TMI Tax Updates - e-Newsletter
September 19, 2018

Case Laws in this Newsletter:

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

TMI SMS

• Restaurant services - The Applicant is not entitled to pay the GST @ 18% with input tax credit - Liable for GST @ 5%, without ITC

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Articles

1. GST Annual Return- A Surgical Strike by Government

   By: NikhilMohan Jhanwar

2. LEVY OF LATE FEE UNDER ‘GST’

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Examination for Confirmation of Enrollment of GST Practitioners

2. CCI approves the combination of Linde Aktiengesellschaft and Praxair, Inc. under Section 31(7) of the Competition Act, 2002, subject to modifications/remedies to address the Anti-competitive effects resulting from the said combination.

3. CCI imposes penalties upon Sugar Mills and their Associations for rigging the bids in respect of Joint Tender floated by Oil Marketing Companies for procurement of Ethanol for blending with Petrol

4. India signs Financing Loan Agreement with the World Bank for US$ 74 Million for Uttarakhand Workforce Development Project (UKWDP)

5. Suresh Prabhu Urges G-20 Members to Focus on Services for Enhancing Global Trade

6. Auction for Sale (Re-issue) of Government Stocks

7. Government initiates consolidation – amalgamated entity to be India’s third largest bank

Notifications

Customs

1. 63/2018 - dated 18-9-2018 - Cus

Amendment to Customs Exemption Notifications No. 24/2015-Customs dated 08.04.2015 to align it with amendment in Foreign Trade Policy

2. 62/2018 - dated 17-9-2018 - Cus

Seeks to further amend the the third proviso to the Notification. No. 50/2017-Customs, dated the 30th June, 2017 and to delay implementation of the retaliatory duties till 2nd Nov 2018

DGFT

3. 33/2015-2020 - dated 17-9-2018 - FTP

Amendment in import policy and policy condition of pepper classified under Chapter 09 of ITC (HS), 2017–Schedule–1(Import Policy)

GST - States

4. CT/LEG/GST-NT/12/17/752 - dated 4-9-2018 - Nagaland SGST

Seeks to extend the time limit for making the declaration in FORM GST ITC-01 for specified classes of taxpayers

5. CT/LEG/GST-NT/12/17/751 - dated 4-9-2018 - Nagaland SGST

Seeks to extend the time limit for making the declaration in FORM GST ITC-04

6. CT/LEG/GST-NT/12/17/750 - dated 21-8-2018 - Nagaland SGST

Seeks to extend the due date for filing of FORM GSTR-3B for the month of July, 2018

Income Tax

7. 53/2018 - dated 14-9-2018 - IT

U/s 10(46) of the Income-tax Act, 1961 Central Government notifies State Load Despatch Centre Unscheduled Interchange Fund- West Bengal State Electricity Transmission Company Limited (PAN AAIAS0980J), a trust constituted under the Electricity Act, 2003 (36 of 2003) in respect of the specified income arising to that trust

8. 50/2018 - dated 14-9-2018 - IT

U/s 10(46) of the Income-tax Act, 1961 Central Government notifies ‘West Bengal State Council of Science & Technology’, Kolkata, a society constituted by the Government of West Bengal, in respect of the specified income arising to that Society

9. 46/2018 - dated 14-9-2018 - IT

U/s 10(46) of the Income-tax Act, 1961 Central Government notifies ‘Rajasthan State Dental Council’, Jaipur, a body constituted by the Government of Rajasthan, in respect of the specified income arising to that body

10. 44/2018 - dated 14-9-2018 - IT

U/s 10(46) of the Income-tax Act, 1961 Central Government notifies ‘Uttar Pradesh Electricity Regulatory Commission’, Lucknow, a commission constituted under the Uttar Pradesh Electricity Reforms Act, 1999 (UP Act No.24 of 1999), in respect of the specified income arising to the said Commission

Circulars / Instructions / Orders

GST

1. Order No. 4/2018 - dated 17-9-2018

Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117(1A) of the Central Goods and Service Tax Rules, 2017 in certain cases

Customs

2. 32/2018 - dated 17-9-2018

Customs procedure for export of cargo in containers and closed bodied trucks from ICDs/CFSs through Land Customs Stations (LCSs) - Reg.

Highlights / Catch Notes

GST

• GST FORM TRAN-1 Submission Deadline Extended for Specific Cases u/r 117(1A), Central GST Rules 2017.

  Circulars : Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117(1A) of the Central Goods and Service Tax Rules, 2017 in certain cases
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• Diesel Engine Fuel Injection Pump Parts Classified Under Tariff Heading 8413 91 90, Subject to 18% GST Tax Rate.

  Case-Laws - AAR : Classification of goods - Parts of Fuel Injection Pumps - The “Parts of Fuel Injection Pumps for diesel engines” are classifiable under Tariff Heading 8413 91 90 as per the Customs Tariff Act, 1975. - Liable to be taxed at the rate of 18% under GST
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• Government Landscaping Services May Be GST-Exempt If Classified as Pure Services, Not Works Contracts.

  Case-Laws - AAR : Levy of GST - landscaping and gardening work for government departments - if it is in the nature of pure services then eligible for exemption - if it is in the nature of works contract, not eligible for exemption and GST is payable accordingly.
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• NHAI Sub-Letting: Toll Charges Collected in Fiduciary Role, GST Applies to Applicant's Operations, Not Ultimate Recipient.

  Case-Laws - AAR : Levy of GST - sub-let of Toll Collection work of certain road by NHAI - The Toll Charges collected by the applicant are not “Toll Charges” per se in the hands of the applicant, but held in fiduciary capacity by the applicant, for onward remittance to Highway Infrastructure (P) Limited.
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• IIM's Executive Post Graduate Programme Not Eligible for GST Exemption, Says Notification Language.

  Case-Laws - AAR : Exemption from GST - Executive Post Graduate Programme in Management (EPGP) conducted by IIM - there is no iota of ambiguity in the language of the impugned notification - The Executive Post Graduate Programme will not be eligible for exemption from GST as the same has been categorically excluded from exemption.
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• University-Affiliated Educational Services Exempt from GST Due to Qualification as Educational Services Under GST Rules.

  Case-Laws - AAR : Exemption from GST - Educational services - The services provided by the applicant in affiliation to specified universities and providing degree courses to students under related curriculums to its students exempt from Goods and Services Tax.
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• Restaurant Services Subject to 5% GST Rate Without Input Tax Credit Eligibility, Not 18% with Input Credit.

  Case-Laws - AAR : Input tax credit (ITC) - rate of tax - restaurant services - The Applicant is not entitled to pay the GST @ 18% with input tax credit as the services being offered by the Applicant are classified under a heading attracting GST @ 5%, without input tax credit.
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Income Tax

• Settlement Compensation Classified as Capital Receipt, Exempt from Taxation Under Current Tax Law.

  Case-Laws - AT : Damages/compensation received - nature of receipt - the amount received towards compensation/damage for settlement of dispute is capital receipt, hence not taxable.
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• TPO Must Use Appropriate Methods with Evidence to Determine Arm's Length Price, No Ad-Hoc Estimations Allowed.

  Case-Laws - AT : If the Transfer Pricing Officer did not agree to the arm's length price shown by the assessee it was open for him to determine the arm's length price by applying one of the most appropriate methods being backed by supporting material. Without complying to the statutory provisions, the Transfer Pricing Officer certainly cannot determine the arm's length price on ad–hoc / estimation basis.
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• Land Sale Between Companies Excluded from Deemed Dividend Definition Under Income Tax Act Section 2(22)(e.

  Case-Laws - AT : Deemed dividend addition u/s 2(22)(e) - business transactions - the transaction between the two companies in the form of purchase and sale of land is purely business and trade transaction and beyond the purview of the deemed dividend u/s 2(22)(e)
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• Income from other sources not disallowed u/s 40(a)(ia) for non-TDS deduction before April 2018 amendment.

  Case-Laws - AT : Addition for Non deduction of TDS - When the income of the assessee has been assessed under the head “Income from other sources” and there is no provision U/s 56 to 58 of the Act to make a disallowance U/s 40(a)(ia) of the Act prior to the amendment vide Finance Act 2017 w.e.f. 1/04/2018
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• Payment for Unfunded Pensions Deemed Welfare Measure, Exempt from Section 40A(9) Provisions.

  Case-Laws - AT : Disallowance of payment made to employees against the provision made for unfunded pension - it is effectively a payment made as a welfare measure - the provisions of section 40A(9) is not at all applicable to the facts of the instant case.
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• Net Profit Estimation at 8% of Gross Turnover Reasonable, Excludes Partners' Salaries and Interest on Capital Accounts.

  Case-Laws - AT : Estimation of net profit @ 8% of gross turnover cannot be said to be unjustified - However, the salary of the partners and interest of the partner’s capital account cannot be clubbed in such addition.
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• Capital Gains Tax: Shares Must Be Allotted Before End of Previous Year in Business Succession u/s 47(xiii)(b).

  Case-Laws - HC : Capital gain tax liability - transfer - scope of 47(xiii)(b) - the allotment of shares of the company which succeeds to the business of the partnership firm has to be complied before the end of relevant previous year in which such succession of business takes place.
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• Unused Funds for Ministry Project Not Classified as Revenue Receipt or Income for Assessee Based on Facts.

  Case-Laws - HC : Addition on account of un-utilized funds for overseeing the project on behalf of the Ministry of Road Transport and Highways - The amount received in view of the factual findings cannot be treated as revenue receipt or income of the assessee.
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Customs

• Streamlined Export Procedures for Containerized Cargo from ICDs and CFSs via Land Customs Stations Ensure Compliance and Security.

  Circulars : Customs procedure for export of cargo in containers and closed bodied trucks from ICDs/CFSs through Land Customs Stations (LCSs) - Reg.
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Corporate Law

• Party Cannot Seek Damages and Specific Performance for Share Purchase Agreement Breach; Amendment Request Dismissed.

  Case-Laws - HC : Failure of the share purchase agreement - once there is alleged breach and a prayer for damages has been sought for by a party, then that party cannot pray for specific performance of the same contract. Amendment application fails and the same is dismissed.
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Indian Laws

• Petitioner Challenges Trial Over Bounced Cheques, Claims No Legally Enforceable Debt Exists to Justify Charges.

  Case-Laws - HC : Dishonor of Cheque due to insufficiency of funds - Repayment of loan - the alleged cheques were not issued by the petitioner for any legally enforceable debt. In such circumstances, the petitioner cannot be subjected to ordeal trial.
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Service Tax

• CENVAT Credit on SIM Card Sales Deemed Eligible; Reversal Demand Unjustified Under Current Regulations.

  Case-Laws - AT : CENVAT credit - SIM Cards - sale of SIM Cards is not goods sold or intended to be sold to the customer - credit availed by the appellants on SIM Cards is eligible and the demand for reversal cannot sustain.
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• CENVAT Credit Denied on Storage, Input, and Port Services; Demand Confirmed Using Extended Limitation Period.

  Case-Laws - AT : CENVAT Credit - Storage and Warehousing Service - input services - port services - denial of credit for the reason that the appellants were receiving reimbursement of the full amount from the customer - demand confirmed invoking extended period of limitation.
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• CENVAT Credit Denial for Cement and TMT Bars Overturned Due to Limitation Period in Port Services Case.

  Case-Laws - AT : CENVAT credit - Cement and TMT Bar used for construction of wall in their port area - denial on account of nexus with the rendering of the Port Service - demand set aside on the ground of period of limitation.
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Central Excise

• Valuation of Lagging Sheets Must Follow Rule 8 of Central Excise Valuation Rules for Compliance.

  Case-Laws - AT : Method of Valuation - lagging sheets - manufactured goods cleared to various branches, used in servicing as well as sold to customers - valuation of lagging sheets needs to be done as per Rule 8 of Valuation Rules.
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• Appellant Not Required to Pay Additional 10% or 5% After Reversing Proportionate CENVAT Credit on Exempted Goods.

  Case-Laws - AT : Reversal of CENVAT Credit - once the appellant has reverse the proportionate Cenvat credit availed on common input services attributable to exempted goods then it is not required to pay 10% or 5% as the case may be as demanded by the Revenue.
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VAT

• Hybrid Amplifier Not Classified Under CII-124: Distinct from Antennas and TV Equipment Categories.

