TMI Tax Updates - e-Newsletter
September 16, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Central Excise Indian Laws

Articles

1. WASTAGE OF TIME OF JUDICIARY AND PUBLIC MONEY -WHY A TEAM OF SO MANY COUNSELS JUST TO WITHDRAW APPEAL AND ALSO ON UNNECESSARY LITIGATION BY REVENUE

   By: DEVKUMAR KOTHARI

2. CONFISCATION FOR NON MAINTENANCE OF ACCOUNTS UNDER GST LAWS

   By: DR.MARIAPPAN GOVINDARAJAN

3. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

4. E-RUPI – The Digital Prepaid Voucher

   By: CSLalit Rajput

5. ECLGS (Scheme) for Industry – An Overview

   By: CSLalit Rajput

News

1. DGGI Gurugram arrests 3 persons, including mastermind, commission agent and CA in racket of fictitious firms involving fake ITC of 121 crore

2. Meeting of BRICS Heads of Tax Authorities and Experts on Tax Matters held virtually under Chairship of India

3. Kushinagar Airport declared as Customs Notified Airport

4. Revamped Gold Monetisation Scheme, reduction in import duty of gold to help the industry to grow to the next level: Anupriya Patel

Notifications

GST - States

1. S.O. 131 - dated 14-9-2021 - Bihar SGST

Seeks to bring in force section 4 and 5 of Bihar Goods and Services Tax (Amendment) Act, 2021

2. S.O. 130 - dated 14-9-2021 - Bihar SGST

Bihar Goods and Services Tax (Sixth Amendment) Rules, 2021.

3. S.O. 129 - dated 14-9-2021 - Bihar SGST

Seeks to exempt taxpayers having AATO upto ₹ 2 crores from the requirement of furnishing annual return for FY 2020-21

4. S.O. 132 - dated 14-9-2021 - Bihar SGST

Seeks to bring in force section 6 of Bihar Goods and Services Tax (Amendment) Act, 2021

5. S. R. O. No. 692/2021 - dated 14-9-2021 - Kerala SGST

Seeks to provide the concessional rate of KGST on Covid-19 relief supplies from 14.06.2021 up to and inclusive of 30th September 2021

6. S. R. O. No. 691/2021 - dated 14-9-2021 - Kerala SGST

Amendment in Notification No. 72/2017/TAXES. dated 30th June, 2017

7. FIN/REV-3/GST/1/08(Pt-1)(Vol. II)/86 - dated 29-8-2021 - Nagaland SGST

Seeks to extend timelines for filing of application for revocation of cancellation of registration to 30.09.2021

8. F.1-11 (91)-Tax/GST/2021 - dated 9-9-2021 - Tripura SGST

Seeks to extend FORM GSTR-3B late fee Amnesty Scheme from 31.08.2021 upto 30.11.2021

9. F.1-11 (91)-Tax/GST/2021 - dated 9-9-2021 - Tripura SGST

Seeks to extend timelines for filing of application for revocation of cancellation of registration

Indian Laws

10. DCM (RMMT) No.S153/11.01.01/2021-22 - dated 10-8-2021 - Indian Law

Monitoring of Availability of Cash in ATMs

SEBI

11. SEBI/LAD-NRO/GN/2021/50 - dated 15-9-2021 - SEBI

Renewal of recognition to the Metropolitan Stock Exchange of India Limited

Highlights / Catch Notes

GST

• GST Classification Overturned: Bangalore Metro Rail Supplies Now Treated as Independent Goods and Services, Not Composite Supply.

  Case-Laws - AAAR : Classification of supply - contract with M/s BMRCL for supply of 150 numbers of Standard Gauge Intermediate Cars which are to be integrated into the existing 3-car trains of Bangalore Metro Rail Project Phase I - Ruling given by the AAR in KAR ADRG 20/2021 dated 6th April 2021 with regard to composite supply set aside - the supplies made by Cost Centres C, D, E and G to M/s BMRCL are to be considered as independent supplies of goods and services as indicated in the Table below and rate of GST as applicable to the supply of goods and supply of service will apply - AAAR
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• Court Orders GST Network to Join Proceedings; Respondent Must Submit Affidavit on Order Upload Timeline Within a Week.

  Case-Laws - HC : Permission to implead Goods and Services Tax Network through his competent authority - At present, there is no material to accept the submissions of learned Standing Counsel. Therefore, let a personal affidavit be filed by the assessing authority-respondent no.2 within a period of one week to establish when he uploaded the entire order GST DRC-07 dated 20.07.2021 (as claimed). - HC
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• Court Orders De-Blocking of ITC as One-Year Limit Expires u/r 86-A(3) of CGST Rules, 2017.

  Case-Laws - HC : Power of authorities to block Input Tax Credit of the registered recipient - Rule 86-A of CGST Rules, 2017 - Rule 86-A (3) is very specific to the effect that the restriction imposed will cease to have effect after the expiry of period of one year from the date of imposing such restriction. There being no dispute that period of one year having elapsed from the date of restriction imposed in the form of blocking the Input Tax Credit. - The respondents are directed to de-block the ITC - HC
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• Anticipatory bail granted in GST circular trading case; custodial interrogation deemed unnecessary despite applicant's non-compliance.

  Case-Laws - DSC : Grant of anticipatory bail - Circular Trading/Transactions without any supply of goods or services - entire case is based on documentary evidence for which custodial interrogation of applicant is unwarranted - section 132 of GST Act - there are substance in the submissions made on behalf of respondent that conduct of the applicant not appearing before respondent for the purpose of inquiry /investigation and not adhering to interim order granted by my learned predecessor disentitle him from consideration of present anticipatory bail. - DSC
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Income Tax

• High Court Orders Reconsideration of Application u/s 264 for Immunity from Penalty and Proceedings.

  Case-Laws - HC : Revision Petition filed u/s 264 of the order passed by AO u/s 270AA(4) - The provision does not provide for any bar or prohibition against the assessee challenging an order passed by the Assessing Officer, rejecting its application made under Sub- Section 1 of Section 270 AA. The application before Respondent No.1 was an order challenging an order of rejection passed by Respondent No. 2 of an application filed by Petitioner under Sub-Section 1 of Section 270 AA seeking grant of immunity from imposition of penalty and initiation of proceedings under Sub-Section 276( C) or Section 277 (CC). - CIT directed to consider de-novo, the application filed by Petitioner u/s 264 - HC
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• Court Upholds Validity of Tax Notice Issued u/s 148; Dismisses Petitions Challenging Notice Timing.

  Case-Laws - HC : Reopening of assessment u/s 147 - time for issuance of notice under Section 148 - Individual identity of Section 148 as prevailing prior to amendment - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia w.e.f. 1.4.2021 - the power to issue notice under Section 148 which was prior to the amendment was also saved and the time was extended. In a result, the notice issued on 28.06.2021 (Annexure P-1) would also be saved. Therefore, no interference is required to be made in the said issuance of notice and accordingly the petitions are dismissed. - HC
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• Court Dismisses Complaint for Non-Payment as Petitioner Paid Penalty Before Filing, No Evasion Alleged.

  Case-Laws - HC : Criminal prosecution for non payment of demanded amount - As pointed out that the petitioner has paid the penalty amount, immediately after receipt of the show cause notice, as early as on 27.07.2017, however, the complaint has been preferred at a much later point of time during October 2017 and further there is no allegation whatsoever to prove that the petitioner has wilfully evaded from payment of tax and penalty and hence the complaint lodged by the respondent is liable to be set aside. - HC
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• Tribunal Rules Separate Tax Rates for Royalties and Technical Services Fees Under DTAA and Section 115A.

  Case-Laws - HC : Application of section 115A or DTAA separately for one sources of income covered by different agreements - From perusal of the aforesaid explanatory notes, it is evident that different rates of taxes in respect of royalty and piece for technical services were provided under different agreements. Therefore, the Tribunal has rightly taken the view that for the purposes of computing tax payable on the royalty income received, it has to be taxed with reference to the provisions of the agreement. - HC
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• Arbitration Settlement Classified as "Income from Other Sources" u/s 56(1) of Income Tax Act.

  Case-Laws - AT : Nature of income - Award received as settlement through an arbitration award - Amount received for withdrawal of cases against the erstwhile partners and partnership firm - To be treated as income from business under section 28(iv) or “Income from other sources” under section 56(1) - the arbitration award is taxable as “Income from other sources” under section 56(1) of the Act, the issue is squarely covered insofar as the present appeal is concerned and nothing survives to be decided. - AT
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• Assessee's interest payments to NBFCs disallowed for not deducting tax at source, except for M/s. Tata Capital Ltd. u/s 40(a)(ia).

  Case-Laws - AT : Disallowance u/s. 40(a)(ia) - assessee has paid interest to various Non Banking Financial Companies without deducting tax at source - the assessee has obtained certificate only from one company named M/s. Tata Capital Ltd., which has claimed to have received interest income - The assessee has not furnished any certificate from any of other payees for the remaining amount. - Disallowance of interest expenditure paid to NBFCs other than M/s. Tata Capital Ltd. confirmed - AT
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• Transfer Pricing: Royalty Payments Must Compare Controlled and Uncontrolled Transactions for Accurate Arm's Length Price Assessment.

  Case-Laws - AT : TP Adjustment - payment of royalty - comparison in order to determine if the ALP cannot be done by comparing the prices charged to by A.E. which is controlled transaction, as the provisions of I.T. Act, mandates that the determination of ALP has to be done by comparison between controlled and un-controlled transactions. - AT
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Customs

• Court Orders Release of Detained Paper Sheets; Bond and 10% Bank Guarantee Required Within Two Weeks.

  Case-Laws - HC : Release of detained imported goods - Coated Paper Sheets - it is directed that the appellants to release the goods on condition the respondent executing a bond for the value of the goods and bank guarantee to an extent of 10% of the value of the goods. The respondent shall complete their part of obligation within two weeks from the date of receipt of a copy of this judgment and the appellants are directed to release the goods within two weeks thereafter. Further, the detention charges shall stand waived. - HC
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Corporate Law

• SFIO Probe Freezes Assets of 157 Companies; Disgorgement u/s 212(14A) Highlights Retrospective Penal Provisions.

