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TMI Tax Updates - e-Newsletter September 14, 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 Warrant of Arrest by the Income tax Recovery Officer - show cause notice not issued - the order is procedurally ultra-vires, set aside - HC Inconsistent Rule with section prescribing additional condition for availing input tax credit is directory in nature and not mandatory. - HC Articles Recent Advance Rulings News Fourth Meeting of the Advisory Council of the Fifteenth Finance Commission held today Scheme for Export Credit to be Announced Soon: Piyush Goyal Notifications Customs 64/2019 - dated 13-9-2019 - Cus (NT) Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver DGFT 19/2015-2020 - dated 13-9-2019 - FTP Export Policy of Onions- Imposition of Minimum Export Price (MEP) GST - States Removal of Difficulty Order No. 07/2019--State Tax - dated 10-9-2019 - Goa SGST Goa Goods and Services Tax (Seventh Removal of Difficulties) Order, 2019 EXN-F(10)-16/2017 - dated 9-9-2019 - Himachal Pradesh SGST Corrigendum - Notification No. 29/2018-State Tax, dated the 7th July, 2018 25/2019-State Tax - dated 9-9-2019 - Himachal Pradesh SGST Seeks to amend Notification No. 22/2019- State Tax, dated the 30th May, 2019 Income Tax 63/2019 - dated 12-9-2019 - IT Cost Inflation Index for the financial year 2019-20 notified as 289 - Seeks to amend Notification No. 26/2018 dated 13/06/2018 62/2019 - dated 12-9-2019 - IT Central Government makes the directions giving effect to the E-assessment Scheme, 2019 61/2019 - dated 12-9-2019 - IT Faceless Assessment Scheme, 2019. Circulars / Instructions / Orders GST - States 108/27/2019-GST - dated 2-8-2019 Clarification in respect of goods sent/taken out of India for exhibition or on consignment basis for export promotion. Customs 31/2019 - dated 13-9-2019 Revised Norms for Execution of Bank Guarantee under Advance Authorisation, DFIA and EPCG Schemes Highlights / Catch Notes GST Refund of IGST - The respondents are directed to pay the balance amount i. e. , IGST minus higher rate of duty drawback already availed by the petitioner within the time granted by this Court and avoid the additional burden of interest payment on IGST refund. - HC Visit to Get Source Provisional attachment to protect revenue - The petitioner has not approached this Court with clear picture, whether he had option to file appeal or not, having regard to Section 107 of the Act. The petitioner is relegated to the Appellate Authority. - HC Visit to Get Source Income Tax Cost Inflation Index for the financial year 2019-20 notified as 289 - Seeks to amend Notification No. 26/2018 dated 13/06/2018 Visit to Get Source Central Government makes the directions giving effect to the E-assessment Scheme, 2019 Visit to Get Source Levy of penalty u/s 271(1)(c) - The assessee's specific case was that they were advised to file the return of income in a particular fashion and prior to the assessment proceedings, their Chartered Accountant had passed away and this had led to the mistake, which the AO pointed out during the assessment proceedings - penalty imposed by the AO and confirmed by the CIT(A) and ITAT is perverse and liable to be set aside - HC Visit to Get Source Reopening of assessment u/s 147 - deduction u/s 54 - allegation that thee property which was named as 'Gupta House' was actually an 'industrial plot' and not a 'residential house' - as per the Tribunal the AO did not have 'reasons to believe' that income chargeable to tax had escaped assessment - order of the ITAT set aside - HC Visit to Get Source Warrant of Arrest issued by Recovery Officer - notice to show cause not issued - prescribed procedure was not followed - The impugned order is procedurally ultra-vires. It is accordingly quashed and set aside - HC Visit to Get Source Merely for the reason that there were high volume of sales in the month of October on account of festival, the sales cannot be extrapolated to the other months for computing annual turnover. This would give unrealistic figures of annual turnover and there would be aberration in computation of profits. - AT Visit to Get Source Depreciation on let out properties u/s 32 - use of properties for the purposes of business of the assessee. - no deprecation u/s 32 can be allowed on these two properties which were acquired in earlier years and were let out throughout the year under consideration income thereof being offered for tax under the head income from house properties, as doctrine of supervening impossibility has set in - AT Visit to Get Source Disallowance of expenditure u/s 40A(3) - cash payments - the assessee is forced to pay the amount collected from the theatres on Sunday night itself after screening the film when the banks are closed. Hence the exclusion prescribed under Rule 6DD.2(j) of the Rules is applicable - AT Visit to Get Source Disallowance of 50% depreciation, interest, loan processing charges, life tax & insurance on the car acquired by the firm in the name of the partner - Claim to be allowed subject to verification of certifica claim to be allowed subject to verification of certain facts and circumstances - AT Visit to Get Source Customs Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver Visit to Get Source Extension of anti-dumping circumvention duty - retrospective effect - It is seen that the Designated Authority, without examining whether the anti-dumping duty should be levied retrospectively from the date of initiation of the investigation, recommended that the anti-dumping duty will be applicable from the date of its notification by the Central Government. - The matter remitted back to the Designated Authority - AT Visit to Get Source DGFT Export Policy of Onions- Imposition of Minimum Export Price (MEP) Visit to Get Source Indian Laws Uber’s discount and incentive policy - Abuse of Dominant Position - so long as this dominant position, whether directly or indirectly, imposes an unfair price in purchase or sale including predatory price of services, abuse of dominant position also gets attracted. Explanation (b) which defines ‘predatory price’ means sale of services at a price which is below cost. - SC Visit to Get Source Service Tax Valuation- C&F Agent service - inclusion of reimbursable expenses - all these expenses were reimbursed by the appellant for the various purposes incurred for carrying on the business of C&F Agent Service. - demand to the extent of reimbursement of expenses set aside - AT Visit to Get Source Classification of services - Gas Connection Charges - the appellant is distributing gas to its customers through pipes and for this purpose, it has installed an equipment called SKID at the customers’ site. - They are, therefore, for the use of the appellant and are not for use by the customers. - cannot be treated as Supply of Tangible Goods - demand set aside - AT Visit to Get Source Central Excise Refund of Excise Duty - The payment of duty was intended to prevent the incidence of interest and liability accruing from the non-payment of duty, and hence, it cannot be termed as deposit. - the same can never partake characteristic of pre-deposit as mentioned in Section 35F - cannot be treated as under protest - HC Visit to Get Source VAT Inconsistent Rule with statutory provision - Section 18(6) of the JVAT Act, 2005 does not contemplate production of JVAT -404 Forms as a mandatory condition for availing benefit of ITC. However, Rule 35(2) stipulates further condition of production of JVAT 404 Form as requirement for claiming benefit of ITC. - To this extent, Rule 35(2) of the JVAT Rules, 2006 is inconsistent with the provision of Section 18(6) of the JVAT Act, 2005 and is required to be held directory in nature and not mandatory. - HC Visit to Get Source Issuance of C-Forms - validity of Notification dated 11.10.2017 - interpretation of statute - amendment and scope of the word 'goods' - Situation of CST post GST - dealers are entitled to continue to be registered under Section 7(2) of the Act, irrespective of the fact whether they are liable to pay any tax to State or not. - HC Visit to Get Source Refund of extra amount deposited during the pendency of appellate proceedings - petitioner claims that entire burden has been born but it only - anthis Court in exercise of its jurisdiction under Article 226 of the Constitution ought not to revisit the very same circumstances and grant the prayers as made. - HC Visit to Get Source Nature of activity - service or not - levy of VAT or Service Tax - no certificate produced from the clients in support of the petitioners' claim that all materials were supplied only by the clients and it was only the activity of installation that was rendered by it - Petition dismissed - HC Visit to Get Source Set off of Entry tax with VAT - The claim of the assessee for set-off under section 4 cannot be granted merely for the asking - The transactions in this case cannot be said to be automatically revenue neutral. - HC Visit to Get Source Case Laws: GST 2019 (9) TMI 565 Extension of time limit for filing of GST Tran-1 - transitional credit - petitioner has alleged in the petition that despite making several efforts, the electronic system of the respondent no.2 did not respond, as a result of which the petitioner is likely to suffer loss of the credit that it is entitled to by passage of time. HELD THAT:- The respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the GST TRAN-1 of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. List this matter on 14.10.2019. 2019 (9) TMI 564 Correction of mechanism of Common Portal of GST in consonance with Notifications dated 31.12.2008 and 11.1.2019 - HELD THAT:- Notice of motion for 27.9.2019. To be taken up in urgent list. 2019 (9) TMI 563 Refund of IGST - Adjustment of amount already availed by the petitioner on account of higher rate of duty drawback - HELD THAT:- The respondents are directed to pay the balance amount i. e. , IGST minus higher rate of duty drawback already availed by the petitioner within the time granted by this Court and avoid the additional burden of interest payment on IGST refund. Petition disposed off. 2019 (9) TMI 562 Provisional attachment to protect revenue - Maintainability of petition - alternative remedy of appeal - Section 83(1) read with Section 5(3) of Karnataka Goods and Services Act of 2017 - HELD THAT:- Petitioner has a remedy of an appeal as provided under Section 107 of the Act, which has not been exhausted. The petitioner has not approached this Court with clear picture, whether he had option to file appeal or not, having regard to Section 107 of the Act. The petitioner is relegated to the Appellate Authority. Petition disposed off. Income Tax 2019 (9) TMI 561 Stay of demand - petitioner is ready to make the deposit for the purpose that the cash credit account of the petitioner may be released from attachment - HELD THAT:- The offer given by the learned counsel for the petitioner, prima facie, appear to be genuine to us, in view of the fact that the cash credit account of the petitioner has already been attached, which may be causing hindrance in the business of the petitioner. Accordingly, we direct the petitioner to make the deposit of ₹ 30,00,000/- and upon the deposit of this amount, the attachment order dated 24.06.2019 attaching the cash credit account of the petitioner shall remain in abeyance, till the period one week, and if revision / review is filed against the order dated 08.04.2019 within the same period, the attachment order shall be guided by the final order passed by the Commissioner of Income Tax, on the revision / review application, and upon its compliance by the petitioner. All these writ petitions are disposed of, directing the petitioner to avail the alternative remedy first. 2019 (9) TMI 560 Grant credit for the tax deducted at source while making payments to the petitioner - First respondent referring to written instructions dated 18.07.2019 states that the first respondent has reexamined the issue, a decision taken for granting refund and now steps are taken to transfer the amount to the credit of petitioner's bank account. According to him, the grievance is substantially redressed by the first respondent himself. Therefore, the cause does not survive. Adv. Smt. Krishna K. requests the Court to place the statement on record and dispose of the writ petition. HELD THAT:- The writ petition is disposed of by accepting the statement made on behalf of the first respondent, The petitioner, if does not get the relief within eight weeks from today, the petitioner is given liberty to file an application for recalling the instant judgment. 