TMI Tax Updates - e-Newsletter
September 20, 2021

Case Laws in this Newsletter:

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

Articles

1. DETERMINATION OF TAX UNDER GST LAWS

   By: DR.MARIAPPAN GOVINDARAJAN

2. GST ON PRIZE MONEY

   By: VISHAKA GOYAL

3. Key take away from Supreme Court ruling in matter of Inverted Duty Structure

   By: Abhishek Raja

4. THE 5 TYPICAL STAGES IN TAX TECHNOLOGY

   By: Ramnarayan Balakrishnan

News

1. On demand fetching of Bill of Entry details from ICEGATE Portal

2. Income Tax Department conducts searches in Mumbai and other regions

3. Central Government relaxes provisions of TDS u/s 194A of the Income-tax Act, 1961 in view of section of 10(26) of the Act

4. Government extends certain timelines to ease compliances

Notifications

Customs

1. 44/2021 - dated 17-9-2021 - Cus

Seeks to amend Notification No. 50/2017-Customs, dated the 30th June, 2017

Income Tax

2. 113/2021 - dated 17-9-2021 - IT

Modification of Notification Nos. 93/2020 dated the 31st December, 2020, No. 10/2021 dated the 27th February, 2021, No. 20/2021 dated the 31st March, 2021, No. 38/2021 dated 27th April, 2021 and No. 74/2021 dated 25 June 2021

3. 110/2021 - dated 17-9-2021 - IT

Central Government notifies that no deduction of tax shall be made on the payment under section 194A of the IT Act 1961

Circulars / Instructions / Orders

DGFT

1. 24/2015-2020 - dated 17-9-2021

Applications for allocation of Tariff Rate Quota(TRQ) under India - Mauritius CECPA for the year 2021-22.

Highlights / Catch Notes

GST

• Court Rules on Section 16(2)(c) of CGST Act: Attachment Order Can't Exceed One Year; Requires Bi-Parte Hearing for ITC Disallowance.

  Case-Laws - HC : Withholding the Input Tax Credit - vires of Section 16(2)(c) of CGST Act, 2017 - Seller has not deposited the tax (GST) with the Government revenue - order of attachment cannot sustain beyond One year - If the department wants to permanently disallow credit of accumulated amount in the ledger of a dealer, it must adjudicate the issue and pass an order after bi-parte hearing. - HC
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• Funds Recovery Challenged: GST Portal Errors and Improper Notice Service Lead to Order Quash and Reconsideration.

  Case-Laws - HC : Recovery of amount from the petitioner's Bank Account, after attachment - Undisputedly, the information was not uploaded on the GST Portal (Form DRC 01 and DRC 01A) and the notice cannot be said to have been served upon the petitioner, for copy of the receipt of the Gmail does not indicate the petitioner's name. - The order in original quashed - Matter restored back - HC
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• High Court Lifts Bank Account Attachment Order Due to Lack of Show-Cause Notice u/s 74, Rule 159(5) CGST Rules.

  Case-Laws - HC : Provisional attachment of bank accounts - the period of one year would come to an end on 21.09.2021 - It must be noted that the exercise of right under Rule 159(5) of CGST Rules presupposes the communication of provisional order of attachment. The fact that the petitioner came to know of the said provisional attachment order from his bankers would be of no relevance - even if there are other proceedings that may be considered to be pending against the petitioner as long as the proceedings under Section 74 are not initiated by issuing a show-cause notice, the order of attachment purportedly relating to the proceedings under Section 74 cannot be upheld. - Order of attachment lifted - HC
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• Court Rules Retrospective Amendment Doesn't Affect Right to Claim Transitional Credit; Department Must Review Applications.

  Case-Laws - HC : Benefit of transitional credit - time limit for taking the input tax credit - Validity of retrospective amendment - the amendment does not affect the right of the petitioner to claim transitional credit and it would be unnecessary to deal with the Constitutional challenge to it. Further, the petitioner is at liberty to apply for the transitional credit which shall be dealt with by the department and disposed of by the department in accordance with law. - HC
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Income Tax

• High Court Upholds Resident Status u/s 6(1)(a) for Tax Purposes; Petitioner's Writ Under Article 226 Dismissed.

  Case-Laws - HC : Revision u/s 264 - Residential Status of Individual - how many days petitioner stayed on foreign soil - treating the assessee/petitioner as “Resident” for having stayed in India for 182 days during the relevant previous year as per Section 6 (1) (a) - tds u/s 192 - for the first time petitioner has produced the aforesaid certificate issued by his employer in this writ proceeding and wants this Writ Court to appreciate and consider the aforesaid piece of evidence in exercise of its constitutional writ jurisdiction under Article 226 - Order of CIT, holding the assessee as Resident, confirmed - HC
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• Dispute Over Section 54F Deduction: Farmhouse Purchase and Agricultural Land Use Examined by Tax Authorities.

  Case-Laws - AT : LTCG - Deduction u/s 54F - Purchase of farmhouse - There is no finding by the learned assessing officer that assessee has purchased excessive land which would be used as a farmland and has for namesake constructed a residential house property. Merely because a property is called a farmhouse, it does not become a non-residential house property unless otherwise proved. - AT
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• Taxpayer Challenges Interest Error u/s 234D; Case Returned for Review Due to Lack of Hearing Opportunity.

  Case-Laws - AT : Rectification of mistake u/s 154 - Wrong computation of interest u/s 234D - assessee contended that there could not have been any levy of interest u/s 234D when refund was never granted to the assessee - AO was obligated by law to provide opportunity of hearing to the assessee before raising fresh demand. - Matter restored back - AT
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• Assessment Reopening u/s 147 Challenged: Lack of Evidence on Alleged Clandestine Clearance and Suppressed Sales.

  Case-Laws - AT : Reopening of assessment u/s 147 - clandestine clearance/ suppressed sale - Excise Department though alleged huge clandestine clearance of goods yet not an iota of evidence to prove procurement of huge quantities of raw materials has been placed on record, though the list of raw material suppliers was with the investigation. Without showing receipt of the raw material clandestinely, manufacture of such huge quantities of excisable goods and clandestine clearance thereof is impossible. Therefore, consequent suppressed sale and again undeclared income there from, is too remote even to be suspected. - AO had merely borrowed satisfaction in respect of escapement from someone else, which is not sufficient to reopen the case - AT
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• Assessment Reopening u/s 147 Quashed Due to Improper Authority Approval; Invalid Notice and Order Issued by Addl.CIT.

  Case-Laws - AT : Reopening of assessment u/s 147 - Assessee challenging notice for want of jurisdiction - the competent authorities to accord the approval as per Section 151 of the Act was Pr.CIT/CIT and not the Addl.CIT, therefore, issuance of notice U/s 148 and consequent assessment order passed are invalid, illegal and are liable to be quashed on the ground that same were not issued by the competent authority and thus stands quashed. - AT
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• TDS Not Deducted for Land Advance: Section 40(a)(ia) Applies Only to Business Expenditures, Not Capital Asset Advances.

  Case-Laws - AT : TDS u/s 194IA - payment for land advance - non-deduction of TDS in violation of Section 40(a)(ia) - the provisions of Section 40(a)(ia) are applicable only to the expenditure claimed while computing income under the head “profit and gains of business or profession” of the Income Tax Act, 1961. In this case, this amount has not been claimed as expenditure being the amount paid as advance for acquisition of a capital asset. - No additions could be made - AT
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Customs

• Court Examines Section 114AA Penalty in Red Sanders Export Case; Reasonable Suspicion Casts Doubt on Appellant's Intent.

  Case-Laws - AT : Levy of penalty u/s 114AA of Customs Act - illegal export of red sanders out of India - misuse of Import Export Code (IEC) - the Revenue has failed to establish the mala fides of the appellant since nowhere has the Revenue alleged that the appellant was aware or had acted deliberately. - The observation by a neutral party throws reasonable suspicion as to the bona fides of the appellant which alone is sufficient to doubt the knowledge or intention of the appellant, in order to attract the mischief under Section 114AA ibid. - AT
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Corporate Law

• High Court Quashes Complaint Due to Typo Error in Minutes; Company Not a Registered NBFC at Relevant Time.

  Case-Laws - HC : Prosecution proceedings - NBFC or not - Inadvertent/typographical error in recording of minutes - it was erroneously recorded in item no. 12 of the minutes that the company submitted application with the Reserve Bank of India for its deregistration as NBFC and registration as a CIC - however, the company was not a registered Non Banking Financial Company (NBFC) at the relevant time - Accepting the explanation of the company, The proceeding in respect of complaint quashed - HC
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• Typo in NBFC to CIC registration corrected, not an offence under Companies Act 2013; no malicious intent found.

  Case-Laws - HC : Application for deregistration as NBFC and registration as a CIC - Typographical/inadvertent error in recording of minutes rectified subsequently can under no stretch of imagination be termed as an offence, far less an offence under the provisions of the Act of 2013 as alleged. That the petitioners acted with a malafide intention to deceive, gain undue advantage or injure the interest of the company or any person connected thereto is not reflected in the four corners of the complaint. Allowing the proceeding to continue shall be a futile exercise and abuse of the process of law in view of the fact that the inadvertent error has been sufficiently and adequately explained and does not call for any prosecution. - HC
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IBC

• NCLT Affirms No Grounds for CIRP as Corporate Debtor Complied with Agreement, Offers Possession to Home Buyers.

