is prior to amendment effected in Rule 2(e) of the CENVAT Credit Rules, 2004. Since the learned Counsel has only confined his arguments on limitation and has not pressed on merit on account of conflicting decisions of the various Tribunals and the High Courts, hence the findings are restricted with regard to limitation alone - Since there was no wrong utilization of CENVAT credit and the appellant has reversed the proportionate credit attributable to trading prior to its utilization and therefore the demand of interest and imposition of penalty is not sustainable. The extended period cannot be invoked and the demand of CENVAT credit can only be made with regard to normal period - the matter is remanded to the Original Authority for quantification of the demand for the normal period - Appeal allowed by way of remand.

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• Central Excise

• 2021 (8) TMI 174
  CENVAT Credit - exempt goods - whether the appellant is required to pay 10% of value of exempted goods in terms of Rule 6(3) of Cenvat Credit Rules, 2004? - HELD THAT:- There is no dispute about reversal of credit on input services attributed to exempted goods. It is also observed that appellant have paid Cenvat credit and wherever there is delay in such payment, the appellant paid interest. In this position, it should be considered as if the appellant have not availed Cenvat credit. Accordingly, Rule 6(3) of Cenvat Credit Rules, 2004 shall not be invoked. Appeal allowed - decided in favor of appellant.

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• 2021 (8) TMI 170
  Levy of penalty - Reversal of CENVAT Credit - goods sent for job work from factory during the months of May 2007 and June 2007, not received back into the factory for further manufacture, within the stipulated period of 180 days - demand alongwith interest and penalty - HELD THAT:- It is undisputed that the appellant has reversed the entire cenvat credit of Rs. 38,87,316/- prior to its utilization and prior to the issuance of show-cause notice. Further it is found that as soon as the audit raised the objection, the appellant who is a Public Sector Undertaking has reversed the cenvat credit prior to its utilization. This issue is no more res integra and has been settled by the 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] where it was held that Once the entry was reversed, it is as if that the Cenvat credit was not available. Appeal allowed - decided in favor of appellant.

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• 2021 (8) TMI 168
  Interest on delayed refund - Relevant date - interest claimed denied on the ground that refund has being sanctioned within 3 months of the date of refund application - whether 16.11.2017 is the date under section 11 B of Central Excise Act, 1944 or the respective dates of the applications filed in 2015-16, as far as liability of Department to give interest is concerned? - Section 11BB of Central Excise Act, 1944 - HELD THAT:- Apparently, the order of Commissioner (Appeals) is much beyond the date of the application of the appellant as was filed under Section 11B of the Act. Hence, it is mandatory for the Department to sanction interest along with the sanctioned refund claim - The ground as taken by the Commissioner (Appeals), for rejecting the sanctioning of interest is observed to be highly irrational as pursuant to the Order-in-Original dated 24.01.2018 there had been a written request of appellant dated 23.04.2018 praying for sanction of interest. Appeal allowed.

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• CST, VAT & Sales Tax

• 2021 (8) TMI 183
  Validity of notices issued - request to petitioner to file its objections, if any, in writing in supported documents, within a period of 15 days of the receipt of the notices - petitioner mainly contended that an opportunity is to be granted to the writ petitioner to defend their case - principles of natural justice - HELD THAT:- The petitioner has failed to state the subsequent Writ Petitions filed by the petitioner in W.P.Nos.15635 and 15636 of 2016, challenging the assessment orders passed by the competent authority on 09.11.2015, for the Assessment Years 2010-11 and 2011-12. Without even stating the fact regarding the above Writ Petitions filed by the petitioner challenging the orders of assessment, the present Writ Petitions are filed, challenging the notices issued pursuant to the orders passed by this Court dated 26.04.2016 in W.P.Nos.15635 and 15636 of 2016. Thus, the petitioner has clearly suppressed the vital information regarding the filing of two Writ Petitions on earlier occasions. This Court has directed the petitioner to file their objections within a period of two weeks from the date of receipt of a copy of that order and thereafter, the Assessing Officer has to decide the matter afresh, on merits. Its contended that in obedience to the orders passed by this Court, notice was issued on 25.05.2016, calling for the objections. The subsequent events occurred are stated in the calender of action produced by the respondents as extracted in the aforementioned paragraphs. The process of assessment is yet to be completed. The writ petitioner, instead of submitting their objections and availing the opportunity for the purpose of defending their case, filed Writ Petitions, questioning the notices, which cannot be appreciated. By filing Writ Petitions after Writ Petitions, the issues are prolonged and protracted. The impugned notices clearly state that the petitioner has to file its objections if any, to the proposals stated in the notices within a period of 15 days from the date of receipt of a copy of the notices. Further, an opportunity of personal hearing was also offered to the petitioner to appear before the authority on 08.07.2021, to represent the case with documentary evidence - it is left open to the petitioner to submit their defence statement along with the documents and the respondents are directed to give one more final opportunity of personal hearing to the writ petitioner and if the writ petitioner has failed to avail the opportunity, then the respondents are at liberty to proceed with the assessment and pass final orders, on merits and in accordance with law. Petition dismissed.

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• 2021 (8) TMI 179
  Constitutional validity of Section 1(2)(b) of the Tamil Nadu Value Added Tax (5th Amendment) Act, 2013 - Retrospective operation of the statutory provision pursuant to the Tamil Nadu Value Added Tax (5th Amendment) Act, 2013 - HELD THAT:- In view of the new notification of the Government dated 21.04.2015, the demand made on the petitioner is unsustainable. Petition allowed.

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• Indian Laws

• 2021 (8) TMI 180
  Assignment of trademark to other person - Section 30(3)(a) of the Trade Marks Act, 1999 - HELD THAT:- The Hon ble Division Bench of the Hon ble Delhi High Court passed an order in the case of Kapil Wadhwa and Others vs Samsung Electronics Co. Ltd and Another [2012 (10) TMI 1246 - DELHI HIGH COURT] and held that Section 30(3)(a) of the Trade Marks Act, 1999 deals with a situation where the registered proprietor of a trade mark sells the goods bearing the trade mark of a person and thereafter assigns the registered trade mark to another person. The said person (another person) cannot oppose further dealing in those goods by the person who has acquired those goods bearing the trade mark. The ratio laid down by the Hon ble Division Bench of the Delhi High Court, in the judgment, is to be followed for the purpose of dealing with the cases, including that of the petitioner - Petition disposed off.

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