  Case-Laws - HC : Investigation into affairs of Company by Serious Fraud Investigation Office - freezing and disgorgement of assets of 157 companies - retrospective effect of penal provisions - Power of Central Government to file application before NCLT u/s 212(14) - Disgorgement occurring in Section 212 (14A) cannot be read in blissful isolation whereas, the length and breadth of the Act, chapter and verse bespeaks of such properties/ shares/ debentures, to be frozen/ liquidated/disposal/ sold for utilization in furtherance of public interest by way of sale, recovery of undue gains to alleviate the wrong done to persons/ financial institutions - the contention that no charges have been framed as yet does not hold a ground since filing of company petition under Section 241(2) is not dependent on filing of the chargesheet in the complaint. - HC
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IBC

• Insolvency Code: CoC-Approved Resolution Plans Are Final and Binding, No Modifications Allowed by Successful Applicants Under IBC.

  Case-Laws - SC : Withdrawal of Resolution Plan - resolution plan was approved by Committee of Creditors - the existing insolvency framework in India provides no scope for effecting further modifications or withdrawals of CoC-approved Resolution Plans, at the behest of the successful Resolution Applicant, once the plan has been submitted to the Adjudicating Authority. - A submitted Resolution Plan is binding and irrevocable as between the CoC and the successful Resolution Applicant in terms of the provisions of the IBC and the CIRP Regulations. - SC
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• Res Judicata Requires Issues to Be Heard and Finally Decided in Court, Key for Insolvency Cases.

  Case-Laws - SC : Principles of res-judicata - Res judicata cannot apply solely because the issue has previously come up before the court. The doctrine will apply where the issue has been “heard and finally decided” on merits through a conscious adjudication by the court. - SC
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Central Excise

• Court Rules Rebate Claims for Scrap During Hand Tool Manufacture Are Unsubstantiated; Paragraph 4(c) Misapplied.

  Case-Laws - HC : Recovery of rebate claims already sanctioned - scrap generated in the manufacture of the hand tools - Benefit of exemption subject to export - Once there is no finding that the material or partially processed goods were moved outside the factory, there will be no applicability of paragraph 4 or its sub-paragraphs of the notification - the respondents have wrongly applied paragraph 4(c) of the notification dated 06.09.2004. Therefore, the impugned orders are vitiated in law and cannot be sustained. - HC
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• Appellant's Re-Credit of Rejected Cenvat Refund Deemed Unlawful Post-CGST Implementation in 2017.

  Case-Laws - AT : Refund claim for unutilised cenvat credit - appellant took re-credit of the rejected amount of refund - the subordinate legislation is effective or in force till the date of Parent Act only. As the Parent Act in this case is repealed w.e.f. 1.7.2017, when the CGST provisions, came into force. Accordingly, the appellant have erred in law taking re-credit of the rejected refund amount in the year 2018 and thereafter they have again filed claim for the rejected amount of refund. - AT
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Case Laws:

• GST

• 2021 (9) TMI 673
  Classification of supply - independent supplies or composite supply with the principle supply being the supply of goods - supply of goods and services from each cost centre C, D, E and G - Naturally bundled services or not - contract with M/s BMRCL for supply of 150 numbers of Standard Gauge Intermediate Cars which are to be integrated into the existing 3-car trains of Bangalore Metro Rail Project Phase I - contract also places on M/s BEML Ltd the obligation and responsibility of commissioning and installation of the cars, attending to the defects/deficiencies - HELD THAT:- From the commencement of GST law in July 2017, M/s. BEML have treated the Cost Centres C, D, E and G, as independent Cost Centres and have been paying GST for the supplies undertaken by each of the said Cost Centres in terms of the contract, at the rates applicable to the nature of supply. In the instant case, there is no doubt that there are multiple supplies of both goods and services being undertaken as part of this contract. While the supply from Cost Centre C is a supply of goods i.e the Standard Gauge Intermediate Cars, the supply by Cost Centre D is primarily a service of commissioning and installation of the Cars supplied by Cost Centre C. Similarly, the supply from Cost Centre E is a service of joint inspection and completion of defects/deficiencies observed during integration test and joint inspection. The supply of spares from Cost Centre G is purely a supply of goods. There is no dispute on the nature of supply by each of the above-mentioned Cost Centres. The bone of contention is whether the supplies by Cost Centres C, D, E and G are to be termed as a composite supply or not. For a supply to be consider as a composite supply, its constituent supplies should be so integrated with each other that one cannot be supplied in the ordinary course of business without or independent of the other. In other words, they are naturally bundled. Naturally bundled services or not - HELD THAT:- The term `naturally bundled has not been defined in the GST Act. The concept of the Naturally Bundled , as used in Section 2(30) of the CGST Act, 2017, lays emphasis on the fact that the different elements in a composite supply are integral to the overall supply and if one of the elements is removed the nature of supply will be affected. There is no such concept in this contract - In this case, although there is only one contract, the different activities done by the Cost Centers C, D, E and G as part of the contract, are clearly specified and identifiable. The scope of works undertaken by each Cost Centre C, D, E and G are entirely independent and specific to that cost center and is not associated with any other Cost Centre. The work undertaken by the Cost Centre D commences only on completion of all the milestone activities of Cost Centre C. Similarly, the work undertaken by Cost Centre E and G commence only on completion of all the milestone activities of Cost Centers D and E respectively. Therefore, it is evident that each Cost Centre is independent and every milestone supply made from the Cost Centre is, an independent transaction. The lower Authority has erred in interpreting the creation of cost centres as per the contract as artificial creations to enable cash flow. When interpreting the nature of a contract, the form of the agreement is not important, it is rather the substance which has to be seen. The parties may use any words they like to suit their intention and it is therefore imperative that the agreement may not be taken as it is but its nature/substance has to be seen to arrive at the correct conclusions - In this case, although a single contract has been made for supply of goods and services, the clear-cut demarcation of activities of supply of goods and supply of services to each Cost Centre clearly demonstrates the intention of the contracting parties that each of the cost centres C, D, E and G is an independent supply centre undertaking either a supply of goods or a supply of service. The mere fact that a number of tasks have been entrusted to the Respondent through a single contract would not make it as composite supply in terms of Section 2(30) of the CGST Act, 2017 - the obligations of supplies envisaged in this contract are distinct and separable and hence the separate activities of supply of goods and supply of services have to be viewed independently on its own merits. The supplies made by Cost Centres C, D, E and G to M/s BMRCL are to be considered as independent supplies of goods and services as described below: Cost Centre C - Delivery and Receipt of indigenous manufacturing - treated as Supply of Goods - applicable rate of GST is 5% upto 30-09-2019. Cost Centre D - Commissioning and acceptance of trains/ cars in depot - treated as Supply of services - applicable rate of GST is 18%. Cost Centre E - Taking over of unit/ train for revenue service - treated as Supply of services - applicable rate of GST is 18%. Cost Centre G - Supply of unit exchange spares, mandatory spares and consumable spares and special tools, testing and diagnostic equipment - treated as Supply of goods - applicable rate of GST is 18% / 28% as applicable.

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• 2021 (9) TMI 669
  Permission to implead Goods and Services Tax Network through his competent authority - Form GST DRC-07 served on the petitioner or not - Principles of natural justice - HELD THAT:- At present, when all notices and orders are required to be submitted online through the GST portal, complete credibility of the system offered by the revenue authorities is necessary to be ensured, without exception. If the authorities are permitted or allowed to act negligently in discharge of such basic requirements, the day is not far when wholly unavoidable litigation would flood this Court. Service of notice or order is necessary to ensure minimum requirements of the rule of natural justice. At present, there is no material to accept the submissions of learned Standing Counsel. Therefore, let a personal affidavit be filed by the assessing authority-respondent no.2 within a period of one week to establish when he uploaded the entire order GST DRC-07 dated 20.07.2021 (as claimed). At present, no direction is required to be issued to the Goods and Services Tax Network, awaiting personal affidavit of the assessing authority - Put up as fresh on 21.09.2021.

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• 2021 (9) TMI 659
  Power of authorities to block Input Tax Credit of the registered recipient - Rule 86-A of Central Goods and Services Tax Rules, 2017 and Andhra Pradesh Goods and Services Tax Rules, 2017 - HELD THAT:- Rule 86-A (3) is very specific to the effect that the restriction imposed will cease to have effect after the expiry of period of one year from the date of imposing such restriction. There being no dispute that period of one year having elapsed from the date of restriction imposed in the form of blocking the Input Tax Credit. The respondents are directed to de-block the Input Tax Credit and permit the petitioners to utilize the Input Tax Credit of Rs. 2,40,76,129/- blocked in Electronic Credit Ledger on 28.01.2020, within a period of 7 days from today - List this case after six (6) weeks.

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• 2021 (9) TMI 628
  Grant of anticipatory bail - Circular Trading/Transactions without any supply of goods or services - entire case is based on documentary evidence for which custodial interrogation of applicant is unwarranted - section 132 of GST Act - HELD THAT:- Perusal of record prima facie reveals that applicant is apprehending arrest with regard to Remand Application No.213/2020 at the best of CGST Bombay West Commissionerate for the offences punishable u/s. 132(1)(b) (c) of CGST Act 2017. As per say of the respondent company of the applicant has availed and utilized Input Tax Credit of Rs. 5.59 approximately. As per say of respondent applicant is involved along with main accused C.P.Pandey a Chartered Accountant in Circular Trading/ Transactions without any supply of goods or services to the firm companies by main accused C.P.Pandey. The said Circular Trading was made in order to enhance turnover of the company by C.P.Pandey in order to fraudulently avail loan or other benefits from the bank. Though applicant had attended the office of respondent once and handed over certain documents. But it is the contention of respondent that applicant failed to attend office of respondent on 13th January 2021 pursuant to summons issued on 7.1.2021 to that effect. As per say of respondent present applicant did not attend office of respondent on 17.12.2020 as well as on 29.12.2020. It is matter of record that my learned predecessor has directed the applicant to respond request of respondent - there are substance in the submissions made on behalf of respondent that conduct of the applicant not appearing before respondent for the purpose of inquiry /investigation and not adhering to interim order granted by my learned predecessor disentitle him from consideration of present anticipatory bail. This is not a fit case for consideration of anticipatory bail - anticipatory bail application rejected.