  Case-Laws - SC : Initiation of CIRP - Financial Creditors or home buyers - possession of flats were offered by the Corporate Debtor - NCLT rejected the application - - The records showed that the Corporate Debtor had in terms of the said agreement dated 1st October 2016, which was the latest arrangement between the parties, offered possession of the flat to the Financial Creditor on 7th March, 2018. As such, there was no default in compliance of the terms and conditions of the said agreement. - Order of NCLT affirmed - SC
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Service Tax

• Dredging Services Deemed Essential for Port Operations, Qualify as Admissible Input Service for Cenvat Credit.

  Case-Laws - AT : Cenvat Credit - input services or not - dredging services - nexus with the output services i.e. Port service and Cargo handling services or not -there is absolutely no doubt that the dredging of channel was therefore essential for enabling the appellant to provide the port services expected by its customer Essar steel. Therefore, the dredging service has direct nexus with the output services of port services and cargo handling services - the dredging services used for providing the port service/Cargo handling service is admissible as input service. - AT
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VAT

• Court Rules Elevator Sales Cannot Be Reclassified as Local for VAT; Upholds Inter-State Transaction Status.

  Case-Laws - HC : Inter state sale or Intra-state sale - elevators are sold to the contractees - If we understand correctly what the Assessing Officer is trying to convey is that had the petitioner from its branch offices brought the machinery within the State and thereafter transferred the title in the goods into the contractees, the same would have amounted to local sale and, therefore, local VAT would have been applicable. This is not a matter of desire of the Assessing Officer where the sale should take place so that the same would be inter-state sale or intrastate sale - the Assessing Officer by way of artificial means tried to tax the same transaction again as a local sale demanding VAT which was wholly impermissible. - HC
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Case Laws:

• GST

• 2021 (9) TMI 830
  Maintainability of petition - availability of alternative remedy of appeal - Violation of principles of natural justice - adjudication order has been passed without prior service of show cause notice - non-speaking order - actionable material to proceed against the petitioner or not - HELD THAT:- The impugned order only records the conclusion of the adjudicating authority without either discussing the facts or affording reasons for the conclusion reached - Therefore, notwithstanding prior to service of notice as claimed by the revenue authority, the impugned order has been passed in violation of essential principle of natural justice. In such facts, no useful purpose would be served in relegating the petitioner to the forum of alternative remedy - the matter is remitted back to the assessing authority to pass a fresh order, strictly in accordance with law, within a period of six months from today after affording due opportunity of hearing to the petitioner - petition allowed by way of remand.

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• 2021 (9) TMI 826
  Withholding the Input Tax Credit - vires of Section 16(2)(c) of CGST Act, 2017 - Seller has not deposited the tax (GST) with the Government revenue - One year has passed since the order of attachment - HELD THAT:- Chapter IX of the said Rules pertains to payment of tax. Rule 86 refers to electronic credit ledger which shall be maintained in relation to the registered dealer where his eligible input tax credit would be accumulated for the purpose of discharging his tax liability to the Government. Rule 86A however provides conditions of use of amount available in such electronic credit ledger - the restrictions that can be imposed on use of amount available in electronic credit ledger of a person can be by way of a temporary measure for a period not exceeding one year. The decision to impose such restriction would be taken by the Commissioner or a person authorised by him upon being satisfied that the input tax credit has been fraudulently availed or is ineligible. In such a case, after recording reasons in writing restriction on use therefore of would be imposed. This is an interim measure and, therefore, cannot take shape of a permanent arrangement. This is an interim measure and, therefore, cannot take shape of a permanent arrangement. If the department wants to permanently disallow credit of accumulated amount in the ledger of a dealer, it must adjudicate the issue and pass an order after bi-parte hearing. Sub-rule (3) of Rule 86A clearly brings about this legislative intent while it provides that such restrictions shall cease to have effect after the expiry of a period of one year. The department cannot continue to subject the petitioner s electronic credit ledger to the restrictions imposed by the Commissioner, on 21st May 2020. The same shall be released. In other words, it would be open for the petitioner to utilise the amount credited in the said ledger for the purpose of payment of its taxes in accordance with law. Interim order passed - Writ petition be listed on 16th November 2021.

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• 2021 (9) TMI 823
  Recovery of amount from the petitioner s Bank Account, after attachment - adequate opportunity of hearing not provided before carrying such option of recovery - HELD THAT:- All the contentions raised by the petitioner in the writ petition is rejected, for the action of the authorities not found to be motivated, malicious or passed for extraneous considerations. In fact, the officers have passed the order protecting not only the interest of the Revenue, but also the assessee, for had it not been so, then the original order dated 19th of March, 2020, (Annexure-P/1 series), whereby the assessment carried out and quantified at Rs. 31,46,273/-, would not have been rectified vide subsequent order dated 1st of March, 2021 (Annexure-R/3), whereby the amount stood reduced to Rs. 13,78,380/-. Undisputedly, the information was not uploaded on the GST Portal (Form DRC 01 and DRC 01A) and the notice cannot be said to have been served upon the petitioner, for copy of the receipt of the Gmail does not indicate the petitioner s name. The original order dated 19th of March, 2020, passed by Respondent No. 8, namely, Assistant Commissioner of State Tax, Patna Central, Patna, in GSTIN-10ACFPS1886H2ZK with respect to the period September 2018, December 2018 and March, 2019 is quashed - petition disposed off.

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• 2021 (9) TMI 822
  Recall of Attachment of Bank Accounts of petitioner - HELD THAT:- It appears that the cause of action for filing the present cases arose out of order of attachment being C. No. V(30)50/Prev/Navya/Ran(2020/ dated 11.01.2021 issued by Deputy Commissioner (CGST CX, Ranchi annexed along with both the writ petitions as Annexure 4, relating to the writ petitioners in both the cases. In view of the subsequent development which has been taken place during the pendency of writ petitions, i.e., the attachment order it self having been recalled with respect of the writ petitioners, nothing survives in the present writ petitions. Petition disposed off.

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• 2021 (9) TMI 821
  Lefting of Provisional attachment of bank accounts - the period of one year would come to an end on 21.09.2021 - no proceedings have been initiated under Section 74 of CGST Act as against the petitioner till date. - Section 83 of CGST Act - issuance of bogus/fake invoices without supply of goods - availment of irregular ITC - HELD THAT:- It must be noted that the exercise of right under Rule 159(5) of CGST Rules presupposes the communication of provisional order of attachment. The fact that the petitioner came to know of the said provisional attachment order from his bankers would be of no relevance vis- -vis in the absence of demonstration by the respondent Authority with legally acceptable material to communicate such order, the contention taken that the representation to seek the relief as provided under Rule 159(5) of CGST Rules is belated, cannot be accepted There was an obligation for the respondent Authority to have considered the representation of the petitioner under Rule 159(5) of the CGST Rules. - However, as the period of one year would come to an end on 21.09.2021, it would be travesty of justice, if the matter is remanded back keeping the option open for the respondent Authority to pass orders on the representation of the petitioner, which theoretically would entitle the respondent, if circumstances are so made out to reject lifting of such attachment. Admittedly, no proceedings have been initiated under Section 74 of CGST Act as against the petitioner till date. What must also be noticed is that though the statement of objections of the respondent Authority seeks to make out a case that the proceedings under Section 74 of CGST Act are sought to be instituted and in the context of which the provisional attachment under Section 83 of CGST Act is resorted to, the impending proceedings under Section 74 of the CGST Act cannot be a ground to exercise power under Section 83 for the provisional attachment. If the only ground made out in the statement objections and the very order of attachment at Annexure-A is the proceedings under Section 74 of the CGST Act, even if there are other proceedings that may be considered to be pending against the petitioner as long as the proceedings under Section 74 are not initiated by issuing a show-cause notice, the order of attachment purportedly relating to the proceedings under Section 74 cannot be upheld. The question of law answered in the affirmative - Order of attachment set aside.

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• 2021 (9) TMI 820
  Benefit of transitional credit - time limit for taking the input tax credit - Validity of retrospective amendment dated 18.05.2020 by which the provision of Section 128 of the Finance Act, 2020 has been inserted with effect from 1st July, 2017 to Section 140 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- The judgment of SKH Sheet Metals Components [ 2020 (6) TMI 385 - DELHI HIGH COURT[ covers the issue in hand. It was held in the case that Petitioner is permitted to revise TRAN-1 Form on or before 30.06.2020 and transition the entire ITC, subject to verification by the Respondents. In view of the observations made by this Court, the amendment does not affect the right of the petitioner to claim transitional credit and it would be unnecessary to deal with the Constitutional challenge to it. Further, the petitioner is at liberty to apply for the transitional credit of Rs. 6,04,47,033/- which shall be dealt with by the department and disposed of by the department in accordance with law. Petition disposed off.

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• 2021 (9) TMI 819
  Seeking grant of Bail - alleged offences under Section 70 of the Central Goods and Services Tax Act, 2017 r/w Section 14 of the Central Excise Act, 1994 and Section 83 of the Finance Act, 1994 - HELD THAT:- Though, the petition is slated for removing of office objection, but challenging the impugned order passed by the court below only for granting of bail by allowing the petition under Section 438 of Cr.P.C., by imposing certain conditions and the court below has been exercising discretionary power. In this petition, it does not call for intervention for setting aside the impugned order passed by the court below and even does not arise for issuance of notice against the respondent-Syed Sardar Pasha who is arrayed as petitioner in Crl.Misc.No.5875/2019 filed under Section 438 of Cr.P.C. - Petition disposed off.

