TMI Tax Updates - e-Newsletter
September 21, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise Indian Laws

Articles

• Important recommendations of 45th GST Council meeting
• Recommendations & Briefing of 45th GST Council Meeting with explanation.
• ADVANCE RULING ON ITC ON FURNITURE & FIXTURES  

News

• Government to start and institutionalise 24 hours "Helpline" for assistance to exporters and resolution of issues- Shri Piyush Goyal

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• Repayment of 8.13% Oil Marketing Companies SB, 2021

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Notifications

GST - States

• 38/1/2017-Fin(R&C)(212)/1865 - dated 16-9-2021 - Goa SGST
  Seeks to bring in force sections 4 and 5 of the Goa Goods and Services Tax (Amendment) Act, 2021

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• 38/1/2017-Fin(R&C)(212)/1865 - dated 16-9-2021 - Goa SGST
  Goa Goods and Services Tax (Sixth Amendment) Rules, 2021

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• 34/2021-State Tax - dated 7-9-2021 - Maharashtra SGST
  Seeks to extend timelines for filing of application for revocation of cancellation of registration to 30.09.2021, where due date for filing such application falls between 01.03.2020 to 31.08.2021, in cases where registration has been canceled under clause (b) or clause (c) of section 29(2) of the MGST Act.

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• ERTS (T) 65/2017/Pt. I/351 - dated 31-8-2021 - Meghalaya SGST
  Modification Notification No. 35/2020-State Tax, dated the 27th April, 2020

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• ERTS (T) 65/2017/Pt. I/350 - dated 31-8-2021 - Meghalaya SGST
  Seeks to amend Notification No. 76/2018 - State Tax, dated the 31st December, 2018

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• ERTS (T) 65/2017/Pt. I/349 - dated 31-8-2021 - Meghalaya SGST
  Meghalaya Goods and Services Tax (Seventh Amendment) Rules, 2021.

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• G.O.Ms. No.111 - dated 31-8-2021 - Tamil Nadu SGST
  Modification Notification No.II(2)/CTR/348(0-1)/2020, 28th May, 2020

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• G.O.Ms. No.110 - dated 31-8-2021 - Tamil Nadu SGST
  Seeks to amendment in Notification No. II(2)/CTR/1099(e-4)/2018 dated 31 December, 2018

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• G.O. Ms. No. 109 - dated 31-8-2021 - Tamil Nadu SGST
  Tamil Nadu Goods and Services Tax (Sixth Amendment) Rules, 2021.

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Circulars / Instructions / Orders

SEBI

• SEBI/HO/IMD/IMD-I/DOF5/P/CIR/2021/629 - dated 20-9-2021
  Clarifications with respect to Circular dated April 28, 2021 on ‘Alignment of interest of Key Employees (‘Designated Employees’) of Asset Management Companies (AMCs) with the Unitholders of the Mutual Fund Schemes’

DGFT

• Trade Notice 18/2021-2022 - dated 20-9-2021
  De-Activation of IECs not updated on the DGFT
• Police Circular No. 37/2015-20 - dated 10-9-2021
  Relief in Average Export Obligation in terms of the para 5.19 of Hand Book of Procedures (HBP) of FTP 2015-20

Highlights / Catch Notes

GST

• Validity of SCN - allegation against the officer of the Department - It is deemed proper to dispose of the petition with a direction to the competent authority to consider the reply of the petitioner especially the objection that audit report was not supplied to him within 30 days as mandated by Section 65(6) of the GST Act and pass a speaking order thereafter on the show cause notice in accordance with law. - HC
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• Seeking grant of Bail - involvement in evasion of taxes and Cess - As per the materials on record, there is no indication that the petitioner, if granted bail, is likely to evade the trial or there is an apprehension of his tampering with the witnesses. Apart from all these, this Court has also taken into fact that during the period of entire investigation, the petitioner has been in custody for 65 (sixty five) days. - Bail granted - HC
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• Maintainability of petition - instead of preferring an appeal, the petitioner has chosen to file the present writ petition - Section 31 of the Tamil Nadu Goods and Service Tax Act - Admittedly, the Appellate Deputy Commissioner is in the rank of Joint Commissioner of Commercial Taxes. Therefore, the petitioner is bound to prefer an appeal before the Appellate Deputy Commissioner under Section 31 of the Act - HC
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Income Tax