  Case-Laws - HC : Hybrid Amplifier has got a totally different function and it has no function akin to an antenna - This Hybrid Amplifier cannot be classified under Schedule Entry CII-124 as it is neither a TV set, TV Camera, TV Receiver, TV Monitor, antennas and components, parts and accessories of any of them.
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Case Laws:

• GST

• 2018 (9) TMI 1042
  Input tax credit - rate of tax - restaurant services - applicability of N/N. 46/2017 dated 14.11.2017 - Whether the applicant is entitled to pay GST @ 18% (CGST-9% and SGST-9%) and claim input tax credit? Held that:- The classification of the services rendered by the applicant is, therefore, clearly defined under Service Code (Tariff) 996331. Notification No. 11/2017Central Tax (Rate) dated 28th June 2017 notifies the rate of central tax in column 4 on the intra-State supply of services of description as specified in column (3) of the Table in the notification, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2) - The restaurant services provided by the applicant are squarely covered under serial number 7 of the aforesaid Notification. Explanation given in Notification 46/2017 makes it clear that 2.5% tax shall be payable and input tax credit shall not be available. The explanation removes any kind of ambiguity on the issue. Ruling:- The Applicant is not entitled to pay the GST @ 18% with input tax credit as the services being offered by the Applicant are classified under a heading attracting GST @ 5%, without input tax credit.

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• 2018 (9) TMI 1041
  Exemption from GST - affiliation to specified universities and providing degree courses to students under related curriculums - N/N. 12/ 2017 Central Tax dated 28.06.2017. Whether the services provided by the applicant in affiliation to specified universities and providing degree courses to students under related curriculums are exempt from Goods and Services Tax vide entry no. 66 of the Notification No. 12/ 2017 Central Tax dated 28.06.2017? Held that:- Since the Services provided by an educational institution to its students, faculty and staff is exempt from tax under the Central Goods and Services Tax Act and the applicant qualifies as an educational institution in so far as those courses for which affiliation has been obtained from the University in the State of Karnataka and for which University Curriculum is prescribed and the qualifications recognized by the law for the time being in force is given after the conduct of examinations by such University, the applicant is exempted from Goods and Services Tax. Similar notification is also present in the Karnataka Goods and Services Tax Act and hence the exemption is applicable mutatis mutandis under the Karnataka Goods and Services Tax Act also. Ruling:- The services provided by the applicant in affiliation to specified universities and providing degree courses to students under related curriculums to its students exempt from Central Goods and Services Tax vide entry no. 66 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28.06.2017 subject to the condition that such education services provided must be as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force. The services provided by the applicant in affiliation to specified universities and providing degree courses to students under related curriculums to its students exempt from Karnataka Goods and Services Tax vide entry no. 66 of the Notification No. 12/ 2017 State Tax (Rate) dated 28.06.2017 subject to the condition that such education services provided must be as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force.

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• 2018 (9) TMI 1040
  Exemption from GST - Executive Post Graduate Programme in Management (EPGP) - applicability of exemption notification no.12/2017 Central Tax (Rate) and corresponding notification under MPGST Act, 2017 - legal status of the IIMs post enactment of IIM Act 2017, which came into effect from 31st January 2018. Whether the course - Executive Post Graduate Programme in Management (EPGP), after enactment Indian Institute of Management Act 2017 notified effective from 31st January 2018, is exempted from Goods and Service Tax? In case of exemption to EPGP, will total amount of fees collected towards EPGP for the academic session 2018-19 is exempted, whether collected before or after enactment of IIM Act 2017 or only amount collected after enactment of IIM Act 2017? Held that:- The language of entry no.67 is quite clear and leaves no ambiguity whatsoever. This entry seeks to exempt various education programmes conducted by IIMs, except the Executive Development Programme, from payment of GST. It is thus clear that irrespective of enactment of IIM Act 2017, the intention of the legislature was no to tax the flagship education programmes conducted by these Institutions. However, specific exclusion of Executive Development Programme from exemption has been made loud and clear, leaving no scope for any interpretation or reading between the lines. Tthe exclusion of Executive Development Programme from exemption becomes even more prominent and emphatic. Moreover, there is no iota of ambiguity in the language of the impugned notification. Further, the principle of Strict Interpretation of the statute has been propounded by the Hon ble Supreme Court in catena of judgments, and one has to strictly go by what is written in the statute. Ruling:- The Executive Post Graduate Programme will not be eligible for exemption from GST as the same has been categorically excluded from exemption under Entry No.67 to the Notification No.12/2017-Central Tax (Rate) and corresponding notification under MPGST Act, 2017 - the Executive Post Graduate Programme being conducted by the Applicant shall be chargeable to GST, irrespective of enactment of IIM Act 2017.

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• 2018 (9) TMI 1039
  Levy of GST - sub-let of Toll Collection work of certain road by NHAI - N/N. 12/2017-Central Tax(Rate) dated the 28th June, 2017 (Sr. No.23)(Heading No. 9967). Whether the same exemption will apply to services provided by the Applicant, i.e. Service by the way of access to a road or a bridge on payment of access to a road or a bridge on payment of toll charges on subcontract basis? Held that:- Under the scheme of exemption under Goods Services Tax Laws, some exemptions are based on activities, some exemptions are based on recipient of the service, some are based on provider of the service and some are based on a combination of the service (goods being supplied as well as the recipient / provider of service. In case where the exemption is based on the recipient of service, the exemption is at times not available to the sub-contractor since the principal contractor receiving supplies from the sub-contractor may not fulfil the qualification regarding recipient as per the exemption notification. In some cases, specific provision has been given in the Notifications itself to take into its fold, the supply by a sub-contractor. For example in Clause (ix) and (x) of Sl.No.3 in Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 makes provision for lower rate of GST for sub-contractor also - In case of providing access to a Road or Bridge on payment of Toll, the exemption is totally based on service of providing access to a road or a bridge on payment of toll charges. There is no restriction regarding the supplier or the recipient of the supply. In the instant case, therefore, even though the supply of the service to the user of the Toll Road is by the sub-contractor, GST is not payable on the amount of Toll Charges collected. In the transaction of collection of Toll Charges by the applicant as a sub-contractor, there are essentially two supplies being made; one to the user of the Toll Road, for which charges are paid by the user of the Road and the other by the applicant to Highway Infrastructure (P) Limited - the ruling has no bearing on the consideration received by the applicant from of Highway Infrastructure (P) Limited for the supplies made by the applicant to Highway Infrastructure (P) Limited. Ruling:- The Toll Charges collected by the applicant are not Toll Charges per se in the hands of the applicant, but held in fiduciary capacity by the applicant, for onward remittance to Highway Infrastructure (P) Limited. The Ruling does not in any way relate to the Toll Charges retained by the sub-contractor, in terms of its agreement with Highway Infrastructure (P) Limited.

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• 2018 (9) TMI 1038
  Rate of GST - finished goods Pallets and Box Pallets - Goods and Services Act, 2017 - Held that:- The commodity pallets and box pallets are covered under HSN 4415 20 00 and covered under entry no. 97 of Schedule II of Notification No.01/2017- Central Tax (Rate) dated 28.06.2017 and entry no. 97 of Schedule II of Notification No.01/2017- State Tax (Rate) dated 28.06.2017 and hence the tax rates applicable on the same are 6% under the Central Goods and Services Tax Act and 6% under the Karnataka Goods and Services Tax Act.

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• 2018 (9) TMI 1037
  Levy of GST - landscaping and gardening work for government departments - pure services - Entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 - Whether landscaping and gardening work for government departments like BBMP, KSRTC, etc, through works contract attracts GST from this society? Held that:- Since the scope of exemption allowed in the entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 is only to the extent of pure services of provision of urban amenities and facilities such as parks, gardens, playgrounds to the Governments and Local Authorities and does not cover any activity where in transfer of property in goods is involved either in the form of a works contract or a composite supply. The activity done by the applicant is of the nature of “maintenance of parks” and hence the activities can be divided into two different types: (a) maintenance of parks not involving the transfer of property in goods And (b) maintenance of parks involving the transfer of property in goods. The first activity is of the nature of pure services and is squarely covered under the entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017, if it is provided to a Government or Local Authority and Governmental authority - The second activity falls in the ambit of works contract and hence is not covered under the entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 even if it is provided to a Government or Local Authority and Governmental authority. The applicant are not covered under the entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 and hence there is no question of answering the same. Ruling:- The service of maintenance of parks provided by the society to the State Government, Central Government or a Local Authority (including BBMP) or a Governmental Authority, not involving transfer of property in goods either as a component of a works contract or a composite supply is covered under entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 and hence exempt. This exemption is not available if there is any transfer of property in goods or if the service is made to persons other than State Government, Central Government or a local Authority or a Governmental Authority.

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• 2018 (9) TMI 1036
  Classification of goods - Parts of Fuel Injection Pumps - benefit of exemption notification. Whether the Parts of Fuel Injection Pumps are classifiable under Tariff Heading 8413 91 90? Whether the applicable entry in Notification )1/2017 Integrated Tax (Rate), is 453 of Schedule III, for parts of fuel injection pumps, attracting a levy of 18%? Held that:- The goods dealt by the applicant are parts of the fuel injection pumps for diesel engines . The parts of pumps for liquids, whether or not fitted with a measuring device are covered under the heading 8413 91 - Since parts of fuel injection pumps for diesel engines are parts of pumps, but are neither covered under HS Codes 8413 91 10 or 8413 91 20 or 8413 91 30 or 8413 91 40, they have to be covered under the residual entry 8413 91 90. Hence Parts of Fuel injection pumps for diesel engines are covered under HS Code 8413 91 90 - Since the goods supplied by the applicant is neither a hand pump or a part of it, the same cannot be covered under entry 231 of Schedule I of the Notification No.1/ 2017 Integrated tax (Rate) dated 28.06.2017 attracting 5% IGST. Further, since the goods supplied is not Power driven pumps primarily designed for handling water, the same cannot be covered under entry 192 of Schedule II of the Notification No.1/ 2017 Integrated tax (Rate) dated 28.06.2017 attracting 12% IGST. Since the goods Parts of fuel injection pumps are not covered under any of the entries in Schedule I or Schedule II or Schedule IV or Schedule V or Schedule VI, and also under any other entries of Schedule III, the same needs to be covered under this entry 453 of Schedule III of Notification No.1/ 2017 Integrated tax (Rate) dated 28.06.2017 and all goods covered under Schedule III of the aforesaid Notification attracts IGST at the rate of 18%. Ruling:- The Parts of Fuel Injection Pumps for diesel engines are classifiable under Tariff Heading 8413 91 90 as per the Customs Tariff Act, 1975. The Parts of Fuel Injection Pumps for diesel engines are covered under the entry no. 453 of Schedule III of Notification No.1/ 2017 Integrated tax (Rate) dated 28.06.2017 and hence liable to tax at 18% under the Integrated Goods and Services Tax Act, 2017.