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• Income Tax

• 2021 (9) TMI 833
  Reopening of assessment u/s 147 - reasons to believe - no link between the statement that there is a reason to believe that income as escaped assessment - HELD THAT:- No case is made out to interfere with the impugned judgment and order passed by the High Court in exercise of powers under Article 136 of the Constitution of India. Special Leave Petition is dismissed.

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• 2021 (9) TMI 832
  Withholding of the refund in terms of Section 241A - Withholding of refund in certain cases - exercise of powers under Section 241A - HELD THAT:- SLP dismissed.

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• 2021 (9) TMI 829
  Revision u/s 264 - Residential Status of Individual - how many days petitioner stayed on foreign soil - treating the assessee/petitioner as Resident for having stayed in India for 182 days during the relevant previous year as per Section 6 (1) (a) - tds u/s 192 - HELD THAT:- As evidence by way of certificate of his employer upon which petitioner wants to rely for his period of stay in question on foreign water was never produced or filed either before the Assessing Officer or before the Commissioner of Income Tax during the impugned proceeding under Section 264 of the Act in which the Commissioner of Income Tax has upheld the order of the assessment u/s 147/144 of the Act treating the petitioner as Resident and for the first time petitioner has produced the aforesaid certificate issued by his employer in this writ proceeding and wants this Writ Court to appreciate and consider the aforesaid piece of evidence in exercise of its constitutional writ jurisdiction under Article 226 of the Constitution of India while all these facts are totally absent in the aforesaid decisions/judgments upon which petitioner wants to rely and furthermore in addition to these facts, circulars/notifications upon which petitioner wants to rely is in conflict with Section 6 (1) of the Income Tax Act, 1961 and it is settled principle of law that if there is a conflict between a circular or notification and an Act the Act will prevail. We are not inclined to interfere with the impugned order of the respondent Commissioner of Income Tax dated 25th January, 2007 passed in exercise of his revisional jurisdiction under Section 264 of the Income Tax Act, 1961, confirming the order of assessment under Section 147/144 of the Income Tax Act, 1961 treating the petitioner as Resident , in exercise of limited scope of judicial review by this Court under constitutional writ jurisdiction under Article 226 of the Constitution of India.

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• 2021 (9) TMI 818
  Penalty u/s 271(1) (c) - substantial question of law - HELD THAT:- Appeal is admitted and substantial question of is law is framed. Penalty amount is paid, no demand is pending against assessee In the circumstances, pending consideration of appeal we deem it appropriate to stay operation of the impugned order in terms of prayer clause (a), which reads thus - (a) That the operation of the impugned order dated 3/8/2016 (Exhibit-K) be stayed pending the present appeal is finally heard and disposed off. . Interim application is accordingly disposed of in aforesaid terms. Interim application is accordingly disposed of . Interim application is accordingly disposed of.

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• 2021 (9) TMI 813
  Disallowance on account of bad -debts written-off - Addition considering the provisions of Section 36(1)(vii) and Section 36(2) - assessed had failed to prove that the amount was actually trading liability and the corresponding amount was actually offered as income in earlier years - CIT-A deleted the addition - HELD THAT:- CIT(A) allowed the claim of the assessee following the decision of the Supreme Court in TRF Ltd Vs. CIT [ 2010 (2) TMI 211 - SUPREME COURT] holding that when the assessee has written off the above sum, debts are already taken into income in earlier years, it is allowable. Nothing new was argued by the DR and the ld AR also reiterated the arguments before the ld CIT(A). We find that when the assessee has written off a debt in its books of account, which was taken into computation of income in earlier years, it satisfied all the characteristic of allowable bad debt u/s 36(2) of the Act. In view of this we do not find any infirmity in the order of the ld CIT(A) in allowing the claim of bad debt written off. Disallowance of expenditure incurred on land acquisition - Revenue or capital expenditure - HELD THAT:- The acquisition of land and payment of electricity charges were on account of above project and it did not create any asset in the hands of the assessee but assessee was merely a contract for construction of border outpost on behalf of Ministry of Home Affairs - CIT(A) has correctly held that in the hands of the contractor, assessee the above expenditure was merely project expenditure and has note created any capital assets , hence, not a capital expenditure. Disallowance on account of provision written back - HELD THAT:- Before the ld CIT(A) the above claim was contested and the computation of income for last three years was shown wherein, the above provision was disallowed. CIT(A) also examined the details of the provision written back. The complete details as well as the justification which clearly shows that the provision made by the assessee in earlier years was never claimed/ allowed to the assessee. CIT(A) also verified the same with respect to the computation of the total income of the assessee for earlier years. Before us the ld DR could not show that these provisions have already been allowed to the assessee in earlier years and therefore, they are required to be taxed in this year u/s 41(1) of the Act. In view of this we do not find any infirmity in the order of the ld CIT(A) in deleting the addition on account of provision of written back. Disallowance made in books profit u/s 115JB - admitting additional evidence adduced by the assessee during appellate proceedings even after specific denial of the Assessing Officer in his remand report - HELD THAT:- CIT(A) has categorically held that the learned Assessing Officer has merely opposed the admission of the additional evidences. The admission of the additional evidences is the prerogative of the learned CIT(A) according to Rule 46 of the Income Tax Rules, 1962. In paragraph No. 16.3 of the order he has categorically admitted the additional evidences and find that the issue is squarely covered by the decision of his predecessor in earlier assessment years, which has been upheld by the coordinate bench in the case of the assessee itself. Therefore, we do not find any infirmity in the order of the learned CIT(A). Even otherwise, on the merit issue is squarely covered in favour of the assessee. Accordingly, ground No 5 of the appeal of the AO is dismissed.

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• 2021 (9) TMI 811
  LTCG - Deduction u/s 54F - Purchase of farmhouse - further allegation that, assessee owned more than one residential property at the time of making claim of deduction - CIT-A deleted the addition - HELD THAT:- AO himself says that he could not prove whether the assessee has more than one property. Furthermore, with respect to the objection of the learned assessing officer, that assessee has purchased a farmhouse and therefore it is not a residential house property is also devoid of any merit. Farmhouse can be residential house also. It is not the case of the revenue that assessee has purchased excessive land and has constructed a small house thereon and thereby claiming the deduction on the total value of land and small property constructed thereon. If that had been the case perhaps, the assessee would have been eligible for proportionate deduction to the extent of residential house property as well as lender pertinent thereto. There is no finding by the learned assessing officer that assessee has purchased excessive land which would be used as a farmland and has for namesake constructed a residential house property. Merely because a property is called a farmhouse, it does not become a non-residential house property unless otherwise proved. In view of this, we do not find any reason to upset the order of the ld CIT(A). Accordingly, ground No. 1 is dismissed. Addition of Credit card expenditure - assessee has submitted that he has three credit cards, which are exclusively used for the purpose of the business of assessee s employer where the assessee is CEO - CIT-A deleted addition - HELD THAT:- When the expenditure is incurred merely because this expenditure has been incurred through his credit card there is no reason to make an addition in the hands of the assessee. The assessee also stated that he continues to make such expenditure on behalf of the firm through his credit card in subsequent years also and no such additions have been made in the subsequent year. This fact remains uncontroverted. In view of this, we do not find any infirmity in the order of the ld CIT(A) in deleting the addition. - Decided against revenue.

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• 2021 (9) TMI 810
  Allowability of marketing expenses as revenue expenditure - HELD THAT:- Similar view has been taken in the case of Hitz FM Radio India Ltd. [ 2015 (9) TMI 898 - ITAT DELHI] wherein it has been held that there is no Law under the Act to say that revenue expenditure is deferred revenue expenditure. It has been held that when A.O. had himself admitted that expenditure in question was a revenue expenditure, he should have allowed the entire claim of assessee in assessment year in question itself - CIT(A) was not justified in disallowing the marketing expenses as revenue expenditure in the year under consideration - Grounds of Appeal Number.1 of the assessee is allowed. Adhoc disallowance on account of vehicle running and maintenance expenses, depreciation on motorcar and adhoc disallowance on account of telephone and interest expenses - HELD THAT:- As total amount A.O. disallowed 10% of the same which the Ld. CIT(A) has restricted - It is the submission Assessee that disallowance of such item of 5% of the expenses is on the higher side - disallowance of Rs. 25,000/- lump sum on estimate basis out of these expenses will meet the ends of justice - as hold and direct accordingly. Grounds of Appeal by the assessee are accordingly partly allowed.

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• 2021 (9) TMI 809
  Validity of the re-assessment proceedings u/s 147 - assessee is a non-filer of income tax return and has made huge cash deposit in his S B Account - explanation of assessee regarding deposit on account of sale of agricultural land non submitted - HELD THAT:- When the assessee has submitted copy of Agreement to Sell of the agricultural land, at least the A.O. could have called the person who had given so much money to the Uncle of the assessee as advance. Further the submission of the assessee before the A.O. that some amount is deposited out of his agricultural income and previous withdrawals from the Bank which were available for deposit in the Bank Account also not considered properly. We deem it proper to restore the issue to the file of A.O. with a direction to grant one more opportunity to the assessee to substantiate his case and decide the issue as per fact and Law - AO may conduct necessary enquiry as he deems proper by directing the assessee to produce the person from whom the advance has been received for sale of land by his Uncle. The assessee is also hereby directed to appear before A.O. and adduce the evidence to the satisfaction of the A.O. regarding source of deposit without seeking any adjournment under any pretext, failing which, the A.O. is at liberty to pass appropriate Order as per Law - Grounds raised by the assessee are accordingly allowed for statistical purposes.