2019 (9) TMI 559 Levy of penalty u/s 271(1)(c) - as assessee is liable for payment of Minimum Alternate Tax (MAT) under Section 115JB, however he had neither filed Form 29B, nor paid taxes as required to be paid under Section 115JB - HELD THAT:- Admittedly, there is no allegation against the assessee before us that they had concealed particulars of their income. However, the allegation is inaccurate particulars have been furnished. AO while completing the assessment vide order dated 01.12.2011, does not record any finding that the particulars given by the assessee in the return of income is incorrect or inaccurate, but the conclusion of the AO is based upon an interpretation of the legal position and held that tax is payable under Section 115JB. The assessee's specific case was that they were advised to file the return of income in a particular fashion and prior to the assessment proceedings, their Chartered Accountant had passed away and this had led to the mistake, which the AO pointed out during the assessment proceedings. Thus, in our considered view, the assessee's case is not a case where the provisions of Section 271(1)(c) could have been invoked, as there has been no finding recorded by the AO that they have furnished inaccurate particulars or for concealing particulars. Order passed by the AO imposing penalty is perverse. Orders passed by the CIT(A) and the Tribunal confirming such orders are liable to be interfered with. Appeal filed by the assessee is allowed 2019 (9) TMI 558 TP Adjustment - comparable selection - Tribunal excluded M/s Accentia Technologies Limited, M/s TCS E-Serve Ltd. and M/s TCS E-Serve International Ltd. from comparables for determining the ALP - HELD THAT:- Revenue was unable to demonstrate that the order of the Tribunal suffers from any illegality or perversity as it had failed to consider or appreciate any relevant circumstances for excluding these three comparables, namely, M/s. Accentia Technologies Ltd., M/s. TCS E-Serve Ltd. and Ms. TCS E-Serve International Ltd. for determining the ALP as functionally dissimilar with that of assessee. It cannot be held that the aforesaid findings recorded by the Tribunal in the appeal warrant any interference by this Court. 2019 (9) TMI 557 Reopening of assessment u/s 147 - deduction u/s 54 - allegation that thee property which was named as 'Gupta House' was actually an 'industrial plot' and not a 'residential house' - as per the Tribunal the AO did not have 'reasons to believe' that income chargeable to tax had escaped assessment and remand back the case to CIT for fresh adjudication - HELD THAT:- It is clear that an illegal set off was sought to be claimed by the respondent (which probably succeeded because of the misleading appellation of the property in the dispute viz. 'Gupta House'). We set aside the finding of the Tribunal that there were no reasons for Assessing Officer to believe that income chargeable to tax had escaped assessment. Facing this, respondent has argued that in the penultimate paragraph of the impugned order, the Tribunal had noticed that it was deciding appeal on the preliminary questions and had consequently, not decided other questions and has prayed that the matter should be remanded back to the Tribunal so that the other questions can be urged. Once the recitals made in the sale deed are not disputed, the other questions do not arise. Appeal stands allowed and the judgment of the Tribunal is set aside and the orders of the Commissioner and the Assessing Officer are upheld. - Decided in favour of revenue 2019 (9) TMI 556 Maintainability of appeal - low tax effect - entire tax effect in the instant writ appeal is less than a sum of ₹ 2 Lakhs - HELD THAT:- The writ petition has been filed by the assessee, in view of their being no remedy provided under the Income-tax Act to challenge the impugned order under the provisions of the Income-tax Act. In the absence of an alternative remedy, the writ jurisdiction was invoked. In case an alternative remedy was provided for under the Income-tax Act, in that event, an appeal would have to be filed, which would then be covered by the monetary limit. Only because an alternative remedy is not provided and the assessee was compelled to file a writ petition, the Revenue cannot take advantage of it. Therefore, for the Revenue to contend, that they are protected by the Circular in writ matters may not be correct. Therefore,entire tax effect is less than ₹ 2 Lakhs, we do not find it appropriate to venture into the merits of the appeal. Consequently, the appeal is dismissed. 2019 (9) TMI 555 Warrant of Arrest issued by Recovery Officer - notice to show cause not issued - prescribed procedure was not followed - HELD THAT:- no order for the arrest and detention in civil prison of a defaulter shall be made unless the Tax Recovery Officer has issued and served a notice upon the defaulter calling upon him to appear before him on the date specified in the notice and to show cause as to why he should not be committed to civil prison, unless the Tax Recovery Officer is satisfied for the reasons which are mentioned in clause (a) and (b) of sub-rule (1) of Rule 73 of Schedule II of the Act. In the instant case, the impugned notice dated 21.11.2017 does not fulfill the requirements prescribed under Rule 73 (1) of Schedule II of the Act, in as much as, no specific show cause notice has been given to the petitioner asking him to show cause as to why he should not be detained in civil prison. The impugned order is procedurally ultra-vires. It is accordingly quashed and set aside. In the result, the petitioner shall be released forthwith from the custody. The petitioner shall deposit his Passport before the Recovery Officer-I, Debt Recovery Tribunal-II, Bengaluru as a condition precedent to his release from the jail. The petitioner shall not leave the Country without seeking leave of the Director General of Police, Bengaluru. 2019 (9) TMI 554 Characterization of income - Treatment to agricultural income as income from other sources - Disallowance of household expenses - HELD THAT:- The assessee has filed copy of the lease deed as noted above which are Dated 08.08.2011 and 05.07.2011. Therefore, these would prove agricultural land taken by assessee on lease in respect of assessment year under appeal, therefore, the very basis of the A.O. to disallow claim of assessee have been negated by the Assessee. Both these lease deeds have been produced before the authorities below supported by copies of the bills of Krishi Upaj Mandi Samiti which clarify that assessee sold agricultural produce through M/s. Jagadamba Traders. M/s. Jagadamba Traders confirmed the selling of the agricultural produce by assessee through them and all the payments are made by cheque/RTGS to assessee through banking channel. Assessee was doing agricultural activities and earned agricultural income, therefore, there was no justification to treat the agricultural income as income from other sources. Further, assessee has explained that he has shown sufficient house hold expenses by self which contain electricity, water charges, medical, vehicle expenses etc. Other family members have also joined him in incurring the house hold expense which was noted above was more than the amount for which addition is made by the A.O. Therefore, there was no justification to make any addition on account of house hold expenses. Both the additions are wholly unjustified.- Decided in favour of assessee. 2019 (9) TMI 553 Addition u/s 56(2)(viib) - assessee has received an excess amount on issue of shares qua the FMV as per Rule 11UA of IT Rules - CIT(A) consequently justified the basis adopted by the AO for rejection of the FMV determined by the assessee and approved the determination of FMV on the basis of book value of assets and liabilities under Rule 11UA of the Rules - HELD THAT:- 0ne of the grounds taken for rejecting the basis of determination of FMV is that no accounting entry has been passed in respect of difference between the FMV of the immovable property at the relevant point of time in the books of accounts. No merit in this line of reasoning adopted by the lower authorities. It is well settled that even where the assessee fails to make necessary entries in the books of accounts, it will not operate as a bar for claiming benefits by way of deduction etc. as was held in the case of Kedarnath Jute Manufacturing Co. Ltd. vs. CIT [ 1971 (8) TMI 10 - SUPREME COURT] Secondly, the second limb of Explanation (a) itself provides for determination of FMV based on value of underlying assets. As a corollary, the value once substantiated would be replaced with the book value for the purposes of FMV regardless of the book entries in this regard. This basis adopted by the lower authorities therefore does not hold any water. Another allegation made by the CIT(A) that the action of the assessee company is marred by adhocism and beset with arbitrariness. CIT(A) has observed that project was ultimately set up at Dahej despite acquisition of land at Padra which defies logic and gives an impression of adhocism. We fail to understand the purport of such observation for determination of FMV. The intrinsic valuation of the land as sought to be demonstrated by the assessee was required to be looked into to give effect to Explanation (a) below Section 56(2)(viib). The manner in which the assessee was required to run its business is totally within the domain of the assessee and has no bearing on applicability of Section 56(2)(viib) - unable to see substance in the allegation of arbitrariness in the conduct of the assessee. What the assessee has attempted to demonstrate that the market value of Padra land and 45% of jantri value of Dahej land itself is sufficient to justify the premium collected. The valuation report is not an evidence in itself but merely an opinion of an independent having regard to totality of expert facts and circumstances existing on the date of valuation. So long as the facts and circumstances exist, the presence or otherwise valuation report per se has no effect. Both the lower authorities have failed to controvert the value adopted for land parcels in departure with the book value. No rebuttal of the fact towards the value is on record. The Revenue authorities are clearly guided by irrelevant consideration while holding against the assessee. The AO himself in the subsequent year has disputed the higher valuation of ₹ 46/- and unequivocally adopted ₹ 33/- as fair value. The assessee has also been able to demonstrate the arm s length transaction and unison of two different groups bringing different capabilities and expertise for the furtherance of business. The peripheral evidences in the form of interest shown by giant groups like Tata are significant and underlie the bonafides in the fair valuation for issuance of fresh shares. There is another overwhelming factor subsisting in the case to justify the fair value. The existing promoters have also subscribed at the rate similar to the rate at which shares were allotted to Luhariwala Group which further reinforces the inherent strength in the valuations of the company as represented by the value of equity shares. We thus see no valid reason whatsoever in upholding the adverse conclusion drawn by the Revenue Authorities. - Decided in favour of assessee 2019 (9) TMI 552 Taxability of deemed income u/s 56(2)(vii)(b)(ii) - AO noticed that the assessee has purchased certain land parcels below stamp duty valuation rate - AO accordingly replaced the stamp duty valuation rate for the purposes of determination of purchase consideration by applying provisions of Section 56(vii)(b) - HELD THAT:- AO has applied the aforesaid provision after comparing the purchase price of the land vis- -vis the stamp duty valuation and added the difference in the hands of the assessee in proportion to his share in land holding. CIT(A) has upheld the aforesaid action of the AO. No infirmity in the order of the CIT(A) in this regard. Section 49(4) clearly provides that the benefit of the inflated cost of acquisition in view of the deeming provisions u/s 56(2)(vii)(b)(ii) would be available at the time of sale of the asset and capital gains will be accordingly reduced to the extent of such increase in deemed consideration. CIT(A) has given appropriate relief in this regard. We thus see no wrong in action of the CIT(A). The plea of the assessee that the agricultural land is rural land was raised for the first time before us. In the absence of any findings of the lower authorities on factual aspects, we decline to entertain the aforesaid new plea. We also find no merit in the plea of the assessee for its inapplicability of Section 56(2)(vii)(b)(ii) to the FY 2013-14 concerning AY 2014-15. The aforesaid provision is applicable from AY 2014-15 and would thus apply to transactions concerning FY 2013-14 as intended by the legislature. The assessee has taken an altogether new plea that agricultural land bearing Block No. 143 was purchased in the subsequent financial year, which plea was not taken before the lower authorities. We thus see no reason to entertain such plea in the absence of any supporting material placed before the lower authorities. Otherwise also, in view of the provisions of Section 150(1) r.w.s. 153(6) of the Act, the differential income can be assessed in AY 2014-15 and therefore the whole exercise will be revenue neutral. We, however, do not seek to delineate. We thus find no merit in any of the grounds set up by the assessee. 