TMI Tax Updates - e-Newsletter
September 10, 2019

Case Laws in this Newsletter:

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

TMI SMS

• Additions u/s 56(2)(viib) - issuance of shares less than fair market value - provisions are not applicable in the case of a non-resident

  ---

Articles

1. Submission of correct return under GST: Instruction from Maharashtra GST Department

   By: Ganeshan Kalyani

2. APPELLATE ADVANCE RULING ON CLASSIFICATION AND RATE OF DE-OILED CAKE

   By: Dr. Sanjiv Agarwal

News

1. India & ADB sign $200 million loan to improve rural connectivity in Maharashtra

2. DPIIT to Launch Plastic Waste Management Campaign for Swachhta Hi Sewa 2019

3. India Participates in Thessaloniki International Fair in Greece

4. Joint Statement of 7th RCEP Ministerial Meeting Held in Bangkok

5. The Fifteenth Finance Commission holds meeting with the Government of Rajasthan

6. The Fifteenth Finance Commission interacts with Economists in Rajasthan

7. The Fifteenth Finance Commission meets representatives of Rajasthan PRIs

8. The Fifteenth Finance Commission meets representatives of Rajasthan Urban Local Bodies

9. The Fifteenth Finance Commission meets representatives of Trade and Industry in Rajasthan

Notifications

Customs

1. 42/2019-Customs (N.T./CAA/DRI) - dated 6-9-2019 - Cus (NT)

Appointment of CAA by DGRI.

2. 41/2019-Customs (N.T./CAA/DRI) - dated 6-9-2019 - Cus (NT)

Appointment of CAA by DGRI.

GST - States

3. 20/2019-(State Tax) - dated 28-6-2019 - Arunachal Pradesh SGST

Arunachal Pradesh Goods and Services Tax (Fourth Amendment) Rules, 2019.

4. S.O. 357 - dated 5-9-2019 - Bihar SGST

Waives the amount of late fee in FORM GSTR-1 and FORM GSTR-6.

5. F-10-32/2019/CT/V(76) - 37/2019-State Tax - dated 21-8-2019 - Chhattisgarh SGST

Amendments in Notification of the State Government, in the Commercial Tax Department, Notification No. 29/2019-State Tax, No. F-10-24/2019/CT/V(53), dated the 28th June, 2019.

6. F-10-31/2019/CT/V(75) - 36/2019-State Tax - dated 20-8-2019 - Chhattisgarh SGST

Amendment in the Notification of the State Government, in the Commercial Tax Department, Notification No. 22/2019-State Tax, No. F-10-19/2019/CT/V(47), dated the 23rd April, 2019.

7. F-10-30/2019/CT/V(71) - 12/2019-State Tax (Rate) - dated 31-7-2019 - Chhattisgarh SGST

Amendments in the Notification of the State Government, in the Commercial Tax Department, Notification No. 1/2017-State Tax (Rate), No. F-10-43/2017/CT/V(69), dated the 28th June, 2017.

8. F-10-29/2019/CT/V(70) - 35/2019-State Tax - dated 29-7-2019 - Chhattisgarh SGST

Amendments in the notification of the State Government, in the Commercial Tax Department, Notification No. 21/2019-State Tax, No. F-10-19/2019/CT/V(46), dated the 23rd April, 2019.

Highlights / Catch Notes

Income Tax

• Court Grants Tax Exemption for Swimming Activities, Denies Exemption for Card-Playing Income u/s 11, Income Tax Act.

  Case-Laws - AT : Exemption u/s 11 - charitable activity u/s 2(15) - public charitable trust providing swimming pool facilities for training and for other aquatic events - assessee is also providing facilities of playing Cards and also having Permit Room, Bar and Restaurants for Catering and Soft Drinks - Except the income from playing cards, exemptions related to other activities allowed - AT
  Visit to Get Source

  ---

• Section 56(2)(viib) Income Tax Act: No tax on shares issued at face value; applies only to residents.

  Case-Laws - AT : Additions u/s 56(2)(viib) - issuance of shares less than fair market value - the shares have been subscribed at face value and there is no premium whatsoever - further, those provisions are applicable only for receipt of consideration for issue of shares from a resident and not in the case of a non-resident - AT
  Visit to Get Source

  ---

• Section 56(2)(vii) Exemption: HUF Members' Receipts from Family Estate Not Taxable as Gifts.

  Case-Laws - AT : Additions u/s 56(2)(vii) - any amount received by a member of the 'HUF', even out of the capital or estate of the 'HUF' cannot be said to be income of the member exigible to taxation. Since such a member himself has a pre-existing right in the property of the 'HUF', hence, it cannot be said to be a gift without consideration by the 'HUF' or by the other members of the 'HUF' to that recipient member. - AT
  Visit to Get Source

  ---

• Taxpayer's Contribution to Public Welfare Allowed as Deduction u/s 37(1), High Court Rules.

  Case-Laws - HC : Expenditure allowable u/s 37(1) - contribution made by an assessee to a public welfare cause - While examining the claim for deduction u/s 37(1) the AO would not blindly or only on the say of the assessee accept the claim - Claim of the assessee allowed - HC
  Visit to Get Source

  ---

• Sworn Statements Alone Insufficient for Tax Assessment; Corroborative Evidence Required, Says High Court on Section 133A(3)(iii) Case.

  Case-Laws - HC : Evidentiary value of a statement made on oath by the assessee for making additions - The assessee can explain or withdraw the admission, if any, made by him in such statement. Assessment of tax cannot be made solely on the basis of such sworn statement made by the assessee u/s 133A(3)(iii) - but, in this case, AO has made the addition on the basis of corroborative evidences - Additions confirmed - HC
  Visit to Get Source

  ---

• Reassessment u/s 147 Must Rely Only on Cited Reasons; External Justifications Are Invalid.

  Case-Laws - AT : Reopening of assessment u/s 147 - reopening cannot be justified on any other material other than referred in the reasons recorded. - Mental exercise must be self-evident from the reasons recorded. Reasons must be self-speaking and self-defending. - AT
  Visit to Get Source

  ---

• Notice to Deceased u/s 147 Invalid, Not Curable u/s 292B, Rules High Court.

  Case-Laws - HC : Reopening of assessment u/s 147 - notice issued in the name of a dead person - Not a curable defect u/s 292B - a case in which notice is issued to a dead person could be termed as nullity. It is something like a safeguard passing a decree against a dead person which cannot be executed through the legal representatives of the judgment-debtor. - HC
  Visit to Get Source

  ---

• Court Rules Against Reopening Assessment u/s 147 Due to Incorrect Facts and Unexplained Cash Deposits.

  Case-Laws - AT : Reopening of assessment u/s 147 - unexplained cash deposits - the deposit in the bank account per se cannot be income of the assessee. It is mere suspicion of the assessing officer based on incorrect facts that income chargeable to tax has escaped assessment - reopening of the assessment and additions made both set aside - AT
  Visit to Get Source

  ---

• Penalty u/s 271(1)(c) Overturned After Assessee's Explanation on Revised TDS Certificate and Late Return Submission Accepted.

  Case-Laws - AT : Penalty u/s 271(1)(c) - employer issued revised TDS certificate with additional salary u/s 192 - Assessee filed the income tax return based on the old TDS certificate issued by the employer - revise return was filed after the case was selected for scrutiny - accepting the explanation offered by the assessee the order for levy of penalty set aside - AT
  Visit to Get Source

  ---

Corporate Law

• Court Rules "Action" Means "Prosecution" in Section 140(5) of Companies Act, Affecting Auditor Removal Cases.