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• 2021 (9) TMI 808
  Disallowance of an amount of TDS payable outstanding on 31st March, 2012 was paid within the due date prescribed - HELD THAT:- The assessee is constantly following cash system which is not disputed by the Revenue. In the previous Assessment Years, no additions were made except in Assessment Year 2011-12 which was deleted by the CIT(A). Thus, the Revenue is continuously taking the stand that the TDS payables outstanding are proper. The decision in case of Deloitte [ 2021 (1) TMI 738 - ITAT DELHI ] is apt in the present case as the assessee has paid the said amount within the due date prescribed by the Act. Thus, Ground No. 1 of the assessee s appeal is allowed. Disallowance of amount being 4/5th of the Electricity expenses - HELD THAT:- After going through the evidences placed before the Assessing Officer, it can be seen that the assessee has given a plausible explanation. AO has made an estimated disallowance which is not supported by any evidence at all. Besides this, the issue contested herein is already decided in favour of the assessee in preceding years upon which the CIT(A) has relied upon in the order. There is no distinguishing facts pointed out by the Ld. DR. Therefore, Ground No. 2 is allowed. Disallowance of interest u/s 40(b) paid to partner of the firm - HELD THAT:- We are restoring the issue to the file of the Assessing Officer to calculate the interest payable to partner as per provisions of section 40(b)(iv) of the Income Tax Act. Needless to say the assessee be given opportunity of hearing by following principles of natural justice. Thus, Ground No. 3 is partly allowed for statistical purpose.

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• 2021 (9) TMI 807
  TDS u/s 195 - Remittaces for supply of software which is his income as per both Section 9(1)(VI) and as per Article 12(3) of India with U.S.A DTAA - HELD THAT:- It is pertinent to note in case of Engineering Analysis [ 2021 (3) TMI 138 - SUPREME COURT] has categorically given the findings thereby observing that the computer software cannot be held as royalty as set out in Paragraph 169 of the said decision - DR s contention that the factual matrix is different is not sustainable as the ratio related to royalty is very much dealt by the Apex Court thereby observing that the same is applicable to computer software cases in different types of series which has been already defined. Hon ble Supreme Court clearly held that there is no element of royalty in these type of transactions. Thus, the appeal of the assessee is allowed.

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• 2021 (9) TMI 806
  Deduction u/s 80P - Deduction in respect of income of Co-operative Societies - whether a souharda registered under the Karnataka SouhardaSahakari Act, 1997 can be regarded as co-operative society entitled to benefit of deduction u/s.80P(2)(a)(i)? - HELD THAT:- As relying on Swabhimani Souharda Credit Co-operative Ltd. [ 2020 (1) TMI 831 - KARNATAKA HIGH COURT ] we are of the view that the assessee should be allowed deduction under section 80P(2)(a)(i) of the Act and the CIT(A) was justified in doing so. Except the ground that the Assessee was not a co-operative society entitled to deduction u/s.80P(2)(a)(i) of the Act, no other reasons were given for denying the benefit of the said deduction to the Assessee. Hence, the order of CIT(A) is upheld. - Decided against revenue.

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• 2021 (9) TMI 805
  Rectification of mistake u/s 154 - Wrong computation of interest u/s 234D - assessee contended that there could not have been any levy of interest u/s 234D when refund was never granted to the assessee - HELD THAT:- As it could be seen that order giving effect to ITSC order has been passed by Ld. AO on 31/12/2013 and a demand to Rs. 102.21 Lacs has been raised against the assessee - the order was rectified u/s 154, at assessee s instance, on 11/06/2014 and fresh computations have been made reducing the demand to Rs. 38.06 Lacs. The demand has been reduced due to reworking of interest u/s 244A and 234D without disturbing the assessed income. The assessee has paid this demand on 04/07/2014. Another rectification has been made in this order on 05/06/2018 raising fresh demand of Rs. 3.50 Lacs against the assessee. This rectification is at the instance of Ld. AO since excess interest was allowed u/s 244A and interest u/s 234D was wrongly charged. In this order also, the assessed income has not been disturbed. Therefore, in our opinion, what this order has rectified is the order passed u/s 154 on 11/06/2014 and not the assessment order framed pursuant to the directions of Hon ble ITSC on 31/12/2013. Therefore, as counted from 11/06/2014, the rectification order passed u/s 154 on 05/06/2018 is well within the limitation period of four years (from the end of financial year in which order sought to be rectified has been passed) and the same could not be held to be bad in law. AO was obligated by law to provide opportunity of hearing to the assessee before raising fresh demand. We find that Ld. CIT(A) has directed Ld. AO to compute correct interest u/s 234D as well as grant correct interest u/s 244A after due verification of facts and in accordance with law. Therefore, with these directions, the grievance of the assessee has been taken care of and Ld. AO has been directed to charge / grant interest as per law.

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• 2021 (9) TMI 804
  Deemed dividend u/s.2(22)(e) - immovable property was purchased in the joint name of assessee and Mr. Pijush Kanti Pal - As per AO legal title of the land in question for taking the view that the payment for purchase of land by M/s. SDCPL, in which the assessee is a director, was indirect way of paying the consideration on behalf of its director - HELD THAT:- Payment of purchase of property was made by the said company through banking channel. The assessee has not shown his share of property in his individual balance sheet, Land Building(KCT) Ledger Account in the books of M/s. SDCPL showing all the details of payments made to acquire the said property. The company, M/s. SDCPL has duly disclosed the land in question in its audited balance sheet appearing in the fixed asset chart at Schedule 10, forming part of the total asset valued at Rs. 316,424,615/-. We find that the land in question has been duly disclosed in the subsequent balance sheets for the F.Ys 2014-15 to 2018-19. There is no iota of evidence that company, M/s.SDCPL has given loan/advance to the assessee and the transaction of purchase of property is purely for the benefit of the company s business and is for commercial expediency. Since there is no loan/advance given to the assessee from the said company and the alleged transaction is for company s own business and commercial expediency, there was no reason to invoke the provisions of section 2(22)( e). In the instant case since no land/advance was given to the assessee from the said company, in which the assessee is a director and, therefore, the ld.AO erred in invoking the provisions of section 2(22)(e) - Decided in favour of assessee.

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• 2021 (9) TMI 803
  Deduction claimed u/s 80IA(4) - Scheme of amalgamation - right of amalgamating company to claim deduction - AO did not accept contentions of the assessee in the absence of complete details with regard to amalgamating company s entitlement to the claim of deductions under section 80IA qua the specific plant machinery - plant set up by the assessee was not new power plant, but it was set up by transfer of old and previously used machinery, value of which was more than 90% of the total value of plant, claim of the assessee under section 80IA was not allowable - HELD THAT:- We find ITAT has arrived at a conclusion that when any undertaking of an Indian Company which is entitled to deduction under this section is transferred before expiry of the period specified in this section to another Indian Company, then as per clause (b) the provision of this sections shall apply to the amalgamated company, as they would have applied to the amalgamating company - provision makes it clear that ambit of this section is extended to the cases where eligible enterprise is transferred, then the transferee company i.e. amalgamated company will become entitled to deduction. CIT(A) appreciated the facts both on facts and in law as well as weighed earlier decisions of his predecessor and allowed the claim of deduction under section 80IA. Therefore, basing decisions of the Tribunal on identical issue on the assessee s own case cited [ 2018 (12) TMI 1679 - ITAT AHMEDABAD] we uphold order of the ld.CIT(A) and dismiss the ground of appeal of the Revenue.

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• 2021 (9) TMI 802
  Reopening of assessment u/s 147 - eligibility of reasons to believe - clandestine clearance/ suppressed sale - independent application of mind v/s borrowed satisfaction - HELD THAT:- A.O. in the present case has not formed his own belief but has rather acted upon borrowed satisfaction. Information relied upon being the SCN is based on a search conducted by the Central Excise Authorities and not by the Income Tax Department and that too at the premises of the Transporters and/or Dealers but not at the place of the assessee. Thus, the impugned reasons are clearly based upon wrong facts and are on the basis of third-party information which is unreliable. Apart from this, no material was found showing that the assessee was indulged in a clandestine clearance/ suppressed sale from its factory without paying excise duty and notices issued by the Excise Department is only on the basis of statement of third party or some information gathered from third party because no direct material or evidence was found or seized from the premises of the assessee. Neither any stock was seized nor was it found that it was the case of lesser stock or excess stock of finished goods or of raw materials found. Absolutely, no evidence was recovered nor has been placed on record to prove illicit transaction of money involved in the alleged transactions. Excise Department though alleged huge clandestine clearance of goods yet not an iota of evidence to prove procurement of huge quantities of raw materials has been placed on record, though the list of raw material suppliers was with the investigation. Without showing receipt of the raw material clandestinely, manufacture of such huge quantities of excisable goods and clandestine clearance thereof is impossible. Therefore, consequent suppressed sale and again undeclared income there from, is too remote even to be suspected. Although the A.O. categorically admitted that the assessee had filed a detailed reply on dated 18.03.2016, however, further held that such factual explanation dealing with each and every case was not relevant inasmuch as the CCE has already examined the issue and recorded his findings. This fact clearly shows that the AO has summarily rejected the contention of the assessee without examining the issue in hand, huge additions were made. Merely relied upon the findings of the CCE, however, it is important to mention that the CCE had passed the order under the provision of Central Excise Act, 1944 in that peculiar context of the case. However, such findings cannot be lifted and relied upon by the A.O. in a different factual context of Income Tax Laws. AO had merely borrowed satisfaction in respect of escapement from someone else, which is not sufficient to confer valid jurisdiction or power upon the AO to initiate reassessment proceedings. See SFIL STOCK BROKING LTD [ 2010 (4) TMI 102 - DELHI HIGH COURT] - Decided in favour of assessee.