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• 2018 (9) TMI 1035
  Classification of goods - Marine Diesel Engine - Gear Box - Whether used as Parts of vessels falling under 8901 to 8907 or not? Whether the classification of Marine Diesel Engine falling under TSH 8408 of Customs Tariff Act, 1975 as adopted to GST attracting 28% of IGST (14% CGST + 14% SGST) as per Schedule IV (Sr. No. 115) of Notification No. 01/2017 - Central GST (Rate) dated is correct or not? - Held that:- Diesel engines are known as compression ignition internal combustion piston engines. Diesel Engine are classified under CTH 8408 and are mainly differentiated as Marine Propulsion Engines, Engines of a kind used for the propulsion of vehicles of Chapter 87 and the third as Other Engines. They can further be classified on the basis of operations viz. 2-stroke, 4-stroke, single acting, double acting and finally, on the basis of Cylinder arrangement namely, horizontal, vertical, radial, etc. DMEs are those engines which are used in marine vehicles namely ships, submarines, etc. Both 2-stroke as well as 4-stroke engines are used in the marine industry. The engines used for the main propulsion or turning the propellers of the normal ships are usually slow speed 2-stroke engines while those used for providing auxiliary power are usually 4-stroke high speed diesel engines. The engine itself is made up of several components such as the crankshaft, bedplate, pistons, liner, etc. - a very specific description and mention of such engines is made under Heading 8408 of the GST Tariff and in view of the same it is very clear that MDEs are classifiable under CH 8408 of the GST Tariff. Under Sr. No. 115 of Schedule IV of Notification No. 1/2017 - Central Tax (Rate) dated 28th June 2017, the tax rate for MDEs is 14% each of CGST and SGST. Whether the classification of Gear Box falling under TSH 8483 of Customs Tariff Act, 1975 as adopted to GST attracting 28% of IGST (14% CGST + 14% SGST) as per Schedule IV (Sr. No. 135) of Notification No. 01/2017 - Central (GST (Rate) dated 28.06.2017 is correct or not? - Held that:- In view of the fact that a very specific description and mention of such gear boxes is made under Heading 8483 of the GST Tariff, we find that Gear Boxes are classifiable under Heading 8483 of the GST Tariff. Under Sr. No. 135 of Schedule IV of Notification No. 1/2017 - Central Tax (Rate) dated 28th June 2017, the tax rate for Gear Boxes is 14% each of CGST and SGST. Whether the goods falling under TSH 8408, 8409 and 8483 of Customs Tariff Act, 1975 as adopted to GST can be treated as parts of heading of 8902, 8904, 8905, 8906 and 8907 attracting 5% of IGST (2.5% CGST+ 2.5% SGST) as per Schedule I (Sr. No. 252) of Notification No. 01/2017 - Central GST (Rate) dated 28.06.2017 or not? - Held that:- Marine engines and marine gear boxes which are claimed to be supplied by the applicant to dealers and shipyard manufacturers for use in goods falling under heading 8901, 8902, 8904, 8905, 8906 and 8907 will be deemed to be Parts of vessels falling under heading 8901, 8902, 8904, 8905, 8906 and 8907, if they are used in goods covered under Tariff Headings 8901, 8902, 8904, 8905, 8906 and 8907 and are not diverted and used for other purposes somewhere else - We are in agreement with the contention of the applicant that the MDEs and Gear Boxes supplied by them for use in goods falling under heading 8901, 8902, 8904, 8905, 8906 and 8907 will be taxable @ 5% IGST (2.5% CGST and SGST each). - However, the benefit of reduced GST rates would not be available in respect of the Engines and Gear Boxes supplied by the applicant if the same are for use in goods other than goods of heading 8901, 8902, 8904, 8905, 8906 and 8907 of the GST Tariff. Ruling:- Classification of Marine Diesel Engine is falling under TSH 8408 of Customs Tariff Act, 1975 as adopted to GST attracting of IGST (14% CGST + SGST) as per Schedule IV (Sr. No. 115) of Notification No. 01/2017- Central Tax (Rate) dated 28.06.2017. Classification of Gear Box is falling under TSH 8483 of Customs Tariff Act, 1975 as adopted to GST attracting 28% of IGST (14% CGST + 14% SGST) as per Schedule IV (Sr. No. 135) of Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017. The goods falling under TSH 8408, 8409 and 8483 of Customs Tariff Act, 1975 as adopted to GST can be treated as parts of heading of 8902, 8904, 8905, 8906 and 8907 attracting 5% of IGST (2.5% CGST+ 2.5% SGST) as per Schedule I (Sr. No. 252) of Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017, subject to these goods, marine Engines and Gear Boxes are used in goods falling under Headings 8901, 8902, 8904, 8905, 8906 and 8907 of the GST Tariff Act, 2017. However if the said goods are used for some other purpose, then the tax rate as applicable to the TSH under GST Tariff would apply.

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• 2018 (9) TMI 1034
  Timelines prescribed under the Extension Notifications (Notification Number 18/2017, Notification number 19/2017 and Notification Number 20/2017- dt. 8th August, 2017 under GST Act, 2017) - Quashing of Extension Notifications - timelines viz 20th August 2017 for July, 2017 and 20th September, 2017 for August 2017 prescribed under the GSTR Notifications as last dates for filing returns of GSTR 3B - quashing the GSTR 3B Notification - declaring the Composition Orders (Order No.0l/2017-GST dt. 21st July and Order No.F.17 (131) ACCT/GST/2017/2258 dt. 21st July, 2017 prescribing the last date as 16th August, 2017 for filing form CMP 01 (for availing composition scheme under section 10 of GST Act, 2017) as arbitrary - act of respondents of making Form CMP 04 - Waiver Notification (Notification No.28 of 2017 dt. 1st September, 2017) - remedy the defect in the GSTN portal - making the form TRAN 1 available on the GSTN portal. Held that:- It appears that the system is not working upto the level and the same is required to be corrected updated to meet requirements. It is directed to take following action: (i) Whosoever try to log-in to the system, if the same is not responding, assessee or Chartered Accountant/ or Tax Practitioner will inform immediately by email to the District Information Officer of the concerned District, appointed by Central/State Government; (ii) Address of the each District Head will be provided. Mr. R.B. Mathur will provide the address of the State Officer and Mr. Sharma and Mr. Ranka will supply address of the Officer of the Central Government; and (iii) Those who inform so by email, their problem will be resolved expeditiously. In the meantime, no coercive action (penal interest, late fees and prosecution) against any of the client of the petitioners members who are referred in the petition and are informing by email, will be protected. The composition Scheme is extended upto 30.9.2017, therefore, desirous assessee can apply. Petition disposed off.

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• Income Tax

• 2018 (9) TMI 1033
  Settlement Commission order rejecting the settlement applications of the petitioners under Section 245D(1) - judicial review and exercise of writ jurisdiction while examining an order of the Settlement Commission - Scope and ambit of the enquiry at the stage of passing of the order under Section 254D(1) - Held that:- What is important and relevant at this stage is the observation of the Settlement Commission in the last sentence of paragraph 10 that “the very foundation of the surrender made by the two petitioners appears to be concocted story” etc. The word “appears” would reflect that the Settlement Commission had not reached or made any firm and final decision. The findings as per the observations were tentative and prima facie. In view of the legal position explained above, the settlement application at the initial stage cannot be dismissed when firm opinion as to frivolousness or concoction is lacking and merits of the settlement application cannot be ascertained and determined. Petitioner Nos. 4 and 5, have drawn our attention to returns filed by the two HUFs under Section 139 of the Act. It is submitted that ''other income'' mentioned in the returns included income earned by way of commission etc. from sale and purchase of property. In the settlement applications, fourth and fifth petitioner had given tabulations and details of the commission earned by them, which was duly corroborated and supported by evidence in the form of income tax returns filed by the petitioners prior to the date of search. Thus, the "prima facie" finding of the Settlement Commission that the fourth and the fifth petitioner had made a wrong declaration as to the manner of earning undisclosed income, is nothing but a surmise, which is incorrect and baseless. This contention is without prejudice to the contention of the fourth and fifth petitioners that the Settlement Commission had erroneously and contrary to law dismissed the application filed by the fourth and fifth petitioners on tentative opinion and 'prima facie' assumption, without forming a conclusive and final opinion. We allow the present writ petition and set aside and quash the impugned order of the Settlement Commission dated 8th May, 2017 rejecting the settlement applications of the petitioners under Section 245D(1) of the Act, with an order of remand to the Settlement Commission to pass a fresh order under the said section within a period of fourteen (14) days from the date a copy of this order is received by them or served on them by the petitioners or the Revenue, whichever is earlier. In order to cut delay, we direct the parties to appear before the Settlement Commission on 20th of September, 2018, when a date of hearing would be fixed.

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• 2018 (9) TMI 1032
  Monetary limit - non maintainability of appeal due to low tax effect - Held that:- We are not entering into the controversy regarding the applicability of the circular, since the tax effect involved is Rs. 1,00,640/-. In view of the order of in 'Commissioner of Income Tax Vs. Dhanalekshmi Bank Ltd., [2015 (8) TMI 474 - SUPREME COURT] where the Supreme Court had dismissed the appeal without going into the merits of the appeal due to low tax effect leaving the question of law open, the present appeal is dismissed. It is, however, clarified that dismissal of the appeal shall not be taken to be affirmation of order of the Tribunal on merits

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• 2018 (9) TMI 1031
  Addition on account of un-utilized funds for overseeing the project on behalf of the Ministry of Road Transport and Highways - Held that:- We would therefore not upset the finding that the money in the separate bank account in the name of the respondent-assessee was not a grant, but an amount that belonged to the Ministry. This being the position we do not find any merit in the submission made by the Revenue that the amount received from the Ministry belonged to the respondent-assessee and was their income. The amount received in view of the factual findings cannot be treated as revenue receipt or income of the assessee. There is case law that money or payment received in trust and in fiduciary capacity, should not be treated as income earned as has been held in Commissioner of Income-tax Vs. Sandersons and Morgans (1968 (4) TMI 17 - CALCUTTA HIGH COURT). In this case it was observed that solicitor’s lien over the advance money received was no different than a person having charge over someone else money. Money received to be income should have profit making quality in it. Every receipt is not income earned. Reference can be also made to Commissioner of Income-tax, Kerala Vs. Mrs.Doris S. Luiz (1973 (12) TMI 11 - KERALA HIGH COURT). Interest earned during the period relevant to the assessment year but not accounted for in the income of this year - addition was deleted by the Commissioner of Income Tax (Appeals), who has observed that the assessee had received contributions in foreign exchange for two projects, i.e. 'SIMBA' and 'STADIUM' - Held that:- The contributions had required permission from the Ministry of Home Affairs, Foreign Contribution Division. Further, this Ministry had imposed restriction on use of the contributions till the permission/registration was accorded by them. Registration under Foreign Contribution Regulation Act was granted to the respondent/assessee on 6.11.2013. Therefore, the interest accrued till 31.03.2012 to the tune of Rs. 2,83,477/- was included as income for the Assessment Year 2014-2015, i.e. after the respondent/assessee had secured registration under the Foreign Contribution Regulation Act. Interest amount has been taxed, albeit in the said year.

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• 2018 (9) TMI 1030
  Maintainability of appeal - tax effect - Held that:- The tax effect in the present appeal relevant for the assessment year 2011-12 is less than the threshold limit. In the case of Commissioner of Income Tax vs. N. Meenakshisundaram [2018 (4) TMI 1582 - MADRAS HIGH COURT] this Court had an occasion to consider various circulars issued by the Central Board of Direct Taxes (CBDT) as regards the threshold limits fixed for filing the appeal by the Revenue or pursue the appeal, which is pending from 2008 onwards. As by Circular No. 3/2018, dated 11. 07. 2018, monetary limit has further been increased and appeals be maintainable before the High Courts. It has been increased to Rs. 50, 00, 000/-. Hence, viewed from any angle, the Revenue cannot pursue this appeal.

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• 2018 (9) TMI 1029
  Disallowance of claim of expenditure on the ground that it relates to prior period - Held that:- The chartered accountant in the audit report could have qualified the expenditure claimed, as the sales incentive was also pertaining to sales made in the earlier year. The finding of the Tribunal is that the sales incentive was to be quantified and was due and payable only during the period relevant to the assessment year 2005-2006. The appellant/Revenue has not placed on record any material and evidence to show and negate the factual finding of the Tribunal that sales incentive was not payable on the basis of the performance in the last 15 months. This factual finding is not specifically challenged as incorrect or wrong by relying on any document or correspondence exchanged between the respondent-assessee and the Assessing Officer or the dealers. Factual finding is not perverse and cannot be regarded as absurd only on the ground of qualifying note of the auditor. - Decided against revenue

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• 2018 (9) TMI 1028
  Assessment of exercise of the stock option plan by the assessee - assessed as long-term capital gain OR treating the same as perquisite - Held that:- What was to be decided by the Tribunal was that whether it was a perquisite, which is in addition to the salary of the assessee or otherwise unless and until that question was decided by the Tribunal, the question of remanding the matter to the Assessing Officer does not arise. This so in the light of the specific plea raised by the Revenue before the Tribunal. Thus, we find that the matter should be first adjudicated on facts and the Tribunal should take a decision on the stand taken by the Revenue before it. This is called for because, the CIT(A) did not deal with the said issue while passing the order dated 30.01.2008. Though the CIT(A) states that he finds considerable force in the claim of the assessee, there is no reason to substantiate as to how the CIT(A) came to the conclusion that the stand of the assessee that the income relating to stock option should be charged as long-term capital gains merits acceptance. We find that there were no reasons assigned by the CIT(A) to come to the conclusion that it was a stock option scheme and chargeable as capital gains - We allow these appeals, set aside the impugned order passed by the Tribunal and restore the appeals to the file of the Tribunal to decide the case afresh on merits

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• 2018 (9) TMI 1027
  Capital gain tax liability - Allotment of shares of the company which succeeds to the business of the partnership firm - reasonable period' - Non-compliance with the condition stipulated in clause (b) of Clause (xiii) of Section 47 - capital gains tax liability of the erstwhile firm or the successor-company - delay the process of allotment of shares of the Company in favour of the erstwhile partners - Held that:- No sufficient reason or excuse to delay the process of allotment of shares of the Company in favour of the erstwhile partners to an unreasonably long period of about 3½ years. By such delay of 3 to 4 years, not only the partners were deprived of their right to receive the Dividends for this period of delay because had they been allotted these shares at the time of succession of the business or immediately thereafter, before the end of previous year on 31.03.2000 as against the succession of business on 01.05.1999, they would have become entitled to receive the Dividends for the financial year ending on 31.03.2000, but since in the present case last allotment of shares to larger extent was made by the Company only on 11.03.2003, they were deprived of such an opportunity for 3 years in a row. Had it been a case of other shareholders or outside shareholders also joining the said company and the allotment process of shares could have been legally delayed for 3 years for such other persons also, in a hypothetical case, even such other shareholders would have been deprived of such Dividends from the company, if the reasons assigned by the Company that Authorized Share Capital of the company was not suitably increased was to be taken as a valid excuse, for that purpose. Therefore, we are satisfied that on a reasonable and harmonious construction of the relevant provisions of the Act quoted above, the Company in the present case was rightly held liable for the capital gains tax liability by virtue of Section 47(A)(3) of the Act read with Section 47(xiii)(b) of the Act. We are of the opinion therefore that the learned Tribunal was justified in holding that the Assessee-company was liable to pay such capital gains tax liability instead of the partnership firm and to that extent the Assessing Authority as well as the First Appellate Authority viz., CIT(A) fell in error in affixing such liability on the partnership firm. Answer the aforesaid substantial question of law in favour of the Revenue and against the Assessee, by holding that the allotment of shares of the company which succeeds to the business of the partnership firm has to be complied before the end of relevant previous year in which such succession of business takes place.

