Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 13, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
Articles
News
Notifications
Customs
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43/2021 - dated
10-9-2021
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Cus
Seeks to rescind the notification No. 34/2021- Customs dated 29.06.2021.
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42/2021 - dated
10-9-2021
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Cus
Seeks to amend the notification No. 50/2021-Customs dated 30.06.2017 and notification No. dated 11/2021 dated 01.02.2021 in order to reduce and rationalise the import duties on Palm, Sunflower and Soya-bean oils .
FEMA
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FEMA 23(R)/(5)/2021-RB - dated
8-9-2021
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FEMA
Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2021.
GST - States
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952–F.T. - dated
6-9-2021
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West Bengal SGST
Corrigendum to notification No. 633-F.T. dated 14.06.2021.
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951–F.T. - dated
6-9-2021
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West Bengal SGST
Seeks to amend Rule 80 of the WBGST Rules, 2017 and notify Form GSTR-9 and GSTR-9C for FY 2020-21. Rule 80 provides for exemption from GSTR-9C to taxpayers having annual aggregate turnover upto ₹ 5 crores.
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950–F.T. - dated
6-9-2021
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West Bengal SGST
Seeks to notify sub-sections (3) and (4) of section 3 of the West Bengal Finance Act, 2021 w.e.f. 01.08.2021. (The provisions amended are in relation to Annual return, and reconciliation statement.)
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949–F.T. - dated
6-9-2021
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West Bengal SGST
Seeks to waive penalty payable for non-compliance of provisions of Notification No. 442-F.T., dated 3rd April 2020 for the period from 01.12.2020 to 30.09.2021
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06/2021–C.T./GST - dated
6-9-2021
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West Bengal SGST
Seeks to exempt taxpayers having AATO upto ₹ 2 crores from the requirement of furnishing annual return for FY 2020-21.
Income Tax
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108/2021 - dated
10-9-2021
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IT
Central Government specifies that, Air India Limited shall not be considered as ‘seller’ for the purposes of sub-section (1H) of section 206C of the IT Act 1961
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107/2021 - dated
10-9-2021
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IT
Central Government specifies that Air India Assets Holding Limited shall not be considered as ‘buyer’ for the purpose of sub-section (1) of section 194Q of the IT Act 1961
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106/2021 - dated
10-9-2021
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IT
Central Government specifies that no deduction of tax shall be made under section 194-IA of the IT Act 1961 on any payment made to the Air India Limited
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105/2021 - dated
10-9-2021
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IT
Income-tax (28th Amendment) Rules, 2021. - Deemed income / Gift - Section 56(2)(x) - not applicable to any movable property, being equity shares, of the public sector company, received by a person from the Central Government or any State Government under strategic disinvestment
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104/2021 - dated
10-9-2021
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IT
Central Government notifies the transfer of capital asset under plan approved by Central Government from Air India Limited
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Revocation of cancellation of registration of the petitioner - The petitioner had remedy of challenging cancellation of registration by filing an appeal which it has not availed. The cancellation of registration was on 14.01.2019 and that order has attained finality - the petitioner cannot be heard to say that as now the amnesty scheme as framed by the Government and as the petitioner wants to avail the benefit of that Amnesty Scheme, the registration which was cancelled needs to be revoked - Petition dismissed. - HC
Income Tax
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Addition u/s 68 - share application money/share capital and share premium as unexplained - The onus was on revenue to dislodge assessee’s documentary evidences and rebut the same by bringing on record any cogent material to demonstrate that assessee’s own money flew back in the shape of share application / share premium - nothing of that sort has been brought on record by Ld. AO. It is trite law that no additions could be made merely on the basis of suspicion, conjectures or surmises - AT
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Additions u/s 28(iv) - Business perquisite - ECB loan as received from the holding company by the assessee in convertible foreign exchange for the purpose of acquiring assets in the earlier years. The said loan has been waived and credited to the capital reserve - Therefore, there is no benefit or perquisite other than in the shape of money to invoke the provisions of section 28 (iv) - AT
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Deduction u/s.54F - Assessee holding more than one property - joint ownership - AO Assessee has relinquished his rights on the two flats - it can be safely concluded that the relinquishment of the half share of his two properties is a family arrangement which cannot be considered as a tax avoidance plan. In view of the above, the Assessing Officer is not correct in denying the benefit of exemption u/s.54F of the Income Tax Act, 1961 to the Assessee.- AT
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Revision u/s 263 - deduction u/s 54 - capital gains/ loss - During the assessment proceedings as well as revision proceeding the assessee had submitted the documentary evidences and explanations in respect of genuineness of the claim of deduction u/s 54Fand the AO on meticulous appreciation of evidence on record has allowed the claim of deduction which is not only accordance with provision of law but also supported from documentary evidences and as such there is no error in the Assessment order. - AT
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Mode and manner of set off of loss - loss from one head set off against other head of income - business loss should be first set off against income from house property and then followed by income from long term capital gain and further still unabsorbed loss remains, it should be set off against income from other sources. - AT
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Initiation of penalty proceeding u/s 271(1)(c) - ndisclosed income as referred under sub-Section 1 of Section 271AAA - Impugned penalty proceeding has been initiated and culminated into imposition of penalty u/s 271(1)(c) but the same has been explicitly prohibited by the provision of sub-Section 3 of Section 271AAA particularly where undisclosed income has been found during the search proceeding. - AT
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Exemption u/s 11 - Denial of registration u/s 12AA - charitable activity u/s 2(15) - charging certain fees to recoup its cost - There are enough safeguards provided in the Act including by way of section 11(4A) to monitor the activities of the assessee society and the Revenue is at liberty to examine the same during the course of regular assessment proceedings - as far as the objects of the assessee society are concerned, the same are clearly charitable in nature and the assessee society therefore deserve to succeed in seeking registration u/s 12AA - AT
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Revision u/s 263 by CIT - - in the present appeals, the assessment orders have already been cancelled – meaning thereby it has extinguished, and therefore, no subsequent further proceedings can be initiated - Commissioner has committed an error by holding that “since the Revenue wants to keep the issue alive, it is necessary to pass such order”. Therefore, in view of the above discussions, the impugned orders are not sustainable in these assessment years. - AT
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Faceless Assessment Scheme as stipulated in Section 144B - Since in the present case no hearing had been granted before passing the impugned assessment order, there is a violation of principles of natural justice as well as mandatory procedure prescribed in “Faceless Assessment Scheme” and stipulated in Section 144B, the matter is remanded back to the AO - HC
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Reopening of assessment u/s 147 - Unexplained cash credit - penny stock purchases - AO was aware of the fact that the script of Shreenath was allegedly a penny stock company as it is clear from the annual information report given by the Assessing Officer himself to petitioner alongwith the first notice. Therefore, there is no question of any further information on the same issue being treated as information so as to justify the reopening of the assessment.The expression "reason to believe" in Section 147 of the Act has been held to mean a cause or justification. - HC
Corporate Law
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Entrustment of Investigation under the Companies Act by Serious Fraud Investigation Office - liability for penal prosecution under the TNPID Act - TNPID Act is not applicable to the present case and the act of ITNL relating to issuance of debentures under the private placement scheme cannot be termed to be receipt of deposit from public and, therefore, the consequential registration of the case for investigation by the 1st respondent against ITNL and the petitioners herein is beyond its legal dominion - HC
Service Tax
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Levy of service tax - Clearing and Forwarding Agency Service - The profits gained by the appellant by buying space on ships at lower price and selling at a higher price to the customers cannot by any stretch of imagination be called “Clearing and Forwarding Agent Service”. No service tax can be charged on this amount. - AT