  Case-Laws - HC : Proceedings against the auditors of the company - removal from the statutory audit- Constitutional validity of sub-section (5) of Section 140 of the Companies Act, 2013 - the word “action” in the second proviso to sub-section (5) of section 140 of the Act, would be required to be read down as “prosecution”. - HC
  Visit to Get Source

  ---

Indian Laws

• Supreme Court Rules for Arbitration in Rent Dispute Over Development Agreements, Overturning Lower Courts' Decisions.

  Case-Laws - SC : Reference of dispute between the parties to the Arbitrator - the dispute is with respect to sharing of the rent of the leased space and it can be said that the respondents are also claiming the share relying upon the Development Agreements; Supplementary Development Agreements and the Addendum. Therefore, the dispute can be said to in connection with or relating to the Agreements also - both the High Court and the learned District Judge have committed grave error in not referring the dispute between the appellants and the respondents to the arbitration - SC
  Visit to Get Source

  ---

Service Tax

• High Court Allows CENVAT Credit for Transport to Own Unit, Criticizes Tribunal for Misapplying Supreme Court Ruling.

  Case-Laws - HC : CENVAT Credit - input services - transportation of excisable goods to its own unit - place of removal - The stark distinction of facts of the case before the Tribunal and the facts before the Hon'ble Supreme Court in Ultra Tech case should have been noticed by the final fact finding authority viz., the Tribunal before applying the judgment of the Apex Court to the facts of the case before it rather mechanically. - Credit allowed - HC
  Visit to Get Source

  ---

Central Excise

• Small Scale Industry Exemption Denied: Clearances Combined as Units Managed by One Individual, One Deemed a Dummy Unit.

  Case-Laws - AT : SSI exemption - clubbing of clearances - dummy unit - the entire operation and business of both the units undoubtedly controlled and managed by one person, hence, the clearance of both units be clubbed. - AT
  Visit to Get Source

  ---

• Court Dismisses Appeal Due to Missing Order Copy; Registry Faulted for Accepting Incomplete Petition.

  Case-Laws - HC : Filing of appeal without the copy of the order in original - Appellant claimed that order was not served upon him - We cannot set aside any order without the copy of the said order before us. In fact the Registry should not have registered the petition without the copy of the order sought to be challenged in the writ petition. - HC
  Visit to Get Source

  ---

VAT

• Full Bench to Resolve Tax Rate Dispute on Bus Body Construction for Customer-Supplied Chassis.

  Case-Laws - HC : Reopening of the assessment which was completed based on compounded rate of tax - 'Bus body' built on chassis supplied by the customer - There exists divergent views in various 'legal precedents - Matter refer to Full bench for an authoritative pronouncement - HC
  Visit to Get Source

  ---

Case Laws:

• Income Tax

• 2019 (9) TMI 360
  Penalty u/s 271(1)(c) - assessment under Section 153C - proof of addition to the declared income - no question of the Assessee not declaring the income of the particulars of the income so as to invite penalty under Section 271C - HELD THAT:- SLP dismissed. Questions of law are kept open.

  ---

• 2019 (9) TMI 359
  Reopening of assessment u/s 147 - non-filing of return (ITR) - reason to believe - no scrutiny assessment - HELD THAT:- SLP dismissed.

  ---

• 2019 (9) TMI 358
  Unexplained cash credit - Assessing Authority creating tax liability was failure on the part of the assessee to produce evidence with regard to some of the investors which was by way of a Bank statement - HELD THAT:- SLP dismissed.

  ---

• 2019 (9) TMI 357
  Evidentiary value of a statement made on oath by the assessee to the income tax authority in survey proceedings held under Section 133A - income tax authority got power to examine on oath any person during survey proceedings under Section 133A - HELD THAT:- Merely by reason of the fact that the income tax authority has administered oath to an assessee and recorded his sworn statement during the survey proceedings under Section 133A it cannot be found that such statement has no evidentiary value at all and that it cannot be used in any manner against the assessee in any proceedings under the Act. As explained in Travancore Diagnostics [ 2016 (11) TMI 76 - KERALA HIGH COURT] the statement on oath made by an assessee to the income tax authority during the survey proceedings under Section 133A is not conclusive. The assessee can explain or withdraw the admission, if any, made by him in such statement. Assessment of tax cannot be made solely on the basis of such sworn statement made by the assessee under Section 133A(3)(iii) of the Act. At the same time, such statement can be used to corroborate other materials before the assessing authority, including the contents of any document. In our view, the dictum laid down in Paul Mathews [ 2003 (2) TMI 25 - KERALA HIGH COURT] and Hotel Samrat [ 2009 (11) TMI 269 - KERALA HIGH COURT] and Travancore Diagnostics (supra) can be harmonised in this manner without any conflict. Thus, the substantial questions of law raised as items (1) and (3) are answered in favour of the assessee and against the revenue. Addition u/s 69 - The assessment of tax made by the authority concerned is not solely based on the sworn statement of the appellant given to the income tax authority. The basis of the assessment is the agreement executed by the appellant for purchase of property and also the circumstance that the appellant failed to establish his plea regarding the investment made. The sworn statement of the appellant only corroborates those materials. The fact that the assessing authority gave emphasis to the sworn statement of the appellant while passing the order of assessment does not change this fact situation. Tribunal has adverted to the factual aspects and confirmed the findings made by the assessing authority and the appellate authority. The conclusion reached by the Tribunal on a finding of fact cannot be interfered with by this Court unless it is shown that it is perverse or that the Tribunal had acted without any materials. In the instant case, the factual findings made by the Tribunal do not suffer from any such error or illegality or perversity.

  ---

• 2019 (9) TMI 356
  Reopening of assessment u/s 147 - notice issued in the name of a dead person - curable defect u/s 292B - Notice deemed to be served on legal representative or not - HELD THAT:- The case on hand is not falling under clause (a) of subsection (2) of Section 159 of the Act, and in such circumstances, the proceedings pursuant to the notice under Section 148 of the Act issued to a dead person cannot be continued against the legal representatives. We are not impressed by the submissions canvassed on behalf of the Revenue that the writ-applicant having participated in the proceedings cannot turn around and submit that the proceedings cannot continue as the notice was issued to a dead person. The purport of Section 292B of the Act is that in the event of any mistake, defect or omission in the notice or other proceedings, if the same is in conformity with or according to the intent and purpose of the Act, the notice cannot be termed as invalid. the notice should be in conformity with and in accordance with the intent and purpose of the Act. In our opinion, a case in which notice is issued to a dead person could be termed as nullity. It is something like a safeguard passing a decree against a dead person which cannot be executed through the legal representatives of the judgment-debtor. We also take notice of the fact that in Sri Durga Enterprises [ 2014 (2) TMI 1297 - KARNATAKA HIGH COURT] the assessee had not only responded to the notice under Section 148 of the Act within one month but, on the basis of the return filed earlier, participated in the proceedings till the matter reached the FAA and was disposed of. None of the three decisions on which reliance has been placed on behalf of the Revenue would make any difference - the proceedings are not tenable in law. - Decided in favour of assessee

  ---

• 2019 (9) TMI 355
  Low tax effect - maintainability of appeal - appeals are not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.8.2019 issued by the Central Board of Direct Taxes - HELD THAT:- The above tax case appeals are dismissed on account of the low tax effect.