2019 (9) TMI 551 TP Adjustment - AMP expenditure - whether amount received by the assessee towards the contribution for advertisement marketing and promotion expenditure is not tainted with mutuality but, thus, income of the assessee chargeable to income tax under the income tax act? - claim of diversion by overriding title - HELD THAT:- According to clause 4 of the above operating agreement the holding company may at the request of the assessee but subject to holding companies sole and absolute discretion paid to assessee any such amount as it may deem appropriate to support the AMP activities during any accounting period. Further it was clarified in the same clause that the holding company shall have no occasion to pay any such amount if it chooses not to do so. However the contribution of the franchisee is covered in clause 3 of the agreement wherein there is a mandatory requirement of contribution by this franchisee to the assessee. Even there is a condition which gives the right to the assessee to terminate this agreement in the even any amount is not paid by franchisee to the assessee. Even the payment of the contribution was also required to be supported with statement of sale is directed by the assessee from time to time. According to clause number 4.2 of the agreement the holding company shall pass on to assessee any rebates received by the holding company from advertisement and marketing companies and attributable to the AMP activities during the terms of this agreement further the board of director of the assessee company shall also be nominated by the holding company and the holding company has reserved its rights to nominate one representative of 2 franchisees on a rational basis further in clause number 7.5 of the agreement there is a binding requirement of increase in the contribution by the franchisee According to clause 10 of the agreement this of operating agreement with the franchisee shall be coterminous with the franchisee agreement and shall terminate automatically with immediate effect on the determination of the franchisee agreement. However on determination there is no provision of paying the balance outstanding amount of the franchisee from the assessee, which remains unspent. However as per clause number 10.3 in the event of termination or expiry of the agreement without determination of the franchisee agreements, the advertising contribution payable by franchisee will be paid by the franchisee to the holding company as per the provisions of the franchisee agreement from the effective date of termination of operating agreement. In view of above facts, the claim of the assessee is that the income of the assessee is diverted by overriding title and hence cannot be taxed in the hands of the company. The judicial propriety also demands that when a particular issue has been decided by the higher forum then, the lower forum should always refrain from deciding any aspect of that matter which can disturb the finding of the higher judicial forum. Therefore it will create a situation of confusion and as we understand, it is improper for us to consider any aspects of taxability of the sum, which was already decided by the Honourable High court. Such overriding power is absent in the hands of the tribunal whose authority is to amend and rectify its order. However when such an order has been challenged before the higher forum and higher forum adjudicate it on the issue, our understanding is that, the tribunal is precluded from dealing with any of the matter relating to the aspect of that particular ground. It cannot be said that if one alternative has failed, the assessee can agitate the alternative contention about the taxability of the same income, which has been considered by the higher forum. Thus, according to us the above issue raised before us in ground number 1 (b) of the grounds of appeal has already reached finality and we are barred by the principle of finality and to an extent the doctrine of merger. We dismiss ground number 1 (b) of the appeal of the assessee only on the issue of principles of finality and doctrine of merger. Application for admission of the additional evidences - Tribunal is empowered to admit the additional evidences if other substantial cause justifies the admission of those evidences. In the present case, we find that to determine the correct facts of the whole case if the assessee, could not produce the fact that its holding company and the Pepsi foods Ltd are also the contributors as well as beneficiaries of the activities of the assessee, we do not find any reason to not to admit those additional evidences. Therefore in the interest of the justice, we admit those additional evidences. Income of contribution from franchisee - For the similar reasons as given by us with respect to the holding company of the assessee, the contribution of the Pepsi foods Ltd is also tinged with commercial considerations. The honourable High Court has held that that principle of mutuality is applicable to those entities whose activities are not tinged with commercial purposes. Therefore according to us, the additional evidences submitted by the assessee do not make any impact on the income of the assessee. Further as per the operational agreement as discussed by us there is no obligation on the holding company to contribute for the advertisement expenditure. Even otherwise it is at the sole discretion of the holding company. Therefore, we do not find any reason to disturb the finding of the coordinate bench, which has been approved by the honourable High Court in assessee s own case for assessment year 2001 02 [ 2009 (4) TMI 1 - DELHI HIGH COURT] . Accordingly ground number 2 of the appeal for assessment year 2002 03 is dismissed. Receipts which represent advertising contribution received from the franchisees and the holding company are in fact diverted at source by overriding title and therefore the surplus over the expenditure is not liable to tax - The True nature of transaction in the present case is of a marketing arrangement by the holding company by forming Assessee Company where the licensees of the holding company shall contribute to the assessee company for a certain business activity. More so the Holding company is not a contributor but gives a direction for spending the fund. Fund is received from the franchisee owners but it is used as per directions of holding company Further treatment of income merely in a particular manner may not be determinative , however the business functions, various agreements, approvals, conditions attached in the agreements clearly show that it is a business arrangement. The issue whether an income is diverted by overriding title or applied cannot be answered with a straitjacket formula and each case has to be decided based on its own merits looking at the specific arrangements made by the assessee. Each and every fact needs to be carefully examined before giving it colour of diversion of income by overriding title at source. The utmost significant factor in deciding a case on such an issue is to see, as formulated in Sitaldas Tirathdas [ 1960 (11) TMI 17 - SUPREME COURT] whether the income had at all reached the assessee or whether the same was diverted at the source itself. Assessee was legally or statutorily obliged to part with such an income by itself cannot be a criterion to decide this question. The nature of obligation is also significant factor to conclude. In the present case, to reach at the conclusion that income of the assessee is not diverted by overriding title, we have relied on the operating agreement, the franchisee agreement, the memorandum of Association, the annual accounts of the assessee as well as approval granted by the SIA. Accordingly we dismiss ground number 3 and 4 of the appeal of the assessee. Addition on account of unverified S. Creditors - HELD THAT:- Before the learned CIT A the assessee explained the differences which is mainly due to the different accounting principles covering income and expenses by the appellant and the creditors and further the learned CIT A has admitted the additional evidences and also obtained the remand report. In fact 10/19 creditors confirmed balance though there were some differences in the closing balances in view of cases due to different method of revenue recognition. Further the assessee also explained the differences in closing balance and also submitted the certificate of the creditors with respect to payment made to them in subsequent years along with the details of the banks how the payments have been discharged. The learned departmental representative also could not show any infirmity in the order of the learned CIT A. In view of this we do not find any infirmity in the order of the learned CIT A in deleting the above addition. Accordingly appeal of the learned assessing officer is dismissed. 2019 (9) TMI 550 Estimation of turnover - GP addition on unrecorded sales - HELD THAT:- In First Appellate proceedings has enhanced GP addition by extrapolating sales for the month of October, 1997 to the entire year. The contentions of the assessee is that October being the month of Diwali festival the sales are at peak. Hence, sales during festival months/seasons cannot be extrapolated to the entire year. We find merit in the contentions of the assessee. Merely for the reason that there were high volume of sales in the month of October on account of festival, the sales cannot be extrapolated to the other months for computing annual turnover. This would give unrealistic figures of annual turnover and there would be aberration in computation of profits. The sales recorded during festival month at the most can be extrapolated to 3-4 calendar months. In so far as the remaining calendar months regular sales figure have to be adopted. Without going into the merits of calculations furnished by the assessee we deem it appropriate to restore this issue back to the file of Assessing Officer for re-computation of annual turnover in line with our aforesaid observations. Accordingly, ground Nos. 1 and 2 of the appeal by the assessee are allowed for statistical purpose. Unexplained expenditure u/s. 69C on account of unexplained expenditure - HELD THAT:- We are of considered view that once GP addition has been made by estimating unaccounted sales turnover, addition u/s. 69C is not warranted. The unaccounted expenditure could have been made by assessee from income generated from unaccounted sales. Our view is supported the judgment rendered in the case of Commissioner of Income Tax Vs. Jawanmal Gemaji Gandhi [ 1983 (10) TMI 17 - BOMBAY HIGH COURT] Addition u/s. 69B on account of unexplained initial investment - HELD THAT:- Assessee has given calculation on the basis of turnover computed after extrapolating sales of festival month to three calendar months and regular sales for remaining 9 months. Since, we have restored the issue of GP addition and computation of annual turnover back to the file of Assessing Officer, the calculation of initial investment has to be re-worked based on the annual turnover computed as per the directions of Tribunal. We deem it appropriate to restore the issue back to the file of Assessing Officer. The Assessing Officer shall grant reasonable opportunity of hearing to the assessee, in accordance with law. Telescopic effect - HELD THAT:- Unaccounted cash found during the search operation has been offered to tax by the assessee as part of undisclosed business income. The additions made during assessment proceedings are in respect of undisclosed business transactions. The GP addition is made on turnover determined by extrapolation of sales. We are of considered view that the assessee deserves the benefit of telescopic effect on GP additions against cash seized and offered to tax. Therefore, we find merit in the contentions of the assessee in seeking the benefit of telescopy of cash seized against addition on account of gross profits on unaccounted sales. In principle, we allow ground No. 6 of the appeal. However, we deem it appropriate to restore this issue back to the file of Assessing Officer for limited purpose of giving telescopic effect to the GP after re-computation. Condonation of delay - appeal is time barred by 465 days - HELD THAT:- The Hon ble Supreme Court of India in the case of Ram Nath Sao @ Ram Nath Sahu and