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• Income Tax

• 2021 (9) TMI 667
  Reopening of assessment u/s 147 - rejecting the objection of the petitioner against the recorded reason for reopening of assessment - HELD THAT:- Revenue could not satisfy this Court about what new material of documents came into the possession of the Assessing Officer after the order of assessment under Section 143(3) of the Act, which were not produced by the assessee before the Assessing Officer in course of regular assessment. We are inclined to set aside the impugned order dated July 30, 2021 of rejecting the objection of the petitioner to the recorded reason and subsequent notice under Section 142(1) of the Act and remand the case to the AO for a limited purpose and only to the extent to reconsider the aforesaid judgment of the Tribunal on the issue in question in the case of Deputy Commissioner of Income-tax, Circle-6, Kolkata Vs. National Insurance Co. Ltd. [ 2016 (8) TMI 326 - ITAT KOLKATA] and also the contention of the petitioner about the change of opinion and pass a fresh speaking order after giving opportunity of hearing to the petitioner or his authorised representative within four weeks from the date of communication of this order. The subsequent proceeding under Section 147 of the Act will depend upon the fresh order to be passed by the respondent-Assessing Officer concerned

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• 2021 (9) TMI 664
  Revision Petition filed u/s 264 of the order passed by AO u/s 270 AA(4) - Respondent No. 1, rejected Petitioner s application on the ground that Sub-Section 6 of Section 270 (AA) specifically prohibits revisionary proceedings under Section 264 of the Act against the order passed by Assessing Officer under Section 270 (AA)(4) of the Act - HELD THAT:- When an assessee makes an application under Sub-Section 1 of Section 270 AA and such an application has been accepted under Sub-Section 4 of Section 270 AA, the assessee cannot file an appeal under Section 246 (A) or an application for revision under Section 264 against the order of assessment or re-assessment passed under Sub-Section 3 of Section 143 or Section 147. This does not provide for any bar or prohibition against the assessee challenging an order passed by the Assessing Officer, rejecting its application made under Sub- Section 1 of Section 270 AA. The application before Respondent No.1 was an order challenging an order of rejection passed by Respondent No. 2 of an application filed by Petitioner under Sub-Section 1 of Section 270 AA seeking grant of immunity from imposition of penalty and initiation of proceedings under Sub-Section 276( C) or Section 277 (CC). Therefore, in our view, Respondent no. 1 was not correct in rejecting the application on the ground that there is a bar under Sub-Section 6 of Section 270(AA) in filing such application. The impugned order has to be set aside and it is hereby set aside. The matter is remanded back to Respondent No. 1 to consider de-novo, the application filed by Petitioner under Section 264 impugning the order passed by the Assessing Officer under Sub-Section 4 of Section 270 AA and pass such orders as he deems fit in accordance with law after granting personal hearing to Petitioner.

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• 2021 (9) TMI 663
  Faceless assessment u/s 144B - As argued assessment order has been passed without affording the petitioner due opportunity of being heard despite the Petitioner seeking a personal hearing - HELD THAT:- As the impugned assessment order dated 15th April, 2021 passed by the Respondents under Section 143(3) read with Sections 143(3A) 143(3B) of the Act for the Assessment Year 2018-19 is set aside and the matter is remanded back to the Assessing Officer, who shall grant an opportunity of hearing to the petitioner by way of Video Conferencing and thereafter pass a reasoned order in accordance with law.

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• 2021 (9) TMI 658
  Reopening of assessment u/s 147 - time for issuance of notice under Section 148 - Individual identity of Section 148 as prevailing prior to amendment - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia w.e.f. 1.4.2021 - effect of Covid lockdown in India - HELD THAT:- Notification issued in exercise of power conferred under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and time for issuance of notice under Section 148, the end date was initially extended uptill on 30th day of April 2021 and subsequently again by notification dated 27th April, 2021 the time limit of 30th day of April 2021 was further extended up till 30th day of June, 2021. By effect of such notification, the individual identity of Section 148, which was prevailing prior to amendment and insertion of section 148A was insulated and saved uptill 30.06.2021. The pandemic and lock down prevailed all over India. The people could not file their return or comply with the various mandate of Income Tax Act. Considering such situation for the benefit of the assessee and to facilitate the individual to come out of woods the time limit framed under Income Tax Act was extended. Likewise certain right which was reserved in favour of the Income Tax Department was also preserved and was extended at parity. Consequently the provisions of Section 148 which was prevailing prior to the amendment of Finance Act, 2021 was also extended. Here in this case, the power to issue notice under Section 148 which was prior to the amendment was also saved and the time was extended. In a result, the notice issued on 28.06.2021 (Annexure P-1) would also be saved. Therefore, no interference is required to be made in the said issuance of notice and accordingly the petitions are dismissed.

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• 2021 (9) TMI 657
  Computation of deduction u/s 10B - whether telecommunication charges and expenditure in foreign currency were to be excluded both from the Export turnover and also from the Total turnover? - HELD THAT:- Similar questions of law were considered in the case of The Commissioner of Income Tax, Chennai -Vs- M/s.Changepond Technologies P.Ltd. [ 2021 (9) TMI 573 - MADRAS HIGH COURT] - Substantial questions of law are answered against the Revenue

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• 2021 (9) TMI 656
  Criminal prosecution for non payment of demanded amount - Revenue initiated penalty proceedings under Section 271(1)(C) - During the pendency ofTax Case Appeal Principal Commissioner of Income Tax, issued a Show Cause Notice under Section 276(C)(1) and 276 C (2) of the Income Tax Act, demanding a sum - HELD THAT:- During the pendency of the appeal, the respondent has issued show cause Notice dated 27.06.2017. For which, the petitioner has also sent his reply on the same day and agreed to pay the penalty amount and also paid the amount of Rs. 29,36,625/- and the receipt for payment of the said amount has been annexed in the typed set filed along with this petition - respondent, without taking note of the payment of the above said amount and pendency of the appeal proceedings before this High Court, has erroneously launched criminal prosecution against the petitioner for wilful commission of concealment of income to avoid payment of tax, under Section 276(c)(1) As pointed out that the petitioner has paid the penalty amount, immediately after receipt of the show cause notice, as early as on 27.07.2017, however, the complaint has been preferred at a much later point of time during October 2017 and further there is no allegation whatsoever to prove that the petitioner has wilfully evaded from payment of tax and penalty and hence the complaint lodged by the respondent is liable to be set aside. Criminal Original Petitions are allowed and quashed the proceedings pending on the file of the Additional Chief Metropolitan Magistrate Court- E.O.-II, Egmore, Chennai.

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• 2021 (9) TMI 653
  Application of section 115A or DTAA separately for one sources of income covered by different agreements - royalty income in respect of agreement entered into before 1/6/2005 which are from one source and royalty income in respect of an agreement entered into on or after that date are from the same source - Indo-US DTAA for computing the tax payable on royalty income received in pursuance of agreements entered into on or before 01.06.2005 - HELD THAT:- In order to correct the anomaly prevalent in Section 115A with regard to rates of taxes in case of non-resident tax payer, in respect of income by way of royalty and piece for technical services as provided under Section 115A, was increased by way of amendment from 10% to 25%. Thus, from perusal of the aforesaid explanatory notes, it is evident that different rates of taxes in respect of royalty and piece for technical services were provided under different agreements. Therefore, the Tribunal has rightly taken the view that for the purposes of computing tax payable on the royalty income received, it has to be taxed with reference to the provisions of the agreement. Decided in favour of the assessee

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• 2021 (9) TMI 652
  Assessment u/s 153A - Whether no incriminating material was there to support the additions made by the AO? - HELD THAT:- It is settled principle of law that when no incriminating material has come on record, very initiation of assessment proceedings u/s 153A is not sustainable in the eyes of law. Ld. DR for the Revenue has failed to rebut the issue decided by the ld. CIT (A) that in the absence of any incriminating material, assumption of jurisdiction u/s 153A of the Act is bad in law. Hon ble jurisdictional High Court in case of CIT vs. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] has decided the identical issue by holding that, completed assessment can be interfered by the AO while making assessment u/s 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search, which were not there in the course of original assessment . - Decided against revenue.

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• 2021 (9) TMI 651
  Validity of the assessment passed beyond the period of limitation as per the provisions of Section 142(2A) - HELD THAT:- There is no dispute on the fact that the Co-ordinate Bench of ITAT, Delhi, vide aforesaid consolidated order[ 2021 (7) TMI 1243 - ITAT DELHI] has already held that the corresponding Assessment Orders are barred by limitation. As a result of the aforesaid consolidated order [Supra] of Co-ordinate Bench of ITAT, Delhi; as far as the present appeals before us are concurred, the corresponding Assessment Orders of Ld. CIT(A) have no existence at present. Thus, the present appeals before us have no legs to stand; and are not maintainable presently.

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• 2021 (9) TMI 650
  Addition u/s 68 - credit balances outstanding as on 31.03.2011 in respect two creditors - HELD THAT:- Ledger accounts along with other documentary evidence were produced before the CIT(A) for which the Assessing Officer in his remand report never doubted the genuineness. In-fact, the two parties regarding which the outstanding balances were pending has been written back by the assessee and was offered to tax in Assessment Year 2014-15. The purchases as well as the corresponding sale were also accepted by the Assessing Officer. Therefore, this addition was based only on the assumption and surmises which cannot sustain under the law. - Decided in favour of assessee. Addition on account of exchange rate fluctuation loss - Non affording any opportunity to the assessee for explaining the nature and justification for the allowability - HELD THAT:- The loss suffered by the assessee on account of the exchange difference on the particular date is indicated in the balance sheet and the same is an item of expenditure u/s 37(1) of the Income Tax Act, 1961. It is an allowable expenditure. In-fact, no adjustment on account of provisions u/s 43A of the Act was reported by the tax auditor in schedule relating to depreciation in Form 3CA-CD. These facts were not disputed by the Revenue authorities and are clearly revenue in nature. Therefore, Ground No. 2 is allowed.