  ---

• 2019 (9) TMI 354
  Expenditure allowable u/s 37(1) - contribution made by an assessee to a public welfare cause - disallowing a sum incurred towards construction of 169 houses for the villagers who had lost their homes due to natural calamity - HELD THAT:- Assessee has incurred the expenditure towards construction of 169 houses for the villagers who had lost their home due to natural calamity. In order to cater to the needs of those destitute persons who had lost the roof over their head on account of natural calamity, assessee constructed the houses by expending the amount. AO and the authorities have held that it was not incurred for the purpose of business. One glaring factor which cannot go unnoticed is, that a MOU came to be entered into by the appellant on 01.12.2009 with the Government of Karnataka, as already noticed herein above, whereunder assessee agreed to construct houses to rehabilitate the flood victims at the earliest possible time and for undertaking the said task, the appropriate Government provided the assessee the land free from encumbrances, upon which the construction of houses came to be commenced, executed and handed over within the time limit agreed to under the MOU. It was the term of the MOU that the donor (assessee) has joined hands with the Government of Karnataka to bring a total relief in the lives of the people who were worst affected by the unprecedented rain and floods and the said project was undisputedly a philanthropic project. As agreed to between the parties that the donor himself would incur financial liability, maintain high standard of quality construction and would construct the houses as per the design offered by the Government of Karnataka, apart from ensuring quality of material used for the construction is of the superior quality. That apart, the work completion certificate has been issued by the Deputy Commissioner, Ballary and it is also certified that a sum been expended by the assessee for construction of 169 Aasare houses at Gundigana village. Thus, it boils down to the fact that construction of houses has been carried out by the assessee as agreed to under the MOU. Tribunal has rejected the contention of the assessee that expenditure incurred for the purpose of business and the onus being on the assessee has not been discharged. It is also further held that no factual condition was laid by the assessee to establish the expenditure so incurred was for business purpose nor any attempt was made before the lower authorities. It further held that assessee has made a bald assertion. It cannot be gain said by the revenue that contribution made by an assessee to a public welfare cause is not directly connected or related with the carrying on of the assessee s business. As to whether such activity undertaken and discharged by the assessee would benefit to the assessee s business has to be examined in the light of the observations made by us herein above. Assessee is carrying of business of iron ore and also trading in iron ore. Thus, day in and day out the assessee would be approaching the appropriate Government and its authorities for grant of permits, licenses and as such the assessee in its wisdom and as prudent business decision has entered into MOU with the Government of Karnataka and incurred the expenditure towards construction of houses for the needy persons, not only as a social responsibility but also keeping in mind the goodwill and benefit it would yield in the long run in earning profit which is the ultimate object of conducting business and as such, expenditure incurred by the assessee would be in the realm of business expenditure . Hence, the orders passed by the authorities would not stand the test of law and is liable to be set aside. While examining the claim for deduction under Section 37(1) the assessing officer would not blindly or only on the say of the assessee accept the claim. AO would be required to scrutinise and examine as to whether said deduction claimed for having incurred the expenditure has been incurred and only on being satisfied that expenditure so incurred is relatable to the work undertaken by the assessee namely, only on nexus being established, assessing officer would be required to allow such expenditure under Section 37(1) and not otherwise. - Decided against the revenue and in favour of the assessee.

  ---

• 2019 (9) TMI 353
  Appropriate method of income recognition in hire purchase transaction - internal rate return (IRR) method OR Even Spread Method (ESM) - HELD THAT:- As decided in own case [ 2019 (3) TMI 1068 - MADRAS HIGH COURT] referring to decision of Commissioner of Income Tax Vs. Ashok Leyland Finance Ltd. [ 2012 (7) TMI 156 - MADRAS HIGH COURT] and Shri Chakra Financial Services Ltd. Vs Commissioner of Income Tax [ 2012 (5) TMI 70 - ANDHRA PRADESH HIGH COURT] upheld the taxability with regard to interest income on EMI method, which has been consistently followed, there is no reason to take a different view in the matter for the present Assessment years, in this case. - Decided in favour of assessee. Provision made in the earlier years in respect of Non Performing Assets which was reversed during the current assessment year - HELD THAT:- What is required to be seen is, for the assessment years under consideration, whether the provisions were allowed as deduction in the respective assessment years. Therefore, we are of the considered view that the matter requires fresh consideration by the Assessing Officer on this aspect. For the above reasons, we are of the view that the matter should be remanded back to the Assessing Officer, who will take a fresh decision on the merits of this issue. In the result, this appeal is allowed and the matter is remanded back to Assessing Officer to take a fresh decision in the matter noting the factual and legal position

  ---

• 2019 (9) TMI 352
  Rectification of mistake u/s 254 - non consideration of case law relied upon by the department - Validity of reopening of assessment u/s 147 - whether non communication of reasons for reopening the assessment renders the assessment invalid or not? - HELD THAT:- ITAT after considering the facts of the case and as per the material available on record, given a finding that the AO did not communicate the reasons recorded for reopening the assessment. On finding the fact that the reasons recorded were not communicated, the ITAT decided the appeal on the basis of the arguments advanced by both the Counsels at the time of appeal bearing. We have gone through our record and observed that the department has not argued the case law mentioned in the Miscellaneous Application i.e. S.Narayanappa Vs. CIT [ 1966 (9) TMI 36 - SUPREME COURT] during the appeal hearing. Therefore, the ITAT has no occasion to consider the decision relied upon by the department. Decision of Hon ble Supreme Court in S.Narayanappa vs.CIT [ 1966 (9) TMI 36 - SUPREME COURT] was delivered much earlier than the decision of Hon ble Supreme Court in GKN Drive Shafts (India) Ltd [ 2002 (11) TMI 7 - SUPREME COURT] and related to validity issue of notice under section 34(1) of 1922 Act. Subsequently Hon ble Supreme Court considered the issue in G.K.N.Drive Shafts(India) Ltd vs CIT in [ 2002 (11) TMI 7 - SUPREME COURT] with particular reference to the provision of section 147 of 1961 Act and held that the AO is bound to communicate the reasons. While deciding the appeals of the Revenue, this Tribunal has relied on the decision of the Apex Court in GKN Drive Shafts and various other decisions of Hon ble Courts and the decision of this Tribunal and decided the appeals. Therefore, there is no mistake in the order passed by the ITAT, hence, the Miscellaneous Application filed by the revenue are dismissed.