Others Vs. Gobardhan Sao and Others [ 2002 (2) TMI 1280 - SUPREME COURT] has held that acceptance of explanation furnished seeking condonation of delay should be the rule and refusal an exception, more so when no negligence or inaction or want of bonafide can be imputed to the defaulting parties. Taking a pedantic and hyper technical view of the matter, the explanation furnished should not be rejected when stakes are high and/or arguable points of facts and law are involved in the case, causing enormous loss and irreparable injury to the party against whom the lis terminates either by default or inaction. The Hon ble Apex Court in various other decisions has taken similar view in liberally accepting the explanation furnished by the assessee for condoning the delay in filing of appeal. Thus delay of 465 days in filing of appeal is condoned. Levying penalty u/s. 271(1)(c) - HELD THAT:- A perusal of the orders by Commissioner of Income Tax (Appeals) initiating penalty proceedings and the order levying penalty clearly indicate that the charge for levy of penalty are not in coherence. The penalty has been initiated for concealment, whereas it has been levied for both the charges of section 271(1)(c) i.e. concealment of income and furnishing inaccurate particulars of income. The Hon ble Bombay High Court in the case of Commissioner of Income Tax Vs. Samson Perinchery [ 2017 (1) TMI 1292 - BOMBAY HIGH COURT] has held that where satisfaction has been recorded for one breach u/s. 271(1)(c) and the penalty has been levied for another, such order levying penalty u/s. 271(1)(c) is not permissible. - Decided in favour of assessee 2019 (9) TMI 549 Revision u/s 263 - Reopening of assessment u/s 147 - HELD THAT:- Documents available on record and realized that though submission of DR is correct to the effect that the AO in the assessment order did not make any discussion in regard to the query made by him and the explanation submitted by the assessee thereto, however from the statutory notices and questionnaire issued by the AO and replies thereto by assessee and documents available on record, it is undoubtedly clear that the AO thoroughly examined and verified the material facts and documents and all the issues raised in the questionnaire including cash deposit in saving bank account No.11321388010 with State Bank of India, Zira, relevant for passing the assessment order u/s 143(3)/147 and therefore it cannot be said that the AO has not made any enquiry and thus such decision of the ITO cannot be held to be erroneous simply because in his order he did not make an elaborate discussion in that regard. CIT issued the notice dated 14.03.2017 u/s 263(1). Though the assessee specifically replied the aforesaid notice as well, however the Pr. CIT, without considering the material available on record, facts and circumstances of the case and contentions of the assessee, cancelled the entire original assessment order dated 20.07.2014 with a direction to the A.O. to the frame the assessment fresh after giving due opportunity to the assessee. Pr. CIT neither make any exercise for examining the record nor gave plausible reason(s) as to why the assessment order is erroneous and prejudicial to the Revenue while coming to the conclusion before initiating and concluding the proceedings u/s 263 therefore, on this aspect as well, the order under challenge cannot sustain. As the original assessment order is based upon detailed enquiry, therefore the Ld. Pr. CIT could not have assumed jurisdiction under the law to revise the Assessment Order in this case, hence we do not have any hesitation to quash the impugned order as the same is unjustifiable and suffers from perversity and impropriety, consequently the same is quashed. Appeal filed by the assessee stands allowed. 2019 (9) TMI 548 Maintainability of appeal - low tax effect - monetary limit for filling appeal - HELD THAT:- As relying on DINESH MADHAVLAL PATEL [ 2019 (8) TMI 752 - ITAT AHMEDABAD] we are of the view that the relaxation in the monetary limit in departmental appeals vide circular dated 8th August, 2019 shall be applicable to the pending appeals in addition to the appeals to be filed henceforth. Thus, the contention of ld D.R. is dismissed. Accordingly, we dismiss the appeal filed by the Revenue without going into merits of the case. However, it is made clear that the Department is at liberty to file Miscellaneous Application, if the tax effect is found to be more than the prescribed limit of ₹ 50,00,000/- as per the amendment carried out by the CBDT in Circular No.17/2019, dated 8th August, 2019, or any of the conditions etc. as available in the amended para 10 of Circular No.3/2018, dated 20th August, 2018. Accordingly, the appeal of the Revenue deserves to be dismissed. 2019 (9) TMI 547 Validity of assessment order u/s. 143(3) r.w.s. 153C - no valid satisfaction as required u/s 153C - HELD THAT:- From the conjoint reading of the provisions of section 153C, the decision of the Hon ble Supreme Court in the case of CIT vs M/s Calcutta Knitwears [ 2014 (4) TMI 33 - SUPREME COURT] and CBDT Circular No.24/2015, it is very clear that even if the AO of the searched person and the other person is one and the same, then also he is required to record separate satisfaction as required u/s 153C of the Act. If, no satisfaction is recorded, then whole proceedings becomes null and void. In this case, the departmental representative filed to produce satisfaction note recorded by the AO, in spite of bench directed to do so. Therefore, we are of the considered view that, there is no satisfaction was recorded by the AO of the searched person and the AO of the assessee, and hence, the assessment order passed u/s 143(3) r.w.s. 153C of the Act, cannot be held valid. Thus in absence of valid satisfaction as required u/s 153C of the I.T.Act, 1961, the whole proceedings including the assessment order passed u/s 143(3) r.w.s. 153C of the I.T.Act, 1961 is void ab-initio and liable to be quashed - Decided in favour of assessee. 2019 (9) TMI 546 GP estimation - non maintenance of stock records - AO estimated the GP rate at 10% as against 5.73% shown by the assessee on the ground that assessee has not maintained any stock register and the closing stock was certified by the partners on the basis of verification of physical stock - CIT(A) relying on various decisions upheld the action of the AO - HELD THAT:- Assessee who is not maintaining any stock register cannot be equated with an assessee who maintenances a stock register on day today basis giving quantitative details of items traded. Further in the instant case find the GP rate has fallen although the turnover has significantly gone up to ₹ 2.09 crores as against 76.46 lacs in the preceding year. When the turnover goes up substantially it is quite possible that the GP rate may come down. As mentioned earlier an assessee not maintaining any stock register cannot be equated with an assessee maintaining stock register giving full details. Therefore, deleting the entire trading addition as argued by assessee cannot be accepted - addition of ₹ 50,000/- on estimate basis for possible leakage of revenue due to non maintenance of stock records will meet the ends of justice. The grounds raised by the assessee are accordingly partly allowed. 2019 (9) TMI 545 Penalty u/s. 271(1)(c) - disallowance of deduction u/s. 80IA on profit from DEPB and computation of book profit u/s. 115JB - debatable issues - HELD THAT:- Assessee had disclosed all relevant particulars for computation of its income. All the relevant facts were already before AO. The issues on which additions were made were debatable and the instant case of the assessee was a case of bonafide difference of opinion on the entitlement of deduction as per provision of the Act. The assessee had also disclosed the compete facts of merger and its claim of deduction u/s. 115JB of the Act. We uphold the findings of the ld. CIT(A) that the assessing officer has not established that the assessee furnished incorrect facts after placing reliance on the decision of CIT vs. Reliance Petro products Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] .- Appeal of the Revenue is dismissed. 2019 (9) TMI 544 Depreciation on let out properties u/s 32 - AO rejected contentions of the assessee on the ground that once assets are let out more so where the income is shown as Income from House Property , the depreciation cannot be allowed - HELD THAT:- The assessee manifested its intention of change of user from business to that of giving these properties on rent for longer period of time wherein doctrine of supervening impossibility had set in preventing business user of these properties for the purposes of business of the assessee. Similar is the case of Ansal Properties [ 2012 (4) TMI 469 - DELHI HIGH COURT] wherein the Hon ble Delhi High Court was not seized of the matter concerning change of user of the assets by the taxpayer. Thus, so far as these two house properties which were acquired in earlier years and were let out on rent from years including year under consideration, income thereof was offered for taxation by assessee under the head Income from House Property , no depreciation can be allowed u/s 32 as there is no business user of these two properties by assessee for the entire year as well for earlier years. These two properties are not even available or ready to be used for business purposes as these are let out on rent for years and doctrine of supervening impossibility of business user has set in keeping in view long period of these properties being let out . We hold that no deprecation u/s 32 can be allowed on these two properties which were acquired in earlier years and were let out throughout the year under consideration income thereof being offered for tax under the head income from house properties, as doctrine of supervening impossibility has set in as neither these properties were used for business purposes, nor ready to be used for business nor available for business user for the purposes of business of the assessee , for the entire year under consideration. Deprecation u/s 32 under these circumstances can not be allowed on these two properties merely on the grounds that once these properties entered Block of Assets viz. Building many years back and continues to be part of Block of Asset viz. Building despite the fact that factual matrix surrounding these two properties had undergone substantial change over years which cannot be given complete go bye 2019 (9) TMI 543 Disallowance by invoking provisions of section 36 (1) (ii) - amount of commission and exgratia paid to one of the director Sh. Anshuman Magazine who is a share holder of this company holding 24% share holding - HELD THAT:- Since the commission paid to Sh. Anshuman Magazine, director of the assessee company was deleted by the CIT(A) in the preceding years and the order of the Tribunal dismissing the appeal filed by the revenue has not been challenged by the revenue in the preceding two years and further considering the fact that the Assessing Officer in the orders passed u/s. 143 (3) for subsequent assessment years from 2010-11 to 2014-15 has allowed similar commission/ incentive, therefore, following the rule of consistency, we are of the considered opinion that no disallowance u/s. 36 (1) (ii) is called for in the instant case. We, therefore, set aside the order of the CIT(A) on this issue and allow the grounds of assessee Excessive claim of remuneration - as alleged statutory approval were not obtained by the assessee - submission of the assessee that in the assessment year 2008-09 amount as disallowed u/s. 36 (1) (ii) which included the amount of excess remuneration, therefore, again the same amount cannot be brought to tax in the impugned assessment year - HELD THAT:- We find merit in the above argument of the ld. Counsel for the assessee. From the details furnished by the assessee, it is seen that the amount of ₹ 3,04,30,061/- was a part of the amount of ₹ 6,47,27,888/- being the amount of disallowance u/s. 36 (1) (ii) for A. Y.2 008-09. We, therefore, restore this part of the disallowance to the file of the Assessing Officer for verification and if the above amount was a part of disallowance made u/s. 36 (1) (ii) then it relates to A. Y. 2008-09 and cannot be disallowed during the current year. AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. Excess remuneration paid to Sh. Anshuman Magazine - necessary approval seeked - HELD THAT:- We find the assessee has obtained approval of the competent authority though on 18.07.2011 i.e. much after the date on which such remuneration has been paid. In our opinion although the approval has been obtained after date of payment, however it will relate back to the year under consideration. Since the approval was granted by the competent authority