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Refund of Service Tax - electrical works contract - the exemption is accorded to activities in connection with ‘civil structure’ or ‘original structure’ and not restricted to erection of the structure which appears to be the construction placed upon the expression by the lower authorities. - The retrospective effect of the exemption is applicable to the electrical works executed, and the maintenance undertaken, by the appellant for Goa State Industrial Development Corporation (GSIDC) and Goa Medical College (GMC) - AT
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Exempt services or not - educational institutions or not - whether the services rendered by the petitioner university by granting affiliation and its allied activities and also by providing shelter in their campus to the service providers like Bank, Post Office, or catering etc., directly beneficial to the students, staff and faculty of the university, are exempted services within the meaning of Section 66-D of the Finance Act and also under the Mega Exemption Notification of the year 2012 as amended from time to time? - Demand set aside - HC
Central Excise
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Rejection of declaration by the petitioner on SVLDRS-1 - scope of the term 'quantified' - The reasoning given by the Designated Committee in the impugned order runs contrary to law. The Designated Committee was obligated to deal with the declaration filed by the petitioner, on merits. No discretion was vested in the Designated Committee to take a different view. Even though the Circular has not been referred to or dealt by the Designated Committee, by virtue of the clear language of Section 133 of the Scheme, it was further obligated to necessarily act in accordance with that law. - HC
Case Laws:
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GST
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2021 (9) TMI 518
Revocation of cancellation of registration of the petitioner - non-filing of the return for a continuous period of six months - grant of benefit of amnesty scheme - HELD THAT:- The registration of the petitioner came to be cancelled after issuing show-cause notice. The reason for cancellation of registration as found in the order is suo motu cancellation due to non-filing of returns. It appears that the petitioner-Company had filed an application for revocation of cancellation of registration. But, that application was also rejected as it was filed after 90 days of the order cancelling registration of the petitioner. The petitioner had remedy of challenging cancellation of registration by filing an appeal which it has not availed. The cancellation of registration was on 14.01.2019 and that order has attained finality - the petitioner cannot be heard to say that as now the amnesty scheme as framed by the Government and as the petitioner wants to avail the benefit of that Amnesty Scheme, the registration which was cancelled needs to be revoked - Petition dismissed.
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Income Tax
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2021 (9) TMI 517
Reopening of assessment u/s 147 - Unexplained cash credit - penny stock purchases - Eligible reasons to believe - whether failure on part of the petitioner to disclose fully and truly all material facts? - assessment sought to be reopened after the expiry of a period of four years from the end of the relevant year - HELD THAT:- Nowhere in the reasons for reopening, it is mentioned that the tangible materials were obtained or received much after the original assessment order was passed. Moreover, the statement of Bhanwarlal Jain recorded on 11th October 2013 has been relied upon, whereas the original assessment, after considering the statement and all other material, was completed on 20th December 2016. We repeatedly asked Mr. Suresh Kumar to identify the fresh tangible material that was available with the department and the date on which it was received to which there was no answer because it is not stated in the reasons for reopening. Therefore, we cannot accept the reason for reopening with regard to the entries regarding these five entities. As regards the penny stock tangible material upon the basis of which the Assessing Officer comes to the reason to believe that income chargeable to tax has escaped assessment can come to him from any source, however, reasons for the reopening has to be only of the AO issuing the notice. No such tangible material is disclosed in the reasons for reopening. AO simply says Kolkata Investigation Wing have analyzed the trade data of identified 84 penny stocks and concluded that most of the purchases in penny stocks on abnormally higher rate are being done by these paper companies and one of those penny stock is Shreenath in which petitioner was found to be involved in trading. This is far too general. We have to agree with petitioner that there is no tangible material for the reopening as stated in the reasons for reopening. AO was aware of the fact that the script of Shreenath was allegedly a penny stock company as it is clear from the annual information report given by the Assessing Officer himself to petitioner alongwith the first notice. Therefore, there is no question of any further information on the same issue being treated as information so as to justify the reopening of the assessment. The expression reason to believe in Section 147 of the Act has been held to mean a cause or justification. - Decided in favour of assessee.
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2021 (9) TMI 515
Faceless Assessment Scheme as stipulated in Section 144B - Non grant an opportunity of hearing to the petitioner - denial of denial of natural justice - HELD THAT:- Since in the present case no hearing had been granted before passing the impugned assessment order, there is a violation of principles of natural justice as well as mandatory procedure prescribed in Faceless Assessment Scheme and stipulated in Section 144B. The impugned assessment order dated 24th May 2021, demand notice as well as notice for initiation of penalty proceeding and all proceedings initiated pursuant thereto for the assessment year 2018-19 are set aside and the matter is remanded back to the AO who shall grant an opportunity of hearing to the petitioner by way of Video Conferencing.
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2021 (9) TMI 514
Revision u/s 263 by CIT - Whether order of AO is erroneous insofar as it is prejudicial to the interests of the revenue? - HELD THAT:- For instituting a valid proceeding under Section 263 of the Act, there should be a valid legal proceeding before the Assessing Officer. Once the assessment order was quashed on the ground that it was passed after limitation provided in the Act for passing such order, then it is to be construed that no assessment order is available on which learned Commissioner could form an opinion as to whether any error is available in such order or not. Section 263 of the Act specifically contemplates that there should be an error either in the proceedings or in the assessment order which has caused prejudice to the interests of the Revenue. Now, in the present appeals, the assessment orders have already been cancelled meaning thereby it has extinguished, and therefore, no subsequent further proceedings can be initiated Commissioner has committed an error by holding that since the Revenue wants to keep the issue alive, it is necessary to pass such order . Therefore, in view of the above discussions, the impugned orders are not sustainable in these assessment years. Accordingly, we quash the assessment orders in all these three assessment years and allow the appeals of the assessee.
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2021 (9) TMI 513
Exemption u/s 11 - Denial of registration to the assessee trust u/s 12AA - charitable activity u/s 2(15) - primary and the dominant object of the assessee society is to provide medical relief to poor and needy people and not to carry out any such activities for the purposes of earning profit - HELD THAT:- The act of charging of fees for such services cannot by itself diminish the very objectives of setting up of the assessee society which is clearly for charitable purposes and not for purposes of profit. Such fees are towards recovery of cost of providing the ambulance services in terms of driver salary and regular maintenance, wear/tear etc and nominal surplus which get generated from such activities are again utilized for the purposes of its charitable activities. The act of undertaking charitable activities cannot at all times be expected to be undertaken from grants and donations and where as part of undertaking the charitable activities, the assessee is charging certain fees to recoup its cost and make its charitable activities self-sustaining, the same cannot lead to a conclusion that the very nature of its activities have lost the character of charity and such activities are undertaken for earning profits. Where as part of rendering of such activities, it recovers certain nominal fees to meet its operational and administrative expenses, the same will not disqualify it from being involved in carrying on charitable activities. As a settled position that the proviso to section 2(15) applies only if an institution is engaged in advancement of any other object of general public utility and postulates that such an institution is not charitable if it is involved in carrying on any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business for a cess, fee or any other consideration. In the instant case, the assessee society is carrying out charitable activities in the field of medical relief to the poor and needy section of the society and not in the field of general public utility and thus, the proviso to section 2(15) is not applicable and thus cannot be invoked. There are enough safeguards provided in the Act including by way of section 11(4A) to monitor the activities of the assessee society and the Revenue is at liberty to examine the same during the course of regular assessment proceedings - as far as the objects of the assessee society are concerned, the same are clearly charitable in nature and the assessee society therefore deserve to succeed in seeking registration u/s 12AA - Appeal of the assessee is allowed.