  ---

• 2019 (9) TMI 351
  Penalty levied u/s 271(1)(c) - Unexplained cash deposits - HELD THAT:- Since the Datamation has already confirmed before the Assessing Officer during the remand proceedings that they are paying the maintenance charges to the assessee, therefore, the cash deposit in the bank account stands explained being the amount received from Datamation. Accordingly, the same is deleted. Ground of appeal No.2 by the assessee is allowed. Addition on account of electricity charges received from Datamation Consults Pvt. Ltd. - HELD THAT:- Explanation of the assessee that he has debited the electricity bill from his bank account for electricity used by Datamation and other parties in the earlier years which were received by him in cash during the current financial year was rejected. In appeal, the ld.CIT(A) upheld the action of the Assessing Officer. As mentioned in the preceding paragraph, during the penalty appeal before the CIT(A) the assessee had filed certain details/confirmations which were sent by the CIT(A) to the Assessing Officer for the remand report. AO in the remand report had confirmed that Datamation has orally confirmed that they are paying maintenance and electricity charges to the assessee. Since the statement of the assessee has been corroborated by Datamation during the remand proceedings before the Assessing Officer, therefore, no addition is called for. Accordingly, ground of appeal No.3 by the assessee is allowed. Addition being loans and advances received - HELD THAT:- A perusal of the various documents filed by the assessee before the lower authorities show that the assessee has filed sufficient details regarding the receipt of loans and advances given in the earlier years. The affidavits filed by the assessee from all the parties with confirmations and their PAN details had not been found to be false or untrue. Further, the amounts are very small. Considering all the addition made by the Assessing Officer and sustained by the CIT(A) is not justified. Accordingly the same is deleted and the ground raised by the assessee is allowed. Addition being the amount received from Mr. Deepak - assessee could not substantiate with evidence to his satisfaction that he has received cash from the office boy Deepak against which cheque was issued to him - HELD THAT:- CIT(A) sustained the addition made by the Assessing Officer. The ld. counsel also could not substantiate with any evidence so as to take a contrary view than the view taken by the CIT(A) on this issue. Accordingly, Ground No.5 is dismissed.

  ---

• 2019 (9) TMI 350
  Revision u/s 263 - issue of exemption u/s 11 and 12 on account of violation of section 13(1)(c) - HELD THAT:- Tribunal in assessee s own case for assessment year 2006-07 has allowed the exemption u/s 11 of the Act which was denied by the Assessing Officer and the CIT(A). Following the order of the Tribunal for assessment year 2006-07, the Tribunal in assessee s own case for assessment year 2007-08, 2009-10, 2010-11 and 2011-12, has allowed the appeal filed by the assessee on the issue of denial of exemption u/s 11 due to violation of the provisions of section 13(1)(c) read with section 13(3) of the IT Act. Merely because the Revenue has not filed any appeal against the order of the Tribunal on account of low tax effect the same in our opinion cannot be held as an adverse view against the assessee. In the case of CIT vs. Arvind Jewellers [ 2002 (7) TMI 50 - GUJARAT HIGH COURT] has held that where the Assessing Officer has considered material on record and framed assessment, revision of order is not justified. When the Assessing Officer has taken a possible view, merely because the ld.CIT(E) does not agree with the view taken by the Assessing Officer, the same cannot be a ground for invoking the jurisdiction u/s 263. Assessing Officer, after considering the reply given by the assessee has passed a speaking order on the issue of exemption u/s 11 and 12 on account of violation of section 13(1)(c) of the Act, therefore, merely because the CIT(E) is not in agreement with the views taken by the Assessing Officer, the same, in our opinion, cannot be a ground to invoke the jurisdiction u/s 263 - Decided in favour of assessee

  ---

• 2019 (9) TMI 349
  Levy of penalty u/s 271(1)(c) - denial of claim of exemption under section 54 - exemption allowable for purchase of one residential house only - amount not deposited in capital gain account - whether s ale consideration is utilised for the construction or purchase of a new residential house before due date of filling of return under section 139(4)? - HELD THAT:- Due date for furnishing return of income according to Section 139(1) of the Income Tax Act, 1961 was subject to extended period provided under Section 139(4) of the Income Tax Act. The assessee has filed the chart which shows that even some of the payments have been made for Flat Nos.489 and 490 after the extended period expired on 31st March 2015. The assessee despite taking specific plea before the CIT(A) and relied upon several decisions, the Ld. CIT(A) did not decide this issue in the light of decisions. Therefore, it requires actual verification how much assessee made payments after the extended period as per Law and whether the assessee would be entitled for deduction under section 54 as per the aforesaid decisions. Accordingly, set aside the Order of the Ld. CIT(A) as regards claim of exemption under section 54 in respect of Flat Nos.489 and 490 and restore the matter in issue to the file of Ld. CIT(A) with a direction to re- decide this issue as per Law, following the decisions of Ms. Jagriti Aggarwal [ 2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT] and CIT vs. Ms. Jagtar Singh Chawla [ 2013 (4) TMI 499 - PUNJAB AND HARYANA HIGH COURT] Exemption u/s 54 in respect of investment made by assessee-company in Flat K-1003 - such claim is not allowable in favour of assessee. Even according to the arguments of Learned Counsel for the Assessee, amendment in the Section is prospective in nature, therefore, it would not be allowed beneficial to the assessee. The language of Section 54 of the Income Tax Act is very clear that benefit under this provision could be extended in respect of investments made in one residential house in India. The authorities below, therefore, rightly denied the claim of exemption under section 54 in respect of Flat K-1003. The Orders of the authorities below to that extent are maintained and appeal of assessee is dismissed.

  ---

• 2019 (9) TMI 348
  Levy of penalty u/s 271(1)(c) - books of account as per section 145 rejected and calculated disallowance under section 40(a)(ia) of the Act for non-deduction of TDS u/s 195 - HELD THAT:- It is pertinent to observe that while passing assessment order Ld.AO initiated penalty proceedings without referring to any charge as to for concealment of income or filing of inaccurate particulars of income . Further Ld.AO subsequent to order passed by Ld. CIT (A) passes penalty order, wherein penalty has been levied for deliberateness of tax evasion , which in our considered opinion is not at all the requirement of Sec.271(1)(c ) of the IT Act. Be that as it may, it is observed that Hon ble High Court for year under consideration admitted substantial questions of law by which addition itself becomes debatable. On perusal of decision relied upon by Ld.AR in case of CIT vs Ankita Electronics Pvt Ltd [ 2015 (3) TMI 1029 - KARNATAKA HIGH COURT] and CIT vs Dr Hirsha N. Biliangady [ 2015 (3) TMI 1146 - KARNATAKA HIGH COURT] additions in respect of which penalty was confirmed has been accepted by Hon ble Karnataka High Court, leading to substantial question of law. Thus when Hon ble High Court admitted substantial question of law on additions, it becomes apparent that issue is certainly debatable. In such circumstances penalty cannot be levied under section 271 (1) (c) of the Act. - Decided in favour of assessee.

  ---

• 2019 (9) TMI 347
  Penalty u/s 271(1)(c) - employer issued revised TDS certificate with additional salary u/s 192 - Assessee filed the income tax return based on the old TDS certificate issued by the employer - revise return was filed after the case was selected for scrutiny - AO initiated the penalty proceedings on the ground that low income was declared - HELD THAT:- Explanation offered by assessee is bonafide to take it out of clutches of the penalty proceedings as no attempt is made by assessee to furnish inaccurate particulars of income nor an attempt is made by assessee to conceal his income more-so there is no prejudice to the Revenue as further income-tax of Rs. 5,00,000/- was deducted at source by employer Pace u/s 192 on behalf of assessee on additional salary income of Rs. 16,63,897/- paid to assessee on 24.09.2013 for impugned ay: 2013-14 within provisions of Section 192 Revised statement of income-tax deducted at source u/s 192 of the 1961 Act in quarterly returns filed with Revenue in Form No. 24Q wherein all the information pertaining to additional salary of Rs. 16,63,897/- and additional TDS paid of Rs. 5,00,000/- stood disclosed to Revenue. - Decided in favour of assessee

  ---

• 2019 (9) TMI 346
  Reopening of assessment u/s 147 - unexplained cash deposits - HELD THAT:- AO in the reasons recorded incorrect facts that assessee made cash deposit of Rs. 9 lakhs, despite assessing officer has accepted that assessee made cash deposit of Rs. 7,50,000/- only. AO while recording the reasons has not applied mind to the material on record. Source of purchase of shares have been accepted by the assessing officer, which was also found factually incorrect. Further the deposit in the bank account per se cannot be income of the assessee. It is mere suspicion of the assessing officer based on incorrect facts that income chargeable to tax has escaped assessment. Following the reasons for the decision in the case of Shri Abrar Ahmad Qasimi, Delhi vs. ITO, Ward-46(5), New Delhi [ 2018 (6) TMI 1655 - ITAT DELHI] set aside the orders of the authorities below and quash the reopening of the assessment in the matter. Resultantly, the addition made in the re-assessment would stand deleted. - Decided in favour of assessee.