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• 2018 (9) TMI 1026
  Addition u/s. 68 - unexplained share capital and premium - Held that:- We have gone through the paper book filed by the assessee and found that in most of the cases, the investor companies had sufficient share holders funds, so as to cover the investments made with the assessee company and the AO has failed to enquire into such facts before doubting the creditworthiness of the share holders. The satisfaction of the Assessing Officer as to the credibility of explanation of assessee is the basis of invocation of provisions of section 68. However, such satisfaction must not be illusory or imaginary but must have been derived from relevant facts and evidences and on the basis of proper enquiry and material before him. In view of aforesaid facts and plethora of evidences submitted by the assessee, on which no reasonable doubts have been created by the AO, the onus that lay on the assessee under section 68, stands completely discharged on the part of the assessee. - Decided against revenue

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• 2018 (9) TMI 1025
  Additional income disclosed in the course of search - Held that:- Revenue has based its case on Shri K.P. Agarwala’s search statement. CIT(appeals) has held that Shri Agarwala was never the authorized person to depose or to offer any income at assessee’s behest. We reiterate that this assessee is a company. It was very much imperative for the Revenue’s to place on record the corresponding details to reverse this clinching finding. There is no such evidence on record. Equally significant is the latter fact; in our considered opinion, that there is no incriminating material found or seized during the course of search which could be taken as evidence for adding additional income sum of Rs. 10 crores. CBDT’s circular dated 10.03.2003 makes it very clear that the an authorized officer during the course of search or survey has to collect evidence rather than obtaining search statements of undisclosed income. There is no even a single such evidence in foregoing facts which could be taken as the relevant material for making the impugned addition. CIT(Appeals) has discussed a catena of case law to this effect as well that such an addition is not sustainable in absence of any incriminating material found or seized during the course of search or survey carrying presumption u/s 292C. No reason to interfere with the CIT(Appeals) detailed conclusion in deleting the impugned addition of additional income amounting to Rs. 10 crores. - Decided against revenue.

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• 2018 (9) TMI 1024
  Condonation of delay - delay of 146 days - Estimation of income - survey operation u/s.133A of the IT Act to mention that the assessee realized profit at Rs. 500/- per sft in respect of area of 77835 sft sold by him - Held that:- In the case before us, the CIT (A) has refused to condone the delay of 146 days. According to us, the assessee does not stand to gain anything by filing the appeal belatedly. Therefore, as held by the Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. MST.Katiji & Ors., (1987 (2) TMI 61 - SUPREME COURT) when substantial justice and technical consideration are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice done because of a non-deliberate delay. Respectfully following the same, we are inclined to condone the delay of 146 days. As regards the merits of the additions are concerned, since the CIT (A) has not decided the appeal on merits on the ground that it is an agreed addition, we are of the opinion that since the AO in the A.Y 2013-14 has accepted the valuation at Rs. 272/-, the valuation for the earlier year cannot be higher at Rs. 500/-sq. ft. Therefore, there is clear dichotomy in the stand of the Department in these two years. Therefore, we deem it fit and proper to remand the issue to the file of the CIT (A) for reconsideration in accordance with law after giving the assessee a fair opportunity of hearing

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• 2018 (9) TMI 1023
  Estimation of income - Net profit assessment @ 8% - Best judgement assessment - deduction of salary paid to partners - Held that:- CIT(A) that in the absence of the major details of expenses which were not produced for verification and in presence of certain lacunae on the part of the assessee as observed above by the Ld. CIT(A) estimation of net profit @ 8% of gross turnover cannot be said to be unjustified. The observation made by the CIT(A) does not call for any interference and thus we do not hesitate to confirm the same. However, the salary of the partners and interest of the partner’s capital account cannot be clubbed in such addition made by the authorities below. We, therefore, find it fit and proper to remit the issue to the file of the AO to deduct the salary paid to the partners in the relevant year and the interest to partners capital accounts as paid from the total addition of Rs. 18,86,442/-. With this direction, we partly allow the appeal filed by the assessee for statistical purposes.

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• 2018 (9) TMI 1022
  Condononation of delay - Held that:- According to us, the assessee does not stand to gain anything by filing the appeal belatedly. Therefore, as held by in the case of Collector, Land Acquisition Vs. MST.Katiji & Ors. [1987 (2) TMI 61 - SUPREME COURT]. Therefore, we are inclined to condone the delay of 146 days. As regards the merits of the additions are concerned, we deem it fit and proper to remand the issue to the file of the CIT (A) for re-consideration in accordance with law after giving the assessee a fair opportunity of hearing - Assessee’s appeal is treated as allowed for statistical purposes.

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• 2018 (9) TMI 1021
  Interest income on NPA accounts assessment - to be assessed on mercantile basis OR receipt basis - Held that:- As decided in assessee's own case [2018 (9) TMI 415 - ITAT KOLKATA] When the account becoming NPA is not disputed by the revenue, the recognition of income is to be done only on receipt basis which is in consonance with the real income theory. In these circumstances and respectfully following the decisions of VASISTH CHAY VYAPAR LTD. [2010 (11) TMI 88 - DELHI HIGH COURT] and various other decisions referred to by the ld AR and in view of this issue being already decided in favour of the assessee by this tribunal in its own case supra, we hold that the interest income on NPA accounts should not be assessed on mercantile basis and the same is to be taxed only on receipt basis. Accordingly, the ground nos. 2(a) to 2(d) raised by the assessee are allowed.” Disallowance of payment made to employees against the provision made for unfunded pension - Held that:- As decided in assessee's own case there was no contribution made by the assessee bank to any of the funds. The payments were directly made to the employees of the bank and subjected to deduction of tax at source. The moment the payments are made to those employees, the assessee had lost complete control over those funds and it had not come back to the assessee in any manner whatsoever either by creation of any fund managed by it or otherwise. From the approval letter of the competent authority of the assessee bank, we find that these payments were made only to meet the increased cost of living of the employees and hence it is effectively a payment made as a welfare measure . Hence the provisions of section 40A(9) of the Act as heavily relied upon by the ld DR is not at all applicable to the facts of the instant case. Disallowance of write off of CENVAT credit - Held that:- AR fairly conceded before us that this sum of Rs. 46 crores was allowed as deduction by this Tribunal in assessment year 2011-12 [2018 (9) TMI 415 - ITAT KOLKATA] and hence the same should be disallowed in assessment year 2012-13 in order to avoid double deduction. We are in agreement with this fair representation by the ld. AR and accordingly uphold the disallowance made in the sum of Rs. 46 crores for assessment year 2012-13 in order to avoid double deduction to the assessee. Addition towards interest on income tax refund - AR vehemently prayed for setting aside of this entire issue for both the assessment years to the file of ld. AO for de novo adjudication with liberty to the assessee to raise fresh grounds in the light of protocol to India-Netherlands DTAA read with India-Italy DTAA vis-à-vis the most favoured nation clause agreed in the protocol to India-Netherlands DTAA - Held that:- DR fairly considered for de novo adjudication of this issue by the ld. AO. Hence we deem it fit and appropriate, in the interest of justice and fair play, to remand this entire issue to the ld. AO for both assessment years 2012-13 and 2013-14 for de novo adjudication of the issue and decide the same afresh in accordance with law. The assessee is at liberty to furnish additional evidences and raise fresh grounds, contentions with regard to this issue for both the assessment years under appeal before us

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• 2018 (9) TMI 1020
  TPA - Comparable selection criteria - Held that:- Assessee which is a captive entity is engaged in providing data processing and back office support services including payment processing, data processing, documentation processing, investigation related services and trade central processing services to its AEs thus companies functionally dissimilar with that of assessee need to be selected from assessee. Risk adjustment - Held that:- Now when the assessee in the case before us had claimed adjustment of 10.29% on account of difference in the risk profile before the TPO and DRP, thus in all fairness, respectfully following the view taken by the Tribunal in the assesses own case for A.Y 2005-06, therein restore the matter to the file of the TPO, in the same terms, for deciding the said issue afresh after considering the decisions relied upon by the assessee.

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• 2018 (9) TMI 1019
  Nature of land sold - Claim of the assessee of agricultural land sold by him is not a capital asset under section 2(14) of the IT Act was rejected by the authorities below - Held that:- For determining the issue of the land in question is not falling in the definition of capital asset but falling in the exclusion clause of section 2(14) of the Act, the distance from the Municipal limits to the area in which the land is situated is to be taken into consideration. The phrase ‘agricultural land’ not being land situate in any area ‘within the distance’ is purposefully used in this provision to avoid the confusion and a situation where one part of a land can fall within the distance of 8 KM and another part can be beyond 8 KM and, therefore, in case when the assessee is selling the land by division in different parts, then one part of the land will be excluded from the definition of capital asset and other part of the same land will be treated as capital asset. Therefore, instead of a particular land, the distance from the Municipal limit to the area in which the land is situated is to be taken into consideration. The issue raised by the assessee requires a proper investigation of facts and also determination of the fact whether the particular land is situated in the area which is beyond 8 KM from the Municipal limits. We set aside this issue to the record of the AO for proper verification and giving the finding about the distance from the Municipal limits to the area in which the land is situated. - Decided in favour of assessee for statistical purposes. Deduction u/S 54F in respect of only one residential property as against three claimed by the assessee - Held that:- The incentive for granting the deduction under section 54F is for investment in the residential house of the assessee which means that the investment is made for own residential requirement of the assessee and not future investment in the property. Therefore, in the absence of any material to show that the three different properties were purchased to meet the residential requirement of the family of the assessee, the claim of the assessee cannot be accepted. It is against the scheme and object of the section 54F of the Act which provides the deduction in respect of the investment made for purchase of residential house for assessee’s own requirement. No error or illegality in the orders of the authorities below, qua this issue. - Decided against assessee

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• 2018 (9) TMI 1018
  Addition on account of undisclosed cash deposit in the assessee’s bank account - explanation of the assessee regarding the source of Rs. 49.00 lacs was not accepted by the ld. CIT(A) on the ground that when the amount was withdrawn from the bank at the time of purchase of agricultural land in the financial year 2005-06 then the claim of keeping the said amount of Rs. 49.00 lacs for last 2-3 years in hand was not satisfactory when the assessee has not explained the utilization of the said amount in the mean time Held that:- Assessee withdrawn Rs. 88,50,000/- for purchase of land, however, the assessee claimed that only Rs. 46.00 lacs was utilized for purchase of land during the financial year 2006-07 and the balance was with the assessee. This explanation of the assessee is otherwise not acceptable as the utilization of the amount for purchase of agricultural land has been explained by the assessee only to the extent which was shown in the titled document and not actual amount of purchase consideration. The preponderance of probability is against the assessee that the entire amount which was withdrawn at the time of purchase of agricultural land was utilized by the assessee for payment of purchase considerations of agricultural land when the assessee has failed to explain the time gap of two years for keeping such a huge amount of Rs. 49.00 lacs/42.50 lacs in hand. Accordingly, we do not find any substance or merits in the present appeal of the assessee and hence the same is hereby dismissed. - Decided against assessee

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• 2018 (9) TMI 1017
  Disallowance U/s 40(a)(ia) - Non deduction of tds on payment made by the assessee to the contractor for construction of building - assessee is a society and engaged in the activity of maintaining the temple and application of the assessee U/s 12AA of the Act was rejected - AO accepted the income of the assessee under the “income from other sources” as per the computation of income - Held that:- When the income of the assessee has been assessed under the head “Income from other sources” and there is no provision U/s 56 to 58 of the Act to make a disallowance U/s 40(a)(ia) of the Act prior to the amendment vide Finance Act 2017 w.e.f. 1/04/2018 whereby sub-Section (1A) of Section 58 has been amended for the purpose of making a provision for disallowance U/s 40(a)(ia) of the Act. Therefore, in view of the above facts and circumstances of the case, when the amendment is applicable from 01/4/2018, no disallowance can be made U/s 40(a)(ia) of the Act against the income of the assessee assessed under the head “Income from other sources”, hence, we direct to delete the disallowance made U/s 40(a)(ia) of the Act. - Decided in favour of assessee