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2021 (9) TMI 512
Validity of penalty proceeding has been initiated and culminated into imposition of penalty u/s 271(1)(c) - initiation of penalty proceeding u/s 271(1)(c) in respect of an undisclosed income as referred under sub-Section 1 of Section 271AAA - HELD THAT:- As during search proceedings initiated u/s 132 of the Act on 15.09.2009 i.e. on or after 01.06.2007 but before 01.07.2012 - admittedly the appellant s case coming under the purview of the statutory provision of Section 271AAA - Section 271AAA (3) specifically prohibits initiation of penalty proceeding u/s 271(1)(c) in respect of an undisclosed income as referred under sub-Section 1 of Section 271AAA. Impugned penalty proceeding has been initiated and culminated into imposition of penalty u/s 271(1)(c) but the same has been explicitly prohibited by the provision of sub-Section 3 of Section 271AAA particularly where undisclosed income has been found during the search proceeding. This provision left no space for confusion or doubt in barring the AO to assume jurisdiction to levy penalty u/s 271(1)(c) - in the present facts and circumstances of the case the very initiation of penalty proceeding under Section 271(1)(c) is contrary to the statutory provision, palpably bad and not maintainable in the eye of law - taking into consideration the entire aspect of the matter we find that initiation of the penalty proceeding is erroneous and is not sustainable. Thus, the same is hereby quashed. - Decided against revenue.
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2021 (9) TMI 511
Revision u/s 263 - grant of deduction u/s 80IA(4) of the Act has not been made in accordance with the provisions of the Act - Whether order is erroneous and prejudicial to the interest of revenue? - HELD THAT:- Hon ble Supreme Court in Malabar Industrial Company Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] has held that the Commissioner has to satisfy himself of both the conditions i.e. the order is erroneous and prejudicial to the interest of revenue. Assessing Officer has raised only a query before completion of assessment u/s 143 (3) relating to claim of 80IA(4). However, the Assessing Officer has not given any cogent finding. Thus, the observation of the Principal Commissioner of Income Tax that the assessment order is erroneous and prejudicial to the interest of the Revenue does have footing. DR s contention that the activities for which claim u/s 80IA (4) was claimed does not come under the purview of infrastructure project specifically Clause (b) is also correct proposition. Although the assessee has given the details relating to infrastructure projects, these are included in the definition of infrastructure project u/s 80IA of the Act, amended position which come into effect from 01/04/2015. The A.O has not applied the proper interpretation of Section 80IA(4) in consonance with evidence. Thus, the Principal Commissioner of Income Tax has rightly invoked Section 263 - Decided against assessee.
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2021 (9) TMI 509
Computation of Total Income - Mode and manner of set off of loss - loss from one head set off against other head of income - setting off the business loss against house property income, income from other sources and thereafter income from capital gains which is in accordance with the provisions of Section 71 - HELD THAT:- Admittedly, income tax provides for computation of income in order of preference starting from income under the head salary, Income under the head income from house property , and income under the head long term capital gain and further income under the head income from other sources' Therefore, in our considered view business loss should be first set off against income from house property and then followed by income from long term capital gain and further still unabsorbed loss remains, it should be set off against income from other sources. Therefore, we set aside appeal to the file of AO and direct him to recompute total income, after allowing set off of loss under the head income from business or profession in terms of our observations herein above - Appeal of assessee is treated as allowed for statistical purposes.
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2021 (9) TMI 508
Ex parte proceedings by CIT-A - denial of natural justice - Reopening of assessment u/s 147 - disallowance of depreciation, addition on account of share application under section 68 and disallowance of purchase - assessee has challenged the order of Ld. CIT(A) on the ground that order was passed without granting opportunity of hearing - HELD THAT:- CIT(A) has not recorded as to when the last date of hearing was fixed. The Ld. CIT(A) has not discussed the facts of the case, issues for determination and decision thereon. CIT(A) has not discussed the facts of the case on adjudication point of determination and the decision thereon for such decision, meaning thereby the order passed by Ld. CIT(A) is not as per the mandate of section 250(6) - Therefore instead of going on the merit of additional grounds of appeals and on the original grounds of appeals, we restore the matter back to the Ld. CIT(A) to adjudicate all the issues afresh in accordance with law. The assessee is given liberty to raise all legal or factual issues before the Ld. CIT(A). CIT(A) is directed to provide reasonable and fair opportunity of hearing to the assessee before passing the order afresh - Appeal of assessee is allowed for statistical purposes
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2021 (9) TMI 507
Unaccounted income - Addition on-money received by the assessee for sale of plots villas of Blue Marino project - HELD THAT:- Respectfully following the view taken by the coordinate bench of ITAT in the assessee s own case [ 2020 (1) TMI 1033 - ITAT VISAKHAPATNAM] we hold that there is no case for assessment of unaccounted income on account of on money received on sale of villas. Accordingly, we, uphold the order of the Ld.CIT(A) and delete the addition made by the AO. Bogus contract payment stated to be made to Mr.KSN Murthy - Addition based on statement recorded u/s 131 - HELD THAT:- The sums were credited in the bank account for the purpose of executing the sub contract works. It is also fact that Dinakar Sai Constructions is executing the sub-contract works and Sri KSN Murty is a managing partner of Dinakar Sai Constructions. Though the AO made an effort to establish that the assessee firm made the payments to Dinakar Sai Constructions and received the amounts back by way of self cheques, the AO, failed to collect the information regarding the exact sub contract works carried on by Dinakar Sai Constructions and the expenditure incurred for such civil contracts. AO also did not bring any material to show that the expenditure was claimed twice through sub contract works and by the assessee themselves debiting the expenditure separately to the P L account. There was no evidence found by the AO, except the statement recorded u/s 131 of the Act, inspite of conducting the survey in the business premises of Sri Dinakar Sai Constructions. AO also did not allow cross examination inspite of specific request made by the assessee. In the absence of any positive evidence to show that the expenditure was not incurred or debited twice, we do not find any reason to interfere with the order of the CIT(A) and the same is upheld. The appeal of the revenue is dismissed.
