TMI Tax Updates - e-Newsletter
September 13, 2019

Case Laws in this Newsletter:

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

TMI SMS

• Procedure for identification and processing of cases for prosecution under Direct Tax Laws - Relief for Small tax payers

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Articles

1. Brief overview of INC –22A

   By: KANIKA LOHIYA

News

1. Biggest ever pan-India joint operation by Directorate General of GST Intelligence and Directorate General of Revenue Intelligence against fraudulently claiming refund of IGST by exporters

2. Press Note No. 3 (2019 Series)

3. Press Note No. 2 (2019 Series)

4. Commerce & Industry Minister Addresses Board Of Trade Meeting

5. Government Committed to Corruption free Environment for Business: Piyush Goyal

Notifications

GST - States

1. 61 - dated 29-8-2019 - Jammu & Kashmir SGST

Notify that no E-Way Bill is required to be generated to transport any class of goods of any value in case of movement of the goods.

2. 60 - dated 22-8-2019 - Jammu & Kashmir SGST

EXTENSION IN ELECTRONIC FILING OF GSTR-3B RETURN FOR THE MONTH OF JULY 2019 ON GST COMMON PORTAL.

3. 04-D/2019 - No. FD 47 CSL 2017 - dated 26-7-2019 - Karnataka SGST

Karnataka Goods and Services Tax (Fifth Amendment) Rules, 2019.

Circulars / Instructions / Orders

Income Tax

1. 24/2019 - dated 9-9-2019

Procedure for identification and processing of cases for prosecution under Direct Tax Laws

FEMA

2. Press Note No. 3 (2019 Series) - dated 11-9-2019

Withdrawal of Press Note No. 17 (1984 Series)

3. Press Note No. 2 (2019 Series) - dated 11-9-2019

Licensing requirement for Parts and Accessories in Defence Sector

DGFT

4. TRADE NOTICE NO. 32/2019-2020 - dated 11-9-2019

Last date of Import of Pulses for the fiscal year 2019-20.

Highlights / Catch Notes

GST

• Court Dismisses Contempt Petition Over Alleged Non-Compliance in Reopening Portal for GST Tran-1 Form Filing.

  Case-Laws - HC : Contempt petition - wilful obedience - Re-opening the common portal to enable the petitioner to file Tran-1 Form - application was rejected after consideration by the Nodal officer - No cause of action survives for pursuing the contempt petition - HC
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Income Tax

• Systematic Approach to Prosecute Direct Tax Law Cases: Identification, Investigation, and Legal Processing for Compliance and Enforcement.

  Circulars : Procedure for identification and processing of cases for prosecution under Direct Tax Laws
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• Tax Appeal Overturned: Commissioner's Personal Opinion on Assessee's Loan to Spouse Lacks Evidence, Ruled Perverse.

  Case-Laws - HC : Deduction of interest - allegation that assessee had lent money from borrowed funds to the husband - principles of commercial expediency - CIT(A) decided the case against the assessee based on its own personal opinion without any material available on record thus the finding rendered by the CIT(A) is perverse. - HC
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• Income Tax Assessment Invalid Due to Incorrect Notice Issuance u/ss 147/148 Instead of 153C, Defect Not Rectifiable.

  Case-Laws - AT : Validity of Assessment - Proceedings initiated after search - instead of issuing notice u/s 153C, notice was issued u/s 147/148 - Assessment order passed u/s 143(3) - order passed suffers from infirmity and the Act itself, defect cannot be rectified u/s 292B - AT
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• CIT(A) Removes Additions: No Rule 46A Violation as Decision Made Without New Evidence; AO's Letter Overlooked.

  Case-Laws - AT : CIT(A) deleted additions by admitting the fresh evidence - whether the same is contravention of Rule 46A of the I.T. Rules - a letter was addressed to AO during assessment proceedings but was not considered - Therefore, the learned CIT(A) has not relied upon any additional evidence while giving relief to the assessee - AT
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• Court Rules: Income Accrual Can't Be Deferred on Hypothetical Grounds; Additions Confirmed for Advance Billings.

  Case-Laws - AT : Accrual of income - advance billings - postponement of revenue on a hypothetical basis could not be considered a valid reason for change of method of accounting - The assessee had no right to postpone the revenue on uncertain grounds - Additions confirmed - AT
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• Oil palm fruits qualify for tax deductions u/s 80IB(11A) as they are considered fruits needing preservation.

  Case-Laws - AT : Deduction u/s 80IB(11A) - certain fruits and vegetables would require processing and preservation for their long shelf-life. As long as the end product is also consumable it cannot be denied exemption u/s 80IB(11A). Therefore we are satisfied that the oil palm fruits are fruits u/s 80IB(11A) of the Act. - AT
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• Pr. CIT's directive for AO to conduct a comprehensive inquiry deemed impermissible u/s 263 scrutiny assessment rules.

  Case-Laws - AT : Revision u/s 263 - Pr. CIT has proceeded to revise the scrutiny assessment order and directing the AO to decide the issue afresh i.e. for making rowing enquiry which is not permissible u/s.263 - AT
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• Penalty u/s 271AAA Not Upheld Due to Unsubstantiated Allegations on Surrendered Income and Its Derivation.

  Case-Laws - AT : Levy of penalty u/s 271AAA - allegation that, assessee had not accounted for this surrendered income in his books of account on the date of search and further the assessee has failed to specify the manner in which such income has been derived and even failed to substantiate such manner, is not correct - no penalty - AT
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• Penalty Imposed for Non-Disclosure of Second Sale Deed; Calculated at 100% of Evaded Tax on Capital Gains.

  Case-Laws - AT : Penalty u/s 271(1)(c) - sale of property - non-disclosure of the second sale deed - penalty restricted to the extent of non-disclosure of the second sale deed to be calculated @100% of the tax sought to be evaded on the capital gains - AT
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• High Court Affirms ITAT's Decision: Converting Plays to TV Episodes is a Charitable Activity, Eligible for Tax Exemption.

  Case-Laws - HC : Exemption u/s 11 - charitable activity u/s 2(15) - “to convert plays into episodes on T.V.” - CIT has wholly misread the objects - ITAT correctly allowed the registration u/s 12A/12AA - HC
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• Society in Early Stages Not Required to Perform Charitable Activities Before Section 12AA Registration Application Evaluation.

  Case-Laws - AT : Exemption u/s 11 - Where the assessee society is at nascent stage then it cannot be expected that the society must do some charitable work before seeking grant of registration u/s 12AA and consequently consideration of genuineness of the activities by the Ld. CIT does not arise. - AT
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• Invalid Assessment Order Can't Justify Section 263 Proceedings; Orders Based on It Are Null and Void.

  Case-Laws - AT : Where the assessment order forming the basis of proceedings u/s 263 are themselves invalid, the order passed u/s 263 cannot survive and it is also a nullity. - AT
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• High Court Clarifies Standard Deduction Entitlement u/s 36(1)(iia) of Income Tax Act for Salary Computation.

  Case-Laws - HC : Entitlement to weighed deduction u/s 36(1)(iia) - allowance of standard deduction - the legislature intended to use the phrase “chargeable under the head salaries” for computation of income u/s 36(1)(iia) in the same way as u/s 16- HC
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FEMA

• No License Needed for Defense Sector Parts Manufacturing Unless Listed in Annexures of Relevant Press Note.

  Circulars : No Industrial Licence/Arms Licence is required for the manufacture of any parts or accessories in Defence Sector, unless they are specifically listed in any of the Annexures of the said Press Note.
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Service Tax

• Show Cause Notice Invalid: Audit Objection Settled Before Notice Issued on 28.07.2009; No Further Action Permissible.

  Case-Laws - AT : Validity of show cause notice - As the audit objection raised by the revenue has already been settled by them on 18.05.2007, in that circumstances, on the same audit objection, show cause notice cannot be issued to the appellant on 28.07.2009. - AT
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Case Laws:

• GST

• 2019 (9) TMI 515
  Refund of IGST - Refund on a transaction which is otherwise zero-rated transaction - scope of Section 16 of IGST Act - HELD THAT:- The subject transaction in fact is with effect from 01.07.2017, come under Section 16 of IGST Act and are zero-rated. It is also not disputed that the voluntary or erroneous payment of IGST is required to be refunded to petitioner - The objection pointed out by Sri Sreejith is that the petitioner has already drawn or availed the higher rate of duty drawback and therefore while ordering refund of IGST the petitioner is required to refund the higher rate of duty drawback already availed by the petitioner with interest. The refund of IGST allowed after adjusting the higher rate of duty drawback availed by the petitioner without refunding IGST amount - petition allowed.

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• 2019 (9) TMI 514
  Supply of facility management services like mechanised and manual cleaning, housekeeping, security services etc. to various Central Government and State Government hospitals - exemption from payment of GST is available for such supplies in terms of Notification No 12/2017-CT(Rate) dated 28.06.2017 and WB Govt Gazette Notification-1136-FT dated 28.06.2017, as amended - HELD THAT:-The Applicant has submitted a copy of the work order issued by SSKM Hospital. It refers to dusting, scrubbing, mopping disinfecting the hospital premises, cleaning of toilets etc. The work order clearly mentions that GST @ 18% is applicable on the services. It is a State Government hospital and, therefore, the Applicant s service in terms of the above work order qualifies to be a supply to the Government. The Applicant is supplying cleaning and sweeping service, which is a composite supply having supply of cleaning material ancillary or incidental to the principal supply of cleaning and sweeping service. Whether the service being provided is an activity relatable to a function listed under the Eleventh or the Twelfth Schedule under Art 243 G or 243 W of the Constitution? - HELD THAT:- Security services provided to Government Hospitals and Medical Colleges are not covered under the either lists. Cleaning and sweeping services can be considered as related to the function listed under Sl No. 26 of the Eleventh Schedule, namely Health and sanitation, including hospitals, primary health centres and dispensaries , provided sanitation service , as classified under SAC 99945, includes sweeping and cleaning of places like hospitals etc. As the scope of the functions listed under the Eleventh Schedule is considered with respect to applicability of the Exemption Notification under the GST, the scope of any service should be determined in terms of the Scheme of Classification of the Services referred to in Explanation 3(i) of the Exemption Notification. Sanitation and similar services , classified under SAC 99945, includes sweeping and cleaning, but only with reference cleaning of a road or street. Cleaning of hospital premises is not, therefore, classified under Sanitation or similar service . Thus, the services the Applicant are, therefore, not exempt under Sl No. 3 or 3A of the Exemption Notification.