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• 2018 (9) TMI 1016
  Addition being cash deposited in the bank account - Assessee explained that he has filed cash book before the Assessing Officer as well as the CIT(A) which was not accepted by stating the same to be afterthought - Held that:- Assessing Officer as well as the CIT(A) after examining the cash book of the assessee, wherein, the source of deposit of money in the bank account was explained has not brought any material on record to show that the assessee could not have the amount of Rs. 2,60,000/- with him to deposit the same in the bank account. It is a settled position of law that a plausible explanation of the assessee cannot be rejected by the Assessing Officer without examining the same and bringing any material on record to show that why the said explanation was not acceptable. After considering the entire facts and circumstances of the case, in our considered view, the addition of Rs. 2,60,000/- on account of deposit in the bank made by the Assessing Officer and confirmed by the CIT(A) cannot be sustained in law. We, accordingly, set aside the orders of lower authorities and delete the addition of Rs. 2,60,000/-. - Decided in favour of assessee

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• 2018 (9) TMI 1015
  Estimation of income at 8% of the purchase price - Held that:- The issue involved in this appeal is squarely covered in the case of Sri Vysyaraju Satyanarayana Raju, Srikakulam Dist. 2016 (8) TMI 1273 - ITAT VISAKHAPATNAM] thus irect the A.O. to re-compute the income of the assessee at 5% of purchase price. Accordingly, this ground of appeal raised by the assessee is allowed. Unexplained expenditure - Held that:- AO considered the sum of Rs. 2,96,433/- as first purchase which was incurred without source. As per the ledger account copy placed before us, the first purchase was Rs. 1,44,711/- but not Rs. 2,96,433/-. This fact was not pleaded before the lower authorities, thus, the issue needs further verification at the end of the AO. Therefore, in the interest of justice, we remit the matter back to the file of the AO to verify the correct amount of initial expenditure and the sources thereon and to redo the assessment afresh on merits. Accordingly, this issue is set aside and remitted back to the file of the AO denovo for fresh consideration Addition of unsecured loans - Held that:- Before the Ld.CIT(A) also the assessee failed to furnish any evidence to prove the genuineness of the outstanding unsecured loans. Therefore, we do not find infirmity in the order of the Ld.CIT(A) and the same is upheld. The appeal of the assessee on this ground is dismissed. Unsecured trade creditors addition - AR requested for admission of additional evidence in the form of confirmation - Held that:- As per para No.12 of this order, we have rejected the admission of additional evidence. In the instant case, the assessee failed to submit the confirmation and the details before both the lower authorities to establish the genuineness and correctness of the unsecured trade creditors. Even the assessee failed to furnish the names of the creditors. Therefore, we do not find any infirmity in the order of the Ld.CIT(A) and the same is upheld. The appeal of the assessee on this ground is dismissed.

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• 2018 (9) TMI 1014
  Deemed dividend addition u/s 2(22)(e) - transaction between the two companies in the form of purchase and sale of land - Held that:- There was no such instance of having used the funds by the Directors or the shareholders for their personal use. As established by the assessee before the Ld.CIT(A) that the funds were used by the company for the purpose of business. Since the funds were placed at the disposal of the sister concern for developing the lands and to deliver the product in time frame, there is no doubt to hold that the amounts were advanced on commercial expediency. It is accepted that the borrowing company has delivered the product to the borrowing company after developing the land and offered the resultant profit the tax. Therefore, we agree with the finding of the Ld.CIT(A) that the transaction between the two companies in the form of purchase and sale of land is purely business and trade transaction and beyond the purview of the deemed dividend u/s 2(22)(e) We upheld the view of the Ld.CIT(A) that the transaction entered in to by both the companies are business transactions and the revenue could not place any evidence to controvert the same. Business transactions does not attract the rigor of deemed dividend u/s 2(22)(e) of the act. - Decided in favour of assessee

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• 2018 (9) TMI 1013
  Approval u/s 10(23C)(VI) denied - proof of charitable activities - Held that:- We are of the considered view that the reasoning given by the ld. CIT(E) for rejection of the application u/s 10(23C)(vi)cannot be held as logical reasoning and therefore, considering the case of the appellant independently, the nature of its activities, 91.74 % of the gross receipts have been applied for educational purposes and fees are being charged according to the parameters of the Punjab University, therefore, we feel it appropriate to remand the case to the file of the ld. CIT(E) to decide afresh application of the Assessee/ Appellant filed u/s 10(23C)(vi) while taking into consideration, the observations and analyzations made above in this order, however, within three months from the date of this order, by affording reasonable opportunities of being heard to the appellant.

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• 2018 (9) TMI 1012
  Claim for deduction under Section 80P - Held that:- Assessing Officer has disallowed the assessee's claim for deduction under Section 80P on the issue that the assessee is a federation of societies and other members and hence the concept of who constitute “Members” is very relevant. We also observe that the Assessing Officer has rendered a finding that the sales are made to agencies other than members, by invoking the principle of mutuality. In the case of Citizen Co-operative Society Ltd. (2017 (8) TMI 536 - SUPREME COURT) in the context of credit co-operative societies has ruled on these two principles while deciding the issue of deduction under Section 80P of the Act. AO is directed to consider the principles enunciated in the aforesaid decision of the Hon'ble Apex Court (supra) while passing orders, after considering the jurisdictional issues remanded back. JCIT assuming jurisdiction over the case on hand without a specific order assigning the case to him - Held that:- JCIT, in the case on hand, has assumed jurisdiction over the case by mentioning that the JCIT has been given concurrent jurisdiction and has also referred to the Central Action Plan for 2013-14. The learned CIT (Appeals) has held that the JCIT has concurrent jurisdiction over this case in terms of Notification issued under Section 140 by the CBDT. As per the decision cited above it is an imperative mandatory requirement of law that an order in writing, to this effect, must be passed under Section 127 by the jurisdictional Commissioner of Income Tax for effecting the transfer of assessment proceedings from one Assessing Officer to another Assessing Officer. From the records before us, it is not clear as to whether such an order has been passed. Considering that there is no clarity on the process adopted, before the JCIT came to pass the impugned orders of assessment for Assessment Years 2010-11 to 2013-14; particularly whether an order under Section 127 of the Act was passed in this regard. In this factual matrix of the case, we deem it appropriate to remand the matter back to the file of the Assessing Officer to examine whether the necessary orders, as explained above, have been passed in the case on hand for the JCIT to assume valid jurisdiction to pass the impugned orders of assessment. Even if such an order is not passed, it would be a procedural issue and in terms of the decision of the Hon'ble High Court of Madras in the case of M/s. Home Finders Housing Ltd. Vs. ITO (2018 (5) TMI 260 - MADRAS HIGH COURT) such a defect is not fatal and can be cured / rectified by passing a fresh order. We remand this issue to the file of the Assessing Officer for necessary action in accordance with law.

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• 2018 (9) TMI 1011
  Deduction of interest subsidy under section 80IC - Hed that:- This issue is squarely covered by the decision in the case of CIT vs. Meghalaya Steels Ltd [2016 (3) TMI 375 - SUPREME COURT] which was also considered by Tribunal in assessee’s own case for AY 2010-11 [2017 (3) TMI 951 - ITAT MUMBAI], wherein exactly identical issue was considered that the impugned amount was received back by the assessee from banks under the scheme of Ministry of Textile in respect of reimbursement out of the actual interest first paid to the assessee to the banks. These facts have not been disputed by the Ld. DR before us. Under these circumstances, we find that judgment of Hon'ble Supreme Court in the case of Meghalaya Steels Ltd. (supra) squarely covers the issues involved. Thus, we find no need for making interference in the order passed by Ld. CIT(A) wherein claim made by the assessee was allowed by Ld. CIT(A) - Decided against revenue

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• 2018 (9) TMI 1010
  Condonation of delay - Default u/s 201(1)/201(1A) - application u/s 154 seeking rectification in the orders passed under section 201(1)/201(1A) - Held that:- It is admitted fact that the delay in filing the appeal after the application under section 154 was disposed off was 87 days which is not an abnormal or inordinate delay and even otherwise in the facts and circumstances of the case when the issue is not a direct tax liability of the assessee but the assessee was held as assessee in default which is vicarious liability for non deduction of tax and dependent on the fact whether recipient of the amount has already considered the same in the total income offered to tax or the income of the recipient was at all liable to tax. The appeal was not filed electronically but manually is only a defect in the appeal filed by the assessee which was subsequently removed by the assessee by filing the appeal electronically and, therefore, once the defect was removed by the assessee then the appeal filed manually would be considered as date of filing of the appeal. Hence in the facts and circumstances of the case, we condone the delay in filing the appeals before the ld. CIT (A). - Appeals of the assessee are allowed for statistical purposes.

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• 2018 (9) TMI 1009
  Assessment of lease rental income - business income OR income from property - Held that:- The assessee is not rendering any services to the lessee except leasing out of the land and the constructed property thereon. In the decisions relied upon by the assessee the income from letting out of the I.T. Parks has been treated as ‘income from business’ because the assessees therein, have not only let out the property, but also have rendered services for the maintenance of the same for effective carrying on of the business of such lessees. In the case before us, the lessees has taken over the possession of the property and thereafter had to conduct its business without any assistance from the assessee. Therefore, the income of the assessee is only from letting out of the property and thus, we agree with the findings of the CIT (A) that the income has to be treated as ‘income from house property’ and not as business income. Disallowance of interest - interest claimed as business expenditure as the loan taken from SBI, Balanagar branch was utilized for the purpose of business - Held that:- oan has been taken from SBI Balanagar Branch for the purpose of business and therefore, it has to be allowed as business expenditure. Irrespective of the nature of the lease rental income, the assessee has utilized the said loan for the business purposes of the assessee which is not disputed by the Revenue. Of course, the said amount cannot be set off from the ‘income from house property’ as claimed by the assessee but the AO/CIT (A) can set off the same from the business income if any, of the assessee. AO is directed to allow the same as business expenditure. We find that the security for the loan, is the lease rental income, but it does not mean that it can be set off against the rental income. Depreciation disallowed on the building which is leased to M/s BHEL Gas Turbines Services Ltd. - Held that:- As already held that the income from lease rental is to be treated as income from house property, the building cannot be treated as a business asset and therefore the depreciation thereon cannot be allowed. Ground rejected. Notional interest at the rate of 12% added on the advances made to sister concerns - Held that:- case of CIT vs. Dalmiya Cements Ltd [2001 (9) TMI 48 - DELHI HIGH COURT] wherein held that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the revenue cannot justifiably claim to put itself in the armchair of the businessman or in the position of the board of directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. We find that neither the AO nor the CIT (A) have verified this claim of the assessee, except for holding that the assessee has not filed the necessary evidence. Therefore, we deem it fit and proper to remand the issue to the file of the AO for denovo consideration. Addition on investments as made in unquoted shares for acquiring the said company - Held that:- Assessee has failed to produce any evidence before us to demonstrate that the advances were made to various parties for the purpose of business. Therefore, the order of the CIT (A) on this issue is confirmed. Addition u/s 68 - Held that:- Assessee has filed confirmation letters before the CIT (A) for which remand report was called for. AO has observed that the assessee could not produce the parties for establishing the genuineness and creditworthiness of the transaction. As the assessee submitted that the assessee has furnished confirmation letters as required by the AO and as observed by him in the remand report and therefore, the additions could not have been confirmed. Copies of the confirmation letters were also filed before us and we find that both the parties are allegedly agriculturists and with no PAN Nos. Therefore, the creditworthiness of the said parties could not be provided by the assessee. - Assessee’s appeal is partly allowed.