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2021 (9) TMI 506
Revision u/s 263 - deduction u/s 54 - capital gains/ loss - specific finding that how the order passed by the AO is erroneous which resultant loss of the revenue - HELD THAT:- As the case was selected for limited scrutiny on the reason Whether capital gains/ loss is genuine and has been correctly shown in the return of income. Not for deduction claimed under the head capital gain - as during the assessment proceedings the AO had also made substantial verification examination on the other issue as the case may be taken up for comprehensive scrutiny, without following legal procedure and necessary approval of the competent authority, conducting an enquiry on the issue which is outside the limited scrutiny would be beyond the jurisdiction of the AO. Therefore, the reason on which the ld PCIT had issued the notice u/s 263 and acquired the jurisdiction is not only illegal but also against the circular issued by Hon ble CBDT and law decided by Hon ble Court. During the assessment proceedings as well as revision proceeding the assessee had submitted the documentary evidences and explanations in respect of genuineness of the claim of deduction u/s 54Fand the AO on meticulous appreciation of evidence on record has allowed the claim of deduction which is not only accordance with provision of law but also supported from documentary evidences and as such there is no error in the Assessment order. Also during the revision proceedings the assessee had explained with legal valid documentary evidences that claim made by assessee on the basis of which the AO had allowed the same - As pointed out before ld PCIT that the facts narrated in show cause notice is apparently incorrect and false as the assessee had constructed the house on other residential plot not on the purchase in the year under consideration and in support of same the assessee had furnished evidences. AO had exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion on the basis of legal valid documentary evidences and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion and also there was no revenue loss as the entire sales consideration had been disclosed and offered for taxation as per provisions of law by the respective parties. It is settled proposition of law that revisionary powers of CIT u/s 263 can be invoked only when the assessment order is erroneous as well as prejudicial to the interest of the Revenue. Since, in the case of assessee, the assessment order could not be established to be erroneous, by Pr CIT-. The sole ground of 263 jurisdiction by the Pr. CIT was that the AO did not make proper enquiry. This itself cannot be said to be erroneous and prejudicial to the interest of the Revenue since the AO was alive on all these questions and he has called upon the assessee to produce relevant material in regard to areas which were stated by the PCIT in his show cause notice. Order u/s 263 cannot be sustained as we find that the assessment order passed by the AO cannot be said to be erroneous or prejudicial to the interest of revenue, and accordingly the order made u/s 263 is quashed. - Decided in favour of assessee.
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2021 (9) TMI 505
Deduction u/s.54F - Assessee holding more than one property - joint ownership - as per AO Assessee has relinquished his rights on the two flats by settling in favour of his wife only to avoid tax - HELD THAT:- We find that the Assessee has relinquished his half share in two properties in favour of his wife. It is not the case of the Department that the Assessee had transferred the entire property which is in the name of the Assessee. It is as a matter of convenience between the husband and wife, this arrangement is made and therefore it can be safely concluded that the relinquishment of the half share of his two properties is a family arrangement which cannot be considered as a tax avoidance plan. In view of the above, the Assessing Officer is not correct in denying the benefit of exemption u/s.54F of the Income Tax Act, 1961 to the Assessee. Though the Assessee had transferred the property in the name of his wife, yet he is the owner of the property and is not entitled for claiming the exemption of Section 54F - A fiction created by one provisions of the Act cannot be super-imposed on another provisions of the Act which has a fiction. Section 54F of the Income Tax Act, 1961 is a provision granting deduction to the Assessee and therefore, it has a fiction. Respectfully following the decision of Mr. Ajit Thomas, Chennai [ 2015 (11) TMI 1847 - ITAT CHENNAI] AND [ 2016 (8) TMI 1545 - MADRAS HIGH COURT] we hold that the Assessee is entitled to claim the benefit of Section 54F of the Income Tax Act, 1961. Accordingly, we cancel the orders passed by both the lower authorities and we direct the Assessing Officer to allow the benefit of claim made by the Assessee u/s.54F. - Decided in favour of assessee.
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2021 (9) TMI 504
Additions u/s 28(iv) - Business perquisite - Waiver of ECB loan - Addition invoking the provisions of section 28(iv) OR Capital receipt - assessee has credited in its reserve account an amount which was waived on External Commercial Borrowings (ECB) loan account - HELD THAT:- Assessee has received ECB in convertible foreign exchange for acquiring assets in the earlier years. During the year under consideration due to heavy losses the ECB loan has been waived by the holding company and same has been credited to capital reserve. The facts remain undisputed by the appellantrevenue that the ECB loans were accepted to acquire capital assets. The waiver off loan having capital in nature cannot change its nature to revenue only because of such waiver by the holding company. As discussed above, the assessee has transferred the waiver of principal amount consisting of ECB directly to its capital. Hon ble Supreme Court held in order to invoke the provisions u/s. 28(iv) of the Act, the benefit which is received has to be in some other form rather than in the shape of money. The very first condition of section 28(iv) of the Act is any benefit or perquisite arising from the business shall be in the form of benefit or perquisite other than in the shape of money and held an amount received as cash receipt due to the waiver of loan can be in no circumstances taxed under the provisions of section 28(iv) of the Act. ECB loan as received from the holding company by the assessee in convertible foreign exchange for the purpose of acquiring assets in the earlier years. The said loan has been waived and credited to the capital reserve to an extent of ₹ 25,19,15,516/-. Therefore, there is no benefit or perquisite other than in the shape of money to invoke the provisions of section 28 (iv) of the Act, thus, in our opinion, the ratio laid down by the Hon ble High Court of Bombay in the case of Mahindra Mahindra Ltd. [ 2003 (1) TMI 71 - BOMBAY HIGH COURT ] which has been affirmed by the Hon ble Supreme Court in the case of Mahindra and Mahindra Ltd. [ 2018 (5) TMI 358 - SUPREME COURT ] is applicable to the facts and circumstances of the case and in view of the same, we do not find any reason to interfere with the order of CIT(A) and it is justified. Thus, the grounds raised by the appellant-revenue are dismissed.
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2021 (9) TMI 503
Denial of exemption u/s 11 - Charitable activity u/s 2(15) - violation of provisions of section 13(1)(c) of the Act while using trademark G.D. Goenka by Shri Anjani Kumar Goenka; that the activities of the assessee society are commercial in nature; and that there is excess income over expenditure; that assessee is not entitled for depreciation as claimed - HELD THAT:- So far as question of using the trademark G.D. Goenka having goodwill and monetary value of the trademark which has been built up in the course of the assessee society s activities is concerned, this issue has already been examined by the Hon ble Delhi High Court in assessee s own case [ 2017 (10) TMI 1584 - DELHI HIGH COURT] We are of the considered view that ld. CIT (A) has decided the issue in favour of the assessee by following the decisions rendered by Hon ble Delhi High Court and coordinate Bench of the Tribunal in assessee s own case for preceding years. Ld. CIT (A) has allowed the depreciation on fixed assets by following the decision rendered by Hon ble Supreme Court in case of CIT-III, Pune vs. Rajasthan Gujarati Charitable Foundation Poona [ 2017 (12) TMI 1067 - SUPREME COURT]. Since no distinguishing facts qua the year under assessment vis- -vis preceding years have come on record, we find no infirmity or illegality in the impugned order passed by the ld. CIT (A), hence present appeal filed by the Revenue is hereby dismissed.