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• 2021 (9) TMI 801
  Reopening of assessment u/s 147 - Assessee challenging notice for want of jurisdiction, without proper approval and satisfaction of higher authorities u/s 151 of the Act and also barred by limitation - A.Ys. 2008-09 - HELD THAT:- It was categorically admitted in its report that notice U/s 148 of the Act for the year under consideration i.e. A.Y. 2008-09 was issued after lapse of four years from the relevant assessment years and the approval for the year under consideration was accorded by the Addl.CIT, Range-2, Jaipur and not from the Pr.CIT/CIT. Admittedly, the competent authorities to accord the approval as per Section 151 of the Act was Pr.CIT/CIT and not the Addl.CIT, therefore, issuance of notice U/s 148 and consequent assessment order passed are invalid, illegal and are liable to be quashed on the ground that same were not issued by the competent authority and thus stands quashed. See M/S N.C. CABLES LTD. [ 2017 (1) TMI 1036 - DELHI HIGH COURT] - Thus we quash the proceeding U/s 147. Reopening of assessment on account of cash deposit in his bank account - A.Y. 2009-10 - assessee has not filed his return of income and issued notice u/s. 148 and after recording reasons that income of assessee had escaped assessment in the meaning u/s 147 of the Act - HELD THAT:- Approval u/s 151 cannot be given of all the 56 assessee s in a single documents, as all assessee s are the independent and separate also the reason recorded are different in each case and it is not possible that there shall be same reasons. Looking to these facts and record it is also held that the procedures and way of approval and satisfaction is not proper. Here AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished and CIT gave approval without applying his mind in slipshod manner. As approval/sanction given by CIT was without recording his own independent satisfaction as noted above, therefore the reopening was not sustainable as per above judicial pronouncements and irregularities noted. There were clear irregularities and violation of the provision of Sec. 151 of the Act and very foundation of the issuance of the notice u/s 148 was not as per law. Then in that eventuality, we are of the view that the issuance notice 148 of the Act and all the consequent proceedings and assessment order passed was not in accordance with law - Decided in favour of assessee.

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• 2021 (9) TMI 800
  Revision u/s 263 by CIT - case of the assessee was selected for limited scrutiny through CASS - Characterization of assessee income - capital receipt OR Business income - activity of purchasing land by the assessee and then converting it into flats and selling after construction to other co-owners - HELD THAT:- PCIT while deciding this issue has completely ignored and overlooked the specific assertions made by the assessee by filing its written submissions dated 11/02/2021 wherein it was specifically pleaded as to why the ld. PCIT has misconstrued the facts of the present case. Apart from this, the ld. PCIT has ignored the very important fact that the same activity on the same land was carried out by the assesse in the previous year i.e. A.Y. 2015-16 as well wherein also the then A.O. had treated the activity of the assessee as business activity and the income of the assesse was considered as business income instead of capital gains. The said order passed by the A.O. was challenged before the ld. CIT(A) and thereafter before the ITAT. The Coordinate Bench of the ITAT after considering the entire facts and circumstances of the case of the assessee had finally decided and concluded that the activities of the assessee is to be taxed under the head capital gains by treating the assets/income as capital asset/income instead of business asset/income and all the expenses borne by the assessee were also construed as part of cost of improvement. Thus the order of the A.O. for the year under consideration treating the asset as capital asset and allowing the claim of exemption U/s 54F of the Act etc. cannot be termed as improper or made without verification or prejudicial to the interest of Revenue. Moreover, after perusal of the record, we found that the A.O. had carried out all the required verifications and had taken the same view as has been taken by the Coordinate bench of the ITAT in assessee s own case[ 2020 (5) TMI 236 - ITAT JODHPUR] . We draw strength from the decision of Union of India Vs Kamalakshmi Finance Corpn. Ltd[ 1991 (9) TMI 72 - SUPREME COURT] wherein it was held that the order passed by the Income Tax Appellate Tribunal are having binding effect upon all the subordinate authorities under the jurisdiction of the said Tribunal, therefore, in order to judicial discipline, the ld. PCIT was not empowered to invoke the provisions of Section 263 of the Act more particularly when he was made aware of the fact that identical issue had already been decided and attained finality by the decision of the Coordinate Bench of the ITAT in assessee s own case for the A.Y. 2015-16 under the identical facts and circumstances. Therefore, order passed by the A.O. cannot be termed as erroneous and prejudicial to the interest of the Revenue, hence, we quash the order passed U/s 263 of the Act. - Decided against revenue.

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• 2021 (9) TMI 799
  Computation of set off of MAT credit u/s.115JAA - whether it should be excluding surcharge and cess or including surcharge and cess - HELD THAT:- This issue is no longer res-integra in view of the decision in assessee s own case by this Tribunal [ 2021 (7) TMI 207 - ITAT MUMBAI] held that while computing MAT credit u/s.115JAA of the Act, the tax should be inclusive of surcharge and cess. Similar views were taken by the Hon ble Calcutta High Court in the case of SREI Infrastructure Finance Ltd.[ 2016 (8) TMI 967 - CALCUTTA HIGH COURT] and in the case of DCIT vs. Scope International[ 2019 (8) TMI 1761 - MADRAS HIGH COURT] .- Decided in favour of assessee.

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• 2021 (9) TMI 798
  Disallowance of the deduction u/s 80IA - assessee was awarded a project by CIDCO to construct a parking lot called truck terminal having facilities on BOT basis - HELD THAT:- As decided in M/S. THAKUR INFRAPROJECTS PVT. LTD. VERSUS DCIT-PANVEL CIRCLE, RAIGAD [ 2021 (1) TMI 1154 - ITAT MUMBAI] disallowance of claim of deduction u/s 80IA in respect of parking slot which was constructed under agreement with CIDCO. Accordingly, we are inclined to set aside the order of Ld. CIT(A) and direct the AO to allow the deduction under section 80IA in respect of the parking facility. Appeal of the assessee is allowed.

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• 2021 (9) TMI 797
  Addition u/s 68 - Unexplained Bank credits, unexplained share application money, unexplained share premium and unexplained share capital - assessee has failed to discharge the initial onus cast on it by proving the various transactions appearing in the bank account - submission that additions on account of Bank interest, dividend income and share application money received through Banking channels have been made, which were already taxed and therefore the same amounts to double addition - HELD THAT:- We deem it proper to restore the issue to the file of A.O. with a direction to grant one more opportunity to the assessee to substantiate its case by filing the requisite details and explaining each and every transaction including the credits in the Bank Account from Auto Sweep Account. Wherever double addition has been made on account of Bank interest, dividend income and share application money etc., the A.O. shall, upon satisfaction, delete the same. The A.O. shall also consider the application of proviso to section 68 of the I.T. Act w.e.f. 01.04.2013 in respect of share application money received from family members relatives of directors. A.O. shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to appear before the A.O. and substantiate its case by producing the requisite details without seeking any adjournment under any pretext, failing which, the A.O. is at liberty to pass appropriate Order as per Law

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• 2021 (9) TMI 796
  TDS u/s 194IA - payment for land advance - non-deduction of TDS in violation of Section 40(a)(ia) - AO disallowed as advance for purchase of property by the assessee for not deducting TDS u/s 194IA and added this amount to the income of the assessee u/s 56(2)(viib) while at the same time referring to the provisions of Section 40(a)(ia) - HELD THAT:- Such action of the AO cannot be upheld as the provisions of Section 40(a)(ia) are applicable only to the expenditure claimed while computing income under the head profit and gains of business or profession of the Income Tax Act, 1961. In this case, this amount has not been claimed as expenditure being the amount paid as advance for acquisition of a capital asset. Further, we also find that the provision of Section 56(2)(viib) would not be attracted even remotely in this case. The order of the ld. CIT (A) is affirmed. Appeal of the revenue is dismissed.