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• 2021 (9) TMI 649
  Correct head of income - interest income received on loan advanced to be assessed as Income from business or Income from other sources - HELD THAT:- It would be relevant to observe, in assessee s own case in assessment year 2013-14 [ 2020 (1) TMI 162 - ITAT MUMBAI] while completing the assessment under section 143(3) of the Act, the assessing officer treated the interest income received on loans advanced as Income from business and also allowed the corresponding expenditure. However, the revisionary authority in exercise of powers conferred under section 263 of the Act revised the assessment order and directed the assessing officer to treat the interest income as Income from other sources . While deciding assessee s appeal against revisionary order passed under section 263 of the Act, the Tribunal not only quashed the order passed under section 263 of the Act, but also restored the assessment order passed by the assessing officer treating the interest income earned on loans advanced as business income and also allowing corresponding expenditure. - Decided against revenue.

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• 2021 (9) TMI 648
  Nature of income - Award received as settlement through an arbitration award - Amount received for withdrawal of cases against the erstwhile partners and partnership firm - To be treated as income from business under section 28(iv) or Income from other sources under section 56(1) - HELD THAT:- As decided in own case [ 2018 (4) TMI 1640 - ITAT MUMBAI] Tribunal has upheld the decision of learned Commissioner (A) that the arbitration award is taxable as Income from other sources under section 56(1) of the Act, the issue is squarely covered insofar as the present appeal is concerned and nothing survives to be decided. Therefore, respectfully following the decision of the co-ordinate bench (supra), we uphold the decision of learned Commissioner (Appeals) by dismissing the ground raised.

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• 2021 (9) TMI 647
  Disallowance u/s 2(22)(e) as deemed dividend - HELD THAT:- Madhur Housing Development Corporation [ 2017 (10) TMI 1279 - SUPREME COURT ] has upheld the judgment of the Hon ble Delhi High Court holding that although there was a person having substantial interest in the assessee company and the company which had given loan, the assessee company, not being a shareholder of the company which had given the loan, the loan was not assessable as deemed income in the hands of the assessee. We also note that although this judgment has been also doubted by the Hon ble Apex Court in the case of National Travel Service Vs. CIT, [ 2018 (1) TMI 1159 - SUPREME COURT ] unless the same is reversed, the same is binding on us. Therefore, we are afraid that the reliance of the Department on the Hon ble Apex Court s judgment in the case of National Travel Service vs. CIT, Delhi [ 2018 (1) TMI 1159 - SUPREME COURT ] would not be of much help - we also note that the Ld. CIT(A) in Para 4.5 onwards of the impugned order has also considered the various documents submitted by the assessee to establish that the transaction of advance was pertaining to a business transaction for purchase a property, and, therefore, on this account also the impugned transaction would not fall within the definition of deemed dividend u/s 2(22)(e). In this regard, the categorical findings of the CIT(A) have not been refuted by the Ld. CIT-DR. Therefore, we have no reason to deviate from the finding of the Ld. CIT(A) on this issue and we, accordingly, dismiss Ground No.2 raised by the Department. Bogus purchases - assessee had failed to produce the said party when called upon by the Assessing Officer to do so - HELD THAT:- When the purchases are otherwise documented and the AO has accepted the book results by accepting the books of accounts, non-appearance a party before the Assessing Officer cannot be the sole ground for treating the purchases as bogus. Also, it is undisputed that the said party had running account in the books of account of the assessee company in which regular transactions were being made and the impugned purchase was not an isolated case of purchase. In such circumstances, we are of the considered view that the Ld. CIT(A) has rightly deleted the disallowance and we uphold the same and reject the ground No.3 of the Department s appeal. Deduction u/s 80IB on sale of scrap - HELD THAT:- It is undisputed that the amount received by the assessee from sale of scrap pertained to scrap generated from the activities carried by the assessee which were part and parcel of the manufacturing process of the industrial undertaking. The Hon ble Delhi High Court has observed in the case of CIT vs. Sadhu Forging Ltd. [ 2011 (6) TMI 9 - DELHI HIGH COURT ] ( that the receipts from sale of scrap being part and parcel of the activities and being approximate thereto would also be within the ambit of gains derived from industrial undertaking for the purposes of computing deduction u/s 80IB ). Accordingly, respectfully following judgment of the Hon ble Apex Court as aforesaid, we dismiss Ground No.4 raised by the Department.

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• 2021 (9) TMI 645
  Rectification u/s 254(2) - Addition of amount to the book profits by holding it to be a contingent liability - HELD THAT:- We find that vide Para 20 of the order [ 2021 (1) TMI 741 - ITAT DELHI] in respect of amount we have for the reasons stated therein have held the aforesaid amount to be allowable expenditure as it is not a liability of contingent in nature. Once the amount has been held it to be allowable as not being in contingent nature, the effect of the same will be that since it is not in the nature of contingent liability, it cannot be added to the book profits u/s 115JB of the Act. We thus find force in the submissions of Ld AR that the Ground No.3 [ 2021 (1) TMI 741 - ITAT DELHI] should have been allowed as its dismissal would be contrary to the finding given in Para 20 of the order. Considering the totality of the aforesaid facts, we are of the view that the dismissal of Ground No.3 is a mistake apparent which is amenable to rectification u/s 254(2) - MA of the assessee is allowed

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• 2021 (9) TMI 644
  Revision u/s 263 - Reply to SCN filed by the assessee at a later stage - income offered by the assessee firm during the course of survey on account of excess stock, cash and debtors was required to be assessed under the provisions of section 69/69A and 69B of the Act and to be taxed u/s. 115BBE @ 30% without allowing for any deduction in respect of any expenditure or any allowance - HELD THAT:- The specific reply/defence put forth by the assessee before the ld. PCIT could not be considered at the time of pronouncement of order U/s. 263 of the Act. Therefore, considering the substantial justice, we restore the matter back to the file of ld. PCIT for fresh reconsideration of the entire matter after considering the reply/defence dated 30/3/2021 of the assessee s paper book or any other documents placed on record by the assessee. Needles to mention here that the ld. PCIT while reconsidering the entire matter and passing the order, appropriate opportunity of being heard be given to the assessee. Appeal of the assessee is allowed for statistical purposes only.

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• 2021 (9) TMI 643
  Disallowance u/s 14A - CIT(A) restricted the disallowance with a direction to rework the disallowance under Rule 8D(2)(ii) of the Income Tax Rules - main contention of ld. AR is that the disallowance should not exceed the exempt income earned - HELD THAT:- As decided in M/S. NIRVED TRADERS PVT. LTD. [ 2019 (4) TMI 1738 - BOMBAY HIGH COURT] as relying on CHEMINVEST LIMITED [ 2015 (9) TMI 238 - DELHI HIGH COURT] limiting the disallowance to the exempt income earned therein. In the present case as discussed above, there is no dispute that the assessee earned exempt income and by applying the decision of Hon ble High Court of Bombay we restrict the disallowance to the extent exempt income earned. Accordingly, the order of CIT(A) is set aside and the grounds raised by the assessee in this regard are allowed. Seeking deduction paid towards Education Cess under Finance Act while computing the taxable income - HELD THAT:- We note that the assessee paid Education Cess while computing the taxable income under normal provision of the I.T. Act. The Hon ble High Court of Bombay in the case of Sesa Goa Ltd. [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] was pleased to hold that the Education Cess is an allowable expenditure as per the provision of the I.T. Act.. Therefore, in view of the above decision, we direct the AO to allow deduction in respect of Education Cess paid by the assessee. Accordingly, the additional ground raised by the assessee is allowed.

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• 2021 (9) TMI 642
  Disallowance under section 14A of the Act r.w.r. 8D - Admission of additional evidences - HELD THAT:- In the present Assessment Year, we find that the assessee has taken a specific plea before the AO that the investments were made out of surplus business funds and not out of any borrowed funds. This submission has not been referred to either by the AO or by the CIT(A). We are of the view that in the light of additional evidence now filed before us, the issue requires fresh consideration by the AO and we accordingly set aside the order of the AO and remand the issue to the AO for consideration afresh. The above directions will hold good for disallowance under section 14A of the Act r.w.r. 8D(2)(i) of the Rules. Disallowance under section 14A of the Act r.w.r. 8D(2)(iii) - Neither the assessee nor the AO have made any attempts to identify which are the expenses that can be said to be attributable to the earning of the said income. We therefore set aside the said disallowance also to the AO for fresh consideration with directions to the assessee to substantiate its case that none of the other expenses can be attributed to the earning of the exempt income. We accordingly allow the appeal of the assessee for statistical purpose.

