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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter September 21, 2020 Case Laws in this Newsletter: GST Income Tax Benami Property Customs Corporate Laws Insolvency & Bankruptcy FEMA Service Tax Central Excise Indian Laws Articles IGST ON RE-IMPORT OF PRECIOUS & SEMI-PRECIOUS STUDDED GOLD JEWELERY BROUGHT BACK FROM EXHIBITION ABROAD RETURNS TO BE FILED UNDER COMPANIES ACT, 2013 DURING CIRP/LIQUIDATION PROCESS Inadequate regulatory oversight of RBI resulting in banks practising random ways to generate revenue News CCI approves acquisition of sole control over Bombardier Transportation’s by Alstom S.A., AND acquisition of approximately 18% and 3% share capital of Alstom S.A. by Caisse de dépôt et placement du Québec (CDPQ) and Bombardier Inc (Bombardier) respectively CCI approves acquisition of Nutrition & Biosciences, Inc. by International Flavors & Fragrances Inc. THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) BILL, 2020 - AS INTRODUCED IN LOK SABHA Quarterly Report on Public Debt Management - April to June 2020 Notifications GST - States G.O.Ms.No.263 - dated 10-9-2020 - Andhra Pradesh SGST Re-constitute the Andhra Pradesh Authority for Advance Ruling under GST G.O.Ms.No.260 - dated 10-9-2020 - Andhra Pradesh SGST Appoints the officers in the Andhra Pradesh State Directorate of Revenue Intelligence (APSDRI) ORDER NO. 01/2020-STATE TAX - dated 19-8-2020 - Assam SGST Assam Goods and Services Tax (Removal of Difficulties) order, 2020 FTX.56/2017/Pt-1/453 - dated 19-8-2020 - Assam SGST Assam Goods and Services Tax (Eight Amendment) Rules, 2020 65/2020-State Tax - dated 15-9-2020 - Gujarat SGST Seeks to amend notification no. 35-2020-ST to extend due date of compliance under Section 171 which falls during the period from "20.03.2020 to 29.11.2020" till 30.11.2020 EXN-F(10)-22/2017 - dated 14-9-2020 - Himachal Pradesh SGST Re-constitute the Appellate Authority for Advance Ruling FIN/REV-3/GST/1/08 (Pt-1)(Vol.II)/143 - dated 30-7-2020 - Nagaland SGST Seeks to amend Notification No.FIN/REV-3/GST/1/08 (Pt-1)(Vol.1)/65 dated the 21st March 2020 G.O. Ms. No. 45 - dated 7-9-2020 - Puducherry SGST Appoints the 18th day of May, 2020 as the date on which the provisions of certain sections of the Puducherry Goods and Services Tax (Second Amendment) Act, 2020, shall come into force G.O. Ms. No. 42 - dated 7-9-2020 - Puducherry SGST Puducherry Goods and Services Tax (Ninth Amendment) Rules, 2020 413-B/CTD/GST Cell/2018 - dated 7-9-2020 - Puducherry SGST Corrigendum – Notification G.O. Ms. No. 9, dated 1st April, 2020 413-B/CTD/GST Cell/2018 - dated 7-9-2020 - Puducherry SGST Corrigendum – Notification G.O. Ms. No. 10, dated 1st April, 2020 F. 17(131-Pt-II)ACCT/GST/2017/5981 - dated 8-9-2020 - Rajasthan SGST Authorize Proper Officer under sub-rule 1 and 2 of rule 86A of GST Rules 2017 G.O. Ms. No. 74 - dated 26-6-2020 - Telangana SGST Extension of date - Providing for waiver of late fee for Form GSTR-1. G.O. Ms. No. 73 - dated 26-6-2020 - Telangana SGST Amendment in Notification No. 1/2017-State Tax (Rate), issued in G.O. Ms. No. 110, Revenue (CT-II) Department, Dt.29-06-2017 Circulars / Instructions / Orders GST F. No. CBEC- 20/01/08/2019-GST - dated 18-9-2020 Administrative instructions for recovery of interest on net cash tax liability w.e.f. 01.07.2017 Highlights / Catch Notes GST Levy of GST - activity of maintaining the facilities at the layout from the funds collected from the members of the Society - Taxable as supply of service - The amount collected from the member who is selling the site and ceases to be a member, as endowment fund is liable to tax under GST. - if the amount per member in that tax period exceeds Rupees Seven thousand five hundred, then entire amount is taxable. - AAR Visit to Get Source Input Tax Credit (ITC) - we do not agree with the applicant’s view that the land filling pit falls under plant and machinery. However, the discussion would be incomplete without deciding the question of Civil Structure, i.e. whether the land filling pit is a civil structure or not. - The Landfilling pit is not a plant and machinery but a civil structure. - AAR Visit to Get Source Income Tax Income Tax Settlement Commission order - Waiver of interest - the Settlement Commission cannot re-open its concluded proceedings by invoking Section 154 of the Act so as to levy interest under Section 234B in view of Section 245I. The terminal point for the levy of interest under Section 234B would be up to the date of the order under section 245 D (1) and not up to the date of the Order of Settlement under Section 245D(4). Sections 234A, 234B and 234C are applicable to the proceedings of the Settlement Commission under Chapter XIX-A of the Act to a certain extent. - HC Visit to Get Source Withholding of refund u/s 241A - Despite issuance of scrutiny notice under Section 143(2) of the Act, 1961, the refund due to the petitioner is liable to be released at the time of issuance of the intimation/order under Section 143(1) of the Act, 1961 unless an order for withholding of refund has been passed under Section 241A.- HC Visit to Get Source Power of CIT(A) in exercising power u/s 250(4) to accept remand report with regard to income as well as claim of expenditure made by assessee - if the Remand Report is accepted with regard to long term capital gains, then addition as income from other sources and income from other sources is also accepted, therefore, the question of law framed in this regard namely, substantial questions of law No.3, 4, 5 and 8 do not arise for consideration in this appeal - HC Visit to Get Source Penalty u/s 271(1)(b) - assessee did not comply with the notice issued u/s 142(1) of the Act requiring the assessee to furnish certain information - Neither the AO nor the CIT(A) has brought on record anything against the evidences furnished by the assessee regarding his ill-health. We are of the considered view that this is not a fit case for imposition of penalty u/s. 271(1)(b) - AT Visit to Get Source Determination of Capital Gain - Application of section 50C - Determination of fair market value of land which is claimed to be sold under compelling circumstances by the assessee as per declared sale consideration and where the Revenue intends substituting stamp duty value for actual sale consideration, the right course of action would have been to refer the matter to the DVO, however, no such action was taken by the ld CIT(A). - AT Visit to Get Source Exemption u/s 11 and 12 - Amount deployed towards share capital of BARC pursuant to the policy of the Central Government and TRAI recommendations - BARC, being a not for profit Company under section 25 of the Companies act, 1956, is not permitted to distribute any dividends or profits to its shareholders - Benefit of exemption cannot be denied - AT Visit to Get Source Customs Valuation of imported goods - suppression and misdeclaration of import price of goods - The documents /data retrieved from the hard disc/pen drive, in absence of the authorised person of the appellant, as admittedly no notice was issued to them, cannot be relied upon - further, there has been mis-carriage of justice by neither examining the persons, whose statements have been relied upon in the course of adjudication proceedings, nor they have been offered for cross examination by the appellant. - AT Visit to Get Source Indian Laws Dishonor of Cheque - the accused had agreed to make payment in installments and the manner in which the said payments are to be made, are clearly explained and agreed between the parties in the agreement - the finding of the trial Court that there was no legally recoverable debt and acquitting the accused on the said ground is illegal and perverse. - HC Visit to Get Source Case Laws: GST 2020 (9) TMI 737 Levy of GST - activity of maintaining the facilities at the layout from the funds collected from the members of the Society - Service or not? - GST for the amount pertaining to the un-expired period - Recovery of cost of water from members on monthly basis - collection of lump-sum amount as endowment fund, the proceeds of which would be utilized for maintenance charges in terms of the maintenance - Exemption in terms of N/N. 12/2017 entry no 77 respect of the value of the maintenance amount collected from the members of the society to the extent of ₹ 7,500/-. Is the activity of maintaining the facilities at the layout from the funds collected from the members of the Society a service attracting GST Maintenance involves upkeep and maintenance of amenities and due to the length of the period roads, drainages and other UGD facilities need to be re- done/ re-constructed? - HELD THAT:- In the instant case, the applicant is involved in the providing layout maintenance service to its members by supplying goods or services and hence the first condition is satisfied. The applicant has rightly admitted that they are receiving the amount from its members as consideration towards the maintenance of the layout and hence the second condition is also satisfied - the facilities or benefits provided by the applicant to its member for consideration is a business as per section 2(17) of the CGST Act 2017 and hence the third condition is also satisfied. Hence the activity of maintenance of layout by the applicant amounts to supply in terms of Section 7 (1)(a) of the CGST Act 2017 - as applicant has rightly admitted that they are collecting maintenance charges from its member, either annually or once in 10 years and said amount is utilized for the maintenance of the layout. The liability to pay tax on services shall arise at the time of supply as per the provisions of sub section (1) of section 13 of the CGST Act, 2017. The time of supply of service in this case is earliest of the date of issue of invoice to the applicant or date of receipt of payment by the service provider. It is also seen that the applicant is bound to refund to its members the amount unutilised at the time of transfer of the entire property to the civic authorities. Therefore, going by the nature of the money collected, it is only in the form of deposit and does not take the character of advance for the services provided. Hence, mere collection and deposit of money does not qualify either as supply of goods as per section 2(52) or as supply of service as per section 2(102) of the CGST Act, 2017 and taxability of the goods or services or both arises only at the time of supply of goods or supply of service or both. Thus the extent of amount utilized by the applicant towards the payment at the time of supply of service by the third person, such amount is liable for GST as per subsection (1) of section 9 of the CGST Act, 2017. Does the Society s collection of sum towards maintenance charges calculated on yearly basis in one lump-sum for certain length of time say 10 years, should the GST be paid even for the amount pertaining to the un-expired period? - HELD THAT:- The services provided by the unincorporated body or a non-profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution up to an amount of seven thousand five hundred per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex is exempted from the levy of GST. Since the applicant being the housing society, this exemption is also applicable to the applicant. The Society is collecting Water charges from the residents for recovery of charges for water. The entire cost of the water is recovered from the members on monthly basis, does it attract GST? - HELD THAT:- The applicant is collecting water charges from the residents of the layout towards the cost of pumping water from bore wells to overhead tank and also for management and maintenance of water distribution systems to each individual houses. The applicant is collecting water charges on monthly basis. The supply of water is exempted from the GST as per entry no. 99 of the Notification No. 2/2017 -Central Tax (Rate) dated 28th June, 2017 - the supply of water is exempt from GST and the applicant is not liable to pay GST on water charges. However, it is not clear from the submission of the applicant that whether the applicant is collecting water charges separately from its members or it is included in total contribution. If water charges are collected separately, then it falls in entry 99 of the Notification No. 2/2017 -Central Tax (Rate) dated 28th June, 2017 which is exempt from the levy of GST. In case water charges are included in the total contribution of each individual member in each month then it is covered under the entry No.77 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 as amended by the Notification No.2/2018-dated 25-01-2018 and