  ---

• 2019 (9) TMI 345
  Rectification u/s 254 - Disallowance by invoking section 40A(3A) - HELD THAT:- The tribunal has passed well reasoned common order for ay: 2008-09 and 2009-10 where all the contentions of both the litigating parties were dealt with. The tribunal also directed to remove double jeopardy in its order so that the assessee is not prejudiced twice for the same additions. The power of tribunal while dealing with MA u/s 254(2) is very limited to rectifying mistakes apparent from records and we have no power to review our decision. The next contention of the assessee in this MA is that the tribunal did not deal with overriding effect of Section 40A(3) wherein it is now contended that it did not override all the provisions of the 1961 Act but only override provisions of the Act dealing with computation of income under the head Profit and Gains of Business or Profession . We are afraid that this contention of the assessee is also not acceptable as tribunal duly dealt with this issue in detail We hold that the assessee has not made out any case for rectifying any mistake which is apparent from records within limited mandate of Section 254(2) and what assessee is seeking is reviewing of our order dated 04.10.2017 which is not permissible within limited mandate of Section 254(2)

  ---

• 2019 (9) TMI 344
  Addition on account of unproved liabilities / Creditors - addition u/s 68 - HELD THAT:- We are of the view that the assessee has not discharged the onus cast upon him under section 68 of the Act. The mere receipt of the amounts by account payee cheque does not mean that the credit is genuine. The assessee has to establish the identity of the creditor, the capacity of the creditor to advance the amount in question and prove the genuineness of the transaction. Assessee has failed to produce any of these details, leading him to observe that the assessee has not produced any details and supporting evidence of ledger account, supporting entries of the respective balance sheet of the parties, etc. In the absence of any clinching evidence, it cannot be said that the assessee has discharged the onus under section 68 of the Act. - Decided against revenue Addition of un-explained cash deposits - CIT(A) rejected this explanation put forth by the assessee on the ground that proper details were not filed in support of the claim - HELD THAT:- Mere consent alone cannot confer jurisdiction to make an assessment. The additions made should be based on corroborative material evidence and cannot be made merely on the concession by the assessee. In this view of the matter, we are inclined to accept the contentions of the assessee that the addition in respect of cash deposits made in the assessee s bank account in the year under consideration should be based on peak credit method. The assessee has furnished the working of peak credit before us showing the peak credit of Rs. 10,70,000/-; but this has not been examined by the authorities below. We, therefore, are of the view that the matter be restored to the file of the AO with a direction to verify the computation of peak credit filed and thereafter to restrict the addition in respect of unexplained cash deposits in the assessee s bank account to the peak credit.

  ---

• 2019 (9) TMI 343
  Reopening of the assessment u/s 148 - addition u/s 68 and u/s 69C - HELD THAT:- Assessee has failed to prove the creditworthiness of the Investor and genuineness of the transaction in the matter. The Ld. D.R. also referred to bank statements of the Investor Company, copy of which is filed in the paper book to show that before giving accommodation entry to the assessee, there was negligible balance in the account of the Investor Company. These facts coupled with the statement of the Director of the Investor Company clearly show that M/s. Hillridge Investment Ltd., has given accommodation entry of Rs. 40 lakhs to the assessee. The decisions relied upon by the Ld. D.R, thus, clearly supports the finding of fact recorded by the authorities below. Learned Counsel for the Assessee was not able to point-out any error in the Order of the authorities below for making the addition - Decided against assessee

  ---

• 2019 (9) TMI 342
  Levy of penalty u/s.271D - receipt of cash loans for violation of provisions of section 269SS - loose sheet seized from the premises of Shri Samir Shah during his search action u/s.132 apparently indicates loan transactions of the assessee - HELD THAT:- Findings given by the CIT(A) in the appellate order passed for Shri Samir Shah that the disputed loans were not received in cash and rather they were received through normal banking channels. Hence, this fact is also accepted by the AO of Shri Samir Shah in his remand report. Hence, it goes to prove beyond doubt that there is no receipt of any cash loan by the assessee from Shri Samir Shah in violation of provisions of Section 269SS of the Act. Accordingly, the penalty u/s.271D of the Act levied in the hands of the assessee deserves to be deleted Accordingly, we direct the ld. AO to delete the penalty levied u/s.271D - Decided in favour of assessee.

  ---

• 2019 (9) TMI 341
  Exemption u/s 11 - charitable activity u/s 2(15) - public charitable trust providing swimming pool facilities for training and for other aquatic events - assessee is also providing facilities of playing Cards and also having Permit Room, Bar and Restaurants for Catering and Soft Drinks - HELD THAT:- No hesitation in holding that the assessee is carrying out objects of general public utility, hence, fulfills the condition of charitable purpose under section 2(15) of the Act. Therefore, the assessee is entitled for exemption under section 11 of the Act. It is worth mentioning, after introduction of proviso to section 2(15) DIT(E) cancelled the registration granted under section 12A of the Act by holding that as per the said proviso, the assessee is engaged in commercial activity. Tribunal while deciding assessee s appeal in [ 2018 (6) TMI 1656 - ITAT MUMBAI] reversed the decision of the DIT(E) and restored the registration granted to the assessee by holding that since there is no change in the activity of the assessee from the past assessment years, registration cannot be cancelled merely because of proviso to section 2(15) of the Act. Assessee is entitled to exemption under section 11 of the Act in respect of income generated from all other activities except the income from playing Cards for stakes. As regards the income generated from playing Cards, it is the contention of the learned Sr. Counsel for the assessee before us that the assessee does not provide facilities for playing Card for stakes but it holds Bridge Tournaments. The aforesaid claim of the assessee has to be verified by the AO and the nature of income derived from playing Cards and its entitlement to exemption under section 11 can be decided after factually examining assessee s claim. Needless to say, the Assessing Officer shall provide adequate opportunity of being heard to the assessee before deciding the issue.

  ---

• 2019 (9) TMI 340
  Non granting TDS credit - original TDS certificates furnished by the assessee at the time of assessment proceedings - second round of litigation before the Tribunal - HELD THAT:- AO to grant the benefit of TDS credit on the basis of original TDS certificates filed by the assessee. The Assessing Officer while passing the order giving effect to the order of Tribunal has deliberately closed his eyes on the directions of Tribunal. In the second round of appeal, the Commissioner of Income Tax (Appeals) again vide order dated 23-12-2016 directed the Assessing Officer to comply with the directions of Tribunal but till date the Assessing Officer has not given effect to the order of Tribunal dated 30-06-2014. Shri N. Ashok Babu representing the Department filed a copy of the order dated 16-07-2019 passed u/s. 154 by the Assessing Officer giving effect to the directions of Tribunal order dated 30-06-2014. AO has now complied with the directions of Tribunal though belatedly. The present appeal filed by the Revenue is without any merit. We see no infirmity in the directions by the First Appellant Authority to Assessing Officer to comply with the decision of Tribunal. In fact, judicial discipline demands that the Assessing Officer should have complied with the directions of the Tribunal in first instance only.