vide letter dated 18.07.2011 for three financial at a time i.e. financial year 2007- 08, 2008-09 and 2009-10, therefore, it is wrong on the part of the AO and the CIT(A) to hold that remuneration is not allowable since the approval has been obtained after the payment of remuneration to the concerned director. Above amount was a part of ₹ 6,64,64,442/- which was disallowed by the Assessing Officer u/s. 36 (1) (ii). However, we have already deleted such disallowances. No finding of the AO and CIT(A) that the expenditure incurred is not for the purpose of business of the assessee. Further the amount has already suffered to tax in the hands of Sh. Anshuman Magazine. In view of the above discussion we are of the considered opinion that the disallowance is not justified under the facts and circumstances of the case. 2019 (9) TMI 542 Rectification u/s 154 - mistake apparent on record - AO need to issue a draft order for rectifying the mistake apparent on record - HELD THAT:- Once the DRP gives the directions in respect of a particular assessment, it is functus officio and one can not go back to the DRP for grievance against the proper effect not being given to the DRP directions. As the law specifically provides, the order giving effect to these directions, as also orders under section 154 in respect of such order, can only be appealed in the Income Tax Appellate Tribunal. The assessee has duly availed this remedy. No merits in the plea of the assessee on this count and hold that the Assessing Officer was not required to issue a draft order for rectifying the mistake apparent on record under section 154. As regards the merits of the rectification order, learned counsel does not have much to say. He fairly accepts that the mistakes pointed out in the rectification order are indeed correct. Once it is not in dispute that the mistakes rectified by the Assessing Officer are indeed covered by the scope of mistake apparent on record , rectification of these mistakes cannot be declined on the ground that there are other mistakes which would neutralize the tax impact of these mistakes. It is for the assessee to seek remedy for the mistakes apparent on record in respect of an order, but the mere existence of such mistakes, even if there be any, cannot be ground enough to decline rectification of other mistakes in the same order. The remedy for other mistakes alleged to have crept in the impugned order, which prejudice the interests of the assessee, cannot be in cancelling the rectification of mistakes which prejudice the interests of revenue; two wrongs will not make a right. We decline to negate the rectification of mistakes for this reason assigned by the assessee as well. There is no cause for interference on merits as such. No merits in grievance of the assessee- on the issue of jurisdiction as also on merits. We, therefore, confirm the impugned rectification order and decline to interfere in the matter. 2019 (9) TMI 541 Disallowance u/s. 40(a)(ia) for want of deduction of tax at source as per statutory provisions - deduction of TDS at 2% instead of 10% - HELD THAT:- Assessee has suffered impugned disallowance u/s 40(a)(ia) for want of deduction of tax at source at higher rate i.e. 10%. It is undisputed fact that the assessee has deducted tax @2% and the additions have been made for short-deduction of tax as per Section 40(a)(ia). We find that the facts of the present case are squarely covered by the cited decision of this Tribunal rendered in ACIT Vs. M/s T.V.Vision Ltd. [ 2018 (2) TMI 1923 - ITAT MUMBAI] wherein the co-ordinate bench, after considering various decisions, decided the issue in assessee s favour. 2019 (9) TMI 540 Disallowance of 50% depreciation, interest, loan processing charges, life tax insurance on the car acquired by the firm in the name of the partner - HELD THAT:- The assessee were the owners of the vehicles and they used them in their business and, therefore, they were entitled to depreciation on them. Similar view was also expressed by the Hon ble Allahabad High Court in the case CIT Vs. Navdurga Transport Company [ 1997 (9) TMI 35 - ALLAHABAD HIGH COURT] . Direct the AO to verify whether the car is acquired from the resource of the firm or the purchase consideration is credited to the partner s current or capital account and if so grant depreciation as claimed by the assessee. We also hereby direct the AO to grant 50% deduction with respect to the claim of interest expense insurance expense incurred by the assessee on the car loan since these expenses are revenue in nature and the assessee has used the car for business as well as for personal purpose and the assessee itself had disallowed 50% depreciation in his computation of income. However the life tax has to be added to the cost of the car because it adds to the value of the car. It is also pertinent to mention that the loan processing charges is an expense incurred by the assessee before the acquisition of the asset and therefore the same has also to be added to the cost of the car. Needless to mention that depreciation has to be granted after taking into consideration the life tax and the loan processing charges as the cost of the car. Disallowance of expenditure u/s 40A(3) - cash payments - HELD THAT:- It is the practice in the business to hand over the collection as soon as the film is screened. Therefore the assessee is forced to pay the amount collected from the theatres on Sunday night itself after screening the film when the banks are closed. Hence the exclusion prescribed under Rule 6DD.2(j) of the Rules is applicable in the case of the assessee for the payment made during the period when the Bank do not function. For the above stated reason we hereby direct the Ld.AO to delete the addition made by invoking the provision of Section 40A(3) of the Act. Disallowance of expenditure towards purchase of pictures / movies by invoking the provisions of Section 194J r.w.s. 9(1)(v) 40(a)(ia) - AO opined that the payment made by the assessee tantamount to payment of royalty as per Section 194J r.w.s.9(1)(v) and therefore the assessee is bound to deduct tax at source in accordance with the provisions of Section 40(a)(ia) - HELD THAT:- Explanation 2(v) of Section 9(1)(v) of the Act makes it abundantly clear that consideration towards sale, distribution or exhibition of cinematography films does not fall within the ambit of royalty. In the case of the assessee it is evident that the assessee has obtained rights for exhibiting cinematography films. Therefore the payment made by the assessee for obtaining such rights cannot be construed as payment made towards fees for professional or technical services as provided U/s 194J of the Act. Hence 40(a)(ia) cannot be invoked in the case of the assessee for non-deduction of tax. Therefore we hereby direct the AO to delete the addition made in the hands of the assessee invoking the provision of Section 40(a)(ia) of the Act r.w.s. 194J 9(1)(v) of the Act. Customs 2019 (9) TMI 539 Extension of anti-dumping circumvention duty - Relevant date of imposition - import of Cold-rolled Flat products of width not covered under customs notification dated 11 December 2015 originating in or exported from China PR, Japan, Korea, European Union, South Africa, Tiwan, Thailand and USA - validity of imposition of ADD on the PUI from the date of publication of the notification on 24 October, 2017 and not retrospectively from the date of initiation of the anti-circumvention proceedings on 19 February, 2016 - Rule 5 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995. HELD THAT:- Section 9A (1) of the Tariff Act empowers the Central Government to impose anti-dumping duty. Section 9A (1A) of the Tariff Act deals with circumvention of anti-dumping duty. It provides that if the Central Government is of the opinion that circumvention of anti-dumping duty has taken place whereby the anti-dumping duty imposed has been rendered ineffective by altering the description or the composition of the article, then it may extend the anti-dumping duty to such article. In exercise of the powers conferred under section 9A (6) of the Tariff Act, the Central Government framed Rules called the 1995 Rules. Rule 25 deals with circumvention of anti-dumping duty, while Rule 26 deals with initiation of investigation to determine circumvention. Rule 27 deals with determination of circumvention. It provides that Designated Authority, upon determination that circumvention of anti-dumping duty exists, may recommend imposition of anti-dumping duty to imports of articles found to be circumventing an existing anti-dumping duty and such levy may apply retrospectively from the date of initiation of the investigation under Rule 26. Sub-Rule (3) of Rule 27 provides that the Central Government may, pursuant to the recommendations made by the designated authority, extend the anti-dumping duty to imports of article from the date of initiation of the investigation under Rule 26 or such date as may be recommended by the Designated Authority. In the instant case, after the Designated Authority informed all interested parties of the essential facts under consideration which formed the basis of its decision, the Domestic Industry filed post disclosure comments. It emphasised that the anti-dumping circumvention duty should be imposed from the date of initiation of the investigation on 19 February, 2016 in terms of Rule 27 of the 1995 Rules. The relevant portion of the post disclosure comments have been reproduced in paragraph 8 of this order. It was pointed out that the motive of the importers/ exporters would be achieved if the Designated Authority recommends prospective anti-circumvention duty - It will, therefore, not be appropriate to examine the order on the basis of reasons not contained in the final findings recorded by Designated Authority. The reasons contained in the order can only be seen, but no reasons are contained in final findings as to why the anti-circumvention duty as pointed out by the Appellant was not levied retrospectively. There is no consideration of this aspect in the final findings even though it was specifically raised by the Appellant in the post disclosure comments. In Kranti Associates Pvt. Ltd. Vs. Masood Ahmed Khan [ 2010 (9) TMI 886 - SUPREME COURT ], reported in the Supreme Court after referring to the earlier decisions that hold that a quasi judicial authority must record reasons in support of its conclusion because reasons assure that the discretion has been exercised by the decision maker on relevant grounds and by disregarding irrelevant considerations, also observed that recording of reasons operates as a valid restraint on any possible arbitrary exercise of quasi judicial power. It is seen that the Designated Authority, without examining whether the anti-dumping duty should be levied retrospectively from the date of initiation of the investigation, recommended that the anti-dumping duty will be applicable from the date of its notification by the Central Government. The Central Government issued the Notification No. 52/2017 that was published in the Gazette of India, Extraordinary on 24 October, 2017 imposing anti-dumping duty from the date of publication in the Gazette. The matter, therefore, needs to be remitted to the Designated Authority to record a specific finding as to whether the anti circumvention duty should be levied retrospectively from the date of initiation of the investigation - Appeal allowed by way of remand. 2019 (9) TMI 538 Imposition of penalty u/s 112(a) and 114AA of CA - Misdeclaration of imported goods - Firecrackers - prohibited goods or not - role attributed by the Revenue to the present appellant is that he filed the online bill of entry for the said import and as such must have been aware of the fact that the goods were being declared - HELD THAT:- The use of the expression must have is indicative of the fact that Adjudicating Authority is not sure about the role played by the said appellant. Otherwise also the filing of online bill of entry by itself cannot be held to be punishable offence unless Revenue produce evidences to establish that the person concerned, by his active involvement, aided and abated the importer. There is no justifiable reasons to impose penalty upon the appellant - appeal allowed - decided in favor of appellant. 2019 (9) TMI 537 Recovery of Customs Duty - Section 143 (3) readwith Section 142 of the Customs Act, 1962 - the basic ground on which the customs duty has been confirmed and ordered for recovery, is for the reason that the appellant have failed to adduce the evidence of fulfillment of their export obligation under advance authorization - HELD THAT:- The claim of the appellant that they have fulfilled the export obligation with regard to the advance authorization dated 10 January 2013 and, therefore, there is no cause for demanding customs duty against the duty free imports effected by them under the above-mentioned advance authorization - it will be proper if the original Adjudicating Authority considers the claim made by the appellant regarding fulfillment of the export obligation and decide the matter afresh. Matter remanded for denovo adjudicating for taking into account the claims of export obligation fulfillment made by the appellant - appeal allowed by way of remand. 