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2021 (9) TMI 502
Revision u/s 263 - purchases made from Satyanarayan certain payments as made in cash - Wooden expenses addition as violation of section 40A - AO has not examined this issue and therefore the same is erroneous - Share Capital addition - Verification of creditors being not done - whether the on various issues the order can be said to be prejudicial to the interest of revenue or is erroneous? - HELD THAT:- Various observations are made which indicates only suspicion and no specific finding had been given. We also find that various issues explanation was submitted during the course of assessment proceedings which were duly examined. The power of revision of orders passed by the AO under S. 263 of the Act is in the nature of supervisory jurisdiction which is permissible to be exercised only when the twin conditions are satisfied that the order passed by the AO is erroneous and further on account of order being erroneous, prejudice has been caused to the interest of revenue. In the instant case, while recording the conclusion that the order passed by the AO is erroneous and prejudicial to the interest of the Revenue, apparently the record of the assessment proceedings was not examined by the Principal CIT in its entirety and objectivity. In relation to purchases from agriculturists due evidence was submitted which cannot be rebutted and that purchases are made from the auction at Krishi Mandi. Similarly the share capital contribution from the existing shareholder and other contribution of share capital are duly accepted from the same shareholder. The purchases had increased, the turnover had increased, in such volume the creditors are bound to increase. The main creditor was a related party for which confirmation of account was submitted and nothing has been pointed out in relation to the said confirmation. Simply because the quantum had increased this cannot be any basis to submit the same is erroneously accepted. In relation to various other expenses also due reply had been submitted. In light of above discussion we hold that the order u/s. 263 cannot be sustained - Decided in favour of assessee.
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2021 (9) TMI 501
Addition u/s 68 - share application money/share capital and share premium as unexplained - onus to prove - only reason to treat the share application money as unexplained cash credit is the quantum of premium charged by the assessee - HELD THAT:- Assessee has filed all the requisite documents as well as confirmations from the investor entities to substantiate these transactions. The notices u/s 133(6) has duly been responded by investor entity. The director of M/s Rossari India Biotech Pvt. Ltd. appeared before AO and confirmed the transactions. The findings, in this regard, have already been tabulated in Annexure-1 of impugned order and the same is not in dispute. Under these circumstances, it could very well be said that the assessee had duly discharged the onus in terms of requirement of Sec.68. The onus was on revenue to dislodge assessee s documentary evidences and rebut the same by bringing on record any cogent material to demonstrate that assessee s own money flew back in the shape of share application / share premium - nothing of that sort has been brought on record by Ld. AO. It is trite law that no additions could be made merely on the basis of suspicion, conjectures or surmises There is no doubt that the revenue authorities were not required to put blinkers while looking at the documents produced before them and they were entitled to look into the surrounding circumstances to find out the reality of the documents produced before them - no such inquiries have been made by AO except for the allegations that the share application was bogus in nature only because the quantum of premium was high - there is nothing on record to substantiate the allegation that the assessee s own unaccounted money was routed in the books in the garb of share capital. In the absence of such findings, the impugned additions could not be sustained in law - Decided against revenue.
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2021 (9) TMI 499
TP Adjustment - comparable selection - HELD THAT:- The assessee-company provides software development services (SWD) and I.T. enabled services (ITES) to its AEs thus companies functionally dissimilar with that of assessee need to be deselected from final list. Working Capital Adjustment - HELD THAT:- There is no dispute with regard to the fact that the difference in working capital would materially effect the price charged for the services rendered. As noticed that the TPO/AO himself has granted working capital adjustment at 1.98%. The grievance of the assessee is that the TPO should have allowed working capital basis on actual basis without placing an upper limit on the said adjustment. As noticed that Rule 10B of the I.T. Rules does not provide for restricting the adjustment. Accordingly, we direct the TPO/AO to grant working capital adjustment on actual rate. Appeal filed by the assessee is partly allowed.
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2021 (9) TMI 498
Income accrued in India - Fee for Technical Services (FTS) within the meaning and scope of section 9 of the Income Tax Act, 1961 as well as Article 12 of the India-US Double Taxation Avoidance Agreement (DTAA). - PE in India or not - receipts of the assessee from various activities of hotel management ranging inter alia from ticketing, reservation, marketing, advertising, operation, administration, catering, network support services, Starwood Portal Services, imparting of skill sets through trainings etc. - HELD THAT:- Revenue does not dispute the facts of the present assessment year is different that the facts discussed in assessee's own case by the Hon'ble High Court as well as by the Tribunal in A.Y. 2013-14 [ 2019 (11) TMI 1675 - ITAT DELHI] wherein took the view that the payments for advertising, publicity and the sales promotion services rendered by the assessee, a company incorporated and tax resident in USA to Indian company, was advisement, publicity and sales promotion keeping in mind the mutual interests and in the context, the use of trademark, trade name etc. and other enumerated services referred to in the agreement with the assessee were incidental to main services and, therefore, the payments received were neither in the nature of royalty under section 9(1)(vi) of the Act, Explanation 2, nor in the nature of 'Fee for Technical Services' (FTS) under section 9(1)(vii) of the Act, Explanation 2, but business income and assessee not having any PE in India such business income was not taxable in India - Decided in favour of assessee.
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2021 (9) TMI 489
Levy of late filing fee u/s 234E - demand u/s 200A - diversified views - HELD THAT:- In the absence of the judgement of Hon ble jurisdictional High Court , we are of the view that the decision, most favourable to the assessee required to be adopted as held by the Hon ble Apex Court in the case of M/s Vegetable Products Ltd. [ 1973 (1) TMI 1 - SUPREME COURT] . The Hon ble Karnataka High Court in the case of Sree Ayyappa Educational Charitable Trust [ 2018 (1) TMI 90 - KARNATAKA HIGH COURT] and Fatheraj Singhvi Ors. [ 2016 (9) TMI 964 - KARNATAKA HIGH COURT] held that unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect, and accordingly decided the issue in favour of the assessee. Thus we hold that the late fee levied is unsustainable, accordingly we set aside the orders of the lower authorities and delete the late fee levied by the AO. - Decided in favour of assessee.
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2021 (9) TMI 484
Additions made on the interest on securities - HELD THAT:- As decided in CITY UNION BANK LIMITED. [ 2007 (2) TMI 187 - MADRAS HIGH COURT] held that the assessee is taxable for interest on securities only on specified dates when it becomes due for payment, in view of third proviso to s.145(1) of the Act, which was in force during the relevant assessment years. Loss on revaluation on securities - HELD THAT:- As decided in CITY UNION BANK LIMITED. [ 2007 (2) TMI 187 - MADRAS HIGH COURT] held that when investments are made in accordance with the requirements of the Act, wherein the market price changed from the value shown in the opening balance and at the end of the year, the same could be allowed as depreciation. Substantial questions of law are answered against the revenue
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Customs
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2021 (9) TMI 519
Imposition of complete ban on imports of various types of cut-flowers through all the Airports of the country except Chennai Airport - discrimination between Flower Traders of Delhi, NCR and other parts of the country or not - violative of Articles 14, 19 and 21 of the Constitution of India or not - HELD THAT:- There are merit in the submission of the counsel for the Petitioner that the matter needs adjudication at the earliest looking to the fact that the goods in question, i.e., cut-flowers are a highly perishable commodity. Instead of expediting the process of filing the counter-affidavit, it appears that the Respondents are completely oblivious of the urgency of the matter and the prejudice caused to the Petitioner due to delay in filing the counter-affidavit. Today, once again on account of the callous and casual approach of the Respondents, this Court is left with no option but to adjourn the matter. We grant last opportunity to the Respondents to file a counter-affidavit on or before 31.08.2021, subject, however, to a cost of ₹ 10,000/- which shall be deposited with the Registrar General of this Court on or before 31.08.2021 - List on 31.08.2021.