  ---

• 2019 (9) TMI 339
  Determination of capital gain assessable on account of sale of property - in the hands of confirming party exercise u/s.50C(2) has been carried out and the DVO has determined the value of the property - whether full consideration required to be deemed u/s.50C for the purposes of section 48 of the Act cannot exceed this amount? - HELD THAT:- This agreement was executed in respect of the immovable property, a right in persona is created in favour of the transferee/vendee (confirming party). When such right is created in favour of the vendee, the vendor is restrained from selling the said property to someone else because vendee in whose favour right in persona is created has legitimate right to enforce such specific performance of the agreement, if the vendor for some reason is not executing the sale deed. By virtue of agreement to sell, some right is given to the vendee by the vendor. It is encumbrance on the property and on relinquishment of such right confirming parties were getting Rs. 23 lakhs which has also been made subject to tax in their hands. In this situation, we are of the view that the issue needs to be remitted back to the Assessing Officer for determining the fair market value of the property sold by the assessee on the date of sale. He will keep two factors in mind, (a) the fair market value determined by the DVO while considering the case of confirming parties, and (b) encumbrance created on the property by virtue of agreement dated 10/12/2008 in favour of three buyers S/Shri Bhavik B.Trivedi, Milind V. Varavadekar and Smt.Madhuben J. Trivedi. After assessing the effect of these factors, he will determine the fair market value of the property which can be considered as deemed full consideration u/s.50C for the purposes of computing capital gain u/s.48 of the Act. Issue is remitted back to the file of Assessing Officer for fresh adjudication - Appeal of the Assessee is allowed for statistical purposes.

  ---

• 2019 (9) TMI 338
  Additions u/s 68 - Addition under the head Other current liability - HELD THAT:- The details of receipt of share application money on various dates. The assessee had applied to the Registrar of Companies for increase in authorized share capital of 32,90,000 equity shares and application money received from various share applicants was converted into equity shares under Board Resolution allotting shares to the various share applicants. No case has been made out by the revenue for invoking the provisions of section 68. As far as invoking the provisions of section 56(2)(viib) - as rightly contended by assessee, those provisions are applicable only for receipt of consideration for issue of shares from a resident and not in the case of a non-resident. In the present case, the consideration for issue of share application money was received from non-residents. Secondly, those provisions are applicable only when the shares are issues over and above the face value of such shares. Admittedly, the shares have been subscribed at face value and there is no premium whatsoever. There is no other basis on which the addition made by the AO and confirmed by the CIT(Appeals) can be sustained. Addition made by the AO and confirmed by the CIT(A) is unsustainable and the same is directed to be deleted. - Decided in favour of assessee.

  ---

• 2019 (9) TMI 337
  Revision u/s 263 - PCIT has set aside the assessment order passed by the AO with a direction to make assessment afresh u/s 143(3) read with section 147 - taxability of gift received from HUF - HELD THAT:- In this case, originally, the assessment was framed u/s 143(3) of the Act accepting the returned income. The assessment was reopened u/s 147 of the Act only to examine the issue as to the taxability of the amount of gift received by the assessee from his HUF . The issue was examined by the Assessing Officer and he accepted the returned income holding that the gift received from HUF was not exigible to tax by relying upon the decisions of Vineetkumar Raghavjibhai Bhalodia vs ITO [ 2011 (5) TMI 1100 - ITAT RAJKOT] and Mr.Biravelli Bhaskar vs ITO [ 2015 (8) TMI 121 - ITAT HYDERABAD] The decisions of the higher judicial authorities were binding upon the Assessing Officer and the Assessing Officer accordingly followed the same. In view of this, the Assessing Officer took a possible view in the light of the direct judicial decisions on the issue. Under the circumstances, the order of the Assessing Officer cannot be said to be erroneous. Taxability of gift received from HUF - Family income flows into a common pool from which resources are drawn to meet needs of all the members which are regulated by the head of the family. In such circumstances, any amount received by a member of the HUF , even out of the capital or estate of the HUF cannot be said to be income of the member exigible to taxation. Since such a member himself has a pre-existing right in the property of the HUF , hence, it cannot be said to be a gift without consideration by the HUF or by the other members of the HUF to that recipient member. Provisions of section 56(2)(vii) are not attracted in case an individual member receives any sum either during the subsistence of the HUF for his needs or on partition of the HUF in lieu of his share in the joint family property. Converse is not true i.e. to say in case an individual member throws his self-acquired property into common pool of HUF . The HUF or other members of the HUF do not have any pre-existing right in the self-acquired property of a member. If such an individual member throws his own/self-earned or self-acquired property in common pool, it will be an income of the HUF , however, the same will be exempt from taxation as the individual members of an HUF have been included in the meaning of relative as provided in the explanation to section 56(2)(vii) of the Act. It is because of this salient feature of the HUF that in case of individual, the HUF has not been included in the definition of relative in explanation to section 56(2) (vii) as it was not so required whereas in case of HUF, members of the HUF find mention in the definition of relative for the purpose of the said section. Amount received by the assessee from the HUF , being its member, is a capital receipt in his hands and is not exigible to income tax. - Decided in favour of assessee.

  ---

• 2019 (9) TMI 336
  Reopening of assessment u/s 147 - arriving at the satisfaction for escapement of Income warranting recourse to notice under section 148 - unexplained investment - reasons to believe or reason to suspect - HELD THAT:- reopening cannot be justified on any other material other than referred in the reasons recorded. Though in notice dated 19.01.15 the learned Addl. CIT, required the assessee to prove the sources of investment, in the forwarding letter addressed to the learned Assessing officer he even directed the learned Assessing officer to enquire about the sources of investment but to the advantage of the assessee while issuing notice dated 24.03.2015 no such query was made by the learned Assessing officer from the assessee. CIT(A) was factually not correct in holding that sources of investment were not satisfactorily explained before AO and which has led to satisfaction of the Assessing officer for escapement of income. The text of the reasons recorded do proves that virtually there has been no application of mind by the learned Assessing officer so as to form requisite satisfaction that any income has escaped assessment and that the reasons recorded in the case in hands are no reasons in the eye of lawas being completely barren and bald in nature. The content of reasons does not reveal that the AO has done some exercise by way of any enquiry having been conducted by him before arriving at the satisfaction for escapement of income. Reasons are his conclusions, leaving the reader to guess for the material on basis of which the belief of escapement is founded. In fact, the aforesaid reasons are instead of being reasons to believe are reasons to suspect. Mental exercise must be self-evident from the reasons recorded. Reasons must be self-speaking and self-defending. The purported reasons do not show any such exercise by the learned Assessing officer and hence we have no hesitation in holding that the learned Assessing officer has exceed his authority in wrongly acquiring the jurisdiction in the matter. - Decided in favour of assessee

  ---

• Customs

• 2019 (9) TMI 335
  Grant of anticipatory bail - Section 135 of the Customs Act, 1962 - Smuggling - Gold - non-bailable warrants - HELD THAT:- There is no ground to grant anticipatory bail to the petitioner. As per the investigation conducted so far, it has come on record that on more than 04 occasions, the accused persons in conspiracy with each other has brought the gold in an illegal manner and the market value of the same is more than Rs. 1 crore making the offence as non-bailable, the allegations against the petitioner is that he is the main king-pin of the racket and is the Financer, who has provided 33000 U.S. Dollars to the co-accused for purchase of 01 Kg. gold and the same was brought from Dubai to Amritsar where it was seized. Considering the serious allegations against the petitioner, there is no ground to grant anticipatory bail to the petitioner - petition dismissed.