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• 2021 (9) TMI 641
  Disallowance u/s. 40(a)(ia) - assessee has paid interest to various Non Banking Financial Companies without deducting tax at source - HELD THAT:- The above said payments have been made to various NBFCs like L T Finance Ltd., Bajaj Finance Ltd., Reliance Capital Ltd., India Bulls Ltd., Daimler Finance Ltd., Kotak Mahindra Bank Ltd., LIC India Ltd. and Tata Capital Ltd. However, the assessee has obtained certificate only from one company named M/s. Tata Capital Ltd., which has claimed to have received interest income - The assessee has not furnished any certificate from any of other payees for the remaining amount. We confirm the disallowance of interest expenditure paid to NBFCs other than M/s. Tata Capital Ltd. With regard to the payment made to M/s. Tata Capital Ltd., we restore the same to the file of the AO for examining the same afresh in the light of additional evidence furnished by the assessee. Accordingly, the order passed by Ld. CIT(A) on this issue would stand modified. Disallowance of wages expenditure - AO examined the vouchers relating to wage payments and noticed that most of them are self made thus made ad hoc disallowance of 10% of wage expenditure - HELD THAT:- As decided in own case [ 2019 (12) TMI 1537 - ITAT BANGALORE] identical disallowance was deleted as that the books of accounts were not rejected and that expenses were allowed consistently in the past in scrutiny assessments. The tribunal has also noticed that the Ld. CIT(A) has observed that the AO has not pointed any specific defects in any of the vouchers. In the instant year also, the Ld. CIT(A) has observed that the AO has given vague reasons for making the disallowance. Further the AO has not rejected the books of accounts. Accordingly, following the decisions rendered by the co-ordinate benches, we confirm the orders passed by LD CIT(A) on this issue. Disallowance made u/s. 14A r.w.r. 8D - HELD THAT:- Identical disallowance was made by the AO u/s. 14A of the Act in AY 2013-14 [ 2019 (12) TMI 1537 - ITAT BANGALORE] also and the Tribunal, in its order referred supra, has confirmed the order passed by LD CIT(A) in restricting the disallowance to the amount of exempt dividend income. We notice that the Hon ble High Court of Delhi in the case of Joint Investment Private Limited [ 2015 (3) TMI 155 - DELHI HIGH COURT] has held that the disallowance u/s. 14A should not exceed exempt income - No infirmity in the decision of Ld. CIT(A) in restricting the disallowance u/s. 14A to the amount of exempt income. Disallowance of interest expenditure relatable to advance given for acquisition of land - HELD THAT:- It is the duty of the assessee to prove that the loan funds were not used for giving advance for purchase of land. Further it is necessary for the assessee to address on applicability or otherwise of proviso to sec. 36(1)(iii) to the facts of the present case and it is for the Ld. CIT(A) to take a decision on it. Accordingly, we are of the view that this issue requires fresh examination at the end of Ld. CIT(A). As noticed that the AO has estimated the interest expenditure to be disallowed for the whole year. In our view, if it is decided that the interest expenditure attributable to advance given for land purchase, then the disallowance should be restricted to the period of actual usage of loan funds - we set aside the order passed by LD CIT(A) on this issue and restore the same to his file with the direction to examine the applicability of proviso to sec. 36(1)(iii) to the facts of the present case and its effect on the interest expenditure claimed by the assessee. CIT(A) may take decision in accordance with law, after affording adequate opportunity to the assessee.

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• 2021 (9) TMI 640
  Reopening of assessment u/s 147 - Unexplained investment made in one piece of land - Proceedings initiated U/s. 147 of the Act was upheld by the ld. CIT(A) on the ground that the assessee failed to explain the source - AO only disputed the sales bills was not produce by the assessee - HELD THAT:- It is a true fact that the assessee is having 60 Bigha of land. This fact is also accepted by the Assessing Officer in the assessment order that assessee produced Jamabandi and Girdawari only but no bill of agriculture produced/crop were produced. The A.O. only disputed the sales bills was not produce by the assessee. This objection of the A.O. was not correct because in the rural area the crops was sales in village and sometime crops sales in Mandi but bills was not kept by the farmers. CIT(A) had given relief of Rs. 2,00,000/- to the assessee on the basis of documents and material placed on record. The ld. CIT(A) has passed a speaking order discussing all the facts and circumstances of the case. No new facts has been brought on record by the ld. CIT(A), therefore, considering the totality of facts and circumstances of the case, we do not find any reason to interfere or deviate from the findings so recorded by the ld. CIT(A), hence, we uphold the same. Appeal dismissed.

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• 2021 (9) TMI 639
  Penalty u/s 271(1)(c) - Defective notice u/s 274 - assessee has filed inaccurate particulars of income on account of Hawala purchases - assessee filed return of income for the year under i.e. A.Y. 2009-10 again u/s. 139(5) wherein the assessee offered additional income - AO did not process the said return as it was time barred but however reopened the assessment already completed u/s. 143(3) - contention of the ld. AR is that when the AO satisfied on one charge and issuance of notice for both the charges is patently wrong - HELD THAT:- In the case of Samson Pernchery [ 2017 (1) TMI 1292 - BOMBAY HIGH COURT] held the AO should be clear as to which the two limbs under which penalty is imposed and the penalty cannot be initiated on one limb for furnishing of inaccurate particulars of income and imposition of penalty on the other limb i.e. concealment of income. In the present case, the AO recorded satisfaction that the assessee filed inaccurate particulars of income and initiated penalty by issuing a notice u/s. 148 of the Act on both the charges and imposed the penalty on both the charges. As in the case of HPCL Mittal Energy Ltd.[ 2018 (8) TMI 507 - ITAT AMRITSAR] the Third Member Bench held the penalty initiated by the AO for concealment of income and imposition of penalty is for concealment/furnishing inaccurate particulars of income is not sustainable. In the present case assessment order clearly recorded that the assessee filed inaccurate particulars of income passed u/s. 143(3) r.w.s. 147 of the Act. In consequence of which the AO issued notice u/s. 274 r.w.s. 271(1)(c) of the Act dated 31-03-2013 for both the charges that are concealment of income and furnishing of inaccurate particulars of income. In penalty order dated 27-09-2013 imposed penalty by recording his satisfaction that the assessee has furnished inaccurate particulars/concealed particulars of income. Thus, the penalty imposed by the AO fails and is quashed - Decided in favour of assessee.

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• 2021 (9) TMI 637
  Expenses claimed u/s 57 - various expenses incurred by the assessee viz., PMS charges, professional fees salary is integral to the investment activity undertaken by him and to earn the income returned in the return of income for the previous year - HELD THAT:- As decided in own case [ 2019 (7) TMI 1860 - ITAT BANGALORE] claim of assessee for allowing deduction of expenses against income from other sources is not allowable because the assessee has not established that the expenses are allowable u/s. 57(iii) - Decided against the assessee

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• 2021 (9) TMI 635
  TP Adjustment - payment of royalty - TPO determined the ALP of the royalty payment at 3% of the sales by taking it as appropriate benchmark - HELD THAT:- Admittedly, the royalty was paid @ 5% of domestic sales and 8% of the export sales in consideration of receipt of technology in the form of know-how, technical training and technical assistance for the purpose of manufacturing the compressors. TPO determined the ALP of the royalty payment at 3% of the sales by taking it as appropriate benchmark. TPO adopted this benchmark considering the transaction of payment of royalty by it s A.E. i.e., Wuxi Atlas Copco Compressor Co Ltd., which is undisputedly controlled transactions, and the difference between two and the actual price was suggested as TP adjustment u/s 92CA of the Act without even going into the issue whether the approval of payment of RBI will constitute a CUP method or not. The present issue can be decided in favour of the assessee by holding that comparison in order to determine if the ALP cannot be done by comparing the prices charged to by A.E. which is controlled transaction, as the provisions of I.T. Act, mandates that the determination of ALP has to be done by comparison between controlled and un-controlled transactions. An identical issue has been dealt in the case of PCIT Vs. Audco India Limited [ 2019 (5) TMI 694 - BOMBAY HIGH COURT] on identical facts had confirmed the decision of Tribunal by dismissing the appeal filed by the Revenue by holding that TPO has to arrive at ALP of the transaction only comparing it with uncontrolled transactions and the Hon ble High Court had found fault with the approach of the TPO by holding that it is contrary to the clear provisions of the Act as per Rule 10A(d) of the Rules. ALP adjustment on account of receipt of commission for Marketing Services - main contention of the appellant is that the functions undertaken by the assessee for selling the product is significantly different from what is undertaken for the purpose of earning the commission income from A.E and profit earned from independent activity of marketing function cannot be compared with the integrated marketing function of a fully integrated manufacturer - HELD THAT:- TPO was not justified in excluding the depreciation and cost of the material consumed in denominator of total costs. Further, we find that the methodology adopted by the TPO does not fall into any of the appropriate methods prescribed under Rule 10(b) of the I.T. Rules, 1962. We must also mention that clause (f) of clause (1) of Rule 10(b) prescribing any other method was inserted with retrospective effect from 01.04.2013 is not applicable for the year under consideration. Therefore, the ratio of the jurisdictional Bombay High Court in the case of CIT Vs. Kodak India (P) Ltd. [ 2016 (7) TMI 677 - BOMBAY HIGH COURT] is applicable in the present set of facts. When the TPO had not adopted any of methods prescribed u/s 92CA of the I.T. Act, no adjustment on account of ALP can be made by TPO. Therefore, the order of the ld.CIT(A) though does not contain independent reasoning, keeping in view of the order of the Tribunal for earlier years on identical issue in assessee s own case on the principle of consistency and ratio of decision of Hon ble Bombay High Court in the case of CIT Vs. Kodak India (P) Ltd. (supra), we uphold the order of ld.CIT(A). Addition on account of Software Development Expenses - CIT(A) deleted the addition by holding that there is no customized software. Mere up-gradation of the software does not result in any enduring benefit when the life of software is less than two years - HELD THAT:- From details on record, it is evident that the expenditure was paid to M/s Radix Business Models Pvt. Ltd., in order to upgrade the application software on contract basis for Lotus Notes Developer. The Hon ble High Court in the case of CIT Vs. Geoffrey Manners Co., Ltd. . [ 2014 (6) TMI 958 - BOMBAY HIGH COURT] that in view of the rapid advancement in the recent technology, it cannot be said that there is any enduring benefit to the assessee. Since the decision of the ld.CIT(A) is in line with the decision of jurisdictional High Court, we do not find any reason to interfere with the decision of ld.CIT(A). Accordingly, ground No.3 of the Revenue stands dismissed. Nature of expenses - expenditure incurred on the renovation of lease premises - HELD THAT:- As in view of the above legal position, the expenditure incurred on rented premises cannot be treated as revenue in view of the plain provisions of Explanation 1 to Sec.32 of the Act. CIT(A) is in total ignorance of the provisions of Explanation 1 of Sec.32 of the Act held it to be revenue in nature. The decision relied upon by the learned counsel has no application after insertion of Explanation 1 of Sec.32 of the Act. In the above circumstances, we reverse the order of ld.CIT(A) and restore the issue in this ground to the file of Assessing Officer. Thus, this ground of the Revenue is allowed for statistical purposes. Addition of miscellaneous expenses - assessee could not produce supporting documents, details, vouchers - HELD THAT:- During the course of assessment proceedings, the respondent / assessee company could not furnish the evidence, bills, vouchers etc to the extent of Rs. 2,59,407/- out of the total Miscellaneous Expenditure. On appeal before ld.CIT(A), ld.CIT(A) restricted the disallowance to Rs. 1,00,000/- which is in accordance with the decision of his order in assessee s own case for the earlier assessment years. On the principle of consistency, we uphold the order of ld.CIT(A). Accordingly, this ground of appeal stands dismissed. Allowance of commission expenditure - HELD THAT:- CIT(A) following the decision of his order in assessee s own case in earlier years has deleted the addition. From the material on record, it is clear that the respondent / assessee had discharged the onus cast upon it by filing the primary details. Mere inability to furnish the confirmation letters from the recipients cannot be the reason to disallow the commission expenditure without causing any further enquiries by the Assessing Officer as to the genuineness or otherwise of the expenditure. Admittedly, there is no material on record exhibiting the non-genuineness of the expenditure. Hence, respectfully following the decisions of this Tribunal and Hon ble Bombay High Court in respondent / assessee s own case, we hold that ld.CIT(A) is justified in deleting the commission expenditure and accordingly, this ground of appeal is dismissed.