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Corporate Laws
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2021 (9) TMI 521
Entrustment of Investigation under the Companies Act by Serious Fraud Investigation Office - Section 212 of the Companies Act - Bar on jurisdiction of other investigating agencies to proceed with investigation into any matter concerning the affairs of the company - default committed by ITNL on account of non-payment of interest - moratorium granted by NCLAT could be held against ITNL and the petitioners - liability for penal prosecution under the TNPID Act - amounts received by ITNL could be held to be deposits within the meaning of Section 2 (2) - ITNL is a financial establishment or not - private placement basis u/s 42 of the Companies Act. Whether entrustment of investigation to SFIO by the Central Government u/s 212 of the Companies Act bars the jurisdiction of other investigating agencies to proceed with investigation into any matter concerning the affairs of the company? - HELD THAT:- It clearly transpires that the jurisdiction of SFIO is vast, in that, in addition to the assignment of investigation under the Companies Act by the Central Government, the SFIO could investigate the issue relating to any other law; however, the other investigating agencies are barred from investigating any matter which is already seized of by SFIO under the Companies Act; rather, the other investigating agencies could only investigate matters which are not within the realm of the Companies Act. To that extent the powers of the SFIO is multifold to that of the other investigating agencies - there exists a complete bar for other investigating agencies to investigate into the matter under the Companies Act once it is assigned to SFIO by the Central Government. Whether the default committed by ITNL on account of non-payment of interest in view of the moratorium granted by NCLAT could be held against ITNL and the petitioners, thereby making them liable for penal prosecution under the TNPID Act? - HELD THAT:- Though the default has occurred, it can safely be concluded, at the present point of time, as being due to the moratorium granted by NCLAT and the culpability of the petitioners in the complex web of the economic offence, which is the subject matter of investigation by SFIO, will entangle itself only after full fledged investigation by SFIO - this Court, at this point of time is not inclined to give a finding one way or the other as to the culpability of the petitioners in the default committed in payment of interest. Whether the amounts received by ITNL could be held to be deposits within the meaning of Section 2 (2) and whether ITNL could be held to be a financial establishment as defined u/s 2 (3) of the TNPID Act? - HELD THAT:- Once this Court has come to the conclusion that neither ITNL could be termed to be financial establishment and the amount collected by it through private placement by issuance of debentures could be termed to be deposit with the meaning of Sections 2 (3) and 2 (2) of the TNPID Act, necessarily it has to follow that the provisions of TNPID Act cannot be made applicable to the case of ITNL in the facts of the present case, as the acts of ITNL are in no way within the parameters codified under the TNPID Act - this Court is of the firm and clear opinion that TNPID Act is not applicable to the present case and the act of ITNL relating to issuance of debentures under the private placement scheme cannot be termed to be receipt of deposit from public and, therefore, the consequential registration of the case for investigation by the 1st respondent against ITNL and the petitioners herein is beyond its legal dominion and, necessarily the crime registered against the petitioners and ITNL deserves to be quashed. Whether the provisions of the TNPID Act could be enforced against ITNL for the debentures issued by it on private placement basis u/s 42 of the Companies Act - HELD THAT:- Once this Court has held that the registration of crime under theTNPID Act against the petitioners and ITNL is not sustainable for the foregoing discussions, the consequential relief prayed by the intervenor/petitioner in the writ petition for an ad-interim order of attachment of the scheduled mentioned properties of the entities/persons by the 1st and 2nd respondent in the writ petition does not arise - the Central Government having already assigned investigation with SFIO, which investigating agency, is vested with jurisdiction and wider powers of investigation to deal with infraction under any law in addition to its exclusive jurisdiction under the Companies Act, it is well open to the intervenors to approach SFIO and submit appropriate representation for the relief aforesaid in accordance with law. Petition allowed.
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2021 (9) TMI 490
Sanction of Scheme is Scheme of Merger by absorption - section 230-232 of Companies Act - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices issued. The scheme is approved - application allowed.
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2021 (9) TMI 487
Sanction of scheme of arrangement - section 230 to 232 of the Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening and dispensation with various meetings issued - directions with regard to issuance of various notices issued. The scheme is approved - application allowed.
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2021 (9) TMI 485
Sanction of Scheme of Amalgamation - Section 230 to 232 of the Companies Act, 2013 r/w. the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- The Statutory Auditors of the Transferor Companies 1 2 and Transferee Company have examined the Scheme in terms of provisions of Sec. 232 of Companies Act, 2013 and the rules made thereunder and certified that the Accounting Standards are in compliance with Section 133 of the Companies Act, 2013. Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of notices also issued. The scheme is approved - application allowed.
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Insolvency & Bankruptcy
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2021 (9) TMI 492
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of its debt and dispute or not - HELD THAT:- On perusal of the material papers on record and in terms of extant provisions of Section 7 of IBC, the debt due to the Financial Creditor is proved. The Adjudicating Authority admits the Petition under Section 7 of the Code, declaring the moratorium for the purposes referred to in Section 14 of the Code - Petition admitted - moratorium declared.
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2021 (9) TMI 491
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - parties to development agreement - existence of debt and dispute or not - HELD THAT:- One thing is clear that amount of ₹ 5,00,000/- had been paid by the Financial Creditor to the Corporate Debtor but the Financial Creditor has not produced anything on record that the amount had been paid to the Corporate Debtor as booking amount for a particular flat. The Development Agreement relied upon by the Financial Creditor is between the Landowners and the Corporate Debtor, and not between the Financial Creditor and the Corporate Debtor. Once it is proved that the amount advanced did not relate to booking of any flat, particularly in the absence of any agreement between the Financial Creditor and the Corporate Debtor to that effect, the Financial Creditor cannot make out a case for initiating CIRP against the Corporate Debtor. The amount given by the Financial Creditor to the Corporate Debtor may have been given for any purpose. No terms of any agreement, specific period, or continued investment, have been proved by any documents placed on record. Even the date of default, if at all, is not clear nor has any letter recalling the alleged loan/advance has been served on the Corporate Debtor or placed on record. The Financial Creditor may however, be free to seek its remedies elsewhere for recovery of the amount of ₹ 5,00,000/- with or without interest as the case may be, as per the documents in its possession. But certainly, it is not a case for initiation of CIRP under section 7 of the IBC, 2016. This is not a fit case for admission - petition dismissed.
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2021 (9) TMI 486
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues or not - Operational Creditors - advance paid for supply of goods can be considered as an Operational debt or not - existence of debt and dispute or not - HELD THAT:- Hon'ble NCLAT in the case of SMT. ANDAL BONUMALLA W/O. VENUGOPAL SWAMI BONUMALLA VERSUS VERSUS TOMATO TRADING LLP., SMART LOGIN SOLUTIONS PVT. LTD. [2020 (8) TMI 791 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] has held that an advance amount paid for supply of goods cannot fall within the category of 'Operational Debt'. Thus, the claim of the Operational Creditor in the instant Application which is totally based on the advanced amount of ₹ 7,05,00,000/- paid towards supply of 5000MT Maize and as such, the instant claim cannot be treated as Operational Debt as per Section 5(21) of the IB Code, 2016 nor the Applicant herein be called as Operational Creditor as per Section 5(20) of the IB Code, 2016. Such being the case, the instant Application cannot be admitted U/s. 9 of the Code. Petition dismissed.