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• 2018 (9) TMI 1008
  Addition u/s 68 - unexplained share application money - Held that:- As gone through the orders of the authorities below. The revenue has not disputed with regard to the fact that the co-ordinate benches of this Tribunal in respect of share application money received from Javda India Impex Ltd. found that the party is genuine and transaction was treated to be genuine. There is no change in the facts and circumstances. However, in respect of the other share applicants, assessee has not brought any material to rebut the finding arrived by the authorities below, hence we direct the A.O. to delete the addition of Rs. 25 lakhs in respect of share application money received from Javda India Impex Ltd. The ground raised in this appeal is partly allowed. Addition u/s 14A - Held that:- There was no exempt income during the year under appeal, therefore, respectfully following the decision rendered by Hon'ble Delhi High Court in the case of Cheminvest Ltd. Vs. CIT-IV [2015 (9) TMI 238 - DELHI HIGH COURT]. Penalty u/s 271(1)(c) - Held that:- In view of the binding precedent of the Hon'ble jurisdictional High Court in the case of PCIT Vs. Kulwant Singh Bhatia [2018 (5) TMI 960 - MADHYA PRADESH HIGH COURT] we hereby set aside the order of Ld. CIT(A) and restore the issue to his file for deciding the facts in the light of the judgement

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• 2018 (9) TMI 1007
  Transfer pricing adjustment made to the arm's length price of royalty paid to Associated Enterprise (A.E) for technical knowhow - comparable selection - Held that:- As could be seen from the order passed by the Transfer Pricing Officer, referring to three agreements / comparables stated to have been selected by him on search of a particular data base, he found that the arm's length price of the royalty payment to the AE should be @ 1% of the net sales. As during the transfer pricing proceedings, in response to a show cause notice issued by the TPO, the assessee has specifically objected to the comparables proposed by the TPO by stating that none of the comparable are functionally similar to the assessee since all of them related to asset purchase agreement and further all the parties relating to such agreement are located outside India, hence, are not governed by Indian rules and regulations. The aforesaid objection of the assessee has neither been dealt with nor controverted by the Transfer Pricing Officer. Thus, when the comparable proposed by the Transfer Pricing Officer are in different geographical location we do not understand how they can be compared to the assessee. Transfer Pricing Officer having not determined the arm's length price in conformity with statutory provision and in the process having failed to demonstrate that arm's length price shown by the assessee is incorrect, the contention of the learned Departmental Representative to restore the issue to Transfer Pricing Officer for fresh determination of arm's length price is unacceptable - adjustment made to the arm's length price of royalty payment is unsustainable.- Decided in favour of assessee Addition on account of adjustment made to the arm's length price of payment to the AE towards availing Information Systems (IS) services - Held that:- The material submitted before us, which also forms part of the Transfer Pricing Officer’s record, indicates that the cost of the software has been allocated to 40 group companies across the globe who are using the software and related services and assessee’s share in cost allocation works out to 2.3%. Moreover, when the Transfer Pricing Officer himself agrees that the AE has provided software and certain services, there is no reason for not accepting the payment made to the AE to be at arm's length in the absence of any contrary evidence brought on record and by simply applying the benefit test. If the Transfer Pricing Officer did not agree to the arm's length price shown by the assessee it was open for him to determine the arm's length price by applying one of the most appropriate methods being backed by supporting material. Without complying to the statutory provisions, the Transfer Pricing Officer certainly cannot determine the arm's length price on ad–hoc / estimation basis. Our reasoning in paragraph 11 to 15 will equally apply to this issue also. We delete the adjustment made to the arm's length price of payment made towards availing information system services from AE. This ground is allowed - Decided in favour of assessee

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• 2018 (9) TMI 1006
  Damages/compensation received - nature of receipt - treated as capital receipt OR revenue receipt - Held that:- The compensation received by the assessee was not for his professional activities but for settlement of dispute between him and some other party resulting in filing of a criminal complaint. That being the case, the amount received towards compensation/damage cannot fit in to the definition of income as per section 2(24) r.w.s 4 of the Act. This view of our gets support from the decision of the Hon'ble Jurisdictional High Court in the case of Amar Dye Chem Ltd. (1993 (10) TMI 366 - BOMBAY HIGH COURT) wherein Held that the amount received towards compensation/damage for settlement of dispute is capital receipt, hence not taxable - addition to be deleted - decided in favour of assessee

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• Customs

• 2018 (9) TMI 1003
  Benefit of DEEC license - non-fulfillment of export obligation - violation of conditions of Notification No. 93/2004 dated 10.09.2004 (as amended) - Held that:- It is an admitted position that the said application is still pending before the licensing authority. It is also not the case of the Revenue that the statement of the appellant that its export obligation got subsumed in the export obligation of the EOU, was wrong nor have they examined the case of the appellant from this angle. When a claim is made by the assessee, the same has been thrown out without examining the claim of the assessee and without finding that such claim/s is/are wrong or illegal. The impugned order cannot sustain - matter remanded back to the file of the adjudicating authority to pass order afresh - The appeal is allowed for statistical purposes, by way of remand.

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• 2018 (9) TMI 1002
  Recovery of Customs Duty collected in excess - Section 28B of the Customs Act, 1962 - Administered Price Mechanism - Unjust enrichment - Held that:- The issue is decided in the case of INDIAN OIL CORPORATION LTD. VERSUS COMMR. OF CUS., KANDLA [2008 (4) TMI 93 - CESTAT, AHMEDABAD], where it was held that there is no excess collection of duty from the customers and therefore, demand is not sustainable - appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2018 (9) TMI 1005
  Failure of the share purchase agreement - plaint filed claiming return of aforesaid Rs. 1.05 Crores paid by plaintiff towards 60% shares in the Consultancy and Agrotech companies together with interest on the same - Prayer for carrying out certain amendments in the plaint - specific performance seeked - limited scope of the instant amendment application it is argued that plaintiff who has rescinded the share purchase agreement qua consultancy company is now attempting to enforce the same - Held that:- The plaint consists of two limbs. The second limb of prayer as alluded to supra is for damages of Rs. 2 Crores which is with regard to both companies, i.e., consultancy company and Agrotech company as alluded to supra. Vide instant amendment application, plaintiff is not seeking any amendment in the prayer or in other words, plaintiff continues to persists and pursue the prayer for damages qua consultancy company also. Therefore, if this prayer in the amendment is acceded to, it will have the effect of plaintiff pursuing remedy of enforcement in the share purchase agreement in NCLT and also seeking damages by rescinding the same on the ground of non performance by defendant. There is no dispute or disagreement that the suit prayer is also for damages for a sum of Rs. 2 Crores pertaining to both companies, i..e, consultancy company and Agrotech company. If the prayer in the amendment application is acceded to, it would tantamount to permitting the plaintiff to seek for specific performance of share purchase agreement dated 14.6.2010 qua consultancy company after rescinding the alleged breach and seeking damages for the same. Further to be noted, the plaintiff is continuing to seek damages qua Consultancy company. In effect, acceding to the prayer in the instant application would tantamount to allowing the plaintiff to do what they are prohibited from doing in the light of the principle laid down by Supreme Court in Jawahar Lal Wadhwa case [1988 (10) TMI 282 - SUPREME COURT] wherein held once there is alleged breach and a prayer for damages has been sought for by a party, then that party cannot pray for specific performance of the same contract. Amendment application fails and the same is dismissed.

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• 2018 (9) TMI 1004
  Oppression and mismanagement - Illegal increase in the authorised share capital - appellants have stated that No notice for holding AGM or EOGM was served on the appellants relating to the increase of authorised share capital of 1st respondent - Held that:- It is noted that in the agreement it is stated that if Rs. 700001/- or any part amount has not been paid within the stipulated period then the shares in proportionate to the outstanding amount will be treated as not transferred. Since the 2nd respondent has not paid the remaining consideration amount of Rs. 700001/-, therefore, 2nd respondent is not entitled for 412 shares (941- 529 shares). Further, we find that the respondents have complied the orders dated 7.7.2017 of the Tribunal and have sent the shares certificate No.27, 28 and 29 in the name of Sujit Kumar Das to the appellants. After hearing the learned counsel for the parties we have come to the conclusion that the appellants have failed to establish the act of oppression and mismanagement. In view of the aforegoing discussions, the conclusion drawn by the Tribunal are justified and reasonable. The appellant has failed to establish his case.

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• Insolvency & Bankruptcy

• 2018 (9) TMI 1044
  Corporate insolvency resolution process - ‘existence of dispute’ - Held that:- From the record we find that e-mails were exchanged between the parties on 3rd May, 2017, 5th May, 2017, and 18th May, 2017 alleging non-submission of work completion certificate, non-completion of work, amount deductible for lead piping and non-removal of scrap material charges and exorbitant tonnage claim made by the appellant contrary to existing industry practices. All these disputes were raised by the respondent much prior to issuance of demand notice under Section 8(1) issued on 7th July, 2017. There is nothing on record to suggest any correctional measure was taken by the appellant. On the other hand, respondent pleaded before the Adjudicating Authority that there is an ‘existence of dispute’. There being disputed question of facts as to whether subsequently the scrap material were removed and exorbitant tonnage claim by the appellant was corrected or amount deducted or reduced, and as such issues cannot be determined by the Adjudicating Authority, we hold that the Adjudicating Authority rightly held that it was not a fit case for admission of application under Section 9. Appeal dismissed.

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• 2018 (9) TMI 1043
  Initiating the insolvency resolution process against the Corporate Debtor - initiating the insolvency resolution process against the Corporate Debtor - Held that:- In view of the decision by the Committee of Creditors and no Resolution Plan having been put up for approval despite expiry of 270 days, we are satisfied that the provisions of Section 32(2) are complied with and we order that the Corporate Debtor be liquidated in the manner as laid down in Chapter III of the Code. Further directions are issued to the Liquidator to issue a public announcement, stating that the Corporate Debtor is in liquidation. We direct that copy of this order be sent to Registrar of companies, Punjab and Chandigarh, with which the Corporate Debtor is registered. Section 34 of the Code provides that where the Adjudicating Authority passed an order for liquidation of the Corporate Debtor under Section 33 the Resolution Professional appointed for the Corporate Insolvency Resolution Process, shall subject to submission of the written consent by the Resolution Professional to the Adjudicating Authority in specified form to act as a Liquidator for the purpose of liquidation. We therefore, while ordering liquidation of the Corporate Debtor, appoint Mr. Bhupesh Gupta, Resolution Professional, having Registration No. IBBI/IPA-002/IP-N00030/2016-17/10067, to act as Liquidator for the purpose of liquidation of the Corporate Debtor. His appointment shall take effect from the date of receipt of this order. All the directions/requirements and provisions of Chapter III of the Code and Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (hereinafter referred to as Liquidation Process Regulations, 2016) shall be strictly complied with.

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• Service Tax

• 2018 (9) TMI 990
  Rectification of mistake - Principles of Natural Justice - payment of Service Tax, by making use of the Cenvat Credit account - Section 66A of FA - it is contended that the Final Order has been passed without consideration of statutory provisions in proper perspective and without considering the various case laws on the subject - Held that:- The final order is a detailed speaking order and has been passed only after taking note of all the written and oral arguments raised. It will not be proper to take the view that it has been passed summarily without considering the statutory provisions. The Tribunal has taken a view as reflected in the Final Order only after cumulatively considering the statutory provisions, the findings of the Adjudicating Authority as well as the arguments placed. It is not required to discuss at length each and every argument advanced. The appellant through ROM has attempted the review of the Final Order already passed which is not permissible in the guise of rectification of mistake. ROM application dismissed.

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• 2018 (9) TMI 989
  CENVAT credit - Cement and TMT Bar used for construction of wall in their port area - denial on account of nexus with the rendering of the Port Service - Time Limitation. Held that:- The guard wall has been built for arresting the sliding cargo from the stands during rainy season. It will help to prevent jamming of dedicated railway tracks installed for movement of loading equipments like stacker-reclaimer. It results smooth dispatches of the imported cargo - The Kolkata Port Trust Haldia Dock Complex, vide letter dated 14/09/2004 and Steel Authority of India Limited, vide letter dated 16/09/2004 addressed to the appellant’s, erection of guard wall was found to be imperative and accordingly, the same was constructed for providing smooth and quality service, to the customers. Time limitation - Held that:- There is no element of fraud, collusion, suppression of facts or misstatement with an intent to evade payment of Service Tax. Since there is no occasion for invocation of extended period of limitation - The Show Cause Notice issued on 08/04/2008 seeking to recover Cenvat Credit availed during March, 2005 and April, 2005 is barred by limitation and is hereby set aside. The appellant is allowed on the ground of limitation.

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• 2018 (9) TMI 988
  Condonation of delay in filing appeal - case of Revenue is that the reasons cited by the appellant in condoning such delay cannot be considered as sufficient cause that had prevented him from presenting the appeal within the period of 2 months against the order of the first adjudicating authority. Held that:- It is a settled principal of law that appellant had to show sufficient cause that prevented him to prefer appeal within the stipulated period but “sufficient cause” is a question of fact and the same is dependent on various factors/ situations, sickness being one of such cause - Section 86 (7) dictates the Tribunal to follow the same procedure as it exercises and follows in hearing the appeals and making orders under Central Excise Act 1994 and the Central Excise Act vide Section 35C empowers this Tribunal to confirm, modify or annul the decision of the order appeal against, which indicates that the merit of the decision is to be assessed by the Appellate Tribunal. In the instant case, as found from the order of the Commissioner (Appeals), no merit concerning tax liability of the appellant has been discussed and the appeal filed by him was rejected as not maintainable as hit by the period of limitation - Since this Appellate Tribunal cannot go beyond the order of the Commissioner (Appeals) to scrutinize the merit of the decision of the adjudicating authority, it is a fit case which necessitates re-adjudication by the Commissioner (Appeals) as under Section 35A (3), he is also empowered to make such further enquiry as may be necessary in order to pass such order as he may think proper and not to confine his views on the merits of the order of the adjudicating authority. The appeal is allowed and the delay of 28 days in filing appeal before the Commissioner (Appeals) is condoned.