2019 (9) TMI 536 Valuation - duty on remnant Aviation Turbine Fuel (ATF) in the Aircraft at the time of its conversion from international sector to domestic sector - Determination of insurance, freight and landing charges required to be added to the IOC price (the basis for payment of duty) for determination of assessable value of remnant ATF in the aircraft at time of conversion from international to domestic run - demand of differential duty alongwith interest and penalty - Scope of Rule 10(2) of the Custom Valuation (Determination of Price of Imported Goods) Rules, 2007- Scope of Rule 10(2) of the Custom Valuation (Determination of Price of Imported Goods) Rules, 2007 - extended period of limitation - Confiscation - contrary views. HELD THAT:- Since there are contrary views to the view earlier taken by the coordinate benches of tribunal, we refer the matter to the President for constitution of larger bench to determine: Whether the value of cost and services as specified in rule 10(2) of the Customs Valuation (Determination of Price of Imported Goods) Rule, 2007, specifically the value towards freight charges is required to be added to the value of ATF determined on the basis of sale price of IOC of ATF to Air India/Indian Airlines for their foreign going aircrafts? Matter referred to President for placing the above question before a larger bench. Corporate Laws 2019 (9) TMI 535 Oppression and Mis-management - appellate remedy provided under Section 421 of the Companies Act 2013 - Maintainability of petition u/s 241 of Companies Act - HELD THAT:- In the instant case, the Companies Act, provides for an appeal from the order of the National Company Law Tribunal to the National Company Law Appellate Tribunal. Appeal is both on law and facts. Both can be adjudicated before the Appellate Tribunal. No doubt, the High Court has powers under Article 227 of the Constitution of India to entertain petitions where Courts and Tribunals under the jurisdiction of the High Court have acted in a manner which has resulted in abuse of process of law or where the facts are so gross that if the High Court does not entertain the petition, then it will result in such an injury which cannot be rectified. Under Section 248 (5) of the Companies Act were passed by the Registrar of Companies, removing the name of the Company from the register, without passing an order under Section 248 (6) of the Act. That was a case wherein it was brought to the notice of this Court that Registrar of Companies struck off the names of the Companies, without passing any order, under Section 248 (6) of the Act. This practise was sought to be rectified by exercising the powers under Article 227 of the Constitution of India. Such is not the scenario here. Efficacious alternate remedy is available to the petitioner, by challenging the order before the National Company Law Tribunal. Petitioner, if so advised can approach before the National Company Law Appellate Tribunal, by filing an appropriate appeal. It is needless to say that National Company Law Appellate Tribunal may entertain an appeal, even after the expiry of the said period applying Section 14 of the Limitation Act,1963. Civil Revision Petition is not maintainable and the same is dismissed. 2019 (9) TMI 534 Oppression and mismanagement - maintainability of the Company Petition - grant of interim relief- It is urged that the alleged acts of oppression/mismanagement are nothing but operational issues arising in day to day management of the Company - Estoppel from denying the factum of seeking time by joint consensus with the Appellant to name the Independent Director - HELD THAT:- It appears that maintainability of the Company Petition in the context of eligibility of Respondent No. 2 (Petitioner) to file petition under Section 241-242 of the Act is not in controversy. The Appellant, however, has vociferously challenged finding as regards limitation at the very threshold stage. It is the settled position of law that limitation is a mixed question of law and fact. Any finding which is not informed of the reasons and does not rest upon appreciation of the relevant material/ evidence on record cannot be supported, more so, when it is neither expedient nor practicable to record such finding at the very threshold stage of proceedings on account of the issue of limitation being a mixed question of law and fact. Grant of interim relief - HELD THAT:- The stand taken by Appellant before the Tribunal qua allegations of oppression and mismanagement is that the same are merely operational issues which included procurement of newsprint. Serious exception has been taken to the conclusions drawn from the pleadings of Appellant in Company Petition proceedings by the Tribunal when it observed in the impugned order that there are certain operational issues and there was a deadlock in the management of the Company. Whether the appointment of any Independent Director was consented to by the Appellant? - HELD THAT:- here being no love lost interse Respondents 4 and 5 on this material aspect, the only inference available is that they are pliable. We refrain from making any further comment on the merits of their respective stand lest same causes prejudice to either of the parties during inquiry in the Company Petition. Whether there are any errors apparent from the face of the record which renders the impugned order unsustainable? - HELD THAT:- The fact remains that in regard to convening of Board Meetings, Annual General Meetings and filing of statutory compliances there is a deadlock. Appellant s contention that such deadlock is artificial and self-engineered by Respondent No. 2 cannot be decided at this stage of the proceedings and within the ambit of application seeking interim directions. The contentions raised on behalf of Appellant in this regard are accordingly repelled. Deadlock in the context of the Board of Directors being equally divided - HELD THAT:- The deadlock, not being limited to issue of numerical strength of the Directors, would not get diluted on account of one or other Independent Director resigning voluntarily or otherwise. We do not wish to say anything more on this aspect at this stage lest the same prejudices the inquiry. Alleged incorrect concessions attributed to Appellant in impugned order - HELD THAT:- Since we have come to an independent conclusion about existence of a prima facie case as regards deadlock and for existence of grounds justifying interim directions for regulating the affairs of the Company, we do not want to enter the controversy as regards such concessions and errors pointed out on behalf of the Appellant as the same may embarrass the inquiry. Appeal disposed off. 2019 (9) TMI 533 Requirement to hold shareholders' meeting and creditors' meeting for approval of the proposed Scheme of merger - Scheme of Merger by absorption of Amanora Future Towers Private Limited with City Corporation Limited and their respective shareholders under Sections 230 to 232 of the Companies Act, 2013 - applicant/Transferee Company submits that since no reconstruction or arrangement is happening with its shareholders or creditors, there is no requirement to hold shareholders' meeting and creditors' meeting for approval of the proposed Scheme. HELD THAT:- The Applicant Company 1 is directed to serve notices along with copy of scheme upon: - (i) concerned Income Tax Authority with in whose jurisdiction the Applicant Company 1's assessments are made (PAN No.-AAKCA3074H Assistant Commissioner of Income Tax Circle 1(1) Income Tax Office, Pmt Building. Shankarseth Road, Pune- 411 037, (ii) the Central Government through the office of Regional Director, Western region, Mumbai, (iii) Registrar of Companies with a direction that they may submit their representations, if any, within a period of thirty days from the date of receipt of such notice to the Tribunal with copy of such representations shall simultaneously be served upon the Applicant Company 1, failing which, it shall be presumed that the authorities have no representations to make on the proposals. The Applicant Company 1 is also directed to serve notice upon Official Liquidator, pursuant to section 230(5) of the Companies Act, 2013 and as per Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Tribunal is appointing M/s. Gondalia Mandviwala, Chartered Accountant, to assist the Official Liquidator to scrutinize the books of accounts of the said Transferor Company for the last 5 years and submit its representation / report to the Tribunal. The aforesaid Company to pay fees of ₹ 1,50,000/- plus applicable taxes, if any for this purpose. Application disposed off. Insolvency & Bankruptcy 2019 (9) TMI 532 Admissibility of petition - Initiation of Corporate Insolvency Resolution Process - no privity of contract - pre-existing dispute - default in respect of operational debt in the manner provided under Section 9 of the I B Code - HELD THAT:- The fact that Priya Trading Company was the name and style under which Arun Agrawal and Annapurna Agrawal have been operating was never a fact required to be discovered or rediscovered. Both are synonyms and well within the knowledge of the Corporate Debtor as also the Appellant . The ground raised to offset the triggering of Corporate Insolvency Resolution Process at the instance of Priya Trading Company as Operational Creditor by taking plea of there being no privity of contract between the Operational Creditor and the Corporate Debtor falls flat and has to be dismissed as being absurd and repugnant to the admitted position in regard to the status and locus standi of the Operational Creditor . Contention raised on this score is rebuffed. Unpaid Liability - alleged default on the part of Operational Creditor - HELD THAT:- There is a crystal clear admission of liability of Corporate Debtor to pay an amount of ₹ 2,96,54,219.00 to Arun Agrawal and Annapurna Agrawal who, we have found, were admittedly operating under the Trade Name of Priya Trading Company . This is notwithstanding the fact that such admission of liability to pay has been subjected to clearing of disputes as mentioned in notice dated 16th June, 2018 and reply notice dated 2nd July, 2018. Reference to such notice and reply notice would reveal that the dispute related to breach of terms of the agreement as regards generating of revenue by the Corporate Debtor which according to it missed the intended target due to non-supply/ short supply of raw material. However, such dispute does not constitute a pre-existing dispute qua the amount payable in law or in fact respecting which default has been committed. Admittedly, the Corporate Debtor did not discharge the liability in regard to the aforesaid operational debt and committed default by raising the bogey that it owed the amount in question to Arun Agrawal and Annapurna Agrawal but not to the Operational Creditor as if they were distinct entities. Viewed thus, the argument advanced in regard to pre-existing dispute being devoid of merit is rejected. Appeal dismissed. Service Tax 2019 (9) TMI 531 Valuation - inclusion of reimbursable expenses in assessable value - C F Agent service - HELD THAT:- The Commissioner (Appeals) though has set aside the demand on TDS and on reimbursement of certain expenditure but he has not given any specific finding on each of the reimbursable expenses viz. Godown rent, damage allowance, loading charges and demurrage charges - Further, all these expenses were reimbursed by the appellant for the various purposes incurred for carrying on the business of C F Agent Service. The impugned order to the extent of Service Tax on reimbursement is liable to be set aside - appeal allowed - decided in favor of appellant. 