the exemption or taxability is determined. Does the society have to pay GST for collecting lump-sum amount as endowment fund, the proceeds of which would be utilized for maintenance charges in terms of the maintenance as indicated in Appendix A above, of the layout with an express condition that the amount would be returned to the Site owners upon the taking over of the layout by the local body as the Society would be utilizing only accretions to the endowment fund from year to year? - HELD THAT:- In the instant case the applicant is collecting amount from the member who is selling the site and that amount is kept as endowment fund. The applicant utilising the proceeds/ accretions of the endowment fund for sourcing goods or service from the third person for the common use of its members. This amount does not amount to the contribution or reimbursement of amount from its members. The exemption under entry 77 (c) of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 as amended by the Notification No.2/2018-dated 25-01-2018 is available only when the applicant receives the amount from its members as contribution or reimbursement against the amount paid by the applicant for sourcing of goods or services from the third person for common use of its members. Since the applicant utilizing the amount which is collected from the member who are selling their sites, such contribution is not for providing any maintenance services, instead he is providing no-objection certificates and other clearances for the site sellers. Hence this amount when collected amounts to a service and the applicant is liable to pay GST at the rate of 18% as such services are unclassified services covered under entry no. 35 of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 - the contributions of the members who are selling the sites and obtaining clearances from the applicant for such sale, are liable to tax under the GST Acts. In the event that any or all of the items from (1) to (4) is rendered taxable whether the same is exempt under Notification No. 12/2017 entry no 77 respect of the value of the maintenance amount collected from the members of the society to the extent of ₹ 7,500/- (Rupees Seven thousand five hundred) per month? - HELD THAT:- Applicability of exemption under entry No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended by the Notification No.2/2018- dated 25-01-2018 is discussed in detail in above paras and this entry applicable to the applicant only when the they have provided services to its own members by way of reimbursement of charges or share of contribution up to an amount of seven thousand five hundred per month per member for sourcing of goods or services from a third person for the common use of its members. 2020 (9) TMI 736 Input tax credit of tax paid or deemed to have been paid - Whether the term other civil structure used in the definition of Plant and Machinery restricts the Land filling Pit from considering it as Plant Machinery and thereby restricts ITC to be availed on it? - HELD THAT:- Section 17(5)(d) of the CGST Act, 2017 denies availment of ITC on goods and services when supplied for construction of an immovable property (other than plant and machinery) on his own account including when such goods or services are both are used in the furtherance of business. Here, two aspects are noteworthy. One is that such goods and services should be used for the construction of an immovable property and the other is that the activity is carried on his own account. Applicant does not deny that the land filling pit is an immovable property. However, the applicant contends that the activity is not carried on his own account but is intended for offering services. The explanation given at the end of Section 17(5) of CGST Act, 2017 defines plant and machinery as apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes Land, building or any other civil structure. We find that land filling pit is a combination- of earth work and other capital goods as given in the brief submitted by the applicant. It can t solely or in itself be identified as apparatus, equipment and machinery fixed to earth by foundation. It is also not a structural support for anything. Therefore, we do not agree with the applicant s view that the land filling pit falls under plant and machinery. However, the discussion would be incomplete without deciding the question of Civil Structure, i.e. whether the land filling pit is a civil structure or not. Inasmuch as the said section is found to be valid by the Hon ble High Court, we do not find any reason to go beyond the Statutory Provisions. However, since the appeal against the High Court order supra is pending before the Hon ble Supreme Court, we refrain from commenting on the eligibility of the ITC in the instant case. The Landfilling pit is not a plant and machinery but a civil structure . 2020 (9) TMI 735 Grant of Anticipatory Bail - notice to the Department not issued - evasion of GST - HELD THAT:- Issue notice to the respondents through all modes including email returnable on 20.10.2020. Income Tax 2020 (9) TMI 734 Income Tax Settlement Commission order - rejecting the prayer for waiver of interest levied under Section 234B of the Act and further ordered that the interest u/s. 234B shall be charged up to the date of order u/s.245D(4) - HELD THAT:- The order passed on the Settlement Applications filed by the assessee is dated 07.01.2000. The second order of ITSC was passed on 19.02.2004. After those orders passed by ITSC on the issue in question, concerning the assessee, in the year 2010, the Honourable Supreme Court had an occasion to deal with the said issue in the case of Brij Lal Others Vs. CIT, Jalandhar [ 2010 (10) TMI 8 - SUPREME COURT] Another Constitution Bench also dealt with the issue and rendered its decision of CIT Vs. Anjum M.H.Ghaswala [ 2001 (10) TMI 4 - SUPREME COURT] held that the Settlement Commission cannot re-open its concluded proceedings by invoking Section 154 of the Act so as to levy interest under Section 234B in view of Section 245I. The terminal point for the levy of interest under Section 234B would be up to the date of the order under section 245 D (1) and not up to the date of the Order of Settlement under Section 245D(4). Sections 234A, 234B and 234C are applicable to the proceedings of the Settlement Commission under Chapter XIX-A of the Act to a certain extent. Even after the above said decision of the Constitution Bench of the Honourable Supreme Court in the case of Brij Lal Other [2010 (10) TMI 8 - SUPREME COURT] in the case of Kakadia Builders (P.) Ltd. [ 2019 (3) TMI 402 - SUPREME COURT] by decision had an occasion to deal with the issue which is similar to the case on hand, wherein, the Supreme Court held that the Settlement Commission's order was already held bad in law on the ground that it was passed under Section 154 of the Act, the same was neither in existence for any purpose nor it could be relied upon by the High Court much less for making it a part of their order for issuing a writ. In such circumstances, following the said decision, the subsequent order passed by the Settlement Commissioner rectifying its order insofar as it pertained to waiver of interest, based on the subsequent legal position on the issue, was remanded back to the Settlement Commission. Writ Appeal is liable to be allowed 2020 (9) TMI 733 Withholding of refund u/s 241A - as per petitioner refund due to the petitioner was liable to be released at the time of issuance of the intimation order under Section 143(1) - HELD THAT:- This Court is not able to appreciate the plea of lack of instructions as the counsel for the respondents had sufficient time to obtain instructions. Assessing Officer is based in Delhi and the present writ petition had been filed on 08th September, 2020 and was adjourned at the request of learned counsel for the respondents on 11th September, 2020 due to poor connectivity at his end. Despite issuance of scrutiny notice under Section 143(2) of the Act, 1961, the refund due to the petitioner is liable to be released at the time of issuance of the intimation/order under Section 143(1) of the Act, 1961 unless an order for withholding of refund has been passed under Section 241A. This Court is of the prima facie opinion that the significance and import of the mentioned judgments have not been appreciated by the AO and the same are being treated as water off a duck‟s back‟. If any order had been passed under Section 241A of the Act, 1961, this Court is of the view that the respondents had sufficient time to produce the same. In response to the petitioner s Grievance Application dated 11th May, 2020 seeking release of refund, the Assessing Officer, Circle 52(1), Delhi had vide letter dated 01st June, 2020 stated that The needful action has been taken by this office as per the communication received from the CPC. To obviate any mischief and as the petitioner s refund has been withheld for nearly ten months, this Court directs the concerned Assessing Officer to be personally present before us via video link tomorrow with all the relevant papers of the assessee. 2020 (9) TMI 732 Revision u/s 263 - deductions of notional expenses like depreciation and special deductions like Section 80IA - HELD THAT:- As M/S KHIVRAJ TECH PARK LTD. VERSUS THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II (4) , CHENNAI [ 2011 (2) TMI 1582 - ITAT CHENNAI] assessee was called upon to file necessary details, assessee had filed such details and the A.O. was in possession of all the relevant particulars regarding the lease income of the assessee which was a stop gap arrangement. In such a situation, we cannot say that the order of the A.O. was one without application of mind. AO thus having come to a lawful view after considering the details submitted by the assessee, we are of the opinion that the CIT was trying to substitute his view to the lawful view taken by the A.O. When two views are possible, and the A.O. has taken one view, we cannot say his order is erroneous as held in the case of CIT v. Max India Ltd. [2007 (11) TMI 12 - SUPREME COURT] . This is not a case where A.O. remained passive in the face of the return filed by the assessee but, on the other hand, had made further enquiries and passed the assessment after obtaining the reply of the assessee. We are of the opinion that in these circumstances, CIT fell in error in invoking provisions of section 263 of the Act, the twin conditions for invoking such powers having not been satisfied. 2020 (9) TMI 731 Long term capital Gain - Transfer of assets - ITAT confirmed the deletion as per the order of CIT(A) - Power of CIT(A) in exercising power u/s 250(4) to accept remand report with regard to income as well as claim of expenditure made by assessee - HELD THAT:- Section 250(4) of the Income Tax Act provides that the Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the (Assessing) Officer to make further inquiry and report the result of the same to the Commissioner(Appeals). When the assessee produced the material before the Commissioner of Income Tax (Appeals), the Commissioner, in exercise of power under Section 250(4) of the Act, directed the Assessing Officer to submit the Remand Report. As submitted by the Assessing Officer himself, it is evident that, if the Remand Report is accepted with regard to long term capital gains, then addition as income from other sources and income from other sources is also accepted, therefore, the question of law framed in this regard namely, substantial questions of law No.3, 4, 5 and 8 do not arise for consideration in this appeal, as the Commissioner of Income Tax (Appeals) has passed the order on the aforesaid Remand Report and the order passed by the Commissioner of Income Tax(Appeals) has been accepted by the Income Tax Appellate Tribunal. So far as other substantial questions of law are concerned, it is not necessary for us to answer the same as the Remand Report is accepted in respect of the aforesaid three heads, the appeal filed by the revenue would not be acceptable before this Court in view of the circular 2019 dated 8.8.2019. 