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• 2021 (9) TMI 631
  Penalty u/s 271(1)(c) - Estimation of income on bogus purchases - assessee has accepted the addition made by the Assessing Officer on account of Rs. 6,27,311 being 12.5% of bogus purchases - HELD THAT:- Since the assessee refrained to contest the addition/disallowance made by the Assessing Officer before the first appellate authority, the Assessing Officer cannot impose penalty under section 271(1)(c) of the Act alleging that the assessee has furnished inaccurate particulars of income thereby concealing particulars of income, particularly when income was estimated on percentage basis upon the alleged bogus purchase. Consequently, we find no cogent reason to disturb the order passed by the learned Commissioner (Appeals) as well warrants us to interfere in the order of the first appellate authority either. - Decided against revenue.

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• 2021 (9) TMI 630
  Credit of TDS u/s 194IA - AR submissions are that the purchaser has deducted the TDS @1% and has deposited in the Govt Account and issued TDS certificate - HELD THAT:- Assessee has claimed TDS credit in the return of income filed manually and electronically in response to notice U/sec148 of the Act, the TDS credit cannot be denied as the A.O. in assessment order has considered the total sale consideration under income from capital gains which is not disputed. Accordingly, we considering the overall facts and the judicial decisions direct the Assessing officer to grant the TDS credit to the assessee after verification and examination of the TDS certificate, Form 26AS and the challan and allow the grounds of appeal of the Assessee.

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• 2021 (9) TMI 629
  Estimation of income - bogus purchases - Purchases from grey market - assessee has obtained bogus purchase bills from suspicious dealer identified by the Sales Tax Department, Government of Maharashtra - HELD THAT:- The income declared by the assessee from contract work has not been disputed by the Revenue. The assessee is a work contractor. Without material the assessee could not have completed the contract job. Ostensibly, the assessee has procured the material for performing contract job either from grey market or any other sources. Thereafter, the assessee obtained bogus purchases bills from hawala operator. As in M/S. PARAMSHAKTI DISTRIBUTORS PVT. LTD. [ 2019 (7) TMI 838 - BOMBAY HIGH COURT] upheld the proposition that it is only the profit element embedded in the bogus purchases that has to be brought to tax. Estimation of disallowance at 30% by the CIT(A) is very much on the higher side. Considering entirety of facts, estimation of GP @12% of bogus purchases would meet the ends of justice - Appeal by assessee is partly allowed.

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• 2021 (9) TMI 627
  Addition of high cash in hand - high cash on hand disclosed in the balance sheet as compared to the preceding year - HELD THAT:- Revenue has not brought any material suggesting that the withdrawal made by the assessee were utilized for making payments. It is also not brought on record that the amounts so withdrawn from the bank account was utilized for any other undisclosed purposes - CIT(A) observed that despite having sufficient cash in hand, the assessee withdraw the amount. It is correct that the assessee has withdrawn higher amounts than the immediate preceding years but that cannot be sole reason for making addition purely on the basis of suspicion. We failed to understand the reasoning of the Assessing Officer that the amount was withdrawn to justify the cash deposits during demonetization period i.e. between 09.11.2016 to 30.12.2016. It is also seen that the cash was withdrawn much prior to such event. So far observation regarding sharp increase in payable expenses is concerned, there is no finding by the Assessing Officer that such expenses are bogus - addition has been made purely on the basis of suspicion. Such action of authorities below cannot be affirmed - Decided in favour of assessee.

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• Customs

• 2021 (9) TMI 666
  Grant of anticipatory bail - removal of consignment from ICD without paying the custom duty - instead of aluminium scrap, cigarettes (100 mm each) of four different brands were imported without paying the custom duty - Section 108 of the Customs Act, 1962 - HELD THAT:- It is apparent that the notice to the petitioner was issued on various dates w.e.f. 12.08.2021 and instead of appearing before the Custom Authorities, the petitioner preferred to present his anticipatory bail application before the Court of Sessions, which was dismissed on 24.08.2021. The present petition is not maintainable and is liable to be dismissed - Even otherwise, there are serious allegations of causing a huge financial loss to the State Exchequer and therefore, even on merits, this petition is liable to be dismissed - petition dismissed.

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• 2021 (9) TMI 662
  Release of detained imported goods - Coated Paper Sheets - appellant are willing to execute a bond for the value of goods and a bank guarantee towards security to an extent of 10% of the value of the goods - HELD THAT:- The appellants/Revenue may be directed to release the goods on condition the respondent executing a bond for the value of the goods and bank guarantee to an extent of 10% of the value of the goods. Therefore, it is directed that the appellants to release the goods on condition the respondent executing a bond for the value of the goods and bank guarantee to an extent of 10% of the value of the goods. The respondent shall complete their part of obligation within two weeks from the date of receipt of a copy of this judgment and the appellants are directed to release the goods within two weeks thereafter. Further, the detention charges shall stand waived. Appeal disposed off.

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• 2021 (9) TMI 660
  Seeking permission to go to Afghanistan - medicines - petitioner carried certain medicines illegally while going to Afghanistan - redetermination of value of goods - confiscation of goods - redemption fine - penalty - prosecution under Section 132 and 135(1)(a) of the Custom Act - HELD THAT:- Considering that the adjudication proceedings qua the petitioner have attained finality and the petitioner even does not wish to redeem the articles, is required to deposit the penalty amount, hence this Court finds no error in the impugned judgment. Petition dismissed.

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• 2021 (9) TMI 646
  Refund of Additional Customs Duty - benefit of notification dated 17 March 2012 - rate of Additional Duty was reduced - incidence of Additional Duty passed on or not - principles of unjust enrichment - entitlement to amendment of the Bills of Entry or for correction of the Bills of Entry - sections 149 and 154 of the Customs Act - HELD THAT:- The Telangana High Court in M/S. SONY INDIA PVT. LTD. VERSUS UNION OF INDIA AND ANOTHER [ 2021 (8) TMI 622 - TELANGANA HIGH COURT] examined almost a similar controversy as has been raised in these two appeals. The appellant therein had imported mobile phones in India for trading purposes during the period 04.08.2014 to 29.01.2015. At the time of import of the mobile phones, the petitioner had not claimed any exemption under serial no. 263A (ii) of the Exemption Notification which allowed payment of Additional Duty at the rate of 1% only in the Bills of Entry in view of the decision of the Supreme Court in M/S SRF LTD., M/S ITC LTD VERSUS COMMISSIONER OF CUSTOMS, CHENNAI, COMMISSIONER OF CUSTOMS (IMPORT AND GENERAL) , NEW DELHI [ 2015 (4) TMI 561 - SUPREME COURT] . The petitioner, in view of the decision in Supreme Court in ITC, made an application for amendment of the Bills of Entries under section 149 of the Customs Act so that after that the duty could be refunded. The application filed by the petitioner was however, rejected. In view of the decisions of the Bombay High Court in DIMENSION DATA INDIA PRIVATE LTD. VERSUS COMMISSIONER OF CUSTOMS AND ANR. [ 2021 (1) TMI 1042 - BOMBAY HIGH COURT] and the Telangana High Court in M/S. SONY INDIA PVT. LTD. VERSUS UNION OF INDIA AND ANOTHER [ 2021 (8) TMI 622 - TELANGANA HIGH COURT] , the respondent can take recourse to appropriate proceedings, including the provisions of sections 149 and 154 of the Customs Act for either amendment of the Bills of Entry or for correction of the Bills of Entry. It is expected that if such applications are now filed by Vivo Mobile, the same would be adjudicated expeditiously as the refund applications were filed in 2015. It is, therefore, ordered that in the event applications are now filed by Vivo Mobile, they shall be decided expeditiously and preferably within a period of three months from the date of filing of the applications - Appeal disposed off.