2019 (9) TMI 530 Classification of services - Supply of Tangible Goods service or otherwise - appellant had received income under the head Gas Connection Charges from Industrial, Commercial and Domestic customers and perusal of the sale agreements and invoices, revealed that such charges were collected for supply of pipes and measuring equipments at the time of providing new gas connections to the customers - recovery alongwith Interest and penalty - benefit of cum-tax value. HELD THAT:- The service should be provided by any person to any other person for use of that person. In the present case, the appellant is distributing gas to its customers through pipes and for this purpose, it has installed an equipment called SKID at the customers site. It is true that the equipment is installed at the site of customer and at the cost the customer without transferring the ownership or possession and that the appellant retains the right to use the equipments, but the issue that arises for consideration is whether the supply of tangible goods, namely the equipment is for the use of the customer. The terms of the agreement leave no manner of doubt that the purpose of the equipment is to measure the amount of gas supplied to the customer for the purpose of billing. They are, therefore, for the use of the appellant and are not for use by the customers. The finding to the contrary recorded by the Adjudicating Authority is, therefore, not correct. The Adjudicating Authority was, therefore, not justified in confirming the demand of duty on the collection charges under the taxable service- Supply of Tangible Goods - In this view of the matter, it may not be necessary to examine as to whether the appellant refunds the collection charges to the customers on termination of the gas connection. Demand set aside - decided in favor of assessee. Central Excise 2019 (9) TMI 529 Refund of Excise Duty - Time Limitation - relevant date - pre-deposit - Whether payment towards Excise duty can be construed to be payment made towards pre-deposit? - HELD THAT:- It is clear that the case of the petitioner that payment towards Excise Duty is in the form of pre-deposit is misconceived. Considering the annexures annexed with the petition i.e. Challans for deposit of Central Excise Duty in Form No.TR-6, that too, without protest is the payment towards the Excise Duty and can never be considered as pre-deposit. If any payment is made as a pre-condition for exercising the statutory right it can be termed as pre-deposit. However,it cannot be equated with voluntary deposit of Excise Duty paid even during the course of investigation and prior to show cause notice or adjudication to assert that it is pre-deposit. The payment of duty was intended to prevent the incidence of interest and liability accruing from the non-payment of duty, and hence, it cannot be termed as deposit. Therefore, the payments made by the petitioner towards Excise Duty in Challans Form No.TR-6, can never partake characteristic of pre-deposit as mentioned in Section 35F of the Act, as argued by learned advocate for the petitioner. The amounts were paid involuntarily and, therefore, are deemed to be under protest and should be considered as deposits deserves to be rejected - Petition dismissed. 2019 (9) TMI 528 Condonation of delay of 621 days in taking out the motion - HELD THAT:- The Applicant was under the impression that the appeal would be numbered and it would come up for consideration in normal course. When the reorganization of the Appellant took place, after the introduction of Goods and Service Tax Act, 2017 the papers regarding this appeal were transferred to Daman Commissionerate. It is at that point of time, on enquiry, the Applicant realized that the appeal was not numbered and it stood dismissed consequent to the order dated 17 March 2016 passed by the Prothonotary and Senior Master - On account of the above misunderstanding of the order dated 3 October 2016 passed by this Court, the Applicant could not take steps early to set aside the order dated 17 March 2016. We are satisfied with the reasons for the delay in filing this application - Notice of motion allowed. CST, VAT & Sales Tax 2019 (9) TMI 527 Refund of extra amount deposited during the pendency of appellate proceedings - petitioner claims that entire burden has been born but it only - whether the petitioner is entitled for refund of excess amount paid for the subject assessment years in terms of the judgment in Ext.P3 and/or whether Ext.P4 order gives finality to conclusions recorded in Ext.P3 judgment? HELD THAT:- when the Hon ble Supreme Court while passing orders in Ext.P4 stated that applications for modification/ clarification stand rejected, anit means that firstly there is no necessity for clarification and secondly the modification of Ext.P3 judgment by issuing necessary directions is not warranted. The word rejected is understood to mean to refuse to believe, anaccept, anor consider (something ). Upon due consideration of the undisputed circumstances the prayer for refund of difference of amount cannot be directed by this Court. This Court is required to bear in mind that by applying the general principles of refund the case of petitioner could not be examined. This Court in exercise of its jurisdiction under Article 226 of the Constitution ought not to revisit the very same circumstances and grant the prayers as made - Petition dismissed. 2019 (9) TMI 526 Detention of goods - mis-declaration of goods - it was alleged that the goods were hosiery while in the bill the same were shown as knitted clothes - condonation of delay in filing appeal - HELD THAT:- The learned Tribunal while dismissing the appeal has categorically held that there was mis-description of the goods; the goods were not being transported in a goods vehicle; and the books of accounts were not produced at the appropriate time and production thereof at a later stage was nothing but an afterthought. Condonation of delay - HELD THAT:- It has been found that the appellate order dated 18. 12. 2014 was passed in the presence of the Chartered Account of the appellant and until and unless a specific objection is raised to the contrary, it would be presumed that the appellate order was received by the appellant in time. The said presumption remained unrebutted. We do not find any infirmity in the impugned order warranting interference. Invocation of Appellate Jurisdiction - HELD THAT:- Keeping in view the petty amount of penalty being ₹ 90, 329/- we do not find it a fit case to invoke the Appellate jurisdiction of this Court in the instant appeal. Appeal dismissed. 2019 (9) TMI 525 Assessment of turnover - KVAT Act - CST Act - non-consideration of all points raised by the petitioner - HELD THAT:- A bare look at these exhibits demonstrates that the objections raised by the Senior Counsel on the mode and manner of examination by respondents is tenable. On the short ground of non-consideration of all the points raised in Exts.P4 and P5, order in Ext.P8 could be set aside - Accordingly, Ext.P8 on the short ground of non-consideration of objections in Exts.P4 and P5 is set aside and the matter restored to the file of the second respondent for consideration and disposal afresh in accordance with law. Petition allowed by way of remand. 2019 (9) TMI 524 Issuance of C-Forms - validity of Notification dated 11.10.2017 - interpretation of statute - amendment and scope of the word 'goods' - Situation of CST post GST - HELD THAT:- In view of the law laid down by the Hon ble Apex Court in Printers (Mysore) Ltd.'s case [ 1994 (2) TMI 261 - SUPREME COURT ] , wherein it is clearly held that the use of the expression goods referred to in the first half of Section 8(3)(b), i.e., on first three occasions can be understood in the sense it is defined in Section 2(d) of the CST Act, whereas the expression goods in the second half of the clause, i.e., on the fourth occasion does not and cannot be understood in the sense it is defined in Section 2(d) of the CST Act, as it refers to the manufactured goods, in the case of the writ petitioners, their end products need not be 'goods' within the meaning of Section 2(d) of the CST Act. There is no merit in the submission of the learned counsel for the State that this meaning has been assigned to the word goods appearing in the second half of Section 8(3)(b) of the CST Act, by the Apex Court in view of the peculiar facts of that case, as in that case, the benefit of Section was given to the printers publishing the 'newspapers' who were not liable to any tax on the sale of 'newspapers' published by them or that they were enjoying the freedom of press under Article 19(1)(a) of the Constitution of India. The only difference in the definition of pre and post amendment of goods as given under Section 2(d) of the CST Act is that earlier the definition was having a wider connotation, empassing into it almost all types of goods, except five goods mentioned therein, i.e., newspapers, actionable claims, stocks, shares and securities, whereas after the amendment the restricted meaning has been given to the word goods which shall include the six items only, which are presently there in the Act. The dealers are entitled to continue to be registered under Section 7(2) of the Act, irrespective of the fact whether they are liable to pay any tax to State or not. We do not find any merit in the submission of the learned counsel for the State that, since the dealers are no more liable to pay tax under the JVAT Act, in view of the fact that the word goods used in Section 2(i) of the CST Act defining the 'Sales tax law' shall mean only those six goods as defined under Section 2(d) of the CST Act, their registration under Section 7(2) of the Act shall come to an automatic end - thus, the very reasoning for issuance of the circular dated 11.10.2017 has no legs to stand in the eyes of law and the said circular cannot be sustained in the eyes of law. Application allowed. 2019 (9) TMI 523 Additions as sales suppression based on the alleged purchase suppression - Levy of penalty - TNVAT Act, 2006 - reconciliation of the profit and loss account with the monthly returns - HELD THAT:- The difference as alleged by the Enforcement Authorities is not be correct, particularly, in the light of the categoric reconciliation provided by the petitioner. The Assessing Authority has proposed a deviation based on the reply and reconciliation provided on 25.07.2014 and finally and as a last resort, he requests the Joint Commissioner to clarify what the purchase and sales turnover should be since he was unable or not in a position to determine the same from the proposal (the word 'proposed' in the reply appears to be an error of language). No reply was received as a result that the officer passed the impugned orders, adverse to the assessee. It is trite to state that an assessment should be made based on materials available and after proper and independent application of mind by the Assessing Officer. In the present case, the intention of the Assessing Officer to conclude the assessment based on the objection dated 25.07.2014 appears very clear from his proposal for deviation not once, but twice. Inspite of the same, the insistence of the authorities to confirm the proposals of the Enforcement Wing is clearly contrary to law. The assessment orders are quashed - petition allowed. 2019 (9) TMI 522 Doctrine or promissory estoppel - Incentive scheme - issuance of eligibility certificate - the date from which the incentives to be given to the Petitioner were to take effect - HELD THAT:- The Incentive Scheme has been framed by the State with a view to ensure equal distribution of wealth and means of production to the common benefit of citizenry of the State. The ostensible purpose was to encourage setting up of industrial units across the State of Maharashtra so that the employment is made available to greater sections of the society and the economy of the State as a whole stands to gain. The object and purpose of the Incentive Scheme is in consonance with the ideals held aloft by the directive principles of State policy contained in Part IV of the Constitution of India, in particular, Article 39(c). In the case of CENTER FOR LEGAL RESEARCH AND ORS. VERSUS STATE OF KERALA [ 1986 (5) TMI 274 - SUPREME COURT] , the Hon'ble Apex Court held that the Court may issue suitable directions so that the Government may perform its duty to implement the directive principles of State Policy. The law so crystallized in relation to the status of the directive principles of State Policy would tell us that if there is any action of the State or any executive order made by the State which dilutes or abridges the mandate of the directives, the Court in exercise of power of judicial review can annul the action or the executive order. The only condition necessary for doing so would be that the executive order or the law underlying the impugned action or order should have a reasonable nexus with the directive principles or should be made for implementing the directive principles and this has to be ascertained by examining nature and character of the basic executive order or the law. Sometimes, even the basic law or order could be in derogation of the directives. The impugned order dated 10th August 2017 is hereby quashed and set aside and the Commissioner of Sales Tax or any authorized Officer is directed to specify the effective date of the Eligibility Certificate without curtailing the validity period in terms of clause 3.1(3) of the Incentive Scheme within a period of four weeks from the date of receipt of this Judgment. 