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• 2019 (9) TMI 513
  Governmental authority or not - managing the procurement of drugs and equipment for the medical colleges and hospitals and construction and maintenance of health facilities - exemption on the consideration received for the management services provided - exemption in terms of Sl.No. 3/3A/4/5 of N/N. 12/2017-CT(Rate) dated 28.06.2017 and WB Govt Gazette Notification-1136-FT dated 28.06.2017, as amended from time to time. HELD THAT:- The Applicant has been set up under Notification No. HF/SPSRC/WBMSC/40/2008/162 dated 17/1 1/2008 of the Department of Health Family Welfare, Government of West Bengal, as a fully owned body for managing the procurement of drugs and equipment for the medical colleges and hospitals and construction and maintenance of health facilities - Section 153(1)(a) of the 1973 Act empowers the Zilla Parishad [Art 243(d) of the Constitution defines a Panchayat as an institution of self-government constituted under Art 243B. Such a Panchayat, according to section 2(15b) of the 1973 Act, includes a Zilla Parishad] to undertake schemes and adopt measures for public health and sanitation, including establishment and maintenance of dispensaries and hospitals. Managing procurement of drugs and equipment for the medical colleges and hospitals and construction and maintenance of health facilities is an activity in relation to establishment and maintenance of hospitals and dispensaries. The Applicant, therefore, is a body established by a State Government Notification, with 100 per cent participation by way of equity and control, to carry out a function entrusted to a Panchayat under Sl No. 23 of the Eleventh Schedule under Article 243 G of the Constitution. It is, therefore, a Governmental Authority as defined under para 2(zf) of the Exemption Notification. The Applicant has not provided any invoice or work order. The description of the activity for which the Applicant raises tax invoice is, therefore, not ascertained. However, the Applicant is eligible for exemption under Sl No. 5 of the Exemption Notification on supply of any service, including composite supplies like works contract service whatever be the proportion of goods, in relation to establishment and maintenance of hospitals and similar health facilities.

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• 2019 (9) TMI 512
  Correction of bona fide error in TRAN-1 - Input Tax Credit - HELD THAT:- It is for the petitioner to approach the appropriate authority viz., Nodal Officer (North), Mahatma Gandhi Road, Nungambakkam, Chennai, and make a representation for redressal of their grievance. Writ Petition is disposed of, only by granting such liberty to the petitioner to approach the said Nodal Officer and make a representation within a period of two weeks from the date of receipt of a copy of this order.

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• 2019 (9) TMI 511
  Contempt petition - Wilful obedience - Re-opening the common portal to enable the petitioner to file Tran-1 Form - HELD THAT:- An affidavit on behalf of the respondents, filed in Court today, is taken on record. A copy of the same is handed over to learned counsel for the petitioner. Along with affidavit, copy of the minutes of meeting/decision dated 27.05.2019 has also been annexed whereby the representation filed by the petitioner has been rejected. No cause of action survives for pursuing the contempt petition Appeal disposed off.

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• 2019 (9) TMI 510
  Illegal detention of a person by the CGST Department, Rohtak - petitioner submits that the petitioner has been allowed to go home but he was kept under detention for two days - HELD THAT:- In view of submissions of learned counsel representing CGST Department that petitioner was called by issuing a notice and thereafter permitted to go home, this petition is disposed of as having been rendered infrucutous leaving the petitioner at liberty to avail other legal remedies regarding submission of learned counsel for petitioner about alleged detention of petitioner. Petition disposed off.

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• 2019 (9) TMI 509
  Cancellation of GST registration without prior notice - revocation of cancellation of GST - HELD THAT:- At the time of hearing today, learned counsel for the petitioner states at the Bar that the present petition has become infructuous as request for revocation of cancellation of GST registration of petitioner firm has been accepted. Petition disposed off as infructuous.

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• 2019 (9) TMI 508
  Deposit of GST in relation to the work executed and completed and the final bill paid - HELD THAT:- the liability as regards the deposit of GST pertaining to the work. - Request for converting the amount to be paid into the installments cannot be accepted in the absence of any provision in the statute. Petition dismissed.

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• Income Tax

• 2019 (9) TMI 506
  Deemed registration under Section 12A - registration under Section 12AA(2) - HELD THAT:- Additional Solicitor General has submitted that the issue as to whether the provisions of Section 12AA of the Income Tax Act, 1961 are directory or mandatory need to be considered. Delay condoned. Issue notice.

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• 2019 (9) TMI 505
  Exemption u/s 11 - employment facilitation as charitable activity u/s 2(15) - application u/s 12AA - The primary object of the Trust is to conduct work in area of research, studies, training, education, health etc. on a non-profit basis, only for charitable purposes - HELD THAT:- SLP dismissed.

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• 2019 (9) TMI 504
  Addition u/s 69A - source of cash deposits - entries made in the cash flow charts were not substantiated by any evidence - contention raised by learned counsel for the appellant that the authorities have not considered the figure of purchase and closing stock as per the VAT return deserves rejection - HELD THAT:- SLP rejected.

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• 2019 (9) TMI 503
  No notice served on the respondent in the appeal filed by the Department against the applicant (who was respondent in the appeal) - HELD THAT:- Taking into consideration the fact that the applicant was not served in the appeal, ends of justice be served in recalling judgment . We do so accordingly. The miscellaneous application is disposed of. Let the appeal be listed for consideration.

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• 2019 (9) TMI 502
  Deduction of interest - allegation that assessee had lent money from borrowed funds to the husband - principles of commercial expediency - diversion of funds - HELD THAT:- No allegation against the assessee of diversion of funds, considering the relationship between the assessee and her husband, who had established the dhall mill and that the assessee is at an advantage in obtaining finished product from her husband s dhall mill and she will be assured of time delivery of the processed dhall and assured of quality processing and obviously at discounted rates. There is no endeavour made by the Tribunal to examine the specific stand of the assessee that the assessee had interest free funds. CIT(A) decided the case against the assessee based on its own personal opinion without any material available on record thus the finding rendered by the CIT(A) is perverse. This perverse finding affirmed by the Tribunal was without any material placed before it to come to a conclusion that the role played by the assessee s husband as a miller is virtually insignificant. Decisions have to be taken based on the return of income filed by the assessee and the documents that may be called for by the Assessing Officer. There is no room for the authority to incorporate their personal opinion while completing the assessment, which precisely was done by the CIT(A) and therefore, has to necessarily held to be perverse and unsustainable. Assessee s husband stood as a guarantor to the assessee for obtaining cash credit facility was not disbelieved. CIT(A) rejects it by stating that the value of the property was not equal to that of the amount borrowed. This is not the concern of the CIT(A), it is for the bank, which extended the loan to be worried about the adequacy of the security offered by the borrower. In any event, the assessee s husband stood as a guarantor for the loan transaction making him jointly and severally liable along with the assessee. - Decided in favour of assessee.

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• 2019 (9) TMI 501
  Denial of an opportunity to cross examination of witness - relief upon the statement of the person, claiming that Cash was received from the assessee, additions were made - non-supply of statements so recorded - unaccounted investment - HELD THAT:- Specific grievance was made about the willingness to cross-examine - The objection taken on behalf of the Respondent needs to be negated. In order to support their contention about the right to cross-examine witness, the leaned Counsel for the Appellant relied upon the Judgment delivered by in case of Andaman Timber Industries V/s Commissioner of C. Ex., KolkataII, Decided [ 2015 (10) TMI 442 - SUPREME COURT] . There was a proceedings relating to the payment of central excise. The Assessee made grievance about denial of an opportunity to cross-examine the buyers. Denial of such an opportunity is a serious flaw rendering the order as a nullity. Hence the Hon ble Supreme Court set-aside the impugned orders. Provisions of Income Tax Act - The investigating team has recorded statement of said Gopal Kondawar on three occasions. They are on 10/4/2013, 31/5/2013 and 7/6/2013. The Appellant Assessee has made grievance about not admitting cash payment by Mr. Gopal Kondawar in first two statements. The Appellant Assessee has insisted on supply of the statement dated 7th June 2013. These statements have been made the foundation by the Income Tax authorities in passing the orders thereby including Rs. 1,50,00,000/in the income of the Assessee. These materials cannot be used against the Assessee without giving them an opportunity to challenge the contents of those statements. That is why an opportunity of cross-examining Mr. Gopal Kondawar needs to be given. Remand - ACIT is the first authority who has conducted that enquiry. Hence, he only can be directed to secure the presence of Mr. Gopal Kondawar for cross-examination by the Assessee. We do not find anywhere any observations by the learned Commissioner of Income Tax and by the learned Appellate Tribunal regarding the grievance made about denial of an opportunity of cross-examination. Failure to give an opinion about this grievance also amounts to refusal of an opportunity to cross-examine the said Gopal Kondwar which is improper. Hence, all the orders needs to be set-aside.

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• 2019 (9) TMI 500
  TDS u/s 195 - payment of Royalty/Fees for technical services - satisfying the condition of make available - DTAA - whether the aforesaid payments for training fees i.e. on account of reimbursement of cost of air tickets travel, imparting training is to be treated as Fees for Technical Services or managerial services as provided in section 9(1)(vii) of the Act? - payment made to entities residents of countries of category III i.e. Singapore, USA, Switzerland and Sweden HELD THAT:- Since DTAA provisions are more beneficial to the entities based in such countries, with which India has tax treaty, but such tax treaty do not have FTS clause, then there is no question of taxability of such receipts under the Income Tax Act, either as business income or other income. In the facts of present case, the assessee has received the services from entities based in different countries and details are enlisted at page 32 of order of CIT(A). The countries falling in category one in the present case are Malaysia, Thailand, Indonesia, UAE and Saudi Arabia. The CIT(A) had relied on three decision while deciding this issue. The assessee while making payments to the entities based in countries falling in category one is thus, not required to deduct tax at source out of payments made to them, since the said amounts received by such entities were not taxable in their hands. Second category of cases i.e. payments to residents of tax jurisdiction with which India has tax treaties and where there is FTS clause, but without make available clause. Then receipts on account of FTS to entities based in such countries get taxed in their hands even in the absence of PE or the fixed base. The list of such countries i.e. category II include China, Denmark, Italy and Germany (i.e. the entities of such countries with whom assessee before us had dealings). Since such receipts are taxable in the hands of recipients, there was obligation on assessee to deduct tax or withhold tax out of such payments. The assessee having not deducted tax at source out of such payments or having not withheld the tax, thus had defaulted and is liable to the demand raised under section 201(1) of the Act and interest charged under section 201(1A) of the Act. The third category of cases are in category III i.e. payments being made to entities resident of tax jurisdiction with whom India has tax treaties; further in such tax treaties, there is a clause of FTS, with condition of make available of any technology. With regard to such entities in countries of category III, the condition of make available is to be fulfilled in order to attract the provisions of clause of FTS. In other words, there has to be transfer of technology by such entities to the recipients of other Contracting States, while providing services to them. With regard to the countries of category III, the question which needs to be satisfied that while providing training, clause of make available of technology was satisfied or not. In the absence of any technology being transferred and where it is case of providing general training or attending seminar, then such receipts are not taxable in the hands of entities based in the source States. Various Courts have decided that the condition of make available as provided in DTAA if does not get satisfied, then such payments to non-resident entities are not liable for tax deduction at source. Authorities below in the present case have not come to any finding that training imparted by associated enterprises to the employees of assessee make available any technology and in the absence of the same, payments made to the entities residents of countries of category III i.e. Singapore, USA, Switzerland and Sweden are not exigible to tax deduction at source. The assessee in such circumstances cannot be held to be in default for not deducting tax out of said payments. Payment made on account of repairs and maintenance - HELD THAT:- CIT(A) has confirmed the order of Assessing Officer in respect of payments to two concerns. The assessee has fairly pointed out that payments made to Tetra Philippines Inc is not taxable as there is no Article in FTS in DTAA and hence, there is no requirement to deduct tax out of such payments. The said concern Tetra Philippines Inc falls in category No.I and hence, we hold that the payments made to such an entity is not exigible to tax deduction at source in line with our deliberations on the issue in paras above. Payments to an entity in China is concerned which falls in category No.II, we hold that the said amount is exigible to tax at source in line with our decision in the paras above in respect of countries in category No.II. TDS on design services to entities in Switzerland and Singapore - Payments made for design services, do not satisfy make available clause, where no technical service had been made available to the assessee, there is no question of same being exigible to tax. The learned Departmental Representative for the Revenue has failed to controvert the findings of CIT(A). The recipients are residents of countries of category III and out of such payments, there is no requirement to deduct tax in the absence of satisfying make available condition. Applicability of provisions of section 206AA - No merit in the grounds of appeal raised by Revenue in this regard as the beneficial provisions of DTAA would override the provisions of Income Tax Act and accordingly, there is no requirement to deduct tax at source as per provisions of section 206AA - See SERUM INSTITUTE OF INDIA LIMITED [ 2015 (6) TMI 26 - ITAT PUNE] confirmed by HC [ 2018 (12) TMI 1341 - BOMBAY HIGH COURT] Applicability of provisions of section 195A - AO grossed up various payments made in accordance with provisions of section 195A of the Act, while calculating the tax payable - HELD THAT:- CIT-A held that there was nothing on record, on the basis of which it could be concluded that the assessee had agreed to bear tax liability of the foreign companies, hence the provisions of section 195A of the Act should not have been applied. The learned Departmental Representative for the Revenue has failed to controvert the same Payments made towards repairs and maintenance and other services - whether tax was deductible? - HELD THAT:- CIT(A) has directed the Assessing Officer to verify the claim of assessee and if the payments were made for material purchase or machinery part charges, then there was no requirement to deduct tax at source and for such non deduction of tax at source, no disallowance can be made. We find no merit in the grounds of appeal raised by Revenue in this regard as the CIT(A) has asked the Assessing Officer to make necessary verification and decide the issue. Payments made for software licenses purchased from other associated enterprise entities - AO and CIT(A) held the assessee in default for non deduction of tax at source on the ground that the said payments were in the realm of royalty - HELD THAT:- We place reliance on earlier decision of Pune Bench of Tribunal in John Deere India Pvt. Ltd. Vs DDIT (International Taxation) [2019 (3) TMI 458 - ITAT PUNE] wherein it was held that no TDS is required to be deducted on purchases of copyrighted software licenses. Accordingly, there was no requirement to deduct any tax out of such payments.