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• 2021 (9) TMI 636
  Jurisdiction - power of Additional Director, D.R.I. to issue SCN - amendment introduced in Section 28 (11) of the Customs Act, 1962 - HELD THAT:- The proceedings are initiated from the show cause notice dated 25.02.2011 issued by D.R.I. The Hon ble Supreme Court in the case of M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [ 2021 (3) TMI 384 - SUPREME COURT] has held that D.R.I officer is not proper officer within the meaning of Section 28 (4) read with Section 2 (34) of the Customs Act, 1962. Though the Revenue has filed a review application against the said judgement, it is noted that as per the recent decision of the Hon ble Apex court in the case of COMMISSIONER OF CUSTOMS, KANDLA VERSUS M/S. AGARWAL METALS AND ALLOYS [ 2021 (9) TMI 316 - SUPREME COURT] , the Hon ble Apex Court has dismissed the appeal filed by the department following the decision in the case of Canon India Pvt. Ltd. The demand raised cannot sustain as show cause notice is vitiated being without jurisdiction to issue the same. Proceedings imposing penalty cannot sustain as the SCN is issued without jurisdiction - Appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2021 (9) TMI 670
  Jurisdiction - Initiation of prosecution - Investigation into affairs of Company by Serious Fraud Investigation Office - freezing and disgorgement of assets of 157 companies - retrospective effect of penal provisions - power of the respondent to initiate proceedings before NCLT - HELD THAT:- It is a settled law the challenge to the jurisdiction of NCLT ought to have been raised before NCLT itself. Once the proceedings have been initiated before NCLT and if the NCLT is seized with the company petition, all contentions including power of the respondent to initiate such proceedings before NCLT must be raised before such forum and be determined in those proceedings - Since the petition has already been filed under Section 241, 242 of the Companies Act; notice having been issued; the contention raised before this Court on the point of jurisdiction of NCLT can very well be raised before the NCLT. Companies Act is a complete code hence statutory mechanism under it cannot be bypassed. Section 430 of the Act provides the jurisdiction of all Civil Courts is barred in respect of the matter which the NCLT or the NCLAT is empowered to determine by or under Act. This Court does not have territorial jurisdiction to entertain this Writ Petition as the company petition is filed before the NCLT at Allahabad and in respect of the companies having its registered office in the State of Uttar Pradesh that is beyond the jurisdiction of this Court - This Court does not exercise supervisory jurisdiction under Article 227 over NCLT at Allahabad and such jurisdiction vests solely with High Court of Judicature at Allahabad. The Hon ble Supreme Court in various judgments have held Section 430 of the Companies Act has to be construed strictly and the NCLT has been given inherent powers to decide the matters of the companies and should not be interfered with lightly - reliance can be placed in the case of SAS HOSPITALITY PVT LTD ANR. VERSUS SURYA CONSTRUCTIONS PVT LTD ORS. [ 2018 (12) TMI 1123 - DELHI HIGH COURT] . Power of Central Government to file application before NCLT u/s 212(14) - Disgorgement occurring in Section 212 (14A) cannot be read in blissful isolation whereas, the length and breadth of the Act, chapter and verse bespeaks of such properties/ shares/ debentures, to be frozen/ liquidated/disposal/ sold for utilization in furtherance of public interest by way of sale, recovery of undue gains to alleviate the wrong done to persons/ financial institutions - the contention that no charges have been framed as yet does not hold a ground since filing of company petition under Section 241(2) is not dependent on filing of the chargesheet in the complaint. There is no merit in the petition(s) and both the petition(s) are accordingly dismissed.

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• 2021 (9) TMI 634
  Approval of the Scheme of Amalgamation - obtaining fresh orders/directions for convening meeting(s) of the Equity Shareholders of the Applicant Companies for consideration - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed.

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• Insolvency & Bankruptcy

• 2021 (9) TMI 672
  Withdrawal of Resolution Plan - resolution plan was approved by Committee of Creditors - principles of res-judicata - seeking refund of Earnest Money Deposit - whether the Third Withdrawal Application by Ebix was barred by res judicata? - HELD THAT:- While res judicata may have been codified in Section 11, that does not bar its application to other judicial proceedings, such as the one in the present case. In Daryao v. State of U.P., [ 1961 (3) TMI 91 - SUPREME COURT] , a Constitution Bench of this Court held that orders dismissing writ petitions in limine will not constitute res judicata. It was noted that while a summary dismissal may be considered as a dismissal on merits, it would be difficult to determine what weighed with the Court without a speaking order - Another two judge Bench of this Court, in its judgment in ERACH BOMAN KHAVAR VERSUS TUKARAM SHRIDHAR BHAT AND ANOTHER [ 2013 (12) TMI 1673 - SUPREME COURT] , has held that the doctrine of res judicata can only apply when there has been a conscious adjudication of the issue on merits. Res judicata cannot apply solely because the issue has previously come up before the court. The doctrine will apply where the issue has been heard and finally decided on merits through a conscious adjudication by the court. In the present case, the NLCT s order dismissing the First Withdrawal Application makes it clear that it had only considered only that part of prayer (iv) which related to re-evaluation of the Resolution Plan, possibly because Ebix had hoped to re-evaluate the Resolution Plan on the basis of the information received as a consequence of prayers (i) and (ii) and those prayers were rejected since such information was not available. Res judicata cannot apply solely because the issue has previously come up before the court. The doctrine will apply where the issue has been heard and finally decided on merits through a conscious adjudication by the court. In the present case, the NLCT s order dismissing the First Withdrawal Application makes it clear that it had only considered only that part of prayer (iv) which related to re-evaluation of the Resolution Plan, possibly because Ebix had hoped to re-evaluate the Resolution Plan on the basis of the information received as a consequence of prayers (i) and (ii) and those prayers were rejected since such information was not available. Ebix was responsible for conducting their own due diligence of Educomp and could not use that as a reason to revise/modify their approved Resolution Plan. In any event, Section 32A of the IBC grants immunity to the Corporate Debtor for offences committed prior to the commencement of CRIP and it cannot be prosecuted for such offences from the date the Resolution Plan has been approved by the Adjudicating Authority under Section 31, if the Resolution Plan results in a change of management or control of the Corporate Debtor subject to certain conditions - in any case even if it is found that there was any misconduct in the affairs of Educomp prior the commencement of the CIRP, Ebix will be immune from any prosecution or punishment in relation to the same. The submission that Ebix has been placed in a prejudicial position due to the initiation of investigation into the affairs of Educomp by the CBI and SFIO is nothing but a red herring since such investigations have no bearing on Ebix. Ebix cannot dispute that E-RP had provided it the relevant information required under Section 29 to formulate its Resolution Plan. The issues in relation to financial investigations into the conduct of Educomp arose when the two articles were published by The Wire, both of which were after the Approval Application had been filed by the E-RP. Further, Ebix was aware of all the proceedings before the NCLT since the various applications were often listed along with the Approval Application, in which it continued to appear. Finally, Ebix has brought nothing on record to prove that E-RP knew of the SFIO and CBI investigations before a regulatory disclosure was made by Educomp. Hence, it cannot be stated that the E-RP had faltered in its duty to provide relevant information to Ebix. Ruling - In the present framework, even if an impermissible understanding of equity is imported through the route of residual powers or the terms of the Resolution Plan are interpreted in a manner that enables the appellants desired course of action, it is wholly unclear on whether a withdrawal of a CoC-approved Resolution Plan at a later stage of the process would result in the Adjudicating Authority directing mandatory liquidation of the Corporate Debtor. Pertinently, this direction has been otherwise provided in Section 33(1)(b) of the IBC when an Adjudicating Authority rejects a Resolution Plan under Section 31. In this context, we hold that the existing insolvency framework in India provides no scope for effecting further modifications or withdrawals of CoC-approved Resolution Plans, at the behest of the successful Resolution Applicant, once the plan has been submitted to the Adjudicating Authority. A Resolution Applicant, after obtaining the financial information of the Corporate Debtor through the informational utilities and perusing the IM, is assumed to have analyzed the risks in the business of the Corporate Debtor and submitted a considered proposal. A submitted Resolution Plan is binding and irrevocable as between the CoC and the successful Resolution Applicant in terms of the provisions of the IBC and the CIRP Regulations. Impact of Delay in approving the Plan - I t would also be sobering for us to recognize that whilst this Court has declared the position in law to not enable a withdrawal or modification to a successful Resolution Applicant after its submission to the Adjudicating Authority, long delays in approving the Resolution Plan by the Adjudicating Authority affect the subsequent implementation of the plan. These delays, if systemic and frequent, will have an undeniable impact on the commercial assessment that the parties undertake during the course of the negotiation. The NCLT and NCLAT are urged to be sensitive to the effect of such delays on the insolvency resolution process and be cognizant that adjournments hamper the efficacy of the judicial process. The NCLT and the NCLAT should endeavor, on a best effort basis, to strictly adhere to the timelines stipulated under the IBC and clear pending resolution plans forthwith. Judicial delay was one of the major reasons for the failure of the insolvency regime that was in effect prior to the IBC. We cannot let the present insolvency regime meet the same fate. Appeal dismissed.

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• 2021 (9) TMI 633
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- The Petitioner raised invoices aggregative of Rs. 9,11,190/- to Corporate Debtor and the Corporate Debtor made a payment of Rs. 2,97,676/- and hence the outstanding amount of Rs. 6,91,514/- remain payable by the Corporate Debtor. The said invoice were to be paid on immediate basis and contain interest clause wherein the Petitioner could claim interest @ 24% in case delayed payment. Hence an amount of Rs. 3,52,953.91/- towards interest was claimed. The total amount outstanding of Rs. 10,45,467.90/-. The debt became due on 09.01.2018. The Petitioner has issued demand notice under section 8 claiming entire amount due and the Corporate Debtor replied to said demand notice stating that they were unable to pay the monies and were facing financial distress. The Corporate Debtor filed reply and sought time of 12 to 15 months to pay the outstanding balance. Therefore, in view of the facts of the present case which clearly demonstrate the debt which was due for payment under the invoices raised by the Petitioner and the admission of liability by the Corporate Debtor and express declaration of inability of non-payment due to financial crisis, this petition is admitted. The application filed by the Petitioner is on proper Form 5, as prescribed under the Adjudicating Authority Rules and is complete - Application admitted - moratorium declared.

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• 2021 (9) TMI 632
  Seeking liquidation of the Corporate Debtor - no resolution Plan was received - Section 33(2) of I B Code - HELD THAT:- Section 33(2) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where the resolution professional, at any time during the CIRP but before confirmation of the resolution plan, intimates the Adjudicating Authority of the decision of the CoC approved by not less than sixty-six percent of the voting share, to liquidate the Corporate Debtor. In the present case, the CoC has resolved by 100% voting share to liquidate the Corporate Debtor. The Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with sub-section (1) thereof - Application allowed.