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Service Tax
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2021 (9) TMI 520
Refund claim - why the present appeal has been filed by the Appellant, if the refund has already been made to the Respondent? - HELD THAT:- The Principal Commissioner, CGST Delhi North is directed to state on an affidavit the exact date on which the process was initiated in the relevant file for filing the present appeal challenging the impugned final order dated 09.01.2020 passed by learned Customs, Excise and Service Tax Appellate Tribunal. It prima facie appears to the Court that the present proceedings are merely an eye wash and an empty formality by the Appellant, for the sake of completing the record. The affidavit shall be filed within a period of three weeks from today.
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2021 (9) TMI 516
Exempt services or not - educational institutions or not - whether the services rendered by the petitioner university by granting affiliation and its allied activities and also by providing shelter in their campus to the service providers like Bank, Post Office, or catering etc., directly beneficial to the students, staff and faculty of the university, are exempted services within the meaning of Section 66-D of the Finance Act and also under the Mega Exemption Notification of the year 2012 as amended from time to time? HELD THAT:- This Court is of the concerned view that, that kind of narrow or pedantic interpretation cannot be possible in the words conduct of examination . The reason being, the very prime function of the petitioner university under the statute, under which it has been created, under Section 4(4) of the University Act, which has been quoted herein above, is to hold examinations and to confer degrees, titles, diplomas and other academic distinctions. Therefore, holding or conducting an examination is primarily a job of the university and the colleges affiliated to the university are only facilitators. Therefore, examinations are not conducted directly by the colleges, it is being conducted by the university, but the facilitator is the college. Therefore, the word conduct of examination by such institution means, conduct of examination by the university and the college and not by the college alone. The examination is the examination of the university, for which, facilitation is given by the college, wherein the examinations are conducted and ultimately, valuation is to be done by the university and marks are awarded and degree is conferred by the university. It is the university, where, the facilitator is the college, where, the examination is being taken place and therefore, the word conduct of examination , cannot have such a narrow and pedantic interpretation. Throughout the regime between 2012 and 2017, the educational institution had been provided with the exemption as has been stated in various provisions of the Act as well as the mega notification, followed by the amended notification and during all these periods, these institutions including the universities can very well enjoy the exemption. Accordingly, the stand taken by the revenue for levying service tax for the services being provided by the petitioner university cannot be approved. Levy of service tax - services such as renting of immovable property for the purpose of bank, post office, canteen etc. - HELD THAT:- These are all allied services of education which are also included in the purview of educational services, in view of clause 9, which has given an expanded meaning of educational services which includes the services to be provided not only to the students, but also faculty and staff. In this category, the faculty and staff of the university are getting whatsoever services by way of transportation, boarding and lodging etc., are also to be included in the meaning educational services being provided by the educational institutions ie., the petitioner herein which can also be exempted from the purview of service tax - the demand made for levying service tax on the services provided by the petitioner institution under the heading renting of immovable property also, in the considered view of this Court, cannot be sustained - the assessment and demand made by the respondent, in the considered view of this Court, is untenable. The petitioner educational institution ie., the university cannot be assessed for demanding any service tax for the services of education provided by them, which includes affiliation or other services provided for the students, faculty as well as the staff of the university - petition allowed.
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2021 (9) TMI 510
Refund of Service Tax - electrical works contract - relevant date for determining limitation under section 11B of Central Excise Act, 1944 - N/N. 25/2012-ST dated 20th June 2012 - HELD THAT:- The restoration, with special enablement of refund, acknowledges the historical existence, and necessity, of exemption of the specified activities from tax that stretch back in time and the claim of the appellant is predicated upon availment of the exemption at the time of contracting with the recipients; and even earlier. There is nothing on record to establish that the denial of refund had been followed up with instituting of proceedings for recovery of tax that had not been paid. The ineligibility of the activity of the appellant for exemption after 1st March 2015, as held by the lower authorities, implied evasion of tax for the period before that. This inconsistency of approach to tax liability would make it appear that that ineligibility for exemption has been contrived solely for denial of refund. The appellant was engaged in erection, installation, testing and commissioning of electrical works and it belies logic to expect electrical works to generally exist independent of civil structure as well as in disregarding the critical indispensability of electrical installation in civil structures. To segregate one component out of the entirety of civil structure does not appear to be the intendment of law. The retrospective effect of the exemption is applicable to the electrical works executed, and the maintenance undertaken, by the appellant for Goa State Industrial Development Corporation (GSIDC) and Goa Medical College (GMC) - Appeal allowed.
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2021 (9) TMI 500
Levy of service tax - Clearing and Forwarding Agency Service - difference between the amounts charged by it from its clients towards Ocean Freight and the amounts paid by it to the Shipping line towards Ocean Freight - steamer agency service - amount received from the agents of the Shipping Line for booking cargoes - differential amounts of Service Tax be demanded under Section 73 of the Finance Act, 1994 - extended period of limitation - levy of interest and penalty. Is the appellant liable to discharge service tax on the difference between the amounts charged by it from its clients towards Ocean Freight and the amounts paid by it to the Shipping line towards Ocean Freight under the head of Clearing and Forwarding Agency Service ? - HELD THAT:- Trading in Ocean Freight is not a service being rendered to the client and no amount is being paid by the client to the appellant as per the records towards trading of cargo space. Evidently as any prudent business would, the appellant is buying space on the cargo ship at a lower price and selling it to its client at a higher price. The difference is its profit. It would have been a different case, if the appellant is organizing space on the ship for their clients and the client is paying shipping line directly and the service of organizing or arranging the space on the ship, the appellant gets paid service charge by the client. In such an arrangement, the amount being received would be a consideration for the service. The present arrangement is an arrangement of the trader who buys cargo space at a lower price and sells it at a higher price and enjoys the margin as profit. The profits gained by the appellant by buying space on ships at lower price and selling at a higher price to the customers cannot by any stretch of imagination be called Clearing and Forwarding Agent Service . No service tax can be charged on this amount. Whether the appellant is liable to discharge service the on the amounts which it received from the agents of the Shipping Line for booking cargos under the head Steamer Agency Service or not? - HELD THAT:- There is nothing on record to prove either that the appellant was a steamer agent or that the appellant rendered service to a shipping line. The service, if any, is rendered by the appellant, it is to the broker and not to the shipping line. Therefore, no service tax can be charged on the disputed amount under the category of Steamer Agent Service on the amounts paid by the brokers to the appellant. Since no demand can be sustained, neither can any interest be charged, consequently, the penalties imposed upon the appellant also needs to be set aside - appeal allowed - decided in favor of appellant.