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• 2019 (9) TMI 499
  Validity of Assessment - Proceedings initiated after search - instead of issuing notice u/s 153C, notice was issued u/s 147/148 - Assessment order passed u/s 143(3) - no notice under section 143(2) of the Act has been issued to assessee - alternate for completing the assessment under section 144 - HELD THAT:- Once no notice under section 143(2) of the Act has been issued, then no assessment can be completed under section 143(3) of the Act. Clause (a) to section 144(1) of the Act talks of failure to file any return of income under section 139(1) of the Act or under sub-sections (4) or (5) of the said section. Clause (b) talks of failure to comply with all terms of notice issued under sub-section 142(1) of the Act and clause (c) talks of failure to comply with the terms of notice issued under section 143(2) of the Act. In such scenario, the Assessing Officer is empowered to pass an order to the best of his judgment to determine the total income or loss of assessee for the relevant assessment year. In the facts of present case, where the assessee had failed to file any return of income under any of the provisions of section 139 and had failed even in terms of notice issued under section 142(1) of the Act, then the provisions of section 144 are attracted and the AO has the power to pass an order to the best of his judgment. The third condition of having filed return of income and not complying with notice issued under section 143(2) do not apply to the present facts. In such scenario, we hold that the order passed under section 143(3) r.w.s. 147 of the Act suffers from infirmity and the Act itself provides an alternate for completing the assessment under section 144 Whether the defect in applying the said section is curable under section 292B of the Act or not? - Section 292B of the Act cannot be pressed into action to cure the defect in the assessment made in the present case. Accordingly, we hold that assessment order passed in the present case is both invalid and bad in law. Thus, the additional ground of appeal raised by assessee is allowed.

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• 2019 (9) TMI 498
  Addition in respect of expenses incurred for operating the toll plaza - CIT(A) deleted additions by admitting the fresh evidence - whether the same is contravention of Rule 46A of the I.T. Rules - HELD THAT:- AO has not brought out anything on record to demonstrate that the expenses were not incurred for the purpose of business neither he has brought on record anything for the proposition that the expenses claimed were not supported with bills and vouchers. CIT(A) has allowed relief to the assessee by recording his elaborate findings CIT(A) are quite exhaustive wherein we do not find any infirmity. As regards the arguments of D. R. regarding fresh evidence accepted in violation of Rule 46A of the I.T. Rules, we find that CIT(A) has noted that on perusal of toll collection statement submitted by the assessee, in the last week in the month of March, 2014, there were total amount of toll plaza fee payable and he has also noted that total amount payable as toll plaza fee comes out. These findings are based upon a letter dated 06/12/2016 and this letter was addressed to AO during assessment proceedings. Therefore, the learned CIT(A) has not relied upon any additional evidence while giving relief to the assessee. Appeal filed by the Revenue is dismissed

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• 2019 (9) TMI 497
  Deduction u/s 80IA(4) - whether assessee engaged in the business of operation of CFS is eligible for claiming deduction u/sec. 80IA (4) or not? - whether definition of infrastructural facility as defined u/s.80IA(4) includes a port, airport, inland water way, inland port or navigational channel in the sea but does not include Container Freight Station(CFS)? - HELD THAT:- CIT(A) by following the decision of the coordinate bench of the tribunal in assessee s own case for the A.Y. 2013-14 [ 2018 (1) TMI 2 - ITAT VISAKHAPATNAM] and also case of CIT Vs. Continental Warehousing Corporation [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] as also the judgment of A.L. Logistics Pvt. Ltd. [ 2015 (1) TMI 401 - MADRAS HIGH COURT] correctly directed the Assessing Officer to allow deduction u/sec. 80IA (4) to the assessee. Before us, assessee has relied on the judgment of the Hon ble Supreme Court in the case of Container Corporation of India [ 2018 (5) TMI 359 - SUPREME COURT] wherein inland container depots are inland ports subject to provisions of section 80IA and deduction can be claimed for income earned out of these depots. - Decided in favour of assessee.

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• 2019 (9) TMI 496
  Addition of Bogus Purchases u/s 69C - peak credit theory applicability - HELD THAT:- AO had placed heavy reliance on the seized document of Shri Bhanwarlal Jain relating to the period 1.1.2008 to 31.12.2008 for making addition in the hands of the assessee. But we find from Annexure C to the assessment order which contains the workings of peak credit for purchases, those are transactions of purchases made by the assessee and payments made by the assessee to the disputed parties. Those transactions are not at all reflected in the seized document of Shri Bhanwarlal Jain. Hence the entire allegations of the ld AO vanishes on this count itself as no addition has been made by the AO using the contents of the said seized document for the period 1.1.2008 to 31.12.2008. AO had made addition by considering the peak credit of purchases. The theory of peak credit could be used only when the transactions are carried out outside the books. Entire purchase transactions are duly reflected in the regular books of accounts of the assessee and payments for the same were made by account payee cheques from disclosed sources. Hence the peak credit theory cannot be made applicable and the addition deserves to be deleted on this count. Addition has been made by the AO u/s 69C - The basic principle of section 69C of the Act is that the incurrence of an expenditure is not in dispute whereas the source for such expenditure is in dispute. In the instant case, since the addition is made u/s 69C of the Act, it could be safely concluded that the purchases has been accepted as genuine by the ld AO and only the source is disputed. We find that the source for such purchases have been explained from the regular books of accounts by making payment by account payee cheques. Hence there cannot be any addition u/s 69C of the Act. Hence the addition deserves to be deleted on that count also. Addition made in the hands of assessee for the Asst Year 2009-10 deserves to be deleted for more than one reason as could be evident from above and has been rightly deleted by the CIT-A. Deletion of addition made on account of alleged disputed purchases, correspondingly, the addition made towards commission at 0.1% also requires to be deleted which was rightly deleted by the ld CITA. - Decided in favour of assessee.

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• 2019 (9) TMI 495
  Accrual of income - Addition on account of advance billings - whether the said amount has not accrued as income during the year under consideration? - Appellant prays that the change in the method of accounting adopted by the Appellant since AY 2004-05 is a bonafide change - HELD THAT:- We find that the above issue is decided against the assessee by the order in assessee s own case for AY 2004-05 [ 2015 (11) TMI 995 - ITAT MUMBAI] as held there was tenure of license/product but there was no certainty that in every subsequent year some determinate service had to be provided by it, that there was no determined/committed expenditure which the assessee was required to incur in the future years towards the corresponding share of revenue, that the indeterminate event of providing of updates and services as and when the they were developed which had been in keeping with the industrial norm. The assessee had no right to postpone the revenue. Inspite of adequate opportunitie, the assessee had not filed any facts before the FAA or us, as stated earlier, in that regard. - Decided against assessee. Deduction for royalties - HELD THAT:- As in assessee s own case for AY 2004-05 [ 2015 (11) TMI 995 - ITAT MUMBAI] assessee s contention that revenue on account of advance billing should be spread over for a period of time has been rejected by the AO which has been confirmed by the Tribunal also. Once that is so, then contention of the assessee that royalty which is payable on such advance billing in accordance with the agreement, should also consequently be allowed in this year only. The DRP has acknowledged this fact and has directed that if the assessee finally accepts the assessability of entire billing amount as revenue in the current year, then the assessee would be entitled for 30% deduction on account of royalty. Thus, AO is directed to allow the claim of deduction of royalty in this year in accordance with law Addition on account of alleged un-reconciled entries of Annual Information Report - AO finds that the assessee has not duly accounted for the above sum and offered it to tax whereas the assessee argues that it has been duly accounted for and offered to tax - HELD THAT:- The above factual matter needs verification at the level of the AO for ascertaining the facts. Therefore, we set aside the order of the Ld. CIT(A) on the above issue and restore the matter to the file of the AO to make an order afresh following the above Instruction of CBDT, after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the AO. Thus the 2nd ground of appeal is allowed for statistical purposes. As the matter has been restored to the file of the AO, we are not adverting to the case-laws relied on by the Ld. counsel.