  ---

• 2019 (9) TMI 334
  Smuggling - Gold - Gold of Foreign Origin or not - it was alleged that appellant did not produce any licit document for possession of said quantity of gold - HELD THAT:- The purity of gold in the seized gold was less than purity of gold of foreign origin. Further, revenue also could not establish from where the gold was smuggled. On the contrary the appellant has established that he has procured the said gold from Shri Shivanshu Agarwal after making payments through banking channels. It was up to revenue to further investigate as to from where Shri Shivanshu Agarwal has obtained the same. Though it is not available on record but it is more probable that after investigation with Shri Shivanshu Agarwal, revenue could not bring out any evidence to establish that Shri Shivanshu Agarwal had obtained smuggled gold and therefore, no such evidence is forth coming from the record. After taking note that the purity of gold was less than the gold of foreign origin and M/s Raj Shree Jewelers and its proprietor Shri Neeraj Agarwal had obtained that gold from Shri Shivanshu Agarwal after making payments through banking channels, we hold that the seized gold was not smuggled into India and therefore, the same is not liable for confiscation. Confiscation as well as penalties set aside - appeal allowed - decided in favor of appellant.

  ---

• Corporate Laws

• 2019 (9) TMI 333
  Proceedings against the auditors of the company - removal from the statutory audit - proceedings after resignation - Constitutional validity of sub-section (5) of Section 140 of the Companies Act, 2013 - prosecution of the Petitioners and initiation of proceedings under section 140(5) of the Act - HELD THAT:- the word action in the second proviso to sub-section (5) of section 140 of the Act, would be required to be read down as prosecution . The prosecution can be initiated only after final report, equated with a report under the provisions of section 173 of the Code of Criminal Procedure, 1973, is made - This issue, in our prima facie opinion, also requires to be dealt with elaborately. The matter thus warrants a response from Respondent No. 1 and Respondent No. 2. We defer the hearing on the writ petitions - Stand over to 3rd October 2019.

  ---

• Insolvency & Bankruptcy

• 2019 (9) TMI 332
  Maintainability of application - initiation of Corporate Insolvency Resolution Process - repayment of outstanding dues - corporate debtor - existence of debt and default - HELD THAT:- In the instant application, from the material placed on record by the Applicant, this Authority is satisfied that the Corporate Debtor committed default in paying the financial debt to the Applicant. As can be seen from the Written Communication of the proposed Insolvency Resolution Professional, no disciplinary proceedings are pending against him. In the instant case, the documents produced by the Financial Creditor clearly establish the debt and there is a default on the part of the Corporate Debtor in payment of the financial debt . There is existence of default and that the application under Section 7(2) of the Code is also complete in all respect - the petitioner/financial creditor having fulfilled all the requirements of Section 7 of the Code, the instant petition deserves to be admitted - petition admitted - moratorium admitted.

  ---

• 2019 (9) TMI 331
  Liquidation - absence of any approved plan - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- No order of settlement can be passed by this Appellate Tribunal, even though the Appellant, promoter agrees to pay all the dues. However, we direct the liquidator to proceed in terms of the decision in Y. SHIVRAM PRASAD AND ASSET RECONSTRUCTION COMPANY (INDIA) LTD. VERSUS S. DHANAPAL ORS. AND SERVALAKSHMI PAPER LTD. ORS [ 2019 (5) TMI 386 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] wherein a detailed order has been passed as to how the liquidator should proceed - appeal disposed off.

  ---

• Service Tax

• 2019 (9) TMI 330
  Permission for withdrawal of appeal - monetary amount involved in the appeal - activity of providing erection, commissioning and installation services/work contract services - HELD THAT:- At the time of hearing, learned counsel for the appellant admits that in view of instructions dated 22.8.2019 issued by Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (Judicial Cell) the instant appeal would not be maintainable before this Court, as demand amount i.e. 11, 20, 077/- for the period from 2009-10 to 2012-13 and Rs. 59, 80, 109 alongwith applicable interest and penalty for the period 2013-14 is to be recovered, which is below the monetary limit of Rs. 1 Crore. Appeal dismissed as withdrawn.

  ---

• 2019 (9) TMI 329
  Permission for withdrawal of appeal - Monetary amount involved in the appeal - Excess utilization of CENVAT Credit - It is alleged that respondent was entitled to utilize cenvat credit upto 20% of the service tax payable, whereas it was utilizing cenvat credit upto 100% of service tax payable - HELD THAT:- At the time of hearing, learned counsel for the appellant admits that in view of instructions dated 22. 8. 2019 issued by Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (Judicial Cell) the instant appeal would not be maintainable before this Court, as demand amount i. e. 94, 57, 161/- is to be recovered, which is below the monetary limit of Rs. 1 Crore. Appeal dismissed as withdrawn.

  ---

• 2019 (9) TMI 328
  CENVAT Credit - input services - transportation of excisable goods from its Chennai Unit I to Jamshedpur Unit 2 of the Assessee itself - place of removal - applicability of the case of Hon ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [ 2018 (2) TMI 117 - SUPREME COURT] in the facts of present case. HELD THAT:- A closer and finer reading of the Hon ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [ 2018 (2) TMI 117 - SUPREME COURT] would clearly reveal that the Hon ble Supreme Court was concerned only with the controversy of Cenvat Credit on goods transported from the place of removal to the buyers premises and not the transport of goods from one Unit of the Assessee to another Unit of the same Assessee. In the context of the factual background, the judgment of the Hon ble Supreme Court, in view of the amended definition of the place of removal wherein the word upto has been substituted for the word from in clause 3 of Rule 2(l) which defines Input Services , cannot be applied to the facts of the present case. The Hon ble Supreme Court held that the Cenvat on goods transport agency availed for transport of goods from the place of removal of Assessee to the buyer s premises was not admissible to the respondent and that by necessary implication would mean that Input Services for transport of goods upto the final place of removal of goods by way of sale to the buyers would be so included. The stark distinction of facts of the case before the Tribunal and the facts before the Hon ble Supreme Court in Ultra Tech case should have been noticed by the final fact finding authority viz., the Tribunal before applying the judgment of the Apex Court to the facts of the case before it rather mechanically. It is the duty of the final fact finding body to analyse the facts of the case on hand appropriately and only after comparing the facts of the case before the higher Constitutional Courts, it should proceed to apply the ratios of the Judgments from the Constitutional Courts to the case before it - The misapplication of the Judgments without comparing the facts, can result in serious miscarriage of justice and can expose the non-application of mind by the responsible appellate forums like the CESTAT in the present case. CENVAT Credit allowed - appeal allowed - decided in favor of appellant.

  ---

• Central Excise

• 2019 (9) TMI 327
  Monetary amount involved in the appeal - HELD THAT:- The petitioner, in all fairness, accepts the submission advanced by the learned counsel for the respondent that the amount involved in the present case is less than Rs. 2 crore. Hence, it is covered by the communication dated 22.08.2019. SLP disposed off.