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• Customs

• 2021 (9) TMI 824
  Principles of natural justice - seeking to grant personal hearing to the petitioner in pre- show cause consultation - seeking restraint on respondent from proceeding with the impugned SCN, during the pendency of the present writ petition - HELD THAT:- A perusal of the Pre-Notice Consultation letter dated 01.06.2021 reveals that vide the said notice, Respondent had called upon the Petitioner to appear before the concerned authority on 02.06.2021 at 15:00 hours for a personal hearing. Petitioner has made a categorical averment in the writ petition that the notice was served on him through a registered post on 10.06.2021. It is understandable that if the notice was served on the Petitioner on 10.06.2021, there could be no representation on behalf of the Petitioner on 02.06.2021. In fact, the action of the Respondent in issuing a notice on 01.06.2021 for a hearing on 02.06.2021 is completely arbitrary as it would have been well-known to anyone with a prudent mind that a notice sent by registered post on 01.06.2021 may not reach the addressee for appearance on 02.06.2021 at 15:00 hours. Principles of natural justice require and mandate that reasonable and sufficient opportunity of being heard ought to have been given by the Respondent to the Petitioner and, therefore, while issuing notice, it ought to have been kept in mind that sufficient time was given before fixing the personal hearing so that the notice could be served on the Petitioner for appearance of its representative for personal hearing to put-forth the case on behalf of the Petitioner. One wonders if a similar treatment were being meted out to the Respondent, i.e. notice is issued by the Court returnable on the next day, whether the officials of Department would be in a position to appear and defend the case, assuming that the notice is served. On the last date of hearing, learned Additional Solicitor General had sought time to take instructions in the matter considering the above facts. Mr. Chetan Sharma, learned Additional Solicitor General, on instructions, submits that the Respondent shall grant personal hearing to the Petitioner pursuant to the pre-notice consultation letter dated 01.06.2021, to enable the Petitioner to defend the allegations levelled against him - It is directed that the Petitioner shall appear before the Respondent for a Pre-Notice Consultation personal hearing on 16.09.2021 at 11 a.m.. Petition allowed.

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• 2021 (9) TMI 815
  Levy of penalty - Section 114 of the Customs Act, 1962 - mismatch as regards the consignment in the shipping bill - HELD THAT:- The Show Cause Notice contains the modus operandi as to how the appellants were involved and nowhere is it seen that the appellants have offered any rebuttal nor have they negatived such allegations. Further, it is well known that it is the CHA or its staff, who alone can enter into the examination area, where the alleged overwriting on the packages had occurred, which also has not been rebutted by the CHA. The Show Cause Notice also contains that the ultimate beneficiary would be the exporter and the correction/overwriting of bundle numbers could not have been done by the CHA staff without any benefit/instruction, which throws sufficient suspicion as to the collusion of the CHA with the exporter. Penalty under Section 114 of the Customs Act is levied for attempt to export goods improperly, etc., by any person who, in relation to any goods, does or omits to do any act or abets the doing or omission of such an act - the facts and follow-up investigation has clearly revealed that the appellants being CHA, had involved itself in trying to abet improper exportation of 26 bundles of semi-finished leather, with misleading declaration, which would have caused huge Revenue loss, which had rendered itself for confiscation. Hence, it is a case where the provision of Section 114(ii) ibid. is clearly attracted. The penalty has rightly been levied. Appeal dismissed.

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• 2021 (9) TMI 814
  Levy of penalty u/s 114AA of Customs Act - illegal export of red sanders out of India - misuse of Import Export Code (IEC) - tampering with the evidences or not - reasonable suspicion as to the bona fides of the appellant or not - HELD THAT:- As per Section 114AA of Customs Act, the confiscation of goods is not necessary, but the only requirement is the knowledge of the person. That means, the appellant in the case on hand against whom the liability is fastened must be aware as to what is happening right from the beginning. The Surveyor, who is not an interested party, has categorically opined that the container was in fact tampered with and surprisingly, it is not the case of the Revenue that it was the appellant who was responsible for the tampering with, as indicated by Shri M. Annamalai. It is not even the case of the Revenue that the appellant had acquaintance with the so-called mastermind i.e., Shri Ramesh which prompted the appellant to act in a reckless manner. Nor is it the case of the Revenue that the appellant had knowingly or intentionally signed any statement or document which was false. So also, the Revenue has failed to establish the mala fides of the appellant since nowhere has the Revenue alleged that the appellant was aware or had acted deliberately. The observation by a neutral party throws reasonable suspicion as to the bona fides of the appellant which alone is sufficient to doubt the knowledge or intention of the appellant, in order to attract the mischief under Section 114AA ibid. Appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2021 (9) TMI 817
  Prosecution proceedings - NBFC or not - Inadvertent/typographical error in recording of minutes - it was erroneously recorded in item no. 12 of the minutes that the company submitted application with the Reserve Bank of India for its deregistration as NBFC and registration as a CIC - however, the company was not a registered Non Banking Financial Company (NBFC) at the relevant time - sections 118(2) and (7) read with sections 447/448 of Companies Act - HELD THAT:- The key ingredient of the offence is the intent to deceive, gain undue advantage or injure the interest of the company or any person connected thereto. In the case in hand, the complaint lodged by the opposite party does not prima facie reflect such intent on the part of the petitioners. Per contra, though the opposite party has referred to the notice of show cause in the complaint, the reply to the said notice given by the petitioners is conspicuously absent therein. It is also inconceivable that the inspection was held sometime in 2018 and the notice to show cause signed on 24th August, 2018 whereas the instruction of the Ministry to launch prosecution for such violation was issued on 7th December, 2017, i.e., preceding the inspection. The complaint does not prima facie make out an offence under sections 118(2) and (7) read with sections 447/448 Act of 2013. Typographical/inadvertent error in recording of minutes rectified subsequently can under no stretch of imagination be termed as an offence, far less an offence under the provisions of the Act of 2013 as alleged. That the petitioners acted with a malafide intention to deceive, gain undue advantage or injure the interest of the company or any person connected thereto is not reflected in the four corners of the complaint. Allowing the proceeding to continue shall be a futile exercise and abuse of the process of law in view of the fact that the inadvertent error has been sufficiently and adequately explained and does not call for any prosecution. The proceeding in respect of complaint case no. 15 of 2018 is liable to be quashed - Application allowed.

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• 2021 (9) TMI 812
  Seeking direction to the respondents to hold/convene the annual general meeting of the company for the financial year 2018-2019 - appointment / nomination of an observer for the annual general meeting of the company to be held for the financial year 2018-2019 - HELD THAT:- The objective of Section 97 of the Companies Act, 2013 is to facilitate an Annual General Meeting of the shareholders through the intervention of the court in case the directors fail to hold the AGM in accordance with the provisions of Section 96. Since the provision starts with the words, If any default is made in holding the Annual General Meeting of a company under Section 96.. , it is clear that the existence of a default is a condition prior to invoking the jurisdiction of this Tribunal under Section 97 of the Companies Act, 2013. The admitted position is that there is a default on the part of the respondents in conducting the AGM of the company, albeit both sides blaming each other for the default. Here, since the 2nd Respondent in his reply affidavit has agreed to conduct the AGM as per the provisions of Section 97 of the Companies Act, this Tribunal directs the respondents to conduct the AGM for the Financial Year 2018-2019 as prescribed under the Companies Act,2013, on 30th October 2021. Petition disposed off.

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• 2021 (9) TMI 792
  Sanction of scheme of amalgamation - Section 230-232 of Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed.

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• 2021 (9) TMI 791
  Seeking restoration of name of company in the Register of Members - non-filing of statutory returns since the Financial Year ended on 2014 onwards - Section 252(3) of the Companies Act, 2013 - HELD THAT:- Section 252(3) of the Companies Act, 2013 confers on this Tribunal powers to order to restore the name of the Company in the Register maintained, provided such application is filed by (i) the Company or (ii) by any Member or (iii) any creditor or (iv) any workmen of the Company within 20 years from the date of publication of the notices under Section 248(5) in Official Gazette about striking off of the name of such Company provided further that it is seen from the material on record that at the time of its name being struck off, the Company was doing its business or carrying its operation. In this case, the applicant produced on record the copy of Audited Annual Accounts of the Company for the period from 31.03.2014 up to 31.03.2020. As per the reports of the Profit and Loss accounts of the Company, it is evident that during the defaulting years the Company has not generated any revenue from its operations or from the business activities for which it was incorporated - It is seen from the available records that the Company is maintaining bank account with State Bank of India with Account No. 31938038734. On perusal of the application, and after hearing to the Ld. Authorised representative, we are of the view that this petition deserves sympathetic consideration, since the company has valuable land. In the facts and circumstances of the case we are satisfied that the name of the company should be restored to the register. The name of company is restored - application allowed.

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• 2021 (9) TMI 789
  Restoration of name of the company in the register of companies - revocation of notification dated June 21, 2017 issued by them under section 248(5) of the Companies Act, 2013 - default in filing its statutory returns, i. e., balance-sheets and annual returns since the financial year ended March 31, 2010 onwards - HELD THAT:- Apart from generating revenues, the company has recorded profits in all the defaulting years. It is also evident from the financial statements that the struck off company has fixed assets and substantial long-term loans and advances. It has also some finance costs during the period under default. Further, the company had spent certain amounts on employee benefits. This prima facie suggests that during the relevant time the company had people in its employment and was carrying its business activities - the details prima facie suggest that the company has carrying on its business activities and is a going concern. The appellant submitted that the company will comply with all the statutory obligations. And prayed that the Registrar of Companies, Odisha may be directed to restore the company s name in the register. The contention of the appellant is accepted that the company was a going concern when its name was struck off. Therefore, in the facts and circumstances of the case and the documents/details on record, we accept the request of the appellant and direct the Registrar of Companies, Odisha to restore name of the company. The Registrar of Companies, the respondent herein, is ordered to restore the original status of the appellant-company - application allowed.