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• 2019 (9) TMI 494
  Commission income qua accommodation entries - HELD THAT:- What should be the rate of commission on amounts provided as accommodation entries is required to be decided following the decision rendered by the coordinate Bench of the Tribunal in case of Dwarka Impex Pvt. Ltd. [ 2019 (5) TMI 20 - ITAT DELHI] AO is directed to determine the rate of commission by adopting the decision of Tarun Goyal Group of Cases. AO is also directed to exclude all intragroup entries in the bank account as per directions of the Tribunal, as discussed in and then compute the commission income @ 0.50%. Since the assessee has not given any segregation of the accommodation entries provided outside the group and accommodation entries pertaining to intra-group transactions, the issue is remanded back to the AO to decide afresh after providing adequate opportunity of being heard to the assessee, in the light of the findings returned herein above. - Appeal filed by the assessee is allowed for statistical purposes

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• 2019 (9) TMI 493
  Business expenditure allowability - Expenditure debited on account of penalty levied by foreign airports for not found in possession of proper or sufficient documents of the passengers on arrival at foreign airports, enabling them to enter in such foreign countries - HELD THAT:- Assesses had not committed any infraction of law but the assessee is required to bear the amount of such penalty/fine levied at foreign airports for certain deficiencies in the records/passports/visa of the passengers carried by the assessee and in accordance with International Air Transportation Laws and/or for commercial expediency and such penalties or fines are borne by the assessee though the assessee itself has not made any infraction of law. At this juncture, a distinction is justified between the case of a deliberate violation of law and one which is innocent and unintended. Case of the assessee for allowance of payment of penalty/fines is on a very strong footing as in the assessee s case the assessee had neither committed any violation of law nor any breach or infraction of the law. As noted earlier the expenses incurred by the assessee on fines/penalties at foreign airport is also in the nature of loss incurred in the carrying on assessee s business and it is incidental to carrying on of such business of International Air transportation of passengers. In the case of Ramchand Shrinarayan Vs. CIT [ 1977 (11) TMI 2 - SUPREME COURT] held that if there is a direct and proximate nexus between the business operations and the Loss and it is incidental to its business operation and doing all that is incidental for profit earning, such losses would be allowable as a business loss u/s.28 of the Act. We noted that on the above mentioned facts in the assessee s case the penalty/fine paid at the foreign airports has a direct and proximate nexus between the business operations and the loss (penalty or fine) and such penalty or fine is incidental to the carrying on of the assessee s business in ordinary course of business and hence it is allowable to the assessee as a business loss also Characterization of income - income derived from interest - income from other sources or business income - HELD THAT:- We noted that this issue is squarely covered in favour of assessee and against the Revenue and respectfully following the view taken in AY.2001-02 by the Hon ble Bombay High Court, we reverse the order of lower authorities and allow this issue of assessee s appeal. Disallowance u/s 14A - proof of exempt income received or receivable- HELD THAT:- As relying on BALLARPUR INDUSTRIES LIMITED [ 2016 (10) TMI 1039 - BOMBAY HIGH COURT] provisions of Section 14A of the Income Tax Act, 1961 would not apply to the facts of this case as no exempt income was received or receivable during the relevant previous year. It is not the case of the Assessing Officer that any actual income was received by the assessee and the same was includible in the total income. In the facts of the case, the Authorities held that since the investments made by the assessee in the sister concerns were not the actual income received by the assessee, they could not have been included in the total income Disallowing the provision made in respect of accounts of Frequent Flyer Programme - HELD THAT:- As decided in own case [ 2016 (4) TMI 1370 - ITAT MUMBAI] there is uncontroverted finding that the liability in respect of FFP miles accrues simultaneously with a passenger undertaking travel on a fare paying ticket, therefore, it cannot be a contingent liability. - decided against revenue Addition made to income in respect to disputed bills - HELD THAT:- Assessee before us now claimed that the authorities have rejected the entire invoice value for overhaul of engine to the extent of Rs. 105.90 Million and settled such invoices towards ferry cost only partly to the extent of Rs. 4.53 Million for the FY.2008-09, relevant to AY.2009-10. It was also explained that on settlement of claim in October, 2008, such amount of Rs. 4.53 Million was accounted in the year 2008-09. When these facts were asked to file in details, assessee as well as the CIT-DR agreed that this matter can be restored back to the file of AO for fresh verification and adjudication. In terms of concession given by both the sides, we restored this issue back to the file of AO, who will consider the issue as per law. This issue is accordingly treated as allowed for statistical purposes. Addition made on account of excess provision for obsolescence or write back the provisions - HELD THAT:- As provisions was never allowed as deduction in earlier years, any amount transferred to the credit of P L Account from such Provisions for Obsolescence could not be added to the income of the appellant and accordingly the Assessing Officer is directed to delete the addition made in respect of Provisions for Obsolescence

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• 2019 (9) TMI 492
  Levy of penalty u/s. 271(1)(c) r.w. s 274 - disallowance of interest expenditure - HELD THAT:-Assessee has filed complete particulars of income before the AO in the return of income and its audited accounts. The assessee has already placed a reliance on the decision in the case of CIT Vs. Reliance Petro-products Ltd [ 2010 (3) TMI 80 - SUPREME COURT] wherein it was held that merely because a claim was not accepted by the Assessing Officer, that cannot itself lead to the levy of penalty. Assessee has filed complete particulars of income in respect of claim of expenditure and it is not the case of non-disclosure. The assessee filed explanation before the AO as well as before the CIT(A). During penalty proceedings the assessee had made investments during the year in shares of Trent Ltd. which is engaged in the business of advertising and the investee company is engaged in the retail sector with a view to building long term business prospects for the group company, Trent Limited. Even the investments in shares were made out of mixed funds as well as borrowed funds. Hence in our view the explanation seems to be bonafide and assessee is not exigible to levy of penalty u/s. 271(1) (c) - Appeal of the assessee is allowed.

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• 2019 (9) TMI 491
  Validity of the notice u/s. 148 - non disclosures of specific charge - non-disallowance u/s. 40A(3) - HELD THAT:- The obligation on the assessee extends to furnishing the relevant, primary facts, and the inference to be drawn therefrom, viz. as to admissibility or otherwise of a specific claim or allowance, is to be by the Revenue authorities - CIT v. Burlop Dealers Ltd. [ 1971 (1) TMI 10 - SUPREME COURT] . The impugned order completely fails to address this specific charge by the assessee. It could also be argued that the relevant account having been furnished on being called for during the original proceedings, the same can only be regarded as having been examined thereat by the assessing authority, who though chose not to make any disallowance u/s. 40A(3). Reference to the said account in the instant proceedings, thus, amounts to a review, a change of opinion, impermissible in law. The argument, valid in principle, would however require the assessee to show that it was show caused qua the impugned disallowance (u/s. 40A(3)), or otherwise queried in its respect, in the original proceedings. And which has not been at any stage. The Revenue has thus not been able to show the assessee s failure to disclose the relevant facts, only which would qualify its action for reopening as valid in law, with, on the contrary, the assessee exhibiting otherwise. - Decided in favour of assessee.

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• 2019 (9) TMI 490
  Eligibility of deduction u/s 80IB(11A) - profit derived from the business of processing preservation and packaging of fruits - HELD THAT:- The intention of the legislature for giving the exemption u/s 80IB(11A) is to promote agro processing industries as is evident from the Finance Ministers speech and also memorandum explaining the amendments to the bill. There is no doubt that oil palm fresh fruit bunches are agricultural products. They may not be edible in their raw or ripe form, but they extract therefore after processing is edible. The language used in the section itself is processing, preservation and packaging of fruits or vegetables. Thus, the legislature was aware of the fact that certain fruits and vegetables would require processing and preservation for their long shelf-life. As long as the end product is also consumable it cannot be denied exemption u/s 80IB(11A). Therefore we are satisfied that the oil palm fruits are fruits u/s 80IB(11A) of the Act. Whether the assessee satisfies all the three conditions of processing, preservation and packaging? - In the case of the assessee before us also, the question involved was whether the extraction of oil from the FFBs of oil palm is processing or not, and the AAR has held similar activity in the case of mango pulp or powder, to be so and hence the principle and ratio of decision of the AAR in the case of Delna Rustum Boyce Inre [ 2009 (10) TMI 23 - AUTHORITY FOR ADVANCE RULINGS] is definitely applicable in other similar cases also and we have to hold that the activities carried on by the assessee for extraction of oil from FFB s of oil palm, will amount to processing u/s 80IB(11A) of the Act. Preservation - As long as the assessee is maintaining the standards and is taking steps to maintain such standards, it can be said that it satisfies the condition of preservation. DR had relied upon the contention of the assessee before the A.O that the crude palm oil requires the least preservation as it is a durable commodity. But this contention of the assessee alone cannot mean that the assessee is not taking any steps for preservation of the oil. It is common knowledge that all items, particularly food items, have an expiry date unless they are preserved in the required conditions. Therefore, we are satisfied that the assessee is also preserving the palm oil extracted from the fresh fruit bunches of oil palm fruits, after the process of pressing and extraction of oil . Packaging - The assessee is preserving and maintaining the palm oil in large containers / tanks. As rightly pointed out by the learned Counsel for the assessee, packaging can be varied and includes the simple boxes to large container/vessel. Since the assessee is involved in large scale operation, it has to store the extracted oil in tanks. Therefore, we are satisfied that all the three processes necessary for claiming deduction u/s 80IB(11A) are satisfied by the assessee. Whether the end product is not a fruit but it is edible oil or kernels and shells which are not consumable goods, and hence it does not satisfy the condition of section 80IB(11A) ? - In the case of Delna Rustum Boyce Inre, the AAR has also held that the end product need not remain in the same form as the raw material. It may be in the form of juice or cut fruits or even oil or powder. As long as the end product is derived from the fruits or vegetables, the assessee is eligible for deduction u/s 80IB(11A) of the Act. In these circumstances, we are satisfied that the oil palm is a fruit and that it undergoes different processes before extraction of oil, and the palm oil is preserved under adjusted temperature and they are packed in large container or tanks and therefore, the assessee is eligible for deduction u/s 80IB(11A) of the Act. The assessee s appeals are accordingly allowed.