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• 2018 (9) TMI 987
  Condonation of delay in filing appeal - Period of limitation - case of Revenue is that there was delay of more than 90 days in filing the appeal and it was outside the purview of the powers of the Commissioner (Appeals) - Held that:- The adjudicating authority issued a corrigendum dt.3.6.2016 to the Order-in-Original dt.12.4.2016 within two months from the date of Order-in-Original - It is settled law that the corrigendum is part and parcel of the order intended to be rectified and hence the period of filing appeal is to be reckoned from the date of corrigendum. The period of limitation in the present case, is to be computed from the corrected date of the order, which is 3.6.2016. By taking the date of corrigendum, the appeal is within the period of limitation - matter is remanded back to the Commissioner (Appeals) to consider the appeal filed by the appellant on its merits - appeal allowed by way of remand.

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• 2018 (9) TMI 986
  CENVAT Credit - Storage and Warehousing Service - input services - port services - denial of credit for the reason that the appellants were receiving reimbursement of the full amount from the customer - Extended period of limitation - Scope of SCN - Held that:- The present Show Cause Notice is issued on the ground that the appellants have received reimbursement of the said expenses along with tax paid by them and therefore, are not eligible for credit. It is correct that the issue of reimbursement was not considered or raised in the earlier Show Cause Notice dated 05.09.2006 - the invocation of extended period is legal and proper - demand with interest upheld. Penalty - Held that:- The appellant having entertained a bona fide belief that they are eligible for credit since the earlier SCN mentioned specifically about the eligibility of credit on Storage and Warehousing Services rendered to M/s. DCW Ltd., the equal penalty is unjustified - penalty set aside. Appeal allowed in part.

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• 2018 (9) TMI 985
  CENVAT credit - inputs - Tower and Shelter Materials - time limitation - penalty - Held that:- The said issue stands decided in the decision of the High Court of Bombay in the case of Bharti Airtel Ltd, [2014 (9) TMI 38 - BOMBAY HIGH COURT] where it was held that the appellants are not eligible for such credit. However, the demand for the extended period as well as the penalties for the normal period is set aside - in the present case, the appellants had disclosed all the details as required by the Department as and when called for, apart from disclosing the credit availed in their ST-3 returns. It is also seen that they were under the bona fide belief that they are entitled to avail the credit of duty paid on tower and pre-fabricated building materials used for providing output service of telecommunication services - extended period and penalty not justified. CENVAT credit - SIM Cards - allegation of the Department is that since the appellants have sold the SIM Cards, the credit availed on such SIM Cards has to be reversed by them - Held that:- In the appellant’s own case, the demand for levy of VAT on the sale of SIM Cards was dropped by the Deputy Commissioner of Commercial Taxes by holding that the sale of SIM Cards is not goods sold or intended to be sold to the customer - credit availed by the appellants on SIM Cards is eligible and the demand for reversal cannot sustain. CENVAT Credit - various input services - Held that:- The definition of input services during the period prior to 01.04.2011 had a wide ambit as it included the words “activities relating to business”. Thus, all the services in the said table is held eligible (except subscription paid to club) - as regards, subscription paid to club, it is not established by the appellant as to why or how such services are related to the output services provided by them. The credit availed on subscription paid to club does not qualify as input service and therefore, the disallowance of credit on such service is upheld. CENVAT Credit of Rs. 58,60,300/- - dis-allowance for the reason that the appellants have not produced necessary documents and that the documents do not contain necessary details - Held that:- We cannot find any merit in the contention raised by the appellant without producing documents on which credit has been availed, and without furnishing necessary details of such documents so as to establish the credit availed, the appellant cannot contend that the credit is eligible - credit not allowed - However, the demand in respect of this amount which pertains to the extended period will require to be set aside. Appeal allowed in part.

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• Central Excise

• 2018 (9) TMI 984
  Clandestine removal - Shortage of Sponge Iron and MS Scrap - Held that:- The entire case of the Revenue is based upon the shortages detected at the time of their visit. It is well settled law that the finding of clandestine removal cannot be upheld on the basis of the shortages detected during the course of visit of officers. Duty to the extent of Rs. 58,203/- and Rs. 4,19,035/- stands confirmed in respect of M.S. Ingots, Runners/Risers respectively based upon the shortages in the stock of the finished products - Held that:- The said confirmation of demand which is solely based upon the shortages, without there being any independent evidences, do not sustain and is set aside. Demand of Rs. 3,32,731/- stands confirmed on the ground that the appellants have removed 102.950 MT of MS Ingots twice by using the same sale invoices - Held that:- There is no evidence as to whom the said goods were sold for the second time. The said fact cannot be held to be a sufficient evidence to uphold the charges of clandestine removal - demand set aside. Penalties also set aside. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 983
  SSI Exemption - use of Brand name of customers - Bonafide belief - time limitation - Held that:- The declaration of law by the Hon’ble Supreme Court in the case of Kohinoor Elastics Pvt.Ltd. [2005 (8) TMI 115 - SUPREME COURT OF INDIA], the larger Bench’s decision of the Tribunal in the case of Prakash Industries vs. CCE, BBSR [2000 (5) TMI 59 - CEGAT, COURT NO. III, NEW DELHI] stands not approved and over-ruled. This leads to an inevitable conclusion that prior to the decision in the case of Kohinoor Elastics, the earlier decisions of the Tribunal including the one of larger Bench in the case of Prakash Industries were in favour of the assessee - there would be a bona fide belief on the part of the appellant as regards the availability of small scale exemption Notification. In the absence of any evidence to reflect upon the assessee’s mala fide, invocation of longer period is not justified - Penalty also set aside. A part of the demand may fall within the limitation period for which the matter is remanded to the original adjudicating authority for re-quantification - appeal allowed by way of remand.

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• 2018 (9) TMI 982
  CENVAT Credit - Common inputs used in dutiable as well as exempted goods - non-maintenance of separate record - Rule 6 of the Cenvat credit Rules, 2004 - Held that:- The appellant has reversed the proportionate credit as per Rules 6 (3A) (ii) along with interest and informed the Department vide letter dated 25.02.2012 and 24.05.2012, further it is found that once the appellant has reverse the proportionate Cenvat credit availed on common input services attributable to exempted goods then it is not required to pay 10% or 5% as the case may be as demanded by the Revenue. The appellant’s case is squarely covered by the decision of Structural Engineers Vs. C.C.E Bangalore-I [2016 (8) TMI 387 - CESTAT BANGALORE], where it was held that In view of subsequent compliance with the provisions of Rule 6(3) (ii) of CCR, with the payment of credit required to be reversed along with interest, there is substantial compliance of the law. The failure if any is only procedural lapse of not filing the declaration of availing option. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 981
  CENVAT Credit - inputs removed as such - whether such removal amounts to trading activity or not? - reversal of proportionate credit - Rule 6(3A) of CENVAT Credit Rules, 2004 - Held that:- The department does not have a case that these spares and consumables are not integrally connected to the machines. They have also not denied that these are inputs for the appellants and also that the credit availed on such spares and consumables are not eligible. It is to be specifically stated that there is no allegation show cause notice that such goods are not inputs to the appellant. Thus when inputs are removed as such Rule 3(5) would come into application. There is clear distinction from Rule 3(5) from trading activity for the reason that the credit is not eligible on traded goods whereas credit under Rule is eligible on inputs used for the clearance of final products. Credit remains allowed - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 980
  Refund of amount deposited - implementation of order pending till date inspite of this Tribunal’s categorical order - Held that:- The Board have now appointed a common Adjudicating Authority vide Order No. 2/2018-CE dated 22.06.2018 - The appellant M/s J. V. Industries Private Limited and the other connected party M/s JSL Stainless Limited are directed to file their submissions/ representation before the respondent adjudicating authority on or before 15.10.2018. Thereafter, the ld. Respondent Commissioner shall fix the date of hearing - If the appellant is found to be entitled for refund pursuant to the adjudication order, the same shall be granted forthwith - The respondent Commissioner shall file the compliance report before this Tribunal and/or progress report otherwise, in the month of January, 2019 on or before 31.01.2019.

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• 2018 (9) TMI 979
  Method of Valuation - lagging sheets - manufactured goods cleared to various branches, used in servicing as well as sold to customers - whether the assessable value of the lagging sheets cleared by appellant to their branches/depots for executing various contracts needs to be valued as per the provisions of Rule 7 or Rule 8 of the valuation rules? Held that:- The issue in respect of valuation of the lagging sheets cleared to depots/branches of the appellant now stands settled in their favour by Apex Court’s decision in TEJO ENGINEERING SERVICES PVT. LTD. VERSUS COMMISSIONER OF C. EX., CHENNAI-II [2005 (3) TMI 374 - CESTAT, CHENNAI], where it is held that valuation of lagging sheets needs to be done as per Rule 8 of Valuation Rules. Appeal allowed - decided in favor of assessee.

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• CST, VAT & Sales Tax

• 2018 (9) TMI 978
  Classification of goods - Hybrid Amplifier or Line Extender - Whether the Tribunal was legally justified in holding the impugned product i.e. Hybrid Amplifier or Line Extender as not an accessory of Cable T.V. covered by the said schedule entry C-II-124 but a general electronic item covered by the schedule entry C-II-126? Held that:- Though Hybrid Amplifiers may be used for Cable TV transmission to the extent that it boosts the signal that has to be transmitted, it has very many other uses. According to the experts' opinion (and which was placed before the MSTT by the Assessee), it can be seen that the impugned product is capable of amplifying signals over a range of 48 MHz to 550 MHz. The maximum output is 120 dBU. For all these reasons, according to the experts' opinion, the impugned product (viz. Hybrid Amplifiers) could be used for a variety of applications including in the aeronautical field, navigation etc. to name a few - the experts' opinion clearly shows that the impugned product can be used for mobile radio, VHF TV channels, Radio Service, FM Radio, in the aeronautical field, amateur Radio, Radio Navigation as well as UHF TV channels. The Hybrid Amplifier basically boosts the signal, be it for the purpose of transmission of Cable TV or for several other purposes as set out by us earlier. This being the position, we agree with the finding of the MSTT that the impugned product viz. Hybrid Amplifier has got a totally different function and it has no function akin to an antenna - This Hybrid Amplifier cannot be classified under Schedule Entry CII-124 as it is neither a TV set, TV Camera, TV Receiver, TV Monitor, antennas and components, parts and accessories of any of them. Merely because the impugned product can also be used for the purpose of boosting Cable TV signals would not alone justify its classification under Schedule Entry C-II-124. The Hybrid Amplifier sold by the Assessee would fall within the Schedule Entry C-II-126 - Decided in favor of assessee.

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• 2018 (9) TMI 977
  Scope of SCN - Appeal was rejected on a completely fresh ground - Whether Hon’ble Tribunal was justified in law to reject the appeal on a completely fresh ground neither arising out of the order appealed against nor raised by the revisionist in ground of appeal filed against the impugned order nor argued during the pleadings by the revisionist or the respondent? - Held that:- Even from a reading of the response filed before this Court in the revision in question there is no such assertion that this plea was ever raised before the Tribunal. It being so this Court is of the view that the Tribunal should not have decided the question as aforesaid without it having been raised, argued or discussed during the course of hearing and without it having put the parties to notice on it - decided in favor of revisionist. Whether the Hon’ble Tribunal was justified in law to hold that the Mild Steel Welding Electrodes and Cast Iron Welding Electrodes may be different goods but are not the goods of a different nature as both are welding electrodes when the raw material used, manufacturing process, chemical composition, machines required for manufacturing, end use of both types of electrodes and common parlance meaning of both types of electrodes is completely different? - Held that:- The relevant aspects of the matter as pointed out by Sri Mishra are based on the grounds taken in appeal before the Tribunal, but have not been considered by the Tribunal appropriately. The Court finds that though the extract of the government order dated 27.9.2002 has been quoted at internal page 7 of the impugned judgment of the Tribunal dated 26.3.2003 the quotation is not complete and there is no discussion as to why the said government order would not help the revisionist herein who was the appellant before the Tribunal - While it is true that the tribunal is the last fact finding authority, it did not consider the matter in correct perspective leaving out relevant parameters as also the grounds raised by the appellant before it therefore it erred while recording it's findings on this question which have to be set aside for reconsideration by it - matter on remand. The matter is remanded back to the Tribunal for re-consideration - appeal allowed in part and part matter on remand.

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• 2018 (9) TMI 976
  Recovery of arrears tax - Held that:- The petitioner expresses its willingness to pay the entire tax arrears through instalments - writ petition disposed off holding that the petitioner shall pay the entire arrears of tax in ten equal monthly instalments beginning from 01.09.2018.