2020 (9) TMI 730 Revision u/s 263 - issues mentioned in reasons recorded in writing while re-opening the original assessment - bogus purchases - HELD THAT:- AO in the instant case has taken a view of taxing only 20% of bogus purchase, which cannot, by any standard, be construed as a non-plausible view. Pune benches of the Tribunal in Vinod Bhagwan Patil vs. Pr. CIT [ 2020 (9) TMI 692 - ITAT PUNE] has quashed the order u/s 263 of the Act in similar circumstances. We, therefore, set-aside the impugned order on this score. We now accentuate the other point of view taken by the ld. Pr. CIT that the AO failed to examine sundry creditors shown by the assessee, details of other purchases, valuation of stock and various expenses as claimed in the Profit and loss account in the reassessment proceedings. DR has categorically submitted that the direction of the ld. Pr.CIT for examining the creditors and purchase accounts etc. along with valuation of stock was connected with the bogus purchases only and not de hors the same. We find this position to be amply emerging from the immediately next line in Para 6.1 of the impugned order to the effect that: Since assessee s computation of profit are dependent on all the above issues and when bogus purchases have come to his notice, it was imperative on the part of the AO to verify all these aspects while completing the assessment. That apart, we find that the ld. Pr.CIT has not indicated anything amiss in these items independent of the issue of bogus purchases. - Decided in favour of assessee. 2020 (9) TMI 729 Penalty u/s 271(1)(c) - Defective notice - non application of mind by AO - Non specification whether the penalty is initiated for concealment of income or furnishing inaccurate particulars of income since both the charges carry different connotations - assessee claimed deduction u/s 10AA @50% - HELD THAT:- AO has initiated penalty on both the counts of concealment of income as well as of furnishing of inaccurate particulars of income. In the show cause notice u/s 274 dated 31.03.2014 also none of the twin charges were stuck off. In the penalty order also penalty is levied for both the deafults. We find that issue is squarely covered in favour of the assessee by the decision of Sahara India Insurance Company Ltd [ 2019 (8) TMI 409 - DELHI HIGH COURT] as held that penalty is not sustainable if none of the twin charges in notice u/s 274 of the Act are cancelled/ stuck off. On this issue, it is clear that the penalty levied by the ld AO is not sustainable in law. - Decided in favour of assessee. 2020 (9) TMI 728 Condonation of delay - delay of 158 days - HELD THAT:- On perusal of the discharge summary and medical prescription by doctors, there is no doubt that the settler and managing trustee was suffering from serious illness and could not pay attention to the issue of filing appeals of the assessee trust on time. On the issue as why the other trustee(s) did not file those appeals, the Ld. Counsel submitted that the impugned order was served through email address of the son of Sh. Naresh Kumar Gupta, and thus other Trustees were not aware of the Income-Tax proceedings of the trust. In our opinion, the illness of settler and managing trustee and the impugned order being not in the reach of other trustees, is a reasonable cause for delay in filing the appeals. By making the delay, the assessee trust does not get benefit in any manner. The delay is not deliberate and there is not any kind of malafide on the part of the assessee trust. In view of the facts and circumstances and in the interest of the substantial justice, we condoned the delay in filing these appeals and the parties were asked to argue on the merit of the appeals. Exemption u/s 11 - trust for registration u/s 12AA and exemption u/s 80G rejected - assessee failed to justify genuineness of its activities - CIT(E) asked the assessee to file certain documents, inter alia documents of the ownership of plot of land and its arrangement of transfer etc., but the assessee failed to submit said documents - HELD THAT:- Before us, assessee has produced all the documents, which were requested by the Ld CIT(E). These documents are available on page 1 to 10 of the paper-book. Counsel accordingly requested for restoring the matter back to the file of the Ld. CIT(E). DR, on the other hand, submitted that the opportunity provided by the Ld. CIT (E) were not availed by the assessee and therefore if the assessee is allowed to go back to the Ld CIT(E), the assessee should be directed to file all the documents and co-operate before the Ld. CIT(E) in disposal of the proceedings . In view of the documents produced before us as additional evidence, we feel it appropriate to set aside the order of the Ld. CIT (E) and restore the issue of registration under section 12AA and exemption under section 80G, back to the file of the Ld CIT(E) for deciding afresh with the direction to the assessee to produce all the documents required for examination of conditions for granting of registration under section 12AA and exemption under section 80G of the Act. Accordingly, the grounds raised in both the appeals are allowed for statistical purposes. 2020 (9) TMI 727 Deduction u/s 80P(2)(a)(i) - Denial of claim as assessee was essentially doing the business of banking, and therefore, in view of insertion of section 80P(4) with effect from 01.04.2007, the assessee will not be entitled to deduction u/s 80P - HELD THAT:- AO after perusing the narration of the loan extracts in the statutory audit report for assessment years under consideration, came to the conclusion that out of the total loan disbursement, only a minuscule portion has been advanced for agricultural purposes. Narration in loan extracts in the audit reports by itself may not conclusive to prove whether loan is a agricultural loan or a non-agricultural loan. The gold loans may or may not be disbursed for the purpose of agricultural purposes. Necessarily, the A.O. had to examine the details of each loan disbursement and determine the purpose for which the loans were disbursed, i.e., whether it is for agricultural purpose or non-agricultural purpose. In these cases, such a detailed examination has not been conducted by the A.O. At the time of assessment, the judgment of Chirakkal Service Cooperative Bank Ltd. [ 2016 (4) TMI 826 - KERALA HIGH COURT ] was ruling the roost and the certificate issued by the Registrar of Co-operative Society terming the assessee as a primary agricultural credit society would be sufficient for grant of deduction u/s 80P. In the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT [ 2019 (3) TMI 1580 - KERALA HIGH COURT ] we are of the view that there should be fresh examination by the Assessing Officer as regards the nature of each loan disbursement and purpose for which it has been disbursed, i.e., whether it for agricultural purpose or not. The A.O. shall list out the instances where loans have disbursed for non-agricultural purposes etc. and accordingly conclude that the assessee s activities are not in compliance with the activities of primary agricultural credit society functioning under the Kerala Co-operative Societies Act, 1969, before denying the claim of deduction u/s 80P(2). - Appeals filed by the assessee are allowed for statistical purposes 2020 (9) TMI 726 Penalty u/s 271(1)(b) - assessee did not comply with the notice issued u/s 142(1) of the Act requiring the assessee to furnish certain information - HELD THAT:- DR could not bring out any evidence nor could establish that the facts in assessee s own case in A.Y. 2009-10 [ 2020 (9) TMI 690 - ITAT PUNE] was something different as compared to these appeals of the assessee before us. Nor he could place any decision of the Higher Forum on this issue in support of the Revenue. As already taken for A.Y. 2009-10 assessee has submitted before the Assessing Officer a medical certificate from Dr. Majoj Dashpute stating that the assessee was under his treatment for depression with anxiety disorder for the last two years. AO still levied the penalty saying that this is not sufficient reason for non-compliance of notice and therefore the AO has absolutely overlooked the facts on record which are genuine. Neither the AO nor the CIT(A) has brought on record anything against the evidences furnished by the assessee regarding his ill-health. We are of the considered view that this is not a fit case for imposition of penalty u/s. 271(1)(b) - we delete the penalty and allow the appeals of the assessee. Penalty u/s 271F - non-filing of return of income u/s 139(1) - HELD THAT:- DR has not made out a case wherein the provisions of Sec.271F of the Act are so stringent that word by word, if Section 139(1) of the Act is not complied with, the penalty will be levied irrespective of any practical or reasonable situations brought on record. In this case, in the entire order of the learned Assessing Officer as well as the ld. CIT(Appeals), the penalty has been levied u/s 271F of the Act for non-filing of return but the Revenue has failed to conduct any specific enquiry as regards the facts stated by the assessee whether they are correct or not. There is no finding to that effect. In our considered view, the facts are on record and they have not been disputed by the Department. Considering the totality of the facts and circumstances, we do not find this as a fit case for imposing penalty u/s 271F of the Act. We therefore delete the penalty imposed u/s 271F of the Act from the hands of the assessee. Appeal of assessee allowed. 2020 (9) TMI 725 Deduction u/s. 80IB(10) on pro-rata basis in respect of shops and commercial buildings - allowability of deduction on pro-rata basis - HELD THAT:- This Tribunal in assessee‟s own case for A.Y. 2013-14 [ 2020 (9) TMI 691 - ITAT PUNE] observed that the respondent revenue granting the deduction consistently on pro-rata basis from A.Y. 2009-10 onwards up to 2012-13 but, however, without there being any change in the facts relating to deduction u/s. 80IB(10), the respondent revenue denied the said deduction for A.Y. 2013-14. This Tribunal on the rule of consistency by placing reliance in the case of Commissioner of Income Tax Vs. Paul Brothers [ 1992 (10) TMI 5 - BOMBAY HIGH COURT] held that the assessee is entitled to claim pro-rata deduction in respect of shops and commercial establishments having no change in the facts of the case. We hold that the assessee is entitled to claim pro-rata deduction on shops and commercial establishments for A.Y. 2014-15 - Decided in favour of assessee. 2020 (9) TMI 724 Exemption u/s 54F with reference to long term capital gains on sale of land - Whether AO was not given an opportunity by the ld. CIT(Appeals) to contest the additional claim / evidence produced by the assessee? - HELD THAT:- This ground was allowed by ld. CIT(Appeals) without giving an opportunity to AO to contest this additional claim / evidence produced by the assessee which is as per the decision in the case of Humayun Suleman Merchant [2016 (9) TMI 70 - BOMBAY HIGH COURT] . That further before us, assessee fairly conceded that this ground is in favour of the Revenue. Hearing the parties and considering the facts and legal parameters on this issue, ground No.3 of the appeal of the Revenue is allowed. Capital gain computation - FMV determination - HELD THAT:- CIT(Appeals) has adjudicated the matter in a balanced way whereby the valuation report sanctity has been upheld but at the same time, it has been brought on record that such valuation report is also not 100% sacrosanct since there is an element of estimate involved and therefore there is a probability of error of 20% in such value. CIT(Appeals) has correctly estimated the Fair Market Value (F.M.V) of the land at ₹ 45,00,000/- as against the value of ₹ 57,02,000/-. After considering the probability of errors at 20% in the valuation report done by the registered valuer for the purpose of computing long term capital gains, we do not find any reason to interfere with the findings of the ld. CIT(Appeals) and therefore the relief provided to the assessee on both these grounds are sustained. 