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• 2019 (9) TMI 489
  Disallowance of deduction u/s 80IB(11A) - as alleged assessee is not engaged in the business of integrated bulk handling storage transportation of food grains and in fact the assessee is engaged in dehusking of paddy into rice and such this is not qualified for deduction u/s.80IB(11A) - HELD THAT:- Hon ble Madras High Court in the case of M/s Muthuramalingam Modern Rice Mill [ 2019 (3) TMI 1104 - MADRAS HIGH COURT ] answered the question in negative i.e against the Revenue and in favour of the assessee by holding that there is no reason to hold that the activity of dehusking of paddy into rice will not amount to manufacture or production and there is no justification to give a narrower meaning to these terms, therefore, the assessee is entitled for claim of deduction u/s.80IB(11A) of the Act. AO was not correct in disallowing the benefit of Section 80IB(11A) to the assessee and, thus, the CIT(A) was not also correct and justified in confirming the disallowance made by the AO. Sole ground of assessee is allowed and the AO is directed to allow the deduction as claimed by the assessee u/s.80IB(11A) Revision u/s 263 - HELD THAT:- We failed to understand on which basis the CIT held that the assessment order dated 27.12.2016 is erroneous or prejudicial to the interest of revenue without calling and perusing the relevant assessment records an merely on the basis of proposal for revision sent to him by the ITO, Ward-1, Ranchi. From the assessment order dated 27.12.2016 AO has examined the claim of the assessee u/s.80IB and thereafter held that the assessee is entitled for claim of deduction u/s.80IB(11A) hence, it is not a case of no enquiry. CIT is empowered to revise the assessment order where such assessment order is erroneous or prejudicial to the interest of revenue after calling and examining the relevant assessment records and holding that either there is no enquiry or there is insufficient or inadequate enquiry by the AO on a particular issue but no such exercise has been undertaken by the ld. Pr. CIT while passing the impugned order u/s.263 of the Act either - no hesitation to hold that Pr. CIT has proceeded to revise the scrutiny assessment order and directing the AO to decide the issue afresh i.e. for making rowing enquiry which is not permissible u/s.263 of the Act. - Decided in favour of assessee

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• 2019 (9) TMI 488
  Bogus purchases - estimation of GP - CIT-A restricted the addition by estimating the income of the assessee on the basis of the average GP rate of past three years including the current year at 8.66% - HELD THAT:- We note that in case of M/s. Kanchwala Gems vs. JCIT [ 2006 (12) TMI 83 - SUPREME COURT] the income was estimated by taking the GP on the entire sales and not an addition was made to the returned income by making the disallowance of unverifiable purchases. In case of M/s. N.K. Proteins Ltd. vs. DCIT [ 2017 (1) TMI 1090 - SC ORDER] it was a case of addition based on inflated purchases and not the estimation of income by rejecting the books of account. Therefore, those decisions relied upon by the Revenue would not help in the present case when the AO has rejected the books of account of the assessee. Accordingly, following the earlier order of this Tribunal, we do not find any error or illegality in the impugned order of the ld. CIT (A). Appeal of the revenue is dismissed.

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• 2019 (9) TMI 487
  Income from other sources u/s 56(2)(vii)(b) - difference between the stamp value of the property purchased as on the date of registration of sale deed and the actual purchase consideration was liable to be considered as income under this section - HELD THAT:- First proviso to section 56(2)(vii)(b) categorically provides that where the date of agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purpose of this provision. Admittedly, the irrevocable PoA was registered in the year 2008 fixing the price of the property at Rs. 21.00 lac, even though the actual transfer took place in the year 2015. Prescription of the second proviso is admittedly fulfilled in the instant case in as much as the assessee paid a sum of Rs. 1.00 lakh as part payment prior to the date of the Agreement in the year 2008 through banking channel. Mandate of the main part of section 56(2)(vii)(b) does not apply to the facts of the instant case as it is covered by the first and second provisos in as much as the assessee entered into an agreement fixing the amount of consideration for the purchase of immovable property in the year 2008 but the actual registration took place in 2015 and further the assessee paid a part of the consideration by cheque in the year 2008 before the date of the Agreement. It is the stamp value on the date of Agreement in the year 2008, which should be applied for the purpose of the sub-clause and not the stamp value as in the year 2015. Stamp value of the property as on the date of agreement in 2008 was Rs. 23,75,000/- as has been recorded in para no.4.2 of the assessment order. As such stamp value is obviously less than the actual consideration at Rs. 31.00 lakh, I hold that the mandate of the main part of section 56(2)(vii)(b) is not attracted so as to warrant any addition on this score

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• 2019 (9) TMI 486
  Levy of penalty u/s 271AAA - allegation that, assessee had not accounted for this surrendered income in his books of account on the date of search and further the assessee has failed to specify the manner in which such income has been derived and even failed to substantiate such manner - HELD THAT:- It is a case where in the seized documents, the aforesaid transactions were recorded, which when being confronted to the assessee, he explained about the mode and manner of earning of such income, which duly stood substantiated in the shape of the documents found during search action. It is not a case where any unaccounted income in the shape of cash or otherwise, was found, of which the assessee could not explain the source, or to say, specify the mode and manner of the earning. In view of this, as per the provisions of section 271AAA the assessee s case squarely falls within the exceptional clauses of sub-section (2) of section 271AAA. The assessee in the course of search has made a statement and has admitted the undisclosed income and also specified the manner of earning of income, which also stood substantiated from the documents seized and has also paid the due taxes together with interest in respect of the undisclosed income. In view of this, the action of the lower authorities in levying the impugned penalty cannot be held to be justified. - Decided in favour of assessee Penalty in respect of which even no document/evidence of any unaccounted transaction was found - assessee surrendered the aforesaid income to cover up further discrepancies, if any, found in the seized documents - HELD THAT:- Definition of undisclosed income would show that there must be some income found during the course of search action either in the form of money, bullion or jewellery or other items or there must be some transaction or entry either not recorded in the books of account or in the form of expenditure or an entry of any expenditure, etc., which is found to be false. However, we find that in the case of surrender except the seized documents, otherwise nothing was found during the search action which would construe undisclosed income of the assessee as defined under the provisions of section 271AAA - Though the assessee has honored its commitment and has duly offered for taxation the total surrendered income. It is not a case of levy of penalty either in the case of the surrendered amount, the mode and manner of remaining of which has been stood specified and substantiated, as held by the CIT(A), nor in respect of the remaining amount which would otherwise, not fall within the definition of undisclosed income. - Decided in favour of assessee

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• 2019 (9) TMI 485
  Depreciation to assessee trust - whether the assessee is entitled to 100% deduction of the capital expenditure as well as depreciation thereon under the provisions of section 11(1)(a)? - AO disallowed the claim for depreciation on the assets of such Institutions, on the basis that once the capital expenditure to acquire assets is treated as the application of income for charitable purposes; the Institutions had virtually enjoyed a 100% write-off of the cost of assets - HELD THAT:- There remains no doubt that the assessee besides the cost of capital expenditure is also entitled to the depreciation while working out the income of the charitable institution having valid registration under section 12A of the Act. There is an amendment u/s 11(6) which restricts the claim of the assessee for both the benefit/deduction, i.e. capital expenditure as well as depreciation thereon. As such as per the amendment the assessee is entitled to the deduction on account of depreciation in respect of such capital expenditures which were not claimed as 100% deduction u/s 11(1)(a). This amendment is applicable with effect from 1.4.2015 and the year under consideration before us is the assessment year 2013-14. Thus this amendment is not applicable for the year under consideration. No infirmity in the order of the learned CIT-A. Accordingly, we decline to interfere in the order of the learned CIT (A). Hence the ground of appeal of the Revenue is dismissed. Grant of exemptions to the assessee u/s 11(1)(a) treating the activity of the trust as in the interest of charity - HELD THAT:- Issue regarding the activity of the trust is not arising from the order of the authorities below. As such we are of the view the activities carried out by the assessee had not been doubted. Thus it can be inferred that the assessee is engaged in the charitable activity as envisaged under section 2(15). Once the activities are charitable in nature then, the assessee is entitled to a deduction under section 11(1)(a). No infirmity in the direction provided by the learned CIT (A). The learned DR has also not brought anything on record contrary to the finding of the learned CIT (A). Therefore we do not find any reason to interfere in the order of the learned CIT (A). Hence the ground of appeal of the Revenue is dismissed.

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• 2019 (9) TMI 484
  TDS u/s 194J or 194C - arriage fees/Placement fees - whether payments made for use of process are royalty as per Explanation 6 to section 9(1)(vi)? - HELD THAT:- Issue involved in the present appeal is squarely covered by the judgment of M/S. NGC NETWORKS (INDIA) PVT. LTD. [ 2018 (5) TMI 1148 - BOMBAY HIGH COURT] held as the amendment by introduction of Explanation 6 to Sec. 9(1)(vi) took place in the year 2012 with retrospective effect from 1976, therefore, the assessee could not have contemplated the said retrospective amendment at the time he had made the payment after subjecting the same to deduction of tax at source under Sec. 194C. The Hon ble High Court while upholding the view taken by the Tribunal that as the channel placement fees was rightly subjected to deduction of tax at source by the assessee under Sec.194C and not Sec. 194J of the IT Act, therefore, no disallowance of the said expenditure was called for under Sec. 40(a)(i) of the Act in the hands of the assessee As the definition of royalty as envisaged in Explanation to Sec. 40(a)(i) and that in Explanation(vi) to Sec. 40(a)(ia) are similarly placed, therefore, the aforesaid judgment of the Hon ble High Court would be applicable to the case of the present assessee where the disallowance had been made by the A.O under Sec. 40(a)(ia). Apart therefrom, we also find that the issue that channel placement fees is liable for deduction of tax at source under Sec. 194C, had also recently been looked into by a coordinate bench of the Tribunal in the case of ACIT, Mumbai Vs. M/s Star Den Media Services Pvt. Ltd. [ 2018 (6) TMI 688 - ITAT MUMBAI] - Decided in favour of assessee.

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• 2019 (9) TMI 483
  Undisclosed income on the basis of his declaration made under VDIS 1997, which did not eventually materialize - search and seizure action u/s.132 - assessee s brother was also simultaneously subjected to search on the same date - HELD THAT:- In the hands of the assessee s brother also, income in the VDIS 1997 declaration was on account of entries in kaccha cash book, marriage expenses and purchase of ornaments, which is similar to the facts of the instant case. This transpires that the facts and circumstances of the extant case are similar to those of Mr. Prakash Bhikchand Agrawal, in whose case the addition has been set-aside and the matter restored to the file of AO for a fresh decision. In the absence of any distinguishing feature and respectfully following the precedent, we also set-aside the impugned order and remit the matter to the file of the AO for deciding the issue afresh - Appeal allowed for statistical purposes.

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• 2019 (9) TMI 482
  Penalty u/s 271(1)(c) - capital gains earned by the assessee on the sale of property - non-disclosure of the second sale deed - HELD THAT:- We not convinced with the arguments that the assessee inadvertently failed to disclose the second sale deed in the return of income. There is no plausible explanation offered by the assessee in this respect. Had the AO not got the information from Departmental sources, the assessee would have left un-assessed in respect of the second sale deed and thereby evasion of due taxes. So far as the contention that section 50C of the Act is deeming provision, that the penalty should not be levied on the difference of amount of actual receipt of consideration and that has been assessed u/s 50C of the Act, the assessee deserves relief on this issue. There is no evidence on the file that the assessee has received any amount more than that has been mentioned in the sale deed itself. The assessee has to pay extra taxes because of the valuation adopted by the Assessing officer as per the provisions of section 50C of the Act. However, this, in my view, cannot be said to be a case of concealment of particulars of income or furnishing of inaccurate particulars of income. Though as pointed out by the Ld. DR, the assessee to escape the rigour of the penalty, in the revised return filed u/s 148 of the Act has shown the capital gains as equivalent at the collectorate rate and also put a claim of exemption u/s 54F of the Act but could not succeed in this respect - interest of justice will be best served if the penalty is restricted to the extent of non-disclosure of the second sale deed to be calculated @100% of the tax sought to be evaded on the capital gains computed as per the actual sale price mentioned in the sale deed. Appeal of the assessee is treated as partly allowed.