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• PMLA

• 2021 (9) TMI 671
  Revival of twin conditions for bail under Section 45 of PMLA after having been declared as unconstitutional - parallel provision to Section 482 Cr.P.C. or not - limitation imposed on civil powers existed in Section 482 Cr.P.C. by Section 362 Cr.P.C. - HELD THAT:- The reliance placed by the applicant/petitioner on the decisions of the Hon ble Supreme Court in cases of NEW INDIA ASSURANCE CO. LTD. VERSUS KRISHNA KUMAR PANDEY [ 2019 (12) TMI 1509 - SUPREME COURT] as well as STATE OF PUNJAB AND SUMEDH SINGH SAINI VERSUS DAVINDER PAL SINGH BHULLAR ORS. ETC. [ 2011 (12) TMI 656 - SUPREME COURT] is to state that inherent powers of the Court u/s 482 of Cr.P.C. are saved by Section 362 of Cr.P.C. but in NEW INDIA ASSURANCE CO. LTD. VERSUS KRISHNA KUMAR PANDEY [ 2019 (12) TMI 1509 - SUPREME COURT] the petitioner was ex parte/not heard and STATE OF PUNJAB AND SUMEDH SINGH SAINI VERSUS DAVINDER PAL SINGH BHULLAR ORS. ETC. [ 2011 (12) TMI 656 - SUPREME COURT] rather carved out certain exceptions to the operation of the bar under Section 362 Cr.P.C. as quoted below: i. If a judgment has been pronounced without jurisdiction or in violation of principles of natural justice; or ii. Where the order has been pronounced without giving an opportunity of being heard to a party affected by it; or iii. Where an order was obtained by abuse of the process of court which would really amount to its being without jurisdiction. The above exceptions, in no way apply to the facts of the present case and hence the present application is not maintainable in light of the express bar under Section 362 of the Cr.P.C. - application dismissed.

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• 2021 (9) TMI 661
  Money Laundering - seeking grant of regular bail - conspiracy - creating false and forged documents for the purpose of cheating and used the said false documents as genuine knowing fully well as false and made transactions in various banks fraudulently - satisfaction of condition of twin limitation for grant of bail u/s 45 (1) of PMLA Act - HELD THAT:- This Court without going into merits of the case, taking into consideration the factors that the petitioner has been languishing in jail from the last 360 days, petitioner himself voluntarily surrendered before the Court below in the year 2019, other accused were already enlarged on bail and the health condition of petitioner, this Court deems it appropriate to grant interim bail to the petitioner for a period one month on certain conditions. The petitioner shall be enlarged on interim bail for a period of one month i.e. from 08.09.2021 to 07.10.2021 (both days inclusive) on his executing a bond for a sum of Rs. 10,00,000/- with two sureties each for a like sum to the satisfaction of learned Metropolitan Sessions Judge-cum-Additional District and Sessions Judge-cum-Special Judge for Trial of Prevention of Money Laundering Act, Visakhapatnam. On such release, the petitioner shall not leave the country and shall not tamper with evidence and influence the witnesses - Post this matter on 05.10.2021.

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• Central Excise

• 2021 (9) TMI 668
  Area based exemption - North East Industrial Investment Promotion Policy, 2007 - vires of notifications dated 27.03.2008 and 10.06.2008 - contention is that the application of the petitioner for fixing of the special rate which was made on 13.06.2021, has not yet been given a final consideration by the Principal Commissioner, GST, Guwahati - HELD THAT:- Considering the limited grievance raised, this writ petition is disposed off directing the Principal Commissioner of GST, Guwahati to pass a reasoned order on the application of the petitioner dated 13.06.2021 requesting for fixation of a special rate. By requiring the Principal Commissioner, GST, Guwahati to pass an order it is meant that the Principal Commissioner, GST may pass any reasoned order as may be advisable under the law by either accepting or rejecting the request made by the petitioner. In doing so, the Principal Commissioner, GST, Guwahati may pass any order as deemed appropriate under the law. Petition disposed off.

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• 2021 (9) TMI 655
  Recovery of rebate claims already sanctioned - scrap generated in the manufacture of the hand tools - removal of such waste on payment of duty as if such waste is manufactured or processed in the factory of the manufacturer or processor - whether such scrap was liable to payment of duty on its clearance - denial of rebate on the ground of non-fulfillment of paragraph 4(c) of the notification No.21/2004-CE(NT) dated 06.09.2004 - HELD THAT:- A clear reading of paragraph 4 to become applicable the conditions sine quo non was the material as such or at partially processed stage had to be moved outside the factory and only and only then paragraph 4 and its sub-paragraphs (a), (b) and (c) would become applicable. Once there is no finding that the material or partially processed goods were moved outside the factory, there will be no applicability of paragraph 4 or its sub-paragraphs of the notification dated 06.09.2004. There is no non-fulfillment of the condition prescribed in paragraph 4(c) of the notification dated 06.09.2004 and the respondents have wrongly applied paragraph 4(c) of the notification dated 06.09.2004. Therefore, the impugned orders are vitiated in law and cannot be sustained. Petition allowed - decided in favor of petitioner.

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• 2021 (9) TMI 654
  Seeking grant of Bail - detention of finished goods against the pending government dues - violation of the undertaking given by the applicant on 10.11.2016 with regard to non-disposal of goods and to keep them in safe custody - HELD THAT:- The undertaking reveals that applicant has declared neither to claim or demand owner-ship of the goods. It is alleged that the applicant has sold the goods after giving such undertaking. The documents in this regard also reveal that final order with regard to detention of the goods to recover government dues was passed on 20.04.2017. Thus, there is delay of more than four years in registration of the FIR as despite having knowledge of selling / detention of goods, the FIR has been filed on 19.04.2021. Considering the facts of the case, the custodial interrogation of the applicant at this stage is not necessary - the applicant is ordered to be released on bail in the event of his arrest, on his executing a personal bond of Rs. 10,000/- with one surety of like amount on the following conditions - application allowed.

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• 2021 (9) TMI 638
  Refund claim for unutilised cenvat credit - appellant took re-credit of the rejected amount of refund and thereafter, again filed the refund claims - entitlement to re-credit under the repealed provisions of N/N. 27/2012-CE - Applicability of first Proviso to Section 142(3) of the CGST Act, 2017 - HELD THAT:- The provisions of Section 142(3) First Proviso read with Section 142(6)(a) along with the proviso clearly provides that the existing pending claims of an assessee under the repealed Central Excise Act or Service Act provisions shall be decided in accordance with erstwhile Act, and it further provides that if any claim of refund is rejected, the same shall lapse. The present appeals are also bad under the principles of res judicata, as the same issue of refund attained finality on passing of the order by the Commissioner (Appeals) in the year 2018 as the appellant chose not to file any further appeal before the higher forum. Further, the subordinate legislation is effective or in force till the date of Parent Act only. As the Parent Act in this case is repealed w.e.f. 1.7.2017, when the CGST provisions, came into force. Accordingly, the appellant have erred in law taking re-credit of the rejected refund amount in the year 2018 and thereafter they have again filed claim for the rejected amount of refund. There are no merits in the appeal - appeal dismissed.

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• Indian Laws

• 2021 (9) TMI 665
  Attachment of several properties of the petitioner-company - vires of notification dated 19th January 2017 issued by the Government of Tripura in exercise of powers under Section 4(1)(ii) of the Tripura Protection of Interests of Depositors (In Financial Establishments) Act, 2000 - seeking protection of attached moveable and immovable properties till appropriate orders are passed by the designated Court - valuation of the properties - HELD THAT:- Once the property has been validly attached under Section 4 of the Act of 2000, all issues concerning such property would be dealt with and decided by the Designated Court. However, when the petitioner has raised a fundamental question of validity of the order of attachment itself, the same must be examined by this Court - As per sub-section (2) of Section 4, upon publication of the order under sub-section (1), all properties and assets of the financial establishment shall forthwith vest in the competent authority appointed by the Government pending further order from the Designated Court - As per sub-section (2) of Section 4, upon publication of the order under sub-section (1), all properties and assets of the financial establishment shall forthwith vest in the competent authority appointed by the Government pending further order from the Designated Court. In an affidavit-in-reply, dated 16th April 2019, filed on behalf of the Government, it is pointed out that the Director of Institutional Finance as well as the office of the District Magistrate Collectors and Sub-Divisional Magistrates had received many complaints from depositors against the petitioner-company of making short payment of maturity amount or non-payment of the invested amount. Some of the complaints are annexed with the said affidavit - It is also stated that the Sub-Divisional Magistrate had issued an interim order, on 12th June 2013, restraining the company from accepting deposits from the public. It is further stated that after receiving the reports of the District Magistrates Collectors and Superintendent of Police of the districts, the Principal Secretary, Finance, Government of Tripura, has issued the impugned notification. It was after perusal of such voluminous material that the Finance Secretary issued the impugned notification. There was thus neither any dearth of material before the authority to enable the said authority to come to the conclusion that it was necessary to exercise the powers in terms of Section 4 the Act of 2000, nor there was any breach of procedural requirement. It is true that sub-section (1) of Section 4 of the Act requires reasons to be recorded in writing. However, such requirement cannot be seen in isolation. Merely because there is no such narration of the satisfaction of the said authority in the impugned notification, it cannot be stated that his decision is bereft of reasons. Once the petitioner is divested of any control over the attached property and pending further orders by the Designated Court the property is to vest in the Government, both in the interest of the petitioner-company as well as the depositors it is the duty of the Government machinery to ensure that the property does not deteriorate or is encroached or stolen for want of proper protection. To what extent the Government machinery can be blamed. However, what ultimate directions can be issued must depend on the outcome of the various proceedings before the Designated Courts and these questions also must be decided by such Courts who are in charge of all proceedings and are entrusted with duty and responsibility to examine all such issues and also vested with necessary powers to do so under the Act of 2000 - the concerned Courts are left to examine full facts and pass appropriate orders either by way of interim measures, if found necessary, or while disposing of the proceedings. Obtaining valuation reports - HELD THAT:- The same can be urged before the Designated Courts which can take a proper view in the matter. Petition disposed off.

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