2020 (9) TMI 723 Condonation of the delay of 489 days - HELD THAT:- The assessee was diligent and has sought advice from his Counsels from time to time and was not guilty of negligence on his part and it cannot be said that the delay was due to the negligence and inaction on the part of the assessee, which could have been avoided by the assessee if he had exercised due care and attention. There is no culpable negligence or malafide on the part of the assessee in delayed filing of the present appeal and he does not stand to benefit by resorting to such delay. There exists sufficient and reasonable cause for condoning the delay of 489 days in filing the present appeal where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. Therefore, in exercise of powers under section 253(5) of the Act, we hereby condone the delay of 489 days in filing the present appeal as we are satisfied that there was sufficient cause for not presenting the appeal within the prescribed time and the appeal is hereby admitted for adjudication on merits. Reopening of assessment u/s 147 - HELD THAT:- No contentions were raised challenging the jurisdiction of the AO u/s 147 and hence, in absence of the same and considering the facts and circumstances of the case, we donot see any infirmity in the action of the AO in acquiring jurisdiction u/s 147 where the assessee has sold his agriculture land and which has not been reported to the tax department in absence of any return of income filed by the assessee. AO was in possession of tangible information that the assessee has sold his agriculture land and thus, basis such tangible information, where he forms an opinion that the income has escaped taxation, we donot see any infirmity in issue of notice u/s 148 and acquisition of jurisdiction u/s 147 by the Assessing officer - As far as first part of the ground of appeal is concerned, where the assessee has challenged the jurisdiction of the AO u/s 147, the same is hereby dismissed. Action of the AO in passing the order u/s 144 without providing adequate opportunity to the assessee and without due application of mind and the said action being confirmed by the ld CIT(A) - It is not the case of the assessee that these notices were not served on him. Therefore, as far as passing of the order u/s 144 ex-parte qua the assessee is concerned, we donot see any infirmity in the action of the AO in view of non-filing of the return of income and noncompliance to various notices issued during the course of assessment proceedings. Where the AO decide to pass the best judgment order u/s 144 and where such order is confirmed by the ld CIT(A), the order so passed must have a reasonable nexus to the available material and the facts and the circumstance of the case. In this regard, we refer to the contention of the assessee regarding non-application of mind by the AO while passing the assessment order where the value as determined by the stamp duty authority has been brought to tax instead of actual sale consideration and that too, without even allowing deduction for cost of acquisition and cost of improvement. Determination of Capital Gain - Application of section 50C - Deduction u/s 54B - Given the facts of the present case where the assessee didn t file his return of income or attended to the assessment proceedings, the AO may not have the precise and exact details of year of acquisition and related costs, however, the fact remains that the AO, having access to the copy of the sale agreement/Registry pursuant to which the matter was reopened and notice was issued u/s 148 which will have a reference to ownership details of such property, he could have possibly determined the year of acquisition of such property and could have estimated the cost of acquisition. No such efforts were made by the AO as there is nothing to this effect recorded in the assessment order or brought to our notice during the course of hearing and no benefit of cost of acquisition/improvement has thus been given to the assessee. Where the assessee pleaded that due to his ill-health, he couldn t attend to the assessment proceedings and wanted to submit the additional evidence in support of his claim of cost of acquisition/improvement, expense in connection with transfer and investment by way of purchase of agriculture land in name of his wife, the additional evidence were admitted by the ld CIT(A) and there is no dispute in this regard. There is no finding given by the ld CIT(A) regarding the cost of acquisition and the contention of the assessee that being an ancestral land acquired prior to 1.4.1981, the estimated cost as on 1.04.1981 may be allowed to him has not been disposed off. Similar, no finding has been given regarding development expenditure and amount given to assessee s sister to avoid litigation which the assessee claims to be a cost in connection with transfer. Further, the assessee has contended that under compelling circumstances, he has sold the ancestral agriculture land and in this regard, the ld CIT(A) has held that the land apparently is an urban land and the valuation adopted by the stamp duty authority appears to be reasonable and justified, however, the basis of such reasonableness is not borne out of records. Determination of fair market value of land which is claimed to be sold under compelling circumstances by the assessee as per declared sale consideration and where the Revenue intends substituting stamp duty value for actual sale consideration, the right course of action would have been to refer the matter to the DVO, however, no such action was taken by the ld CIT(A). Regarding investment by way of purchase of agriculture land in the name of assessee s wife, we find that the ld CIT(A) has apparently not considered in case of Sh. Mahadev Balai vs. ITO ( [ 2017 (11) TMI 1622 - RAJASTHAN HIGH COURT, JAIPUR] wherein in the context of section 54B, it was held that where the investment is made in the name of the wife, the assessee shall be eligible for claim of deduction u/s 54B of the Act. We therefore find that it would be in fitness of things that all these critical aspects of the matter require a fresh examination and the matter is accordingly set-aside to the file of the AO to examine the same afresh as per law after providing reasonable opportunity to the assessee. The ground is thus partly allowed for statistical purposes. 2020 (9) TMI 722 Exemption u/s 11 and 12 - Amount deployed towards share capital of BARC pursuant to the policy of the Central Government and TRAI recommendations treated in the nature of investment in violation of Section 11(5) read with section 13(1)(d) - HELD THAT:- BARC enables assessee to fulfil its objects incidental or ancillary to the attainment of the main objects, like to affiliate, admit to membership, aid and to receive aid from any other society, association, company, corporation firm, partnership or person promoting or formed or intending to promote any of the objects of Company - BARC, being a not for profit Company under section 25 of the Companies act, 1956, is not permitted to distribute any dividends or profits to its shareholders On liquidation, its MOA provides that any surplus left shall be transferred to another Section 25 Company undertaking similar objectives and cannot distribute any such funds to its shareholders, which establishes that the deployment of funds in BARC is not for earning any income or profit, rather only to meet the objectives of the Assessee. It cannot be said that the assessee invested the amounts and committed violation within the meaning of section 13 (1) (d) of the Act - whatever may be stage, the observations of the Hon ble Delhi High Court in assessee s own case [ 2017 (3) TMI 1820 - DELHI HIGH COURT] to the effect that the amounts in question were deposited with the BARC not by way of investment or choice, but on account of a Central government policy, can not be ignored - there was no violation committed by the assessee within the meaning of the provisions under section 11 (5) of the Act read with section 13 (1) (d) - Decided in favour of assessee. 2020 (9) TMI 721 Ex-parte order passed by CIT-A - Denial of natural justice - non giving opportunity of hearing to the respective assessee - addition u/s 68 - HELD THAT:- From the perusal of the order of the CIT(A) can be seen that the notice were issued to the assessee and on two occasions, the assessee sought time before the CIT(A). The respective assessee have not made out any case as regards to the non appearance before the CIT(A) despite giving proper opportunity. Therefore, we are imposing cost of ₹ 5,000/- in each case which should be paid by the respective assessee to the Prime Minister s relief fund. The CIT(A) has not discussed the merit of the case and passed ex-parte order. It will be appropriate to remand back this issue in entirety to the file of the CIT(A).The appeal of the assessee is partly allowed for statistical purpose. 2020 (9) TMI 692 Revision u/s 263 - Estimation of additional profit at the rate of 11.27% towards bogus purchases by AO - HELD THAT:- The view taken by the AO in not taxing 100% but only profit element in such hawala purchases is fortified by the judgment in Pr.CIT Vs. Mohommad Haji Adam Co. [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT ] wherein it has held that no ad hoc addition for bogus purchases can be made. Rather, the addition should be made to the extent of difference between the gross profit rate on genuine purchases and gross profit rate on hawala purchases. Since the AO in the instant case has made addition for the additional profit at the rate of 11.27% towards bogus purchases, we hold that the impugned order, treating such assessment order as erroneous and prejudicial to the interest of revenue, cannot be validated. The AO has taken a view, which cannot, by any standard, be categorized as a non-plausible view. We, therefore, set-aside the impugned order. - Decided in favour of assessee. 2020 (9) TMI 691 Deduction u/s. 80IB(10) - principle of consistency - Pro-rata allotment - CIT(A) held that the project is a composite project and cannot be construed that the housing project and commercial establishments are separate projects and confirmed the order of AO in denying the deduction u/s. 80IB(10) - Whether deduction u/s. 80IB(10) of the Act should be automatically granted on pro-rata basis in respect of housing project completed by the assessee? - HELD THAT:- Coming to the decision of Hon ble High Court of Bombay in the case of Paul Brothers [ 1992 (10) TMI 5 - BOMBAY HIGH COURT] [ as pleased to hold when there was no change in the facts which were in existence during the initial assessment year, the claim of exemption cannot be withdrawn. In the present case as discussed above, the fact remains undisputed there was no change in the facts of the case as compared to earlier years. Therefore, in our opinion the decision on the principle of consistency laid down by the Hon ble High Court of Bombay is clearly applicable to the present case. Revenue could not bring on record there was change in the facts of the case in the year under consideration compared to the facts of earlier years in assessee s own case, thereby we hold that the assessee is entitled to claim deduction u/s. 80IB(10) of the Act on pro-rata basis by following the rule of consistency. Therefore, the order of CIT(A) is not justified. Accordingly, the additional ground raised by the assessee is allowed. 2020 (9) TMI 690 Levy of penalty u/s. 271(1)(b) - non-compliance of notice u/s. 142(1) - HELD THAT:- Informations were received by the Assessing Officer from Sales Tax Department, Maharashtra and after which he had issued notice u/s. 148 of the Act to the assessee for which there was no compliance. AO had issued another notice u/s. 142(1) of the Act. Again there was non-compliance and the Assessing Officer proceeded to impose penalty u/s. 271(1)(b) of the Act stating that there was no reasonable cause demonstrated by the assessee for non-attendance on the given date as per the said notice. The penalty was confirmed by the ld. CIT(A) upholding the findings of AO. When we peruse the penalty order is crystal clear that the assessee has submitted before the Assessing Officer a medical certificate from Dr. Majoj Dashpute stating that the assessee was under his treatment for depression with anxiety disorder for the last two years. AO still levied the penalty saying that this is not sufficient reason for non-compliance of notice and therefore the AO in our considered view has absolutely overlooked the facts on record which are genuine. Neither the AO nor the CIT(A) has brought on record anything against the evidences furnished by the assessee regarding his ill-health. We are of the considered view that this is not a fit case for imposition of penalty u/s. 271(1)(b) of the Act and we therefore, delete the penalty - Decided in favour of assessee. Benami Property 2020 (9) TMI 720 Suit for partition - whether suit is barred under the provisions of Benami Transactions (Prohibition) Act 1988? - one Gopal Pillai is the father of the 1st respondent and the 8th respondent who purchased the property in the name of the 8th respondent and after the death of Gopal Pillai, the 1st defendant/8th respondent sold the suit property through Power of Attorney to the petitioners herein and therefore, respondents 1 to 7 herein/plaintiffs filed the suit for partition and also seeking to declare the sale deed in favour of the petitioners herein and Power of Attorney as null and void HELD THAT:- Gopal pillai is the father of 1st and 8th respondents. While Gopal pillai was working in Food Corporation of India at Madras Harbour, at that time, he purchased the property in the name of the 8th respondent. At that time, the age of the 8th respondent is only 19 years and studying in the school. For the sake of investment, the said property was acquired by Gopal pillai in the name of 8th respondent and the said property was in the possession of Gopal Pillai. After the death of Gopal Pillai dated 20.03.1994, taking advantage of the same, in the year 2001, 8th respondent has executed General Power of Attorney in favour of the 9th respondent herein and sold the property in the name of the petitioners. Therefore, the 1st respondent came to knowledge of the sale deed on 30.03.2004 and after that the respondents 1 2/plaintiffs applied for the certified copy of sale deeds and thereafter, they filed the suit. Admittedly, in this case, the 1st respondent/plaintiff in his plaint has stated that 1st and 8th respondents are coparcener and the sons of Gopal Pillai who purchased the property out of his funds in the name of the 8th respondent. So, Gopal Pillai, was in possession of the property. After the death of Gopal Pillai, without the knowledge of the 1st respondent, 8th respondent executed General Power of Attorney in the name of the 9th respondent. 