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• 2019 (9) TMI 480
  Reopening of assessment u/s 147 - non deciding the objections or issuing any show cause notice - non passing speaking order on the objections raised by the petitioner - HELD THAT:- When action was initiated u/s 148 the assessee had filed the objections which were duly acknowledged by the portal of the revenue, but without deciding the objections or issuing any show cause notice, AO had passed impugned order and issued a demand notice under Section 156. The stand of the revenue is that those objections never reached the AO. Once the objections were duly uploaded on the portal of the revenue, this argument would not be available to the revenue. Petitioner relied upon the decision of various High Courts and Apex Court in GKN Driveshafts (India) Ltd. vs. ITO [ 2002 (11) TMI 7 - SUPREME COURT] , Garden Finance Ltd. vs. Asstt. Commissioner of Income Tax ( 2003 (10) TMI 17 - GUJARAT HIGH COURT ) and Home Finders Housing Ltd. vs. ITO, Chennai ( 2018 (5) TMI 260 - MADRAS HIGH COURT] ) wherein it was held that Assessing Officer is bound to pass a speaking order on the objections raised by the petitioner, after giving an opportunity of hearing to them. We set aside the order with liberty to the revenue to re-examine the issue after taking into consideration the objections filed by them.

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• 2019 (9) TMI 479
  Entitlement to weighed deduction u/s 36 (1) (iia) - income of employees chargeable under the head salaries before allowance of standard deduction under Section 16 to be considered - HELD THAT:- If you compare the language employed in Section 36(1)(iia) proviso, it uses the expression chargeable under the head salaries while qualifying salary. Section 16 provides for certain deductions to be made to arrive at the salary chargeable under the head salaries . It is quite plain that the legislature intended to use the phrase chargeable under the head salaries for computation of income under Section 36 (1) (iia) in the same way as under Section 16. Therefore, the first question is answered in the negative in favour of the assessee and against the revenue. Depreciation of building machinery plant or furniture sold, discarded etc, in the previous year, not being the year in which it is bought - Loss under Section 32 (1) (iii) of the Act was allowable not in the year in which fixed assets were discarded but only in the year in which they were sold? - HELD THAT:- Words sold and discarded are disjunctive and denote separate dealing with the above items. Therefore, the tribunal made an error of law in coming to the conclusion that there was no evidence to prove that the items claimed to have been discarded and scrapped were actually sold by the assessee. Therefore, this question is also answered in the negative in favour of the assessee and against the revenue. Addition u/s 40A (5) - expenditure on motor cars were provided the senior employees both for official and personal use - HELD THAT:- Expenditure incurred on motor cars for the use of employees for business purposes may be apportioned out of the total expenditure incurred for that purpose and deduction claimed of the apportioned amount in accordance with the section. As relying on FORBES, EWART AND FIGGIS PVT. LIMITED [ 1981 (6) TMI 14 - KERALA HIGH COURT] appellant was entitled to deduction of the amount spent by them for business purpose subject to the ceiling, if any applicable under the said section. Decided in favour of the assessee and against the revenue. Deduction u/s 35B(1) (iv) in respect of commission payable outside India - whether the expenditure claimed was incurred wholly or exclusively on the maintenance outside India of a branch or agency for the promotion of sale of the subject goods, service or facilities? - HELD THAT:- As decided in ARAVINDA PARAMILA WORKS VERSUS COMMISSIONER OF INCOME-TAX [ 1999 (3) TMI 14 - SUPREME COURT] expenditure that is referred to therein has to be incurred on the maintenance outside India of a branch, officer or agency for the promotion of sales outside India of the assessee s goods, services or facilities. Therefore, what is requisite is that the assessee should have maintained the branch, officer or agency outside India - While we think that there is some merit in the observation of the Karnataka High Court that the words branch, officer or agency in the clause draw colour from each other and that the word agency should, therefore, be interpreted in the light of the words branch and office , it is, in any event, very clear that even if the agency is an agency established not by the assessee but by a third party, the agency must be maintained by the assessee. - Decided in favour of assessee. Depreciation on moulds used for manufacture of glass was rightly - @10% OR 30% - HELD THAT:- indings of the tribunal were made on the question of fact, whether the moulds in question were used in glass manufacturing concerns except direct fire glass melting furnaces. The impugned order of the tribunal does not determine whether the appellant was a glass manufacturing concern and/or whether the manufacturing process involved direct fire glass melting in furnaces. This determination of fact was essential to come to a finding whether the appellant was entitled to a higher rate of depreciation of 30% on moulds. The reasons given by the tribunal are inadequate. More analysis of the facts and reasons were required. This is a kind of perversity. Therefore, the question is also answered in favour of the assessee and against the revenue.

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• 2019 (9) TMI 476
  Reopening of assessment u/s 147 - invoking statutory remedy available - HELD THAT:- We are not inclined to entertain the present writ petition insofar as the challenge to the order dated 18.12.2018 is concerned. The petitioner has already invoked the statutory remedy available to it by preferring its appeal against the assessment order dated 27.12.2018 before the CIT (A), and it shall be open to the petitioner to assail the issuance of notice u/s 148; the reasons for re-opening furnished by the AO; as well as the order dated 18.12.2018 disposing of the petitioner s objections to the re-opening of the objections u/s 148. Insofar as the petitioner s prayer that the respondent Department should lay down binding guidelines for proper examination of tax evasion complaints by field officers, prior to taking action on such complaints is concerned, in our view, the decision rendered in Scan Holding (P) Ltd. [ 2018 (1) TMI 942 - DELHI HIGH COURT ] lays down sufficient guidelines and the said decision is binding on all the Revenue Authorities. In respect of the grievance of the petitioner, that the order dated 18.12.2018 is contemptuous, since it has allegedly been passed in breach in Scan Holding (P) Ltd. (supra), it shall be open to the petitioner, if he is so advised, to take appropriate proceedings in that respect independently.

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• 2019 (9) TMI 473
  TP Adjustment - determining 0.5% p.a. as arm s length corporate guarantee fee - HELD THAT:- We find that the impugned order has allowed the Respondent-Assessee s appeal while holding that the rate of 3% taken as ALP for the fee to grant corporate guarantee to its Associated Enterprises, is not appropriate. This as on identical facts, this Court in the case of CIT v/s. Everest Kento Cylinders Ltd. [ 2015 (5) TMI 395 - BOMBAY HIGH COURT] held that corporate guarantee, cannot be compared with the guarantee provided by the commercial banks. In the above view, this Court held that the adoption of 0.50% as ALP for the fee for grant of corporate guarantee, would be the appropriate ALP. Appeal admitted on the substantial question of law at (a) - Whether on the facts and in the circumstance of the case and in law, the Tribunal erred in law in deleting, in principle, transfer pricing adjustment made by the Assessing Officer (AO)/ Transfer Pricing Officer (TPO) in respect of expenditure incurred on Advertising, Marketing and Promotion Expenses ( AMP Expenses ) ?

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• 2019 (9) TMI 471
  Exemption u/s 11 - Registration as a Charitable Trust u/s 12A - charitable activity u/s 2(15) - to convert plays into episodes on T.V. - HELD THAT:- Commissioner has wholly misread the objects. Clause (e) is of the objects is to create a culture among the elite class of the society for considering work of art an asset than can be passed on to the next generation with pride and prestige. Immediately, following clause (f) which has not been fully reproduced by the Commissioner in his order is to write through or with the help of literary persons, of different aptitudes or classes, plays in art and culture and other languages on different topics, to translate plays written different languages into other languages, or to convert plays into drams in to short plays or episodes or T.V. or radio plays. The Commissioner, thus, picked a portion of this clause in isolation to argue that the same was not charitable. - Decided against revenue

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• 2019 (9) TMI 467
  Reopening of assessment u/s 147 - Revision u/s 263 - no notice u/s 143(2) was issued - HELD THAT:- Where the assessment order forming the basis of proceedings under section 263 are themselves invalid, the order passed u/s 263 cannot survive and it is also a nullity. No decision to the contrary has been cited. Since the assessment order in the present case was void ab initio for want of issuance of notice under section 143(2) the return filed by the assessee having been accepted, the revisional order passed on the said assessment order is also a nullity. We hold accordingly and the impugned order passed under section 263 of the Act is set aside and cancelled. As such, nothing further survives for adjudication.

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• 2019 (9) TMI 460
  Addition on un-vouched expenses and expenses of personal in nature - HELD THAT:- Assessee has already paid the relevant taxes on the amount under consideration and therefore, double addition cannot be made and the assessee cannot be subjected to double taxation. We realized that the said addition has already been made by the AO while framing the assessment order dated 04.12.2009 u/s 143(2). Though the assessee did not disclose the said addition in the return filed u/s 153A of the Act, however, it is a fact that the assessee has already paid the taxes on the said addition, which is not refuted by the Revenue Department, hence the instant addition of Rs. 1,06,000/- is not warranted because if allowed, then the same would amount to double taxation hence, we are inclined to delete the same, consequently, the same stands deleted. Addition of sum alleged to have been paid to Sh Sardool Sikander, a singer pursuant to an agreement - rejecting the assessee s contention that the same had been cancelled - re-assessment proceedings 147 have been initiated on dated 26.03.2015 against the singer who made the agreement with the assessee - HELD THAT:- CIT(A) in the instant case though have taken into consideration, the conclusion drawn by the said AO in the assessment proceedings initiated against the singer u/s 147 of the Act, however observed that the Assessing Officer has passed a cryptic one line order dropping proceedings u/s 147/148 without in any manner confirming that Sr. Sardul Sikander (singer) was never paid any money by him. However, as it reflects from the note of the said assessment order wherein the Assessing Officer while dropping the proceedings specifically noted about receiving of the part payment of Rs. 2,00,000/- only during the assessment year relevant to the instant case - the agreement in question was never materialized fully and consideration amount was not paid in full, due to the reason that the said singer did not record the solo music album which resulted into verbal cancellation of the agreement in question, hence, the addition made and sustained by the authority below is liable to be deleted, therefore we do not have any hesitation to delete the same.