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• Indian Laws

• 2018 (9) TMI 1001
  Dishonor of Cheque - recovery of amount remain unpaid arising as a result of Business Transaction - whether the order of conviction and sentence passed by the Trial Court is sustainable in law? - Held that:- This Court is satisfied that there are necessary averments in the affidavit with regard to the knowledge of the Power of Attorney Holder representing the respondent/private complainant. Accordingly, I have no hesitation to hold that the statutory requirement of the affidavit relating to personal knowledge of the Power of Attorney is fully complied with. From the evidence of the prosecution witness P.W.1 and the documents Ex.P.1 to P.13, it is seen that private complainant has successfully demonstrated regarding the business transaction between the parties and revision petitioner has liability of Rs. 4,60,388/- which has been admitted under Ex.P.3. Since the said document remained unchanged and the cheque in issue was also representing legally enforceable debt and the cheque was dishonored with an endorsement “stop Payment” and even after statutory notice demanding the payment, he has not paid the amount and hence, the conviction and sentence passed by the Courts bellow cannot be interfered with as they does not suffer from any irregularity or illegality warranting interference by this Court. Criminal Revision Case is dismissed.

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• 2018 (9) TMI 1000
  Dishonor of Cheque due to insufficiency of funds - Repayment of loan - Section 138 of Negotiable Instruments Act - existence of legally enforceable debt or not? - Held that:- Admittedly, the petitioner and his mother borrowed a loan on execution of registered mortgage deed of their properties in favour of the respondent and his wife. When it being so, without repaying the same, again on 02.05.2007, the petitioner borrowed a sum of Rs. 7,00,000/- on issuance of post dated cheque for the said sum dated 16.05.2007. It is seen from the notice dated 22.11.2005 issued by the petitioner and his mother to the respondent and his wife, calling upon them not to present the cheques obtained at the time of borrowing the loan viz., in the year 2003 and 2004 for collection as they were not issued in discharging of any liability. The alleged cheques were not issued for any legally enforceable debt. It is also proved from the notice dated 22.11.2005 that the said alleged cheques and other pronotes were obtained by the respondent/complainant at the time of borrowal of loan in the year 2003 and 2004. Therefore, the alleged cheques were not issued by the petitioner for any legally enforceable debt. In such circumstances, the petitioner cannot be subjected to ordeal trial. The complaint cannot be sustained and it is liable to be quashed - petition allowed.

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• 2018 (9) TMI 999
  Dishonor of cheque due to insufficiency of funds - repayment of loan - Section 138 of Negotiable Instruments Act - Held that:- Admittedly, the petitioner and her son issued notice on 22.11.2005 as stated above and after receipt of the same, the respondent and her husband also replied through reply notice dated 02.12.2005. Therefore, it can be construed that the alleged cheque was already obtained for the purpose of security, while borrowing the loan in the year 2003 and 2004. That apart in the said notice dated 22.11.2005, the petitioner and her son specifically averred the cheque particulars and pronotes obtained by the respondent herein. Therefore, the present complaint is nothing but abuse of process of law. The complaint cannot be sustained and it is liable to be quashed - Petition allowed.

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• 2018 (9) TMI 998
  Dishonor of Cheque - case of appellant is that the Cheque id given just for security and is not meant to be honored - Held that:- The contention of the appellant-defendant that the cheques were given as mere security and were not meant be honoured on presentation again does not impress us. The cheques issued were not to be kept in a show-case and were meant to be honoured on presentation. The e-mails placed on record show that the appellant-defendant had not disputed its liability to pay, albeit the appellant-defendant was praying for time as they were facing a liquidity crunch and waiting for certain deals to come through. These e-mails do not, in our opinion, furnish any reason and ground for grant of leave to the appellant-defendant. Appeal dismissed.

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• 2018 (9) TMI 997
  Dishonor of cheque due to insufficiency of goods - Section 138 of Negotiable Instruments Act - main contention of the appellant is that after closing the defence side evidence, the matter was not posted for sometime - Held that:- In the present case on hand, it is stated that the matter was reserved for judgment on 20.01.2010 and subsequently it was adjourned to 27.01.2010 for reopening the case. Either on 20.01.2010 or 27.01.2010, the presence of the appellant is not necessary. Even assuming that the presence of the appellant is necessary, the trial Court ought to have issued a notice to the appellant before dismissing the complaint. But, after completion of evidence of the appellant, the learned Magistrate should not have dismissed the complaint for default under Section 256 Cr.P.C. The trial Court should have issued a notice to the appellant before dismissing the complaint or atleast passed the judgment on merits - the matter is remitted back to the learned Judicial Magistrate-II, Coimbatore and the learned Judicial Magistrate is directed to dispose of the complaint on merits and in accordance with law - matter on remand.

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• 2018 (9) TMI 996
  Dishonor of Cheque due to insufficiency of funds - repayment of loan - Order of acquittal - Section 138 of the Negotiable Instruments Act, 1881 - Held that:- There is a material contradiction in the complaint, proof affidavit filed for Chief-examination and Cross-examination. The appellant has not stated any specific date either in the notice, complaint or in the proof affidavit, but he has simply stated that the respondent borrowed a sum of Rs. 6,00,000/- during the year 2006 for his business development as hand loan on oral promise to repay the same shortly. Secondly, since the appellant repeatedly demanded to repay the said amount orally, the respondent instead of repaying the loan amount he issued a cheque dated 23.11.2006 bearing No.768492 dated 23.11.2006, drawn on ICICI Bank, Pricol Complex, Periyanaickenpalayam, Coimbatore. Further, the appellant, in his cross examination, has stated that the respondent issued post dated cheque dated 23.11.2006 on 01.03.2006, but, no where, he has stated that the respondent issued a post dated cheque on 01.03.2006 itself. It is well settled law that the appellant/complainant has to prove the case in the manner known to law. Even though, the respondent denied the case, he has not come forward to examine any witness to deny the execution of the cheque. Though the appellant alleged the borrowal of money and the issuance of cheque, he has not automatically entitled to the relief sought for in the complaint, unless he proved his case. There is a material contraction in the materials placed by the appellant namely, the complaint, proof affidavit and evidence. Even though, the respondent denied the borrowal and issuance of the cheque in the notice itself, the appellant has not stated anything either in the complaint or in the proof affidavit about the specific date of borrowal and date of issuance of post dated cheque. The appellant has not established his case. Hence, the trial Court found that the respondent is entitled for acquittal and there is no need to interfere with the judgment passed by the Court below - appeal dismissed.

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• 2018 (9) TMI 995
  Dishonor of cheque due to insufficiency of funds - repayment of loan - section 138 of Negotiable Instruments Act, 1881 - Held that:- It is seen from Ex.P.7 that the respondent along with the appellant and others are jointly carrying on the real estate business. At one point of time, the appellant took the respondent's ICICI Bank cheque leaf and forged the same by filling up of Rs. 5,00,000/-. The respondent came to know the said fact on 04.11.2009 when it was returned with an endorsement "Insufficient of funds" and he has no money transaction with the appellant - Moreover, it is known from Ex.P.1, complaint that on 20.04.2009, the respondent met the appellant and agreed to buy a place consists of 74,655 sq.ft. and they agreed to execute a sale agreement by investing Rs. 5,05,000/- each. Accordingly, the appellant gave Rs. 5,05,000/- on 20.04.2009. But, the appellant no where either in complaint or in his evidence stated that he has received any kind of document for giving Rs. 5,05,000/- and he has failed to prove the same. Secondly, it is seen that the appellant has not given any notice when the cheque was dishonoured. Thirdly, the trial Court, while analysing the cheque, has found that the ink of the name and signature and the ink of the amount and date are different. The difference found in the cheque i.e. the ink of name and signature and the amount and date are also presumed to be in favour of the respondent. Therefore, the appellant has not established his case. Hence, the trial Court found that the respondent is entitled for acquittal and there is no need to interfere with the judgment passed by the Court below. In a criminal case, it is not necessary for the respondent/accused to disprove the case of the prosecution beyond reasonable doubt. If the respondent is able to satisfy the Court by legally acceptable defence that the case of the prosecution lacks bona fide, the respondent will be entitled to the benefit of doubt - Further, when there are two views possible, one in favour of the respondent/accused and the other in favour of the appellant/complainant, the view favouring the respondent/accused should be taken into consideration in an appeal against acquittal. There is no reason to interfere with the order of acquittal passed by the trial Court - appeal dismissed.

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• 2018 (9) TMI 994
  Misuse of Blank Cheque - section 138 of Negotiable Instruments Act - Trial has reached the penultimate stage - Held that:- The case has been periodically adjourned for service of summons, finally, the accused had appeared before the Trial Court namely the Judicial Magistrate Curt No.I, Puducherrry, as it could be seen by the adjudication dated 16.04.2010 and the case thereafter periodically adjourned for trial and finally, the evidence of the complainant was recorded by way of proof affidavit on 01.12.2010 and Ex.P1 to P6 have been marked. Thereafter, the petitioner had filed the above quash petition on 08.04.2011 due to which the trial is pending. In the meanwhile, the records have been called for and the trial in C.C.No.78 of 2009 had been successfully put on hold for the past seven years - The learned counsel for the petitioner sensing that this Court is not accepting the contention of the petitioner, though initially appeared and made his submissions, thereafter, failed to appear before this Court, on subsequent dates despite the name of the petitioner being printed in the cause list The contention of the petitioner does not merit any consideration and the quash petition is dismissed, since the matter is pending from the year 2011, without any progress and the Trial has reached a penultimate stage - The Trial Court is directed to conclude the trial, within a period of three months from the date of receipt of the copy of this order and report compliance.

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• 2018 (9) TMI 993
  Dishonor of cheque due to insufficiency of funds - repayment of loan - section 138 of Negotiable Instruments Act - During the examination, the respondent has totally denied the charges - Held that:- During the examination, respondent/accused has clearly denied the compliant lodged against him and also there was enquiry against him and did not appear before the police station and also during the examination not at all spoken about the compliant given before the Police Station. But whereas he has categorically stated that several incident took place in the Police Station, Chennai and the evidence about incidents in police station out of memory cannot be acceptable one and especially, the respondent/accused given a reply in EX.B6 stating that already he lodged a complaint viz., Ex.B7- Ramanathapuram Police Station. Therefore, the First Appellate Court found that the appellant has not approached the Court with clean hands, before the date of issuance of alleged cheque, there was a dispute between the husband of the respondent and the appellant. The trial Court failed to consider this aspects and accepted the case of the appellant and the first Appellate Court has rightly re-appreciated the entire oral and documentary evidence and found that there is suspicion and held that appellant has not proved his case beyond reasonable doubt and accordingly, set aside the judgment of the trial Court and acquitted the respondent. Appeal dismissed.

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• 2018 (9) TMI 992
  Recovery of Four Cheques in the police enquiry - dishonor of three cheques - Section 138 of Negotiable Instruments Act - Held that:- The reason adduced in the complaint and it is the case of complainant also that since the Respondent/Accused involved in misappropriation, police complaint was lodged and the same was registered in Crime No. 482 of 2013. However, though it is contended that the cheques in dispute were obtained in the police enquiry, the evidence of DW-1 has not in that line and he has not stated that the cheques in dispute were handed over during the police enquiry or out of the police enquiry. When no such evidence was let in on the side of the Respondent/Accused, then it cannot be considered that the cheques in dispute were obtained by using force or in the police custody - Here in the instant case no explanation is offered by the Accused as to for what purpose he issued four cheques and for what purpose one cheque alone was allowed to get honored and the other cheques were allowed to get dishonored. The judgment of the learned Trial Court is set-aside and the Respondent/Accused is convicted for the offence under Section 138 of the Negotiable Instruments Act and ordered to undergo a simple imprisonment for a period of one year and to pay fine a sum of Rs. 10,000/- in default to undergo a simple imprisonment for a period of 1 month - appeal allowed.

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• 2018 (9) TMI 991
  Dishonor of Cheque due to insufficiency of funds - case of the appellant is that the appellant has proved the case that the respondent borrowed a sum of Rs. 75,000/- from the appellant and issued the cheque and on presentation, the subject cheque was returned - Held that:- The appellant had no money to pay Rs. 75,000/- to the respondent. The appellant has suppressed these transactions and stated that the respondent received a sum of Rs. 75,000/- from the appellant and issued the cheque and the respondent approached him personally and requested to present the cheque once again therefore the second time, presented the cheque dated 16.01 2008. Even that fact has not been proved by the appellant and simplified in order to make the cause of action and also the limitation and he has stated that when the first time returned, since the respondent requested the appellant to present the cheque once again hence he has not sent the notice and once again, he represented the cheque. Appeal dismissed.

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