9th respondent sold the property to the petitioners. So the issues raised herein that (i) as to whether the property is purchased by Gopal Pillai in the name of the 8th respondent out of his funds; if so at the time of purchase, whether the 8th respondent has got the means to purchase the property and (iii) as to whether Gopal Pillai has purchased the property in the fiduciary capacity or the purchase of property alleged to have been made by Gopal Pillai in the name of the 8th respondent is hit by Benami Transactions (Prohibition) Act, are all points can be decided only after recording evidence in the suit. Time and again, the Honourable Supreme Court and this Court have reiterated that at the time of deciding the application under Order 7 Rule 11, of CPC, the court has to see only the averments made in the Plaint not the defence taken by the defendants in the case. The facts of this case are peculiar in nature and therefore, that has got to be decided only after trial and not at this stage. Therefore, at these circumstances, this court does not find any merit in the Revision and therefore, the Revision is liable to be dismissed. 2020 (9) TMI 719 Benami transaction - Burden to prove the question of possession - suit for declaration and injunction - Possession of the original title deeds - suit property originally belonged to the plaintiff's husband one Durairaj, who was the Zamindar of Pappanadu Village. He has settled the property in the name of the plaintiff on 13.11.1959 and she was put in possession of the property. The first defendant was very closely associated with the husband of the plaintiff. He was trusted by the plaintiff's husband Durairaj.In the year 1972, during the month of September, at the instructions of her husband, she has executed a nominal sale deed dated 19.09.1972 in favour of the first defendant - as contented said sale deed was not acted upon and it is only sham and nominal HELD THAT:- As prior to the sale, there was an agreement of sale between the plaintiff and the first defendant. When the recitals clearly show that there was an agreement between the parties with regard to the sale of property, the parties cannot go beyond the terms of the contract, which was reduced and registered as per law. Once transaction is entered between the parties, heavy burden lies on the party to show that the transaction is sham and nominal. Apex Court in the judgment in Vimal Chand Ghevarchand Jain v. Ramakant Eknath Jadoo [2009 (3) TMI 997 - SUPREME COURT] has held that the registered sale deed carries presumption that the transaction was a genuine one and if the execution of sale deed is proved, onus lies on the party to prove that the sale deed was not executed and it was a sham and nominal. Except contending that before the sale by the first defendant in favour of the second and third defendants, the plaintiff perfected title by adverse possession in Paragraph No. 8(A) of the plaint, there is no pleading as to when possession has become hostile, what was the nature of possession, whether possession was hostile to the first defendant and continuous adverse to the knowledge of the first defendant. In the absence of any pleadings and evidence, the finding of the Courts below that the plaintiff perfected title by adverse possession also cannot be countenanced, when the possession itself has not been properly established. Whereas, the Courts below wrongly shifted the burden on the defendants to prove the question of possession. The documents of the plaintiff, namely, Exs. A.20 and A.21-certified copies of the telegrams show that the defendants, in fact, are in possession and making an attempt to change the service connection. To contend that only the plaintiff was in possession and put up construction, no material whatsoever filed on record to show that the plan was approved to put up construction. Therefore, merely on the basis of the receipts, part of the receipts obtained after the suit, one cannot establish adverse possession. The Courts below have, in fact, not analysed the facts properly and shifted the burden wrongly on the defendants and simply carried away by the after suit documents without deciding the plea of benami transaction. No declaration sought to cancel the documents either Ex. A.1 or Exs. B.1 and B.2, within the period of limitation as per Article 59 of the Limitation Act, 1963. Such being the position, the plaintiff cannot succeed in the suit for declaration and injunction. Accordingly, all the substantial questions of law are answered in favour of the appellants. Customs 2020 (9) TMI 717 Time Limitation for issuance of SCN - Seizure Order - Section 110 of the Customs Act 1962 - HELD THAT:- The respondents may file their counter affidavit in these proceedings within a period of three weeks from today. Rejoinder affidavit, if any, be filed within a period of one week thereafter. The respondents are at liberty to move the CESTAT for early listing of the appeal or the stay application in the meantime. List the Special Leave Petition on 15 October 2020. 2020 (9) TMI 716 Service of SCN - respondent nos.2, 3, 4 5 states that her clients have received confirmation from D.C. SVB, New Delhi to the effect that no notice from other customs locations have been issued to the petitioner - HELD THAT:- Keeping in view the fact that since only one show cause notice has been issued to the petitioner by Delhi Customs, this Court is of the view that the procedure prescribed under paragraph 9.2 of the Circular dated 09th February, 2016 is not applicable to the present case. Consequently, the letter dated 17th January, 2020 issued by respondent no.5 is quashed and the respondent no.2 is directed to expeditiously adjudicate the Show Cause notice dated 10th July, 2018 preferably within a period of six months, in accordance with law. Petition disposed off. 2020 (9) TMI 715 Smuggling - Betel Nuts - Whether the goods are indigenous or imported, however pending adjudication above goods were released provincially under Section 110A of the Customs Act, 1962 on a condition that the petitioner will deposit ₹ 70.51 lakh? - HELD THAT:- At this stage, learned counsel for the petitioner put forth the Intimation Notice for my perusal under Section 150 of the Customs Act, 1962 for disposal of the subject Dry Betel Nuts. He submitted that this notice deserves to be stayed, since condition precedent for provincial release, is sub-judice before this Court. Hearing of the petition is deferred, stand over to 30-09-2020. Till next date the Notice dated 8th September, 2020 issued by the Superintendent CPF, Champai under Section 150 of the Customs Act, 1962 is stayed. 2020 (9) TMI 714 Valuation of imported goods - Batteries - rejection of declared value - suppression and misdeclaration of import price of goods - HELD THAT:- So far as the batteries imported from M/s Power ROC Company Ltd. vide three bills of entries dated 24.1.2007 is concerned, the bill of entries were assessed provisionally and were pending finalisation. Accordingly, the impugned order is bad under Section 28 of the Customs Act, as the provisional assessment is still not finalised. Accordingly, the demand in respect of three bills of entry nos. 101168, 101169 and 101167 is set aside. In the present case, the appellant has imported VRLA batteries 6-V/4.5 GLA/4.2 AH/4.5 A.H. We also find that the show cause notice was issued by relying upon the data from seized hard disc and pen drive. However, the appellant was informed later on that the said pen drive and hard disc are not traceable for the purpose of adjudication. The Dy. Commissioner of Customs, SIIB (I), JNCH, in his communication dated 4.11.2016 has categorically stated that the original file of seized documents, hard disc and pen drive seized under Panchnama are not traceable. We further find that the appellant was not noticed before opening of the hard disc/pen drive by the Department. One hard disc and pen drive was opened in the presence of Shri Sanjay A. Chothani, employee of the CHA firm and at the time of opening of another hard disc on the other date, nobody was present in absence of notice to the appellant to witness the retrieval of data. Thus, the whole exercise of the retrieval of data is vitiated rendering it unreliable - Further, as required by Section 138 C of the Customs Act, Revenue failed to bring on record the details of the computer or machine, on which the data was prepared or compiled. Further, it is found that there is no specific correlation with the bills of entry under dispute with the alleged evidence of wire transfer. Further, there is no investigation or confirmation from the persons, whose names have appeared from the email for wire transfer. The conclusion has been drawn by the Revenue from the cost sheet on the basis of assumption and presumption. The cost sheet reflects the invoice value, which has been remitted through normal banking channel along with other expenses. The suppression of transaction value would also have been reflected in the said cost sheet, which is not the case. The NIDB data is in respect of the import of 12 V batteries by other importers, whereas in the present case, the appellant has imported 6 V batteries. Hence, the NIDB data cannot be relied upon. Further, in respect of the batteries imported from M/s.Shenzhen Leoch Battery Technology, China, we find that the demand of differential duty is based upon the allegation that the appellant has under-valued the other consignments. Hence, they must have suppressed the value in respect of these bills of entries also. The documents /data retrieved from the hard disc/pen drive, in absence of the authorised person of the appellant, as admittedly no notice was issued to them, cannot be relied upon - further, there has been mis-carriage of justice by neither examining the persons, whose statements have been relied upon in the course of adjudication proceedings, nor they have been offered for cross examination by the appellant. The issue as regards the transaction value of batteries imported from M/s.Shenzhen Leoch Battery Technology, China, requires re-consideration by the Court Below - the matter as regards the three bills of entries for the batteries imported from M/s.Suqian Yongda Import Export Co. Ltd. China is remanded and the demand of differential duty and penalty with respect to the import from Power ROC Co. Ltd. is set aside - the penalty in respect of the appeal of the Director of the appellant company, Shri Kapil Garg is set aside. Appeal allowed in part and part matter on remand. 