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• Insolvency & Bankruptcy

• 2021 (9) TMI 831
  Maintainability of application - initiation of CIRP - Financial Creditors or home buyers - possession of flats were offered by the Corporate Debtor - NCLT rejected the application - existence of debt and default or not - HELD THAT:- The NCLT found that on 1st October 2016 the Financial Creditor had entered into an agreement with the Corporate Debtor, for purchase of a flat in a complex which the Corporate Debtor was developing. In terms of the said agreement the outstanding dues of the Corporate Debtor were to be appropriated towards consideration for the flat - The NCLT held that the Financial Creditor had chosen to enter into an Agreement with the Corporate Debtor for purchase of a flat in the Kumar Golf Vista . The Financial Creditor could, in case of default on the part of the Corporate Debtor, to maintain a petition as home buyer. The NCLAT found that the admitted document executed between the parties which was the latest in point of time, was the agreement dated 1st October 2016. Considering the contents of the said agreement, the NCLAT found no reason to disagree with the adjudicating authority - The records showed that the Corporate Debtor had in terms of the said agreement dated 1st October 2016, which was the latest arrangement between the parties, offered possession of the flat to the Financial Creditor on 7th March, 2018. As such, there was no default in compliance of the terms and conditions of the said agreement. Appeal dismissed.

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• 2021 (9) TMI 795
  Remission of share of the CIRP costs and expenditure in proportion to their voting rights - whether the first respondent is required to pay the CIRP in relation to the corporate debtor and if not so, what will be consequences? - HELD THAT:- In the claim form filed by the first respondent along with DBS Bank Ltd., Singapore, the proceeds of the amount pursuant to the resolution plan, if any, approved by this Tribunal would go into the account of the DBS Bank India Ltd. - As per regulations 33 and 34 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 it is the duty of the members of the committee of creditors to pay the fees and the cost incurred by the resolution professional, once the same has been ratified by the CoC by passing a resolution to that effect. The first respondent in the present case is not willing to pay the CIRP costs citing the reason that they have to get approval of the RBI in order to the pay the CIRP costs in relation to the corporate debtor, which reason we find it quite bizarre and we are unable to comprehend. The first respondent is ready to receive the proceeds of the resolution plan, into its bank account, however for the purpose of the paying the CIRP costs they are raising a feeble defence that they have to get the approval of the RBI - The Regulations framed by the IBBI and the provisions of IBC, 2016 have no specific provisions in relation to the same. However, it would be a futile exercise, if we direct a member of the CoC who has already expressed its inability to make the payment towards the CIRP costs. The IBC, 2016 being a time bound process ; the RP cannot run from pillar to post to collect the CIRP cost. Hence, on equity, since the first respondent cannot contribute towards the CIRP costs, the first respondent is debarred from participating in the meetings of the CoC. Also, the first respondent has categorically stated in the counter that they are not the financial creditor in respect of the corporate debtor and they are acting only as an arranger for DBS Bank Ltd., Singapore. Since both of them are not ready to bear the CIRP costs, both the first respondent as well as DBS Bank Ltd., Singapore cannot participate in the meetings of the CoC. The first respondent has expressed its inability to pay the CIRP costs, the applicant is directed to remove the first respondent from the member of committee of creditors and to reconstitute the CoC afresh, without the first respondent - application disposed off.

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• 2021 (9) TMI 794
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of financial debt in terms of Debenture Trust Deed (DTD) and default committed by the Corporate Debtor as envisaged in the events of default - HELD THAT:- The execution of DTD dated 08.03.2019 and Supplementary Trust Deed dated 22.03.2019 demonstrate existence of Financial Debt in pursuance of Section 5(c) of the Code and the essential ingredients of debt which is disbursed against consideration of time value and money is thus satisfied. It is undisputed fact that an amount of Rs. 72 crores was disbursed by the Petitioner No. 3 to the Corporate Debtor as on 11.03.2019. The Petitioner No. 3 further was not able to disburse the second tranche and sought amendment of the DTD vide email dated 26.07.2019. The first coupon was payable by the Corporate Debtor as on 11.09.2019, however, despite extension of grace period till 15.10.2019, the Corporate Debtor failed to make the payment of Rs. 2,18,95,890.41/- as on 15.10.2019 - The events of default as contemplated under the DTD stipulate that on occurrence of default and nonpayment of coupon, the entire amount of outstanding loan became due and payable. Thus, the rights of the Debenture Holder/Debenture Trustee crystallized immediately upon default and the rights of the Petitioners are well defined under the DTD. The essential ingredients of Section 7 Application, i.e., financial debt under Section 5(8) of the Code and the default under Section 3(2) of the Code are met. The Petition was filed on 28.11.2019. Thereafter, the Corporate Debtor has invoked the Arbitration Clause under Section 9 of the Code and the Arbitrator was appointed by the Bombay High Court. The Interim Award was passed by the Arbitrator wherein he has directed the Corporate Debtor to pay an amount of Rs. 72,06,99,224/- with further interest - this petition is not maintainable under section 7 and has to be treated as an application of section 9 of the code, the petition was filed prior in time before the commencement of arbitration proceedings and the Petitioners have exercised their rights of initiation of CIRP against the Corporate Debtor under the Code. There has been a debt and non-payment of coupon interest as on 15.10.2019 which triggered the event of default and the rights of claiming redemption of entire amount is guaranteed under DTD. Therefore, this Bench notes that the passing of Interim Award only confirms the debt by the Arbitrator and thus, all the allegations regarding wrong invocation of pledge etc. are misconceived and the Petitioners has the right to affect the sale of pledge share in any manner it deems fit. This Bench is of the opinion that there is a clear debt and default on the part of the Corporate Debtor and the Petition deserves admission - Petition admitted - moratorium declared.

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• 2021 (9) TMI 793
  Seeking approval of the period of exclusion - Section 47A of the Insolvency and Bankruptcy Code, 2016 - period between 23rd March 2020 and 31st August 2020 and 10.05.2021 to 21.06.2021 - seeking to Approve an extension of 1 Year from 23rd November 2021 to continue the liquidation period - Regulations 44(2) of the Insolvency and bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT:- It is seen that the Liquidator is yet to complete the Liquidation process in relation to the Corporate Debtor and all the e-auctions conducted by the Liquidator have failed. Further, due to the prevailing Covid - 19 pandemic and subsequent lock-down imposed by the Government of India and the State Governments, the Liquidator was unable to complete the Liquidation process of the Corporate Debtor within the time limit prescribed under the Code and in terms of Regulation 44 of the IBBI (Liquidation Process) Regulations, 2016. Regulation 44(2) of IBBI (Liquidation Process) Regulations, 2016, which was amended upto 15.12.2016, is taken into consideration for the facts of the present case and it contemplates that if the liquidator has failed to liquidate the Corporate Debtor within two years then he has to make an application to the Adjudicating Authority to continue such liquidation, along with a report explaining why the liquidation has not been completed specifying the additional time that shall be required for completion of the liquidation. This Authority feels that it is just and proper to extend the Liquidation period for a further period of one year and as such the Liquidation period of the Corporate Debtor is extended for a period of one year from the date of this Order and the Liquidation process in relation to the Corporate Debtor is required to be completed on or before 02.08.2022 - Application allowed.

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• 2021 (9) TMI 790
  Jurisdiction - Power of Tribunal to order registration of transfer of shares held by Corporate Debtor - e-auction - HELD THAT:- It is trite law, that the claims/dues of R1 society pertaining to the preadmission of CIRP, had to be filed before the Applicant and if these claims were not filed with the Applicant and these are not realizable unless the claims are filed with the Applicant. Be that as it may, the R1 society cannot exercise any lien/create encumbrance on the said property as the said property has been sold by way of e-auction and the rights of title/ownership/possession has been passed on to the R3 vide a Registered Sale Deed executed on 10.03.2021. This Bench is of the considered opinion that the property has been validly transferred to the R3 vide Registered Sale Deed dated 10.03.2021 and that the R1 cannot link granting of NOC to its past dues. The transfer of property act contemplates transfer of title/ownership/possession, there can be no fetters attached to such transfers which have been conducted by a process of e-auction and it is held in catena of judgments that the claim of dues of the society amounts to be an Operational Debt and cannot be linked or claimed from the third party bonafide purchaser. Respondent No. 1 is directed to transfer shares of Corporate Debtor in favour of Respondent No. 3 and grant NOC in favour of Respondent No. 3 - Respondent No. 1 is directed to file its claims/dues of Respondent No. 1 society to the Applicant forthwith - application allowed.

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• 2021 (9) TMI 788
  Seeking approval of the resolution plan - section 30(6) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In view of the ruling of the apex court in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS [ 2019 (11) TMI 731 - SUPREME COURT ], the resolution applicant takes over the corporate debtor with all its assets and liabilities as specified in the resolution plan subject to orders passed herein. As already indicated the resolution plan has been approved by the CoC with 67.01 per cent. votes in its meeting held on December 31, 2020 - In the said case, the hon ble apex court clearly laid down that the Adjudicating Authority would not have power to modify the resolution plan which the CoC in their commercial wisdom have approved. The instant resolution plan meets the requirements of section 30(2) of the Code and regulations 37, 38, 38(1A) and 39(4) of the Regulations. The resolution plan is not in contravention of any of the provisions of section 29A of the Code and is in accordance with law - Application allowed.