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2021 (9) TMI 494
Maintainability of appeal - time limitation for filing appeal - appeal filed within two months from the date of receipt of Order-in-Original as is required under Section 35A of Central Excise Act - manpower recruitment supply agency service - HELD THAT:- The date of Order-in-Original is 18.03.2019 but there is no evidence to show as to when the said order was received by the appellant. The learned Commissioner (Appeals) has mentioned that OIO was dispatched by registered post and has not been received back undelivered, therefore, is deemed to be delivered. The findings itself makes it clear that the findings of Commissioner (Appeals) are merely presumptive. There is no effort on the said adjudicating authority to ensure as to whether the order was actually received by the appellant or not. Period of limitation for filing an appeal before the Commissioner is no doubt of 2 months but this period has to reckon not from the date of Order-in-Original i.e. the order challenged before Commissioner (Appeals), but from the date of receipt of said Order-in Original by the assessee. The valuable right of the assessee to seek a remedy by way of appeal cannot be forfeited based on mere presumptions and surmises - It is clear that there is no evidence as on what date the Order-in-Original got actually received by the appellant. Since the date of receipt of Order-in-Original apparently is 17.07.2019 and the appeal being filed on 7th August, 2019. It is held that the appeal was very much within the period of two months from the date of receipt of Order-in-Original as is required under Section 35A of Central Excise Act. Learned Commissioner (Appeals) is held to have wrongly rejected the same being barred by time - the Commissioner (Appeals) is required to adjudicate the matter on merits. Appeal allowed by way of remand.
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2021 (9) TMI 488
CENVAT Credit - input services - service tax paid for accommodation such as guest house/hotel - denial on the premise that services might have been used for personal purposes by the employees - HELD THAT:- It is clearly stated that when the employee of the appellant goes for an official visit for consultancy to their clients for the stay thereof, they required accommodation by way of guest house/hotel. These facts has not been controverted by the revenue with any tangible evidence. In the absence of any contrary evidence produced by the revenue, the allegation is only an allegation and that cannot be turned into demand as revenue has failed to produce any evidence on record to say that the guest house/hotel has been used by the employees of the appellant for their personal use. The Cenvat credit cannot be denied to the appellant - credit allowed - appeal allowed - decided in favor of appellant.
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Central Excise
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2021 (9) TMI 522
Rejection of declaration by the petitioner on SVLDRS-1 - seeking settlement of dispute under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - short payment of Central Excise duty against shortage of stock - CBIC Circular No. 1071/4/2019-CX.8, dated 27.8.2019 - HELD THAT:- In the present case, Section 133 of the Scheme is pari materia (in material parts) to Section 119(1) of the Income Tax Act, 1961. Under clause 10(g) of Circular issued by the CBIC under Section 133 of the Scheme, the CBIC had forsaken the power it wielded, to its own advantage, under the Scheme. Thus, it waived that advantage and relaxed the rigor of law - to make the Scheme more purposeful and successful by maximizing amicable/consented resolution of legacy disputes, under all indirect taxation enactments, in the context of the imminent enforcement of the G.S.T. Regime, at the relevant time. That being the emphasis laid by the CBIC, it clearly sought to maximize the number and quantum of settlements under the Scheme. The CBIC has only clarified the meaning to be given to the word 'quantified' used under the Scheme to include thereunder any duty liability admitted (in writing) by a person (during an enquiry or investigation) as a 'written communication' spoken of under Section 121(r) of the Scheme. Also, ₹ 45,38,231/- is the exact amount quantified while issuing the subsequent show-cause-notice dated 06.09.2019. The reasoning given by the Designated Committee in the impugned order runs contrary to law. The Designated Committee was obligated to deal with the declaration filed by the petitioner, on merits. No discretion was vested in the Designated Committee to take a different view. Even though the Circular has not been referred to or dealt by the Designated Committee, by virtue of the clear language of Section 133 of the Scheme, it was further obligated to necessarily act in accordance with that law. The impugned order is set aside. In absence of any other dispute or objection, the matter is remitted to the Designated Committee to issue the necessary SVLDRS-3, within a period of thirty days from today - Petition allowed by way of remand.
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2021 (9) TMI 497
Method of valuation - section 4 or 4A of CEA - Pressure cookers parts - Notified goods or not - requirement to affix MRP on goods or not - entitlement to abatement claim of 35% - sale of goods to the sister units as well as to the outside parties in open market - revenue neutrality - HELD THAT:- The facts are not in dispute that the parts of the pressure cookers have been cleared by the appellant from their depots in open market @ MRP less 41.41%. When comparable price is available, then the goods cleared to their sister units are to be assessed on the same value, but in this case, the appellant has cleared the goods to their sister units on higher value i.e. MRP less abatement @35% of the MRP. There are no merit in the impugned orders - appeal allowed - decided in favor of appellant.
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2021 (9) TMI 496
Refund claim - time limitation - whether provisions of section 11B of CEA are applicable to the amount of refund claim in the present case or not - penalty - HELD THAT:- The Show Cause Notice alleges that the application has not met the time line in terms of Section 11B(2) (ec). This provision prescribes the relevant date for refund application as the date of the order which allowed the said refund - Apparently and admittedly the final order of CESTAT which sanctioned the impugned refund is dated 28.11.2016. Thus, this is the relevant date as per sub-clause (ec) of Section 11B CEA wherefrom period of one year had to reckon. The applications of 19.04.2017 is very much within the said time limit. Hence, the finding of holding the application delayed by 10 years is absolutely beyond the scope of Show Cause Notice and wrong as well. The time bar of section 11B cannot be invoked in this case as Section 11 B is applicable to the amount of duty or interest or such similar charges. The amount in question is neither of these liabilities as against the present appellant. It was the demand confirmed against the predecessor of the appellant from whom the appellant has acquired his property. Penalty - HELD THAT:- Since the refund of later amount has already been sanctioned, there appears no justification for rejecting the impugned amount of ₹ 3,50,000/-, the balance amount of said penalty imposed upon M/s. Regency Industries. Appeal allowed - decided in favor of appellant.
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2021 (9) TMI 495
CENVAT Credit - input services - outward transportation of finished goods upto the depot of the appellant - Place of removal - beyond the factory gate or not - entitlement to the credit when the valuation was done under section 4A of Central Excise Act - HELD THAT:- Considering the Chhattisgarh High Court decision in the case of Ultratech Cement and Rallis India Limited [ 2014 (8) TMI 788 - CHHATTISGARH HIGH COURT ] of this tribunal and board circular dated 02.02.2016 held that whether valuation is done under 4 or 4A of Central Excise Act, the depot being place of removal the credit upto depot on outward transportation is admissible. The issue is no more under dispute and has been settled as there is no appeal filed by the revenue as per record of this appeal - the Cenvat credit on outward transportation upto depot is admissible - Appeal allowed - decided in favor of appellant.
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2021 (9) TMI 493
Refund of amount paid during persuasion of the department - claim rejected holding that same is beyond prescribed limit - section 11B of Central Excise Act 1944 - HELD THAT:- As it is clear from the order of Ld. Commissioner (Appeals) dated 19.01.2010 that it is not duty, therefore, the provisions of Section 11B of the Act are not applicable to the facts of the case to allege time limit prescribed under Section 11B of the Act is applicable to the facts of this case. The same view was taken by the Hon ble High Court of Karnataka in COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [ 2012 (7) TMI 22 - KARNATAKA HIGH COURT] as well as the Hon ble Apex Court in UNION OF INDIA VERSUS ITC LIMITED [ 1993 (7) TMI 75 - SUPREME COURT] . The refund claim filed by the appellant is not barred by limitation - appeal allowed - decided in favor of appellant.
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