2020 (9) TMI 693 Maintainability of appeal - contention of learned counsel for the petitioner that the appeal has not been admitted nor any notice has been issued to it as yet, cannot be entertained in the present petition - Release of seized goods - release sought on the premise that the statutory appeal filed by the petitioner against the order of seizure under Section 128 of the Act has been decided in its favour - Section 110 of the Customs Act, 1962 - HELD THAT:- As far as prayer in the present writ petition to give effect to the order passed by the Commissioner under Section 128 of the Act is concerned, the appropriate course of action for the petitioner would be to approach the adjudicating authority, which has passed the order of confiscation of goods, to give effect to the order passed by the appellate authority i.e. for releasing the seized goods, if the seizure order has been set aside in appeal and there is no interim order against the petitioner reviving seizure of goods. Simultaneously, it would be open for the department to pursue the stay application in the pending appeal. No mandamus can be issued in the writ petition. Petition dismissed. Corporate Laws 2020 (9) TMI 713 Condonation of delay in filing appeal - power to condone the delay beyond a period of 45 days - appellants admittedly received the certified copy of the order on 19.12.2019, they chose to file the statutory appeal before NCLAT on 20.07.2020 - Winding up of Company - contentions raised by the learned counsel for the appellants are twofold namely (i) that the Appellate Tribunal erred in computing the period of limitation from the date of the order of the NCLT, contrary to Section 421(3) of the Companies Act, 2013, and (ii) that the Appellate Tribunal failed to take note of the lockdown as well as the order passed by this Court on 23.03.2020, extending the period of limitation for filing any proceeding with effect from 15.03.2020 until further orders - Section 420(3) of the Companies Act, 2013. Computation of period of limitation from the date of the order of the NCLT - Section 421(3) of the Companies Act, 2013 - HELD THAT:- From 19.12.2019, the date on which the counsel for the appellants received the copy of the order, the appellants had a period of 45 days to file an appeal. This period expired on 02.02.2020 - By virtue of the proviso to Section 421(3), the Appellate Tribunal was empowered to condone the delay upto a period of period of 45 days. This period of 45 days started running from 02.02.2020 and it expired even according to the appellants on 18.03.2020. The appellants did not file the appeal on or before 18.03.2020, but filed it on 20.07.2020. It is relevant to note that the lock down was imposed only on 24.03.2020 and there was no impediment for the appellants to file the appeal on or before 18.03.2020. To overcome this difficulty, the appellants rely upon the order of this Court dated 23.03.2020. Failure to take note of the lockdown as well as the order passed by this Court on 23.03.2020, extending the period of limitation for filing any proceeding with effect from 15.03.2020 until further orders - HELD THAT:- What was extended by the order of this Court was only the period of limitation and not the period upto which delay can be condoned in exercise of discretion conferred by the statute. The above order passed by this Court was intended to benefit vigilant litigants who were prevented due to the pandemic and the lockdown, from initiating proceedings within the period of limitation prescribed by general or special law. It is needless to point out that the law of limitation finds its root in two latin maxims, one of which is Vigilantibus Non Dormientibus Jura Subveniunt which means that the law will assist only those who are vigilant about their rights and not those who sleep over them. The expression prescribed period appearing in Section 4 cannot be construed to mean anything other than the period of limitation. Any period beyond the prescribed period, during which the Court or Tribunal has the discretion to allow a person to institute the proceedings, cannot be taken to be prescribed period . The appellants cannot claim the benefit of the order passed by this Court on 23.03.2020, for enlarging, even the period up to which delay can be condoned - The second contention is thus untenable. Appeal dismissed - decided against appellant. 2020 (9) TMI 712 Approval of Amalgamation Scheme - Sections 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- The main object of the Transferee Company is to get engaged in the work of developers, promoters, colonizers, builders, town planners, designers, civil engineers, construction contractors for real estate development of all kind whether on freehold or leasehold properties, owned by the company or otherwise, sale and purchase of land and properties, plotted development and generally to deal in the real estate business - The Board of Directors of the Transferor Companies have approved the present Scheme vide Resolution dated 16th July 2018. The other necessary requirements have also been fulfilled as per the directions given by this Bench from time to time. The Company Petition is allowed and the Scheme of Amalgamation annexed as annexure A-1 with the Petitions is hereby Sanctioned. The Scheme approved shall be binding on the Shareholders, Creditors and employees of the Companies involved in this Scheme. The Appointed date of the Scheme is 01.04.2018 - While approving the Scheme, it is further clarified that this Order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable, as per the relevant provisions of law or from any applicable permissions that may have to be obtained or, even compliances that may have to be made as per the mandate of law. In compliance with requirements of Section 230(7) of the Companies Act, 2013, the Transferee Company herein shall until the scheme is fully implemented, file with the Registrar of Companies, the statement in Form No. CAA. 8 along with such fee as specified in the Companies (Registration Offices and Fees) Rules, 2014 within two hundred and ten days from the end of each financial year - The Order of sanction to this Scheme shall be prepared by the Registry as per the relevant format provided under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 notified on 14.12.2016. The Scheme is sanctioned. 2020 (9) TMI 711 Approval of the Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- The Transferor Company Number 4 is carrying on the business of leasing, finance, hire purchase and to finance, lease operation of all kinds of purchasing, selling, hiring or letting on hire all kinds of plant and machinery, equipment, computers, motor cars, trucks, motor lorries and to assist in financing of all and every kind of their purchase of deferred payment or similar transactions and to subsidies finance of assist in subsidizing or financing the sale and maintenance of such goods - The Transferee Company's main object is to lease and hire-purchase and general finance company and to acquire and to provide on lease or to provide on hire purchase basis all types of house hold appliances industrial and office plant, equipment, machinery, vehicles, buildings and real estate required for manufacturing, processing, transportation and trading business, to finance industrial enterprises and to promote companies engaged in industrial and trading business by way of Finance. The Board of Directors of the Transferor Company have approved the present Scheme vide its Resolution dated 1st March 2018. The other necessary requirements have also been fulfilled as per the Order dated 07.01.2020 passed by this Bench in CA (CAA) - 180(ND)/2018. Taking into consideration the above facts, the Company Petitions are allowed and the Scheme of Amalgamation annexed with the Petitions is hereby Sanctioned. The Scheme approved shall be binding on the Shareholders, Creditors and employees of the Companies involved in this Scheme. The Appointed date of the Scheme is 01.04.2019. 2020 (9) TMI 710 Approval of the Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- The Company Petition is allowed and the Scheme of Amalgamation annexed with the Petitions is hereby Sanctioned. The Scheme approved shall be binding on the Shareholders, Creditors and employees of the Companies involved in this Scheme. The Appointed date of the Scheme is 01.04.2017 - While approving the Scheme as above, it is further clarified that this Order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable, as per the relevant provisions of law or from any applicable permissions that may have to be obtained or. even compliances that may have to be made as per the mandate of law. The scheme is sanctioned. 2020 (9) TMI 709 Approval of the Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- The Company Petitions is/are allowed and the Scheme of Amalgamation annexed with the Petition(s) is hereby Sanctioned. The Scheme approved shall be binding on the Shareholders, Creditors and employees of the Companies involved in this Scheme. The Appointed date of the Scheme is 1st April, 2018. While approving the Scheme as above, it is further clarified that this Order will not be construed as an Order granting exemption from payment of stamp duty or taxes or any other charges, if payable, as per the relevant provisions of law or from any applicable permissions that may have to be obtained or, even compliances that may have to be made as per the mandate of law - The Companies to the said Scheme or other person interested shall be at liberty to apply to this Bench for any direction that may be necessary with regard to the working of the said Scheme. The Order of sanction to this Scheme shall be prepared by the Registry as per the relevant format provided under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The scheme is approved. 2020 (9) TMI 708 Sanction of Scheme of Amalgamation - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not contrary to public policy - From the material on record, the Scheme appears to be fair and reasonable and is not contrary to public policy Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 4232 of 2019 is made absolute in terms of prayer clause of the Company Petition. The Scheme is sanctioned hereby, and the appointed date of the Scheme is fixed as 1st April 2019. 2020 (9) TMI 707 Sanction of Scheme of Merger by Absorption - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme of Merger by Absorption appears to be fair and reasonable and is not in violation of any provisions of law and is not contrary to public interest - Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition filed jointly by the Petitioner Companies are made absolute in terms of prayers made in CSP No 3442 of 2018 of the Company Scheme Petition. The Petitioner Companies are directed to file a copy of this Order along with a copy of the Scheme of Merger by Absorption with the concerned Registrar of Companies, electronically, along with E-Form INC-28, within 30 days from the date of receipt of the Order from the Registry - The Petitioner Companies to lodge a copy of this Order and the Scheme duly certified by the Deputy Director or the Assistant Registrar, as the case may be, National Company Law Tribunal, Mumbai Bench, with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, on the same, within 60 days from the date of receipt of the Order. The Scheme is sanctioned hereby, and the Appointed date of the Scheme is fixed as 1st April, 2017. 2020 (9) TMI 706 Restoration of the name in the Register maintained by the Registrar of Companies, Maharashtra, Pune (RoC) - section 252(3) of the Companies Act, 2013 read with rule 87-A of National Company Law Tribunal Rules, 2016 - HELD THAT:- It appears that the petitioner company had entered some business dealings in respect of some other land with a company, Synergyone Infradevelopers Private Limited. Following disputes, Synergyone Infradevelopers Private Limited filed a complaint with the police authorities, who registered a First Information Report (FIR) against the petitioner company and its directors for cheating, criminal breach of trust, fraud and misappropriation of funds - On 23.05.2018, the Petitioner Company addressed a letter to Janta Land Promoters Private Limited, the company entrusted with the construction of the school on the allotted site, requesting for an update on the status of construction. A letter dated 23.08.2018 has been placed on record, wherein Janta Land Promoters Private Limited, the allotters of the site, have requested the Petitioner Company to pay the remaining sum immediately so that the possession of the site can be delivered. It is observed that the Petitioner Company has invested ₹ 6,75,00,000/- (Rupees six crore and seventy-five lakh only) for allotment of a School site with Janta Land Promoters Private Limited. It has been maintaining a bank account with IDBI Bank wherein ₹ 38,40,414/- has been maintained - Under Note 6 of the Notes to Accounts forming part of the Balance Sheet of the Petitioner Company as at 31.03.2019, the advance ₹ 6,75,00,000/- paid to Janta land Promoters Private Limited against the Memorandum of Understanding has been reflected. In BASANT KUMAR BERLIA AND ASHOK AGARWAL VERSUS REGISTRAR OF COMPANIES, KOLKATA AND M/S HORIZON ISPAT COMPANY PRIVATE LIMITED [ 2019 (4) TMI 738 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] , while considering a similar case where there was no revenue from operations, the Hon ble National Company Law Appellate Tribunal, observed that in the light of huge investment made by the company and above reasons, it would be just that the name of the company is directed to be restored. Petition allowed. 