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• 2021 (9) TMI 787
  Direction to respondents to make contributions to the assets of the Corporate Debtor - ex-management of the Corporate Debtor and related parties carried on the affairs of the Corporate Debtor in a fraudulent manner with intent to defraud its creditors - related parties are the beneficiaries of such fraudulent transactions or not - section 66 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- After rejection of the Resolution Professional s first application under section 66 of the Code, the Resolution Professional collected and produced on record some additional evidence in the form of Forensic Audit Report dated 24.12.2018 prepared by M/s. Haribhakti Co. It was found from the loan amount, the Corporate Debtor had created Fixed Deposits and sought loan to its subsidiary companies pledging those Fixed Deposits. It was done in the year 2016, viz. almost five years after the Consortium of Lenders granted and disbursed the Corporate Debtor some amounts of loan. The Resolution Professional has averred that under section 25(1) of the I B Code the Corporate Debtor has issued notice dated 19.02.2014 for withdrawal of an amount of Rs. 1452 crores in order to invest the said amount in plant and machinery, for carrying some civil work, to invest some amount in fixed assets for laying transmission lines, etc. In view of this it was for the Resolution Professional to put on record the material indicating that though the Corporate Debtor has shown the above expenses, in fact, those amounts were not spent at all for the purpose for which it is shown to have been spent - It is not in dispute that the Liquidator (then Resolution Professional) has sold the Corporate Debtor as a going concern. It means that the Corporate Debtor was a going concern throughout the CIRP period and hence it has to be held that the entire loan amount has not been misused as alleged by the RP. Second transaction called in question by the Resolution Professional is that the Corporate Debtor gave advance to M/s. Sokeo Power Pvt. Ltd. in 2014. It was independent transaction carried out by the Corporate Debtor and the creditors having no relations thereto except the allegation that the Corporate Debtor ought not to have advanced such amount and the amount was given in advance to defraud them - there are no reason to record any finding other than the finding of fact recorded by this Adjudicating Authority while rejecting the earlier application filed by the RP. There is one more aspect which needs our serious consideration. It is not in dispute that now some members of the Consortium of Lenders have filed an F.I.R. against the respondents and officers of the Axis Bank alleging that the disputed transactions are fraudulent in nature. Central Bureau of Investigation (CBI) has registered a crime and has started investigation into the matter. Now at this stage, can this Adjudicating Authority, in its limited jurisdiction, record finding that the transaction in dispute is per se fraudulent in nature. In our considered opinion it would be against the cannons of justice. Let the prime investigating agency investigate into the allegations. Let the competent court, during the trial, record findings of fact. The RP/Liquidator could not establish that the transactions in dispute are fraudulent in nature. This finding is recorded for want of sufficient material before us and hence the respondents cannot be called upon to contribute to the assets of the Corporate Debtor as per section 66 of the I B Code, 2016 - Application dismissed.

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• Service Tax

• 2021 (9) TMI 828
  Denial of benefit of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - denial on the ground that condition contained in section 125(1)(e) of the Finance Act, 2019 is not satisfied because there has been no quantification arrived at by Anti Evasion, CGST, Mumbai Central - violation of principles of natural justice - HELD THAT:- The respondents do not dispute that no opportunity of hearing was extended to the petitioner. He has fairly conceded to the suggestion of the Court that the eligibility of the petitioner to avail the benefits of the scheme may be directed to be considered afresh, keeping open all points for determination by the appropriate authority. The impugned order stands set aside. The appropriate authority shall proceed to consider the issue of eligibility of the petitioner to avail the benefits of the scheme by extending to it an opportunity of personal hearing as early as possible, but not later than a fortnight of receipt of a copy of this order. After hearing the petitioner, a fresh order shall be passed in accordance with law and the same shall be communicated to it immediately thereafter. Petition disposed off.

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• 2021 (9) TMI 816
  Cenvat Credit - input services or not - dredging services - nexus with the output services i.e. Port service and Cargo handling services or not - navigation channel for which dredging service was availed is not a private property of EBTL as per the agreement between EBTL, GMB and Essar Steel - whether the appellant operating the port/jetty is entitled for cenvat credit in respect of dredging service against the provision of output service viz. port services and cargo handling services? Whether the dredging services has nexus with the output service namely port service and cargo handling service or not - HELD THAT:- The dredging service availed by the appellant is integral to providing output services for ships to come at the appellant s jetty, without availing the dredging service the appellant could not be able to provide the output service of cargo handling. The dredging service was availed exclusively for the purpose of making channel at port Magdalla which was very shallow and as a consequence of mother vessels which required a higher deep draft could not have reached the said port - there is absolutely no doubt that the dredging of channel was therefore essential for enabling the appellant to provide the port services expected by its customer Essar steel. Therefore, the dredging service has direct nexus with the output services of port services and cargo handling services - the dredging services used for providing the port service/Cargo handling service is admissible as input service. CENVAT Credit - Navigation channel for which dredging was availed - private property or not - HELD THAT:- The sea coast parcel on which construction of the port is allowed is always on lease basis and not on the ownership basis however, the operation of port is carried out by the port operator. It is also undisputed position that the entire port operation on the port including the Port service and cargo handling service are liable to payment of service tax on the said output service. Therefore, any service is availed in relation to the operation of port or construction of port is indeed the input service. Accordingly, the assessee is entitled for cenvat credit in respect of such input service i.e. dredging service used for providing output service i.e. Port Service. It also not disputed that the entire service charges along with service tax there on for dredging of navigation channel was paid by the appellant to the aforesaid contractors who carried out the dredging services. In this undisputed fact the appellant is the service recipient for dredging service which is undisputedly used for providing Port Services and cargo handling services, hence, the appellant is entitled for taking cenvat credit on dredging services. Allegation of the department that the navigation channel is meant for other users - HELD THAT:- The credit is not admissible to the appellant, firstly, the entire contract of dredging of navigation channel is between the service provider i.e. M/s Van Oard Dredging and Marine Contractor and M/s Van Oard India Pvt. Ltd and the appellant. The entire service charge along with service tax was borne by the appellant no other persons are involved in the transaction of said services. Therefore, the appellant only is the sole recipient of the services. Accordingly, the appellant is entitled for the entire cenvat credit - In this position even though there is a condition in the agreement with GMB to allow the navigation channel to others but practically the said channel cannot be used by others. Moreover, the revenue has not adduced a single incident of the said navigation channel being used by any other persons. Therefore, even though the condition for allowing the navigation channel to other as per the agreement but in fact there is no user of said navigation channel except the appellant. Accordingly, the case of the revenue is not sustained on this count also. The very same issue has been considered by this tribunal in the case of SAURASHTRA CEMENT LIMITED VERSUS C.C.E. S.T. - BHAVNAGAR [ 2018 (8) TMI 460 - CESTAT AHMEDABAD] wherein the cenvat credit was allowed even though the private jetty does not belong to the assessee and consequently it was used by other jetty owners also. Extended period of limitation - HELD THAT:- All the information regarding dredging service availed by the appellant, Cenvat credit availed there on etc were in the knowledge of the department therefore there is no suppression of fact or mis declaration with intent to evade duty on the part of the appellant. From the Show cause Notice it was observed that the appellant had availed Cenvat credit on dredging services from 19.04.2010 to 1.12.2012 whereas the Show Cause Notice denying the said Cenvat credit was issued on 13.04.2015. Therefore, the entire demand is under the extended period, hence in view of the above facts the demand is not sustainable on limitation also. The demand of cenvat credit is not sustainable on merit as well as on limitation - Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2021 (9) TMI 825
  Refund of Excise duty in cash - fixing special rate of valued addition in terms of notification dated 14.11.2002 - exemption of goods cleared from units located in specified areas from the duty equivalent to the amounts of duty paid by the manufacturer - HELD THAT:- This petition is disposed off with the direction to the respondent No.3, Assistant Commissioner Central Goods and Services Tax Division, Jammu to consider the applications of the petitioner for fixation of a special rate in terms of the notifications referred in accordance with law most expeditiously without insisting for the time of filing of the applications in the light of the judgment of the Guahati High Court if possible within a period of one month from the date a copy of this order is produced before him. In the meantime, no final order shall be passed in response to the show-cause notices dated 02.05.2013, 01.10.2013, 28.042015, 03.03.2020 and 05.06.2020 for a period of one month or till the aforesaid applications are decided as directed. Petition disposed off.

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• CST, VAT & Sales Tax

• 2021 (9) TMI 827
  Inter state sale or Intra-state sale - elevators are sold to the contractees - petitioner would procure peripheral machinery and use further manpower for installation purpose on which it would pay VAT - AO was of the opinion that even on the cost of elevators the petitioner must pay the local taxes - HELD THAT:- The Assessing Officer and the revisional authority have made a serious error in demanding VAT from the petitioner on sale and supply of the elevators to its contractees. In plain terms, the machinery was supplied separately by way of a sale which was in the nature of an inter-state sale and on which applicable Central Sales Tax was paid. When the petitioner undertook the work of installation of such machinery and commissioning of the project, the petitioner could be charged only on the incremental value where the local sale took place. The sale of elevators cannot be by any standard treated as a local sale. The Assessing Officer devised an artificial means to tax the same under TVAT Act by suggesting that the petitioner had a local registration and in the course of execution of the work of installation and commissioning of elevators, the petitioner could have brought the machinery from outside and implemented the contract. If we understand correctly what the Assessing Officer is trying to convey is that had the petitioner from its branch offices brought the machinery within the State and thereafter transferred the title in the goods into the contractees, the same would have amounted to local sale and, therefore, local VAT would have been applicable. This is not a matter of desire of the Assessing Officer where the sale should take place so that the same would be inter-state sale or intrastate sale - the Assessing Officer by way of artificial means tried to tax the same transaction again as a local sale demanding VAT which was wholly impermissible. Impugned order of assessment is set aside - revision petition allowed.

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