2019 (9) TMI 521 Input tax credit - Inconsistent Rule with statutory provision - tax paid on purchase of coal which is used by it for generation of electricity in its captive power plant and in turn, electricity so generated - absence of production of statutory declaration form JVAT 404 - Jharkhand Value Added Tax Act, 2005 - Jharkhand Value Added Tax Rules, 2006. HELD THAT:- From the reading of the provisions of the JVAT Act, 2005 it would transpire that said provisions are in consonance with the scheme of Value Added Tax Regime introduced in the Country. From the scheme of JVAT, 2005 it would be thus evident that output tax liability of a dealer was required to be determined after subtracting therein the input tax paid by the dealer - Section 18 of the JVAT Act, 2005 provides for determination of the Input Tax Credit which is available to a dealer in respect of input tax paid by it on the goods. Whether the petitioner is entitled to ITC u/s 18(4)(iii) of the JVAT Act, 2005 on input tax paid by it on coal which was utilized for generation of electricity, which in turn, was exclusively used for manufacturing and processing of finished product of the petitioner for sale? - HELD THAT:- The Hon ble Supreme Court in its decision in the case of JK. COTTON SPG. WVG. MILLS CO. LTD. VERSUS SALES TAX OFFICER, KANPUR [ 1964 (10) TMI 2 - SUPREME COURT] was considering the provision of Section- 8(1) and 8(3)(b) of the Central Sales Tax Act, 1956 which is almost parametria to the provisions of Section 18(4)(iii) of the JVAT Act, 2005 and has held, in substance, that if a process or activity is so integrally related to the ultimate production of goods so that without that process or activity manufacture would be commercially inexpedient, goods required in that process would fall within the expression in the manufacture of goods . Thus, it would be evidently clear that use of coal by the petitioner-Company for generation of electricity, which in turn, was used for manufacturing of finished product, was integrally connected with the ultimate finished goods. Under the said circumstances, coal used for generation of electricity is to be categorized as raw material for ultimate production of the finished goods of the petitioner i.e. Sponge Iron and M.S. Billet - it can be concluded that the petitioner has fulfilled requisite conditions of availing benefit of ITC on coal utilized by it for generation of electricity. Availability of benefit of ITC to the petitioner in absence of production of Statutory JVAT 404 Forms - HELD THAT:- It appears that from bare reading of Section 18(6) of the JVAT Act, 2005 would reveal that ITC can be claimed by a dealer on production of tax invoices in original containing the prescribed particulars of sale evidencing the amount of tax paid. Further, said section contemplates that even for good and sufficient reasons to be recorded in writing where a dealer is prevented from furnishing tax invoices in original the prescribed authority may even then allow ITC by recording its reason. Thus, Section 18(6) of the JVAT Act, 2005 does not contemplate production of JVAT -404 Forms as a mandatory condition for availing benefit of ITC. However, Rule 35(2) of the JVAT Rules, 2006 stipulates further condition of production of JVAT 404 Form as requirement for claiming benefit of ITC. To this extent, Rule 35(2) of the JVAT Rules, 2006 is inconsistent with the provision of Section 18(6) of the JVAT Act, 2005 and is required to be held directory in nature and not mandatory. It is always open for the State Tax Authorities on the strength of tax invoices produced before it by a dealer to verify the genuineness of said invoices and to ascertain that said dealer has in fact discharged liability of input tax on such invoices in respect of which ITC is being claimed. Thus, the production of JVAT- 404 Form for the purpose of claiming ITC is merely directory in nature and not mandatory. Application allowed. 2019 (9) TMI 519 Non-filing of statutory returns in terms of the Entry Tax Act - disclosure of purchase turnover of the vehicles and payment of entry tax at 12.5% - Entry of Goods into Local Areas Act, 1990 - reduction in the levy of entry tax - HELD THAT:- Though the levy of entry tax and State sales tax are separate and distinct, the intention of section 4 appears to be that there should be a unified and integrated levy on the transaction of entry into and sale of a vehicle within a State. If an assessee is in a position to establish that it had defrayed the entry tax liability on a particular vehicle, credit to that extent would be available in computing sales tax liability on the sale of that vehicle. In the present case, there is, admittedly, a violation of statutory provisions insofar as the petitioner has not filed returns under the Entry tax Act. The excuse offered, of ignorance of law, does not constitute valid justification for non-compliance of statutory duties. That is one aspect of the matter. The other aspect is, that VAT liability of a higher percentage than entry tax, has admittedly been remitted by the petitioner - The crucial aspect is the timing of the two remittances. A return of entry tax is due on or before the 20th of a month immediately succeeding such taxable event accompanied by proof of payment of entry tax in terms of section 7 of the Entry Tax Act read with Rule 3(2) of the Tamil Nadu Tax on Entry of Motor Vehicles Rules, 1990. Section 4 envisages a set-off as between State Commercial Taxes and Entry Tax only in respect of an identified vehicle. This appears evident by use of the qualifying word such to precede the words scheduled goods in section 4(1), meaning thereby that where an importer pays entry tax, credit of such amount may be availed as set off in regard to the VAT paid on the sale of such scheduled goods . Thus if the vehicle had entered the State but had been sold interstate, the turnover from such inter-state sale would not be available for grant of credit for payment of Entry tax. Thus, a correlation qua vehicle has to be furnished by the assessee to establish that entry tax paid and VAT credit sought, are in respect of the same vehicle. This exercise is required for acceptance of the claim under Section 4. In this case, neither the objections filed by the petitioner before the officer nor the Writ affidavit provide details of such correlation. In the absence of the factual particulars as to (i) when a particular/identified vehicle entered the State of Tamil Nadu (ii) when such vehicle was sold and (iii) whether such sale was intra or inter-state, the claim of the assessee for set-off under section 4 cannot be granted merely for the asking - The transactions in this case cannot be said to be automatically revenue neutral. The assessments for being re-done by the Assessing Authority is set aside - petitioner will file returns of entry tax in terms of Section 7 of the Entry tax Act for the periods 2013-14, 2014-15 and 2015-16 on or before 23.09.2019 - petition disposed off. 2019 (9) TMI 518 Condonation of delay in filing application - Section 38 of the Goa Value Added Tax Act, 2005 - HELD THAT:- The Tribunal has held that since the First Appeal before the First Appellate Authority was instituted beyond the period of one year from the date of service of original order, no useful purpose will be served in condoning the delay in instituting the Second Appeal before it. The issue before the Tribunal, at least in the first instance was only whether any sufficient cause has been made out by the Applicant to seek condonation of delay in instituting the Second Appeal before it. The Second Appeal was admittedly instituted within a period of one year from the date of service of the decision of the First Appellate Authority. Accordingly, the Tribunal was required to first consider whether there was any sufficient cause for condonation of delay in instituting the Second Appeal. Matter remanded to the Tribunal for consideration of Applicant's Application for condonation of delay in instituting the Second Appeal on its own merits and in accordance with law. 2019 (9) TMI 517 Revision of assessment - TNVAT Act - time limit prescribed u/s 27 of TNVAT Act - AO sought to revise the assessment in respect of the relevant assessment years 2008-09, 2009-10 2010-11, to which, the deemed assessment has already been taken place and completed on 30.06.2012 - HELD THAT:- If the Assessing Officer intends to revise the assessment based on a reason that the turn over has escaped assessment or that the assessee has wrongly availed the Input Tax Credit, he ought to have proceeded within the time prescribed under the above said provision of law, namely section 27 of the Tamil Nadu VAT Act. In this case, admittedly notice of revision itself was issued on 03.09.2018, beyond the period of six years. Though the respondents sought to contend that the inspection was conducted on 23.07.2012 to 26.07.2012, on which date, the assessee had also paid the tax and therefore, the proceedings for revision of the assessment should deemed to have commenced from that date onwards, this Court is not in a position to accept the above contention, especially, when it is clearly contemplated under section 27(1)(a) of the TNVAT Act, 2006 that the Assessing Officer may at any time within a period of six years from the date of assessment determine to the best of its judgment, the turn over which has escaped assessment and assess the tax payable on such turnover after making such enquiry as it may consider necessary - If the notice of proposal itself is issued beyond the period of six years, certainly, consequential assessment orders, as has been issued in this case, are also barred by limitation and thus, the same cannot be sustained. The impugned orders of assessment are set aside solely on the ground that they are barred by limitation - Petition allowed. 2019 (9) TMI 516 Nature of activity - service or not - levy of VAT or Service Tax - Defects in the completion of original proceedings - petitioner engaged in the activity of interior decoration - TNGST Act - case of the petitioner is that income was earned purely on the activity of interior decoration, for which service tax has been paid - detailed records not produced by the petitioner - HELD THAT:- There is no merit in the Writ Petition insofar as the Assessing Authority, has in the course of the order, rendered categoric findings with regard to his repeated requests for evidences in support of the stand of the petitioner to the effect that the activity carried on by the petitioner was pure installation, that were not produced. The categorisation/classification of an activity can be undertaken by the Court only if all material, relevant and descriptive details of the work have placed before the authorities and findings contrary to such evidences have been rendered. In this case, despite more than adequate opportunities, having been extended, the petitioner has placed on record only very limited particulars, that are insufficient to support its stand - There was no detailed description given and importantly, no certificate produced from the clients in support of the petitioners' claim that all materials were supplied only by the clients and it was only the activity of installation that was rendered by it - thus there is nothing perverse in the order impugned, warranting interference. Petition dismissed. Indian Laws 2019 (9) TMI 520 Uber s discount and incentive policy - Abuse of Dominant Position - Infringement of Section 4 of the Competition Act, 2002 - HELD THAT:- Dominant position as defined in Explanation (a) refers to a position of strength, enjoyed by an enterprise, in the relevant market, which, in this case is the National Capital Region (NCR), which: (1) enables it to operate independently of the competitive forces prevailing; or (2) is something that would affect its competitors or the relevant market in its favour. Given the allegation made, it is clear that if, in fact, a loss is made for trips made, Explanation (a)(ii) would prima facie be attracted inasmuch as this would certainly affect the appellant s competitors in the appellant s favour or the relevant market in its favour. Insofar as abuse of dominant position is concerned, under Section 4(2)(a), so long as this dominant position, whether directly or indirectly, imposes an unfair price in purchase or sale including predatory price of services, abuse of dominant position also gets attracted. Explanation (b) which defines predatory price means sale of services at a price which is below cost. There is no case to interfere with the order made by the Appellate Tribunal - appeal dismissed.
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