2020 (9) TMI 705 Sanction of Scheme of Merger by Absorption - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not in violation of any provisions of Law and is not contrary to public policy - Since all the requisite statutory compliances have been fulfilled, Joint Company Scheme Petition No. C.P. (CAA)/4311/MB/2019 filed by the Petitioner Companies are made absolute in terms of prayer clause (a) of the Joint Company Scheme Petition. Petitioner Companies are directed to lodge a certified / authenticated copy of this Order and the Scheme with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, on the same within 60 working days from the date of the receipt of the certified copy of the Order, for the purpose of adjudication of stamp duty payable. 2020 (9) TMI 704 Approval of Scheme of Merger by Absorption - Section 230 to 232 of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not in violation of any provisions of law or contrary to public policy - Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition No. 3420 of 2019 filed by the Petitioner Companies is made absolute in terms of prayer Clause 26(a) to 26(c) of the Company Scheme Petition. The Petitioner Companies are further directed to file a copy of this Order along with a copy of the Scheme with the concerned Registrar of Companies, electronically in e-Form INC-28, within 30 days of the receipt of copy of this Order - The Petitioner Companies are directed to lodge a copy of this Order and the Scheme duly certified by the Deputy or Assistant Registrar, National Company Law Tribunal, Mumbai Bench, Mumbai with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable, if any, on the same, within 60 days from the receipt of the Order. 2020 (9) TMI 703 Sanction of the Composite Scheme of Amalgamation and Arrangement - section 230 to 232 of Companies Act 2013 - HELD THAT:- From the material on record and after perusing the clarifications and submissions of the Petitioner Companies to the Report and the Supplementary Report filed by the Regional Director, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy - Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition CP (CAA) 4051/MB/2019 filed by the Petitioner Companies is made absolute in terms of prayer clauses (a), (c) and (d) of the Company Scheme Petition. The Petitioner Companies to lodge certified copy of this order along with a copy of the sanctioned Scheme attached thereto, with the concerned Collector of Stamps, for the purpose of adjudication of stamp duty payable, if any, within 60 days from the date of receipt of the certified copy of this order - The respective Petitioner Companies are directed to file certified copy of this order along with a copy of the sanctioned Scheme attached thereto, with the concerned Registrar of Companies, electronically, along with e-form INC 28 within 30 days of receipt of certified copy of this order. All concerned authorities to act on certified copy of this order along with the sanctioned Scheme, duly certified by Deputy/ Assistant Registrar of the National Company Law Tribunal, Mumbai Bench. Insolvency & Bankruptcy 2020 (9) TMI 718 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- It is admitted fact that the Corporate Debtor has not sent the reply as required under Section 8(2) of the IBC, 2016, according to which, the Corporate Debtor shall within a period of 10 days of the receipt of demand notice or copy of invoices mentioned in sub section (1) bring to the notice of the Operational Creditor, the existence of dispute or record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such disputes. Before initiating a proceeding under Section 9, the operational-creditor is required to fulfil the conditions mentioned under Section 8(1), if he has not sent the demand notice as required under Section 8(1) of the Code, then he cannot invoke the provision under Section 9, rather he can invoke the provision of Section 9 only, when Corporate Debtor fails to raise the existing of disputes or produce the document to show that unpaid operational debt has been paid within ten days of the receipt of the demand notice - Section 8 and 9 cast a duty upon the operational-creditor as well as Corporate Debtor to act as per Section 8 and if they fail to fulfil the conditions of Section 8 and 9 then in that case neither the application filed by the operational-creditor is maintainable nor the plea of existing of disputes or the payment of debt subsequently taken by the Corporate Debtor can be taken into consideration. Since it is specifically mentioned in Section 8(2) of the Code that within ten days from the date of the receipt of the demand notice, the corporate-debtor is required to bring to the notice of the operational-creditor, the existence of dispute or the documents regarding the payment of debt, therefore, we have no option, but to hold that since the corporate-debtor fails to give the reply of the demand notice and raised the disputes, hence after his appearance in response to the notice, he cannot raise it by filing the reply to the application filed on behalf of the operational-creditor and this has also been held by another NCLT, Delhi Bench in the case of JAI LAXMI TRADERS VERSUS MAYASHEEL RETAIL INDIA LTD. [ 2020 (3) TMI 1251 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI] . In view of Section 9(5)(i)(a) since the application is complete, there is no payment of unpaid operational debt, which is more than ₹ 1 Lakh, which is the minimum threshold U/S 4 of the Code for initiating a proceeding U/S 9 of the Code and no notice of dispute as required U/S 8(2) of the Code is raised by Corporate Debtor - Petition admitted - moratorium declared. 2020 (9) TMI 702 Settlement agreement - withdrawal of CIRP - HELD THAT:- Indeed, the settlement arrived at between the Parties are not in dispute. Further, pursuant to the Memorandum of Understanding dated 01.09.2020, it is brought to the notice of this Tribunal that the 1st Respondent/Parsvnath Developers Ltd. had received the Demand Draft bearing No. 004069 for ₹ 12/- Lakhs from the Appellant. Added further, the Resolution Professional, Mr. Naresh Kumar Munjal informs this Tribunal that he is yet to receive the remuneration for the month of August and September, 2020 and in respect of the Miscellaneous Expenses , he had raised his invoice to an extent of ₹ 53,000/- etc. - In view of the fact that, the Memorandum of Understanding dated 01.09.2020, was reached between the Parties culminating in settlement, this Tribunal recording the said fact disposes of the Appeal, but without costs. This Tribunal deems it fit and proper in directing the Resolution Professional, Mr. Naresh Kumar Munjal to file an Application under Section 12A of the I B Code 2016, for Withdrawal of Application before the Adjudicating Authority, within three days from today, without any delay. Soon after filing of the withdrawal of Application in terms of Section 12A of the Code, the Adjudicating Authority shall do the needful in this regard, within a period of one week thereafter. 2020 (9) TMI 701 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Application admitted - moratorium declared. 2020 (9) TMI 700 Attachment of property of Corporate Debtor - Maharashtra Protection of Interest of Depositors Act, 1999 - HELD THAT:- The assets of the Corporate Debtor have been wrongly attached vide MPID order dated 01.02.2012. The MPID order sought to attach the properties of Dhanlaxmi cooperative society and the name of the Corporate Debtor is not notified in the MPID notification, but the properties of the Corporate Debtor have been attached and sealed. Further due to illegal attachment of properties, the resolution professional could not take control of the said properties, appoint valuer etc. to perform his duties under the I B code. The order of attachment under the notification dated 01.02.2012 under the MPID Act to the extent of property Shop No. 21, Ground Floor, Bonanza Arcade, Amboli, S. V. Road, Andheri West, Mumbai-400058 is set aside. Application allowed. 2020 (9) TMI 699 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - pre-existing dispute or not - Operational Debt due and payable by the Corporate Debtor - Whether the invocation of the arbitration clause between the withdrawal of the first petition vide order dated 13.03.2018 and the issue of the second demand notice dated 23.08.2018 to the Corporate Debtor should be treated as pre-existing dispute within the meaning of section 5(6) of the IBC? - HELD THAT:- The invocation of the arbitration clause by the Corporate Debtor between 13.03.2018 (when the first Company Petition bearing CP (IB) No.1823/2017 was dismissed as withdrawn with liberty), and 23.08.2018 (when the second demand notice came to be issued by the Operational Creditor to the Corporate Debtor), is of no consequence and cannot be treated as pre-existing dispute within the meaning of section 5(6) of the IBC. If the answer to the above is No then whether there is a debt due and payable by the Corporate Debtor in favour of the Operational Creditor? - HELD THAT:- There was ample time and opportunity on the part of the Corporate Debtor to cancel the work order in case the work was deemed to be substandard. This was not done. Even after demobilisation by the Operational Creditor from the work site, this aspect of abandonment has never ever been raised by the Corporate Debtor with the Operational Creditor. Further, it is also observed from the records that the site was duly handed over by the Operational Creditor to the Corporate Debtor on 19.11.2015 with due notice. Therefore, it is difficult for us to hold that there was any deemed abandonment of the project by the Operational Creditor. Whether there is a default of the Operational Debt due and payable by the Corporate Debtor in favour of the Operational Creditor? - HELD THAT:- The device of attempting to invoke the arbitration clause in the Work Order on the very day that the petition came to be dismissed with liberty by the Adjudicating Authority, can only be seen as a last-ditch effort to stave off the proceedings under section 9 of the IBC by claiming that the second petition cannot be admitted because it is blighted by the pre-existing dispute. The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor - Application admitted - moratorium declared. 2020 (9) TMI 698 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Hon ble National Company Law Appellate Tribunal in the case of Dr. Vishnu Kumar Agarwal Vs. Piramal Enterprises Limited [ 2019 (2) TMI 316 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] has held that There is no bar in the I B Code for filing simultaneously two applications under Section 7 against the Principal Borrower as well as the Corporate Guarantor(s) or against both the Guarantors . However, once for same set of claim application under Section 7 filed by the Financial Creditor is admitted against one of the Corporate Debtor (Principal Borrower or Corporate Guarantor(s)), second application by the same Financial Creditor for same set of claim and default cannot be admitted against the other Corporate Debtor (the Corporate Guarantor(s) or the Principal Borrower). In view of the judgement of the Hon ble NCLAT in the case of Dr. Vishnu Kumar Agarwal Vs. Piramal Enterprises Limited, this bench is bound by the said judgement and unable to accept the contentions of the Petitioner who relies on Section 60(2) of the Code for initiating the CIRP against the Corporate Debtor. Hence, the other contentions raised by the Corporate Debtor are not dealt with. Petition dismissed. FEMA 2020 (9) TMI 697 Detention Orders at the pre-execution stage - Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA Act) - HELD THAT:- Proposals for invoking the provisions of the COFEPOSA Act were mooted in the second week of October 2019 - overseas evidence was received from SPA Dubai in the first week of November 2019. The proposal to detain the petitioners was further analysed keeping in view the strong tendency to indulge in smuggling activities in future. The proposal for preventive detention of the petitioners was sent to the Detaining Authority on 02.01.2020. The proposal was placed before the Central Screening Committee on 13.01.2020, and the recommendations of the Central Screening Committee (CSC) were submitted to the Detaining Authority on 14.01.2020. The proposals were examined by the Detaining Authority, and after arriving at his subjective satisfaction, the Detaining Authority passed the Detention Orders dated 21.01.2020. Aforesaid satisfactorily explains and justifies the time consumed in mooting the proposal for detention of the petitioners under the COFEPOSA Act and for consideration of the said