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• 2019 (9) TMI 459
  Exemption u/s 11 - application filed u/s 12AA denied - charitable activity u/s 2(15) - assessee society is at nascent stage - HELD THAT:- Where the assessee society is at nascent stage then it cannot be expected that the society must do some charitable work before seeking grant of registration u/s 12AA of the Act and consequently consideration of genuineness of the activities by the Ld. CIT does not arise. In the instant case the Ld. CIT(E) has that no charitable activity has been conducted by the applicant society since its inception except purchasing land. We have given our thoughtful consideration to this reason of rejection. Though the assessee society though has not started construction of its hospital yet but it is a case that the assessee society has been formed only on 19.08.2016 and has already purchased the land and is in the process of constructing hospital for which site plan has already been prepared and placed before the CIE(E) as well as before us for perusal which further strengthen the contention of the assessee that the purchase of land for construction of Hospital and starting process for construction of Hospital is certainly in pursuance to the aims and objections of the society and sought registration u/s 12AA Thus the assessee society is at nascent stage but even otherwise carried out small charitable activities such as providing medical aid and Langer to the needy people during the F.Y. 2017-18, therefore, the observation of the CIT(E) that the applicant society did not conduct any charitable activity since its inception, is not sustainable.- Decided in favour of assessee

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• 2019 (9) TMI 458
  Capital gain on sale of land - LTCG OR STCG - Period of holding - delay in non-registration of the sale deed and possession of the property - HELD THAT:- Assessee in the instant case has fulfilled all the conditions specified in the agreement but the seller failed to do so for the reasons best known to him. Accordingly, we conclude that the delay in non-registration of the sale deed and possession of the property has occurred for the reasons beyond the control of the assessee i.e. due to default of the seller of the property. The law of impossibility of performance does not necessarily require absolute impossibility, but also encompass the concept of severe impracticability. In our humble opinion, the doctrine of impossibility of performance applies in this case. Due to uncontrollable circumstances, the performance of the obligation as specified under the agreement became impossible to perform within the time for the assessee. The assessee cannot be penalized for the delay in the registration of the property in the given facts and circumstances. Hence the assessee is entitled to reckon the period of holding from the date of the registration of the agreement i.e. 15th February 2006. Execution of the sale deed in pursuance to the order of the court would relate back to the original agreement to sale as discussed above. Hence the assessee is entitled for the claim of index cost of acquisition being the holding period more than 36 months. Therefore the ground of appeal of the assessee is allowed. Denial of deduction of cost of improvement - admission of additional ground - HELD THAT:- Admittedly, the issue raised by the assessee in the additional ground of appeal relates to the factual dispute which was discussed in the assessment order. But the impugned issue was agitated by the assessee before the authorities below. As such the authorities below did not entertain the claim of the assessee on the reasoning that the assessee failed to furnish the supporting documents. This fact can be verified from the order of the authorities below. Therefore we are of the view that the assessee being aggrieved is entitled to raise the additional ground in the instant case. Accordingly, we are inclined to admit the additional ground of appeal raised by the assessee. Claim of the assessee was rejected by the authorities below in view of the fact that the supporting documents were not furnished. Therefore, in the interest of justice and fair play, we are inclined to refer the matter to the file of the AO for fresh adjudication as per the provisions of law.

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• 2019 (9) TMI 457
  Addition u/s 68 - unexplained Cash Credits - assessee s return was picked up for scrutiny under CASS - Ld. AR offered to demonstrate this claim by addressing the vouchers of any specific day on a test check basis stating that he would be able to show that 35% of the sum total of the said date has been reflected in the books - HELD THAT:- The impugned order is set aside back to the file of the AO with the direction to verify the stated claim of the assessee namely that the sums reflected by her as her income of a specific day is the 35% of the sum total of the receipts of the vouchers of the specific date. It is directed that in case the assessee succeeds in demonstrating her claim, the addition is to be deleted. However in case after carrying out the said verification, the claim is found to be not acceptable, it is directed that the AO necessarily shall confront the deficiencies noticed to the assessee and after giving the assessee a reasonable opportunity of being heard in the spirit of the suggestions made hereinabove shall then pass a speaking order in accordance with law.

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• 2019 (9) TMI 456
  Addition towards concealed Gross Profit in Gold and Silver - method of accounting - addition on account of alleged suppression of value of closing stock - AO had proceeded to estimate the closing stock by adopting average weighted method as against the LIFO method adopted by the assessee - HELD THAT:- Assessing Officer had not pointed out any defects in the method of accounting followed by the assessee nor disputed the quantity of purchases and sales. The Assessing Officer only estimated the gross profit by adopting weighted average cost method of the stock only because the profits shown or the value of the closing stock is less. As a part of exercise to arrive at the value of the closing stock, assessee can adopt any of the following method. (i) LIFO (ii) FIFO and (iii) Weighted average cost method. It is normal practice in the business of trading in jewellery to follow LIFO method wherein last bought items were sold first, which results in the value of goods lying closing the stock was shown much less than the prevailing market value. This would enable the assessee to keep accumulating the old jewellery and enable the assessee not to pay tax on appreciated value of the gold , which is permissible under law. Having regard to the ratio decision in the case of United Commercial Bank [ 1999 (9) TMI 4 - SUPREME COURT] AO is bound to accept this method of accounting preferred by the assessee and he cannot impose another method on the assessee, in the absence of any defects in the method of accounting followed by the assessee. Addition made by the Assessing Officer cannot be sustained in the eyes of law, viewed from any angle - Decided in favour of assessee

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• 2019 (9) TMI 455
  Reopening of assessment - interest receipts addition - method of accounting - amount actually paid during the year towards interest paid outstanding were considered and excess of interest credited - HELD THAT:- Addition made on the ground that assessee followed cash system in respect of interest receipts, whereas for payments, followed mercantile system of accounting. The case of the assessee is that the payees themselves requested the assessee to retain the interest payments, therefore he followed mercantile system of accounting. The assessee has not given satisfactory explanation before the CIT(A), therefore CIT(A) confirmed the order of the AO. Even before us, assessee has not given any explanation why he is following two different methods for receipts and payments. We have gone through the order of the CIT(A) and find no error in it. - Decided against assessee

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• Customs

• 2019 (9) TMI 478
  Valuation of imported goods - rejection of declared value - alleged forgery of market enquiry - HELD THAT:- There is some element of truth in the contentions of the petitioners that the Market Inquiry Report dated 31.05.2012 (P-2) is possibly forged, however, we do not find it appropriate to decide the issue while exercising writ jurisdiction under Article 226 of the Constitution. Further, the Tribunal consisting of two members (Member Judicial and Member Technical) would be quite competent to deal with all the issues raised by the petitioners for proper adjudication. It is also conceded that at present the Tribunal is available at Chandigarh, therefore, there seems to be no difficulty for the petitioners to approach the Tribunal. The petitioners are relegated to file their appeals before the CESTAT, Chandigarh and if the appeals are filed within one month the date of receipt of certified copy of this Order, the learned Tribunal shall preferably within next six months decide the appeals in accordance with law without going into the question of limitation - petition disposed off.

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• Corporate Laws

• 2019 (9) TMI 465
  Restoration of name of the company in the Register of Registrar of Companies - failure to apply for the status of a dormant company - HELD THAT:-It is a matter of record that the factum of fraudulent activities of one of the Directors of the Company involving theft of machineries and raw materials to the extent of Rs. 2 Crores is taken note of by the Tribunal in the impugned order. In the given circumstances, it would be unjust to strike off the name of Company from the Register of Companies merely because it failed to apply for seeking of a Dormant Status. The twin grounds projected at the hearing constitute a valid and just ground for restoring the Company on the Register of Companies - restoration of the name of the Company on the Register of Companies is allowed subject to the Appellants complying with all the statutory requirements for the defaulting period and paying off the fee including penalties leviable thereon warranted under law as determined by the Registrar of Companies, NCT of Delhi & Haryana, within one month - appeal allowed.

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• Insolvency & Bankruptcy

• 2019 (9) TMI 468
  Maintainability of petition - initiation of Corporate Insolvency Resolution Process - default in repayment of debt - Insolvency and Bankruptcy Code, 2016 - HELD THAT:- There is no dispute with regard to the fact that the Corporate Debtor had taken credit facilities from UCO Bank on 19.01.2005, 22.02.2008, 31.03.2009, 06.11.2009 and 18th May, 2012. There is no dispute regarding the fact that Corporate Debtor had secured the credit facilities taken by equitable mortgage of immovable property and by executing other securities. The filing of proceedings before DRT in 2014 and invoking of Section 13(2) of SARFAESI in 2016 are also not disputed. Amount more than Rs. 1 Lakh is in default, is apparent from record. The proceeding in DRT is still pending. It is clear that the question of limitation has to be looked into from the angle whether the debt is payable in law or in fact. Although the proceeding under IBC is an Application, question for consideration is whether the debt is payable in law. The yardstick is to see whether there is continuous cause of action for the debt claimed. The limitation for enforcing payment of money secured by a mortgage or otherwise charged by the immovable property is twelve years at the time when money sued for becomes due. Thus for 12 years after becoming due, the debt would be payable in law. In the present matter, the sanction letters are between 19th January, 2005 to 18th May, 2012 and there were Master Restructuring Agreements executed in 2012. Apart from proceeding filed in DRT in May, 2014, which is pending, the loan was secured by equitable mortgage and as such, it cannot be said that the debt was barred by limitation, when Section 7 Application was filed on 07.08.2018. There is no substance in the arguments raised with regard to limitation. As such, there is no substance in the Appeal. Whether Corporate Debtor is MSME? - HELD THAT:- The question was raised only at the time of arguments and the Financial Creditor is raising dispute on the basis that the Application for status of MSME was sought only after the CIRP process started. We need not decide this issue at present as we are on the stage of admission of proceedings under Section 7. Whether or not the Corporate Debtor can take benefit of Section 29A of IBC would have to be considered at the appropriate stage. Appeal dismissed.

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• 2019 (9) TMI 454
  Condonation of delay - Section 61 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Considering the proviso of sub-section (2) of Section 61, we have authority to condone the delay, if there is sufficient cause only to the extent of fifteen days. Apparently, the present Appeal is hopelessly time barred and we have no jurisdiction to entertain the same. The Application for condonation of delay is rejected.

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• 2019 (9) TMI 453
  Dissolution of the Corporate Person - Section 59 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Petition is filed by the Liquidator under Section 59 of the IB Code, 2016. This Adjudicating Authority has to see whether the liquidator has complied with all the provisions of Section 59 of the IB Code, 2016 read with Regulation 3 of the Regulations before initiating voluntary liquidation of the company. It is on record that the board of directors have passed necessary resolution on 11.12.2017 to liquidate the company voluntarily and the directors have also executed the Declaration of Solvency dated 16.11.2017 by way of an affidavit in terms of provisions of Section 59(3)(a) of the IB Code, 2016 - The Company has issued notice to all the shareholders and an Extraordinary General Meeting was also held on 11.12.2017 in which the approval for liquidating the company was also given. The Company has also filed MGT 14 informing the special resolution passed by the members to the ROC. The voluntary liquidator has complied with the requirement of the provisions of section 59 of the IB Code, 2016 and filed this Petition under section 59(7) of the IB Code, 2016 to dissolve the Petitioner/Corporate Person viz., Cognistreamer Consulting India Private Limited. Petition disposed off.

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• Service Tax

• 2019 (9) TMI 469
  Recall of an order - rectification of mistake - non-speaking order - case of appellant is that the conclusion of this Bench that the appellant had rendered other than legal services is an apparent mistake - HELD THAT:- There is no mention nor discussion as to the applicability or otherwise of various decisions relied on by the appellant in the impugned final order - There is no dispute that non-consideration of a judgment of the jurisdictional High Court or Supreme Court is itself a mistake/error on the face of the very order which could be rectified. Apparently, there is no discussion also on various documents like invoices etc., relied on by the applicant and furnished in the paper compilation, suffice it to say that non-consideration of the same amounts to passing a non-speaking order. The impugned final order is recalled and the Registry is directed to relist the appeal for fresh hearing in due course - application allowed.