  ---

• 2019 (9) TMI 326
  Permission for withdrawal of appeal - monetary amount involved in the appeal - SSI Exemption - use of brand name of others - extended period of limitation - HELD THAT:- The learned counsel for the appellant admits that in view of instructions dated 22. 8. 2019 issued by Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (Judicial Cell) the instant appeal would not be maintainable before this Court, as demand amount i. e. Rs. 55, 91, 573/- is to be recovered, which is below the monetary limit of Rs. 1 Crore. Appeal dismissed as withdrawn.

  ---

• 2019 (9) TMI 325
  Filing of appeal without the copy of the order in original - Appellant claimed that order was not served upon him - request for release of bank account from attachment - Section 37C of the Central Excise Act - the respondent submits that the petitioner is served with the order in original by speed post, however at present the acknowledgment is not traceable - HELD THAT:- We cannot set aside any order without the copy of the said order before us. In fact the Registry should not have registered the petition without the copy of the order sought to be challenged in the writ petition. Upon receipt of the certified copy the petitioner may file an appeal against the said order if so advised before the appropriate forum. The appropriate forum shall naturally consider about the claim of the petitioner that the order in original was not served upon the petitioner and thereafter shall pass the necessary orders.

  ---

• 2019 (9) TMI 324
  SSI exemption - clubbing of clearances - dummy unit - non-inclusion of clearances of other unit namely, M/s Kumar Polyextrusion, which is owned by the wife of the proprietor - case of appellant is that merely because two units are owned by husband and wife, clearance of one unit cannot be clubbed with another in considering the SSI exemption notification. HELD THAT:- The learned Commissioner (Appeals) has erred in appreciating the evidence as a whole and in particular the control and management of the unit M/s Kumar Polyextrusion by Proprietor of M/s Mali Pipe Industries even though on paper both the units were shown and claimed to have separate existence and functions separately carrying out its business of manufacture and sale of goods independent to each other. On the contrary, the entire operation and business of both the units undoubtedly controlled and managed by one person that is Shri Kumar Shankar Mali, hence, the clearance of both units be clubbed. The facts of the present case are more or less similar to the facts of the case in M/S LIBRA ENGINEERING WORKS VERSUS COMMISSIONER OF CENTRAL EXCISE-AHMEDABAD-I [ 2016 (7) TMI 1116 - CESTAT AHMEDABAD] , hence by the judgment of this Tribunal delivered in the said case where it was held that for all practical purposes, the management/control of the business of manufacture and sale has been handled by Mr. Asgarali A. Siddiqui, proprietor of the Appellant and clearances were clubbed. Maintainability of appeal - the respondents raised another issue that the Revenue has not filed four appeals but instead filed only one appeal, therefore, the same is not maintainable - HELD THAT:- The learned Commissioner (Appeals) has decided the issues partly in favour of the respondents, modifying the Order of the adjudicating authority, therefore, the Revenue has filed only one appeal challenging the Order-in-Appeal only to the extent it was not accepted by the Revenue, that is on the issue of clubbing of clearance. Consequently the Appeal is sustainable. Demand upheld - decided in favor of Revenue.

  ---

• 2019 (9) TMI 323
  Interest on delayed refund - Refund claim of pre-deposit made - refund was sanctioned beyond 3 months of the application - time limitation - Section 35 F and 35FF of CEA - HELD THAT:- Where any pre-deposit amount is paid in accordance of Section 35F, it is Section 35FF which is applicable with effect from 06.08.2014 by virtue of the amendment in Section 35F brought by the Finance Act (2) of 2014. No doubt the pre-deposit in the present case was made before the said amendment but the application praying for refund thereof is post amendment i.e. on 04.04.2017. The order of sanctioning the refund was passed on 31.07.2017. Hence, the amended provision shall squarely cover the present case of refund. The refund got sanctioned beyond three months - appellant is held entitled for the interest on the impugned refund amount at such rate as is mentioned in Section 35F - Appeal allowed - decided in favor of appellant.

  ---

• CST, VAT & Sales Tax

• 2019 (9) TMI 322
  Validity of revised assessment - reopening of the assessment which was completed based on compounded rate of tax - Bus body built on chassis supplied by the customer - Section 25 of the KVAT Act - whether the Assessing Officer can revoke the permission by exercising any of the powers vested on him? - HELD THAT:- It is evident that there exists divergent views among the legal precedents. In George Thomas [ 2011 (12) TMI 728 - KERALA HIGH COURT ] relying on Joy Alukkas Traders [ 2009 (11) TMI 960 - KERALA HIGH COURT ] it is held that the powers vested under Section 19 (1) 35 of the KGST Act (which are in pari materia with Section 25 and 56 of the KVAT Act) are one and same in nature. But considering the rulings cited on behalf of the assessee, including Koothattukulam Liquors [2014 (3) TMI 782 - Supreme Court] , Bhima Jewellers [ 2014 (10) TMI 411 - SUPREME COURT] and other judgments, there is a reiteration of the legal principle that the option for compounding once accepted creates. Concluded contract which cannot be rescinded by one. of the parties or annulled through a re-opening of the assessment concluded. There exists divergent views in various legal precedents - we think it only appropriate to refer the questions involved, for an authoritative pronouncement by a Full Bench. The Registry shall post the above cases before the Full Bench, after obtaining necessary orders from the Hon ble Chief Justice.

  ---

• Indian Laws

• 2019 (9) TMI 321
  Reference of dispute between the parties to the Arbitrator - scope of the terms of the agreement - Section 8 of the Arbitration and Conciliation Act, 1996 - application filed under Section 23 of the Societies Registration Act to Arbitration - HELD THAT:- Clause 19 shall be applicable in the event of any dispute and difference arising among the parties out of, in connection with or relating to the agreement - In the present case, the developers, owners, societies and the original owners and even subsequent societies formed are parties to the agreement and the Addendum. It is also required to be noted and, as observed hereinabove, the dispute is with respect to sharing of the rent of the leased space and it can be said that the respondents are also claiming the share relying upon the Development Agreements; Supplementary Development Agreements and the Addendum. Therefore, the dispute can be said to in connection with or relating to the Agreements also. Clause 19 of the Addendum to the Supplementary Development Agreement shall be squarely applicable and therefore the disputes between the respondents and the appellants for which the respondents initiated proceedings under the Societies Registration Act, are required to be referred to the Arbitration and/or to the Arbitral Tribunal - both the High Court and the learned District Judge have committed grave error in not referring the dispute between the appellants and the respondents to the arbitration.

  ---

• 2019 (9) TMI 320
  Dishonor of Cheque - insufficiency of funds - section 138 of NI Act - permission sought to cross-examine the respondent-complainant - HELD THAT:- Though there is no necessity to recall and reexamine complainant but Magistrate can pass a specific order to recall the complainant. Such an order is to be passed either on an application made by the accused or under Section 145(2) of the Act or suo motu by the Court. This court is not in agreement with the findings recorded by learned Court below, while passing impugned order that the defence plea raised by the accused is neither substantial nor specific. Accused has specifically taken a plea that though he had issued blank cheque as security, but subsequently wrong amount came to be filled in the same by complainant, as such, accused is well within his right to cross- examine the complainant and its witnesses, specifically on the aforesaid points. Moreover, as has been observed herein above, a careful perusal of the second part of S.145(2), nowhere talks about assigning reasons in the application for recall/re-examination of a witness, meaning thereby that it is obligatory for the court to recall complainant or its witnesses, if an application is made in that behalf. Petition allowed.

  ---