proposal, firstly, by the Central Screening Committee, and thereafter, by the Detaining Authority. The time lapse, in our view, is not such as to lead to the inference that the live-link between the prejudicial activity of the petitioners, which was discovered in April 2019, and the object of detention, namely, to prevent them from indulging in such prejudicial activity, stood snapped. Pertinently, it is not the case of either of these petitioners that they have discontinued their ostensible business of dealing in gold and gold jewellery - observations in Muneesh Suneja [ 2001 (1) TMI 903 - SUPREME COURT] is attracted in the facts of these cases. We also agree with the submission of Mr. Mahajan that petitioners reliance on Rajinder Arora [ 2006 (3) TMI 173 - SUPREME COURT is misplaced for the reasons advanced by Mr. Mahajan and recorded hereinabove. Therefore, we reject this submission of Mr. Chaudhri. Whether the petitioners absconded and, if so, whether they are precluded from assailing the Detention Orders in respect of each of them on that account? - We are of the view that there is no merit in the petitioners submissions that neither of the three petitioners was not absconding. Abscondence is not only a matter of physical disappearance, but also carries with it the intent to hide, disappear, or evade the concerned person, or authority. A Detention Order would lose its force and object, if it were to be served upon the representative, or counsel, as the element of surprise would be lost which is crucial to be able to detain a person, as there is every likelihood of the person absconding, or evading execution of the Detention Order the moment he learns that such an order had been passed. The respondents are not obliged to serve the Detention Order, the Grounds of Detention, or the Relied Upon Documents on a third party. If this submission of the petitioner MNK were to be accepted, it would render the law of preventive detention completely ineffective and not workable. The petitioner MNK, however, failed to provide his actual address where he could be served the Detention Order. If the petitioner MNK was not to be found at his ancestral address, there was no point of furnishing the same. Thus, we are satisfied that the petitioner MNK deliberately absconded to evade the service of the Detention Order. So far as the petitioner APS is concerned, we find that the position is no different. The reason given by the petitioner APS for his not being found at his given address is completely belied by the reports submitted by the DCP, West District, New Delhi. We find it very hard to believe that neither the petitioner APS s wife, nor his father was aware of his whereabouts. Clearly, APS was in hiding and his wife and his father also feigned ignorance, which would be the case only if the petitioner APS were to instruct them not to disclose his whereabouts. We are, therefore, of the view that the petitioner APS is equally guilty of abscondence. Petitioner Gopal Gupta - he was not found at his given address. His wife/ Smita was found at the said address who stated that the petitioner Gopal Gupta had gone somewhere in South India for his medical treatment and she did not have any knowledge about the exact whereabouts, and the date of arrival of her husband. This again, we find to be rather unusual that a wife would not know where her husband has gone and would not even know when he would arrive. In today s day and age when mobile communication is common place, we find the statement made by the petitioner Gopal Gupta s wife Smt. Smita to be unacceptable and clearly the idea was to suppress the information with regard to the whereabouts of Gopal Gupta. The stand now taken by the petitioner Gopal Gupta that he was at his father s residence, is completely contradicted with the statement of his wife Smita. We find that, firstly, the petitioners are not entitled to maintain these petitions in view of their conduct of abscondence and in view of the decision of the Supreme Court in Subhash Popatlal Dave [ 2013 (8) TMI 8 - SUPREME COURT] and even otherwise, we do not find any merit in any of the grounds taken by the petitioners to assail the Detention Orders issued in respect of each of them under Section 3 of the COFEPOSA Act at the pre-execution/ detention stage. Service Tax 2020 (9) TMI 696 CENVAT Credit - input services - construction of landfill in setting up of Common Hazardous Waste Treatment, Storage and Disposal Facility on Build, Own and Operate basis - denial on the ground that the same is a works contract service involving civil construction that was covered under the exclusion clause of the definition of input services under Rule 2(l)(A)(a) of the CENVAT Credit Rules, 2004 - HELD THAT:- Going by the language of para 3 of the show-cause notice one thing is clear that setting of landfill is a mandatory requirement of the guidelines set by the State Pollution Control Board and the said construction was made for storage and disposal of Hazardous Waste which can be equated with construction of immovable property but not other than plant and machinery as found in the definition of works contract services. Further, it is difficult to arrive at a definite conclusion if the said setting up of a landfill is civil structure or not, in view of the fact that civil structure has to be a structure of a permanent nature and the life of landfill ends after the same gets fill up, as has been reflected in para 9 of the show-cause notice. Even by going through the definition contained in Rule 2(l) of CENVAT Credit Rules, 2004 dealing with exclusion clause, service portion in the execution of a works contract and construction service including services listed under clause B of Section 67E of the Finance Act excluding all other specified services therein are only excluded from the definition of inputs service and not the whole portion of work including raw material used etc. However, in the demand raised against the appellant, every expenditure concerning setting up of the landfill and tax paid there on was taken into consideration to deny the credits on the entire amount. Extended period for imposition of penalty - HELD THAT:- The contradictory findings by two Commissioners on the same issue would demonstrably illustrate that issue involved in this litigation is interpretative in nature that would defeat invocation of extended period for imposition of penalty on the appellant. Moreover, the subsequent Commissioner, in the similar facts of the case and issue involved therein, had hold a finding that such landfill is not a civil structure . Having regard to the fact that only service portion of the civil structure is disallowed for CENVAT credit and the landfill setup had a very limited life span that help in storage and disposal of Hazardous Waste and setting up of such landfill is a mandatory requirement in waste management as per guidelines of the State Pollution Control Board, we have no hesitation to hold a finding that credit taken by the appellant in setting up of such landfills are admissible credits. Appeal allowed - decided in favor of appellant. Central Excise 2020 (9) TMI 695 Irregular availment of CENVAT Credit - contravention to Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 - demand based on various statements - reliability on Chartered Engineer s Certificate - discrepancies pointed out by the department with regard to the Transportation of Goods from the factory of M/s.Industrial Associates to the factory of the appellant - Failure to Produce Documents - non-appearance against summons - HELD THAT:- The inputs received by the appellants were duly entered in their RG-23A Part-I for the period from August, 2008 to January, 2009 and such records were subject to scrutiny by their jurisdictional Central Excise Officers and the credits were being availed with the knowledge of the Revenue and by reflecting the inputs in the records. In such a scenario, it is a difficult proposition to come to a finding that all the inputs received by the appellants, which have been utilized in the manufacture of their final product, were not actually received by the appellants. The appellants received the goods in their factory under cover of the Central Excise invoices issued by M/s.Industrial Associates. The concerned staff at the factory gate puts the receipt seal under his initial and affected a consolidated entry in Form-IV Register for the receipt of said inputs along with other inputs of analogous character. The credit availed by them were duly reflected in their monthly ER-I returns. They also received tax-invoice-cum-challan along with original for buyer copy of the excise invoices for inputs received from the said manufacturer. The amounts were paid by them by account payee cheques/RTGS. VAT were also reflected in the invoices raised by the said company. The transportation costs were paid by them to the vehicle drivers/owners under the cash vouchers. The appellants have admittedly manufactured their final product by using the said inputs and the final products stands cleared by them on payment of duty. The final product cannot be manufactured out of nothing and obviously requires inputs. There is no iota of evidence produced by the Revenue to reflect upon the fact as to from where the appellants have procured such a huge quantity of inputs used by them in the manufacture of their final product. As such, there is a lacuna in the Revenue s investigations to that extent also. The Tribunal had come to a finding that the assessee in fact had received the goods covered under the disputed invoices inasmuch as the Revenue has not brought any tangible evidence to prove nonreceipt of the goods by the respondent - it is undisputed fact that all the purchases were duly recorded in the statutory books of the appellant and the goods were also found to be entered in statutory records of the appellant. None of the consignors of the goods have denied the clearance of the goods to the appellant. There is no evidence which can show that the records maintained by the appellant are not correct. The order for disallowance of credit to the appellant is not sustainable - in the absence of any cogent evidence, the demands are not sustainable, as a consequence, the penalties imposed on both the appellants are also not sustainable and are accordingly set aside - appeal allowed - decided in favor of appellant. Indian Laws 2020 (9) TMI 694 Dishonor of Cheque - acquittal of the accused - legally enforceable debt or not - Section 138 of Negotiable instruments Act, 1881 - HELD THAT:- If a cheque is issued in terms of an agreement and the same is dishonored, the amount of the cheque, constitute legally enforceable debt, as the agreement is legally enforceable between the parties - When the complainant is successful in proving the existence of legally recoverable debt and issuance of Ex. P1-cheque and also dishonor of the same, presumption under Sections 118 and 139 of the Act comes into operation and it is for the accused to rebut these legal presumptions. In the present case, accused has not made any attempt to rebut the presumption. When he admitted the agreement-Ex.P6 and also issuance of the cheque Ex. P1, it cannot be said that there is no legally recoverable debt. Even though accused cross examined PW1 through his counsel and got examined himself as DW1, nothing has been placed before the Court to rebut the presumption or to substantiate the contention that he has not taken over the business of the company nor he has acted as managing director or that he has not availed loan either from KSFC or from SBI or his contention that his signatures were obtained by the complainant on the blank papers and documents - there are no bonafides in the contentions raised by the accused in his defence. The opinion formed by the trial Court that the agreement in question is dated 09.02.2005, whereas the cheque in question dated 10.05.2007 and therefore there was no legally enforceable debt at the time of issuance of cheque, cannot be accepted. The terms and conditions in Ex. P6 itself makes it clear that the accused had agreed to make payment in installments and the manner in which the said payments are to be made, are clearly explained and agreed between the parties in the agreement - the finding of the trial Court that there was no legally recoverable debt and acquitting the accused on the said ground is illegal and perverse. The impugned judgment of acquittal passed by the trial Court is set aside. The accused who is the respondent herein is convicted for the offence punishable under Section 138 of the Act - Appeal allowed.
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