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• 2019 (9) TMI 464
  Validity of show cause notice - Audit objections were already settled - Erection Commissioning and Installation Service - availment of abatement on job-work - benefit of N/N. 19/2003 dated 21.08.2003 as amended and N/N. 1/2006-ST dated 01.03.2006 - the objection was raised on the ground that the appellant has not sold any goods and material while providing services to the appellant, but, have received only the amount on job work done by them vide audit objection dated 17.01.2007. HELD THAT:- As the audit objection raised by the revenue has already been settled by them on 18.05.2007, in that circumstances, on the same audit objection, show cause notice cannot be issued to the appellant on 28.07.2009. Therefore, the whole of the demand on the basis of said objection is not sustainable and is also time barred. Benefit of N/N. 19/2003 dated 21.08.2003 as amended and N/N. 1/2006-ST dated 01.03.2006 - HELD THAT:- As per the agreement between the appellant M/s Steel Strips Wheels Ltd. dated 02.08.2001 on basis of which audit objection was raised have been examined and as per the said agreement the appellant was required to provide material while providing services, in that circumstances, the appellant has rightly availed the benefit of N/N. 19/2003 dated 21.08.2003 as amended and N/N. 1/2006-ST dated 01.03.2006. In that circumstances, the demand of service tax is not sustainable against the appellant. Demand alongwith penalty set aside - appeal allowed - decided in favor of appellant.

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• 2019 (9) TMI 463
  Commercial or Industrial Short payment of service tax - Construction Services - Work Contract Services - demand of differential service tax - case of appellant is that they have provided service alongwith material and have paid VAT thereon - HELD THAT:- As it is a fact on record that the appellant is paying VAT on the works contract amount, in that circumstances, the appellant has rightly paid service tax @2% of the value of works contract. Thus, the appellant is not required to pay further service tax on their activity and whatever service tax has been paid by the appellant is the correct payment of service tax payable by the appellant. Demand do not sustain - appeal allowed - decided in favor of appellant.

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• 2019 (9) TMI 462
  Classification of services - health services or support services of business or commerce? - revenue sharing basis - agreement with various doctors/consultants on revenue sharing basis whereby a part of the doctor s/consultants fee is retained by them in lieu of providing administrative support to them - HELD THAT:- The issue has been settled by this Tribunal in the case of M/S SIR GANGA RAM HOSPITAL, BOMBAY HOSPITAL & MEDICAL RESEARCH CENTRE, APPOLLO HOSPITALS, M/S MAX HEALTH CARE INSTITUTE LTD VERSUS CCE DELHI-I, CCE&ST INDORE, CCE&ST RAIPUR, CST NEW DELHI AND CST DELHI VERSUS M/S INDRAPRASTHA MEDICAL CORPORATION LTD [2017 (12) TMI 509 - CESTAT NEW DELHI] where it was held that the service provided by the respondent hospital would merit classification under Health Care Services extended to the patients. The appellant had not provided any business support service to the consultants/doctors or patient, therefore, no service tax is payable by appellant under the category of ‘Business Support Service’ - appeal allowed - decided in favor of appellant.

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• Central Excise

• 2019 (9) TMI 477
  Permission for withdrawal of appeal - monetary amount involved in the appeal - Condonation of delay of 1475 days in filing appeal - Section 5 of the Limitation Act - HELD THAT:- 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. 62, 30, 807/- is to be recovered, which is below the monetary limit of Rs. 1 Crore. In view of the said instructions dated 22.8.2019 learned counsel for the appellant prays for withdrawal of the instant appeal, however the question of law raised would remain open. Appeal dismissed as withdrawn.

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• 2019 (9) TMI 474
  Maintainability of appeal - availability of alternative remedy - Process amounting to manufacture - excisability - printing of Signages (Sign Boards), Printed Digital Flex, Pylon Signs, Glow Signs etc., and supplying the same to various customers, like M/s.Reliance Retail, M/s.Arvind Styles, M/s.3M India etc. - demand of excise duty - HELD THAT:- We are not inclined to entertain this Writ Appeal, as we are of the opinion that the learned Single Judge was justified in relegating the appellant to the alternative remedy of the statutory appeal, provided under the law. No exceptional circumstances are found to allow such issues to be raised in Writ jurisdiction. Of course, the appellant is free to raise all the questions, including the question of lack of territorial jurisdiction, before the Appellate Authority, who is expected to decide all the questions and objections, raised by the appellant. Also, this Writ Appeal is filed against the order of the learned Single Judge, dated 09.11.2018, as belatedly as on 9th June, 2019, after a gap of seven months. Appeal dismissed.

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• 2019 (9) TMI 472
  Evasion of Central Excise Duty - guilty of the offence set out under Section 9(1) of the Central Excise Act - special and adequate reasons within the meaning of proviso to Section 9 of the Act or not - HELD THAT:- Section 9 of the Central Excise Act, 1944, sets out the offences and penalties. The respondent, in this case, had admitted and they were also found guilty of the offence set out under Section 9(1) of the Central Excise Act. Proviso to Section 9(1) of the Central Excise Act, 1944, prescribes a minimum term of six months imprisonment. Of-course, if there are special and adequate reasons, it is open to the trial Court to sentence the accused for a term of less than six months. The learned Special Public Prosecutor appearing for the Department would contend that the reasons assigned by the Court below cannot be called as special and adequate reasons within the meaning of proviso to Section 9 of the Act. I am in substantial agreement with the submission of the learned Special Public Prosecutor. But then, the question that arise for consideration is whether I should still interfere in the matter. As rightly pointed out by the learned counsel appearing for the respondents in Criminal Appeal (MD)No.307 of 2008, the cause of action dates back to the year 1983-1987. In other cases, the events date back to the year 1999 to 2001. Thus, it cannot be in dispute that there has been a very substantial lapse of time. It is not in dispute that all the accused are certainly in their late 70 s - Though the age of the accused is an irrelevant factor, this Court cannot lose sight of the fact that they are all suffering from ailments. Medical grounds can certainly be taken note of by this Court. It is seen that even before the Court below, the accused have filed medical certificates to establish their medical condition. R2-D.D.Jayaraman is directed to pay a further sum of Rs. 50,000/- as fine to the credit of C.C.No.3 of 2005 on the file of the Chief Judicial Magistrate, Madurai, within a period of twelve weeks from the date of receipt of a copy of this order - Upon such deposit, the amount now directed to be paid will be disbursed to the complainant. Criminal appeal allowed in part.

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• 2019 (9) TMI 470
  CENVAT Credit - input services - Outward Transportation of Goods (GTA services) - period May 2016 to November 2016 and December 2016 to June 2017 - HELD THAT:- The Ld.Consultant has argued that the sale is on F.O.R. Destination basis, however from the records placed before me, I am not able to find sufficient evidence to establish this contention - It is necessary to establish place of removal in the present case. The adjudicating authority is directed to verify and determine the place of removal after appreciating the facts as well as the documents produced by the appellant - matter is therefore remanded to the adjudicating authority for de novo consideration of the issue. Appeal allowed by way of remand.

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• 2019 (9) TMI 466
  CENVAT Credit - input services - freight charges for outward transportation of goods - HELD THAT:- It is clear that the sale is on F.O.R. basis. The documents show that the sale is on F.O.B. destination/free house delivery. The appellant was under an obligation to deliver the goods at the buyer’s premises. They have also included the freight charges in the assessable value while discharging the excise duty. This issue, as to how to determine the place of removal, when the sale is on F.O.R. basis, as has been dealt in the case of COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [2015 (4) TMI 857 - SUPREME COURT]. The department has also clarified vide its Circular dated 08.06.2018 that when the sale is on F.O.R. basis, the freight charges ought to be included in the assessable value and the place of removal would be buyer’s premises. The documents in the present case as well as the facts reveal that the place of removal is the buyer’s premises - the disallowance of credit is unjustified. Appeal allowed - decided in favor of appellant.

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• 2019 (9) TMI 461
  CENVAT Credit - input services - outward freight up to the place of buyer - period October, 2010 to March, 2014 - amendment in the definition of input service - HELD THAT:- Apparently and admittedly, the cenvat credit has been availed on the service tax paid for the services as that of transportation which are used beyond the place of removal. Hon ble Apex Court in Ultra Tech Cement [ 2018 (2) TMI 117 - SUPREME COURT ] has clarified that the word up to signifies the terminating point, putting an end to the transport journey - Prior the amendment in the definition of input service in the year 2008, the word from instead of the word up to was used, which used to include the services even beyond the place of removal. That situation stands extinct since the amendment which came into effect from 01.03.2008. The amount paid on the freight for outward transportation of goods from the place of removal do not anymore qualify to be called as input service. Accordingly, the amount in question is not eligible to be availed for credit in view of Rule 3(1) of CCR, 2004. Credit cannot be allowed - appeal dismissed- decided against appellant-assessee.

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• CST, VAT & Sales Tax

• 2019 (9) TMI 507
  Grant of Luxury Tax exemption - period 1 April 2017 to 31 March 2027 - HELD THAT:- Learned Counsel appearing for the State, seeks twelve weeks time to enable the State Government to take a view on the recommendations of High Power Committee. We expect the State Government would take a decision within twelve weeks on the recommendations of High Power Committee and if accepted also decide, whether to extend the benefit as suggested by the High Power Committee, across the board to all similarly situated parties. This would bring about certainty and help in equal application of the decision on all similarly situated parties. Adjourned to 22 November 2019.

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• 2019 (9) TMI 475
  Validity of assessment order - branch transfers - inter-state transfer or not - Section 29 (2) of Punjab Value Added Tax Act, 2005/Central Sales Tax Act, 1956 - HELD THAT:- Concededly, against said orders dated 20.11.2017 (Annexure-P-7 and Annexure-P-8), appeal under Section 18A of the Central Sales Tax Act, 1956 was maintainable before the Punjab Value Added Tax Tribunal - Admittedly, the appeal stood filed before the Tribunal. However, the petitioner-Company was constrained to file present writ petition as Tribunal was not functioning at the relevant time due to absence of the Chairperson. The petitioner Company would be free to pursue its appeal already filed before Tribunal and parallel proceedings by way of present writ petition would thus not be maintainable.

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• Indian Laws

• 2019 (9) TMI 481
  Dishonor of cheque - failure to disclose the material fact related to inter-corporate loan - cheating under Section 420 of IPC - Petitioner being director of the company - HELD THAT:- The petitioner alongwith R.C. Bagrodia and B.K. Ametha represented Accused Company and approached the complainant in June 1996 at Complainant s Registered Office in New Delhi and requested the complainant for inter-corporate deposit of Rs. 25 Lakhs and did not disclose the fact that the Accused Company has already undergone into winding up proceedings. However, they misrepresented the fact that the Accused Company is financially sound and the post dated cheque issued to the Complainant in lieu of the Loan amount will be honoured in the due course. The contention of the Ld. Senior Counsel on behalf of the Petitioner that at the relevant point of time, the petitioner was neither a Director nor held a responsible position in the accused company for conducting day to day affairs of the accused company loses its significance as the petitioner was in fact President of the Accused Company and had written the aforesaid letter to the Complainant just 4 days after the alleged meeting happened. The Court below after going through evidence supported by direct evidence of CW1 took cognizance of offence under Section 420/34 IPC. This Court find no ground to interfere with Summoning Order - Petition dismissed.

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