• Depreciation on apple ipad - at the general rate of 15% OR 60% - whether the iPad falls in the definition of computer or mobile phone? - in case the assessee wishes to claim that iPad is a computer and is required to have depreciation at the higher rate, then in our opinion, the onus is on the assessee to prove that the assessee is entitled to higher depreciation and merely on the basis of deduction/assumption it cannot be held that the iPad is computer. - AT
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• TDS u/s 195 - royalty payments or not - Consideration for advertisement is paid to the overseas bank account of Non-resident - the payments made by the assessee the non-resident company M/s. Facebook, Ireland cannot be considered ad "royalty payments" - There is no requirement to deduct tax at source from those payments u/s. 195 - Hence the assessee herein cannot be considered as an assessee in default u/s. 201(1) of the Act. - AT
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• Revision u/s 263 by CIT - If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. TCommissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. - AT
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• Long term capital asset as per Section 2(42A) - period of holding - Memorandum explaining the provision in the Finance Bill - after taking into consideration that the condition for the period of holding was curtailed from 36 months to 12 months by the Finance Act, 1987, it was only for 'share held in a company' - the said Memorandum clearly makes a distinction between the company shares and other than company shares. The above decision of the ITAT has laid down the correct legal principle which we have discussed in the preceding paragraphs. - HC
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• Sales tax set off as deduction u/s 43B - whether the set off or adjustment amounts to deemed payment? - When the assessee purchases raw materials, it is liable to pay purchase tax on the purchase. An equivalent of this amount is adjusted towards the liability on the sale of the product produced out of the raw materials purchased. This adjustment, by legal fiction, is deemed to be an actual payment of the tax liability. Admittedly, this amount is a tax payable. If it is a tax liability on being set off or adjusted, deemed actual payment by legal fiction, it is deductible under Section 43B of the Act. - HC
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• Interest u/s 234B - Shortfall in payment of advance tax - TDS was not deducted on the income received by the payer - prior to the financial year 2012-13, the amount of income-tax which is deductible or collectible at source can be reduced by the assessee while calculating advance tax, the Respondent cannot be held to have defaulted in payment of its advance tax liability -There is no doubt that the position has changed since the financial year 2012-13, in view of the proviso to Section 209 (1) (d), pursuant to which if the assessee receives any amount, including the tax deductible at source on such amount, the assessee cannot reduce such tax while computing its advance tax liability. - SC
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Customs

• Amendment of Bill of Entry - seeking amendment in GSTIN and the address in the BOE - The petitioners had prayed for amendment of documents only, which is squarely covered under section 149 of the Act, any deficiency in the system cannot be used by the respondents as a shield so as to deny relief to a party; if indeed the system does not permit, the deficiency has to be covered up manually until improvements are effected in the system for such amendment. - HC
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Indian Laws

• Dishonor of Cheque - discharge of legally enforceable debt or not - Admittedly, the accused is neither a friend nor relative of the complainant. Hence, the financial status of the complainant itself is in doubt and as such, the accused has created a dent in the case of the complainant. - Considering these facts and circumstances, it is evident that the accused has rebutted the presumption available in favour of the complainant. Thereafter, the burden again shifts on the complainant to establish his financial status - HC
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Service Tax

• Levy of Service Tax - foreign remittances - market research and exploration executed outside India - Though market research and exploration have not been specifically stated in the contract, but still the scope of the work clearly suggests that the contract is basically for the work of market research and exploration which would be taxable under section 65(105)(y) of the Finance Act but in view of the provisions of rule 3(ii) of the Import Rules, no service tax would be payable. - AT
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Central Excise

• Seeking to Issuance of directions to re-dispose the application for settlement filed by the petitioner - transparency in the matter of conducting an investigation by the Department Officials or not - the petitioner has failed in extending their cooperation for the purpose of settling the issues by the Settlement Commission and thus, the petitioner is not entitled for the relief, as such, sought for in the present writ petition - HC
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• Reversal of CENVAT Credit - the object of both the provisions is clear and the only difference is that Chapter X uses the word “remission” of duty on excisable goods” and Central Excise Rules 2001 used the word ”exemption of duty to excisable goods”. None of these words have been defined in the Central Excise Act. - the adjudicating authority has failed to appreciate that Rule 6(3)(b) is applicable where the manufacturer is manufacturing two separate products one being charged to duty and another being exempt from payment of duty or is charged with ‘NIL’ rate of duty. - AT
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Case Laws:

• GST

• 2021 (9) TMI 873
  Maintainability of petition - instead of preferring an appeal, the petitioner has chosen to file the present writ petition - Section 31 of the Tamil Nadu Goods and Service Tax Act - HELD THAT:- This Court is of the considered opinion that filing of an appeal is the rule. Entertaining a writ petition is only an exception. If the writ petition is filed on the ground that the authority who issued the order impugned is incompetent or having no jurisdiction under the provisions of the Act in a direct manner or when allegation of malafides are raised, then alone the writ petition needs to be entertained and in all other circumstances, the aggrieved person is bound to prefer an appeal as provided under the statute - Undoubtedly, writ proceedings may be entertained before exhausting the appellate remedy. However, it is to be ensured that there is an imminent threat or gross injustice warranting urgent relief to be granted. Mere violation of principles of natural justice is insufficient to entertain a writ proceedings under Article 226 of the Constitution of India, as every Writ Petition is filed based on one or the other ground stating that the principles of natural justice is violated or statutory requirements are not complied with or there is an illegality or otherwise. Thus, dispensing with an appellate remedy is to be granted cautiously in view of the fact that the very purpose and object of legislation providing an appellate remedy cannot be diluted nor the benefit be denied to the aggrieved person to exhaust the same. Based on the mere affidavits filed by the litigants, the disputed facts cannot be concluded. Thus, the importance of fact finding by the appellate forums is of more value for the purpose of providing complete justice to the parties approaching the Court of law - In the case on hand, the impugned orders were passed by the Assistant Commissioner. However, in respect of the Assistant Commissioner contemplated under Section 31 of the Act, a notification was issued by the Government redesignating the post of Assistant Commissioner as Deputy Assistant Commissioner, now the Appellate Deputy Commissioner is exercising the appellate power under Section 31 of the Act. Admittedly, the Appellate Deputy Commissioner is in the rank of Joint Commissioner of Commercial Taxes. Therefore, the petitioner is bound to prefer an appeal before the Appellate Deputy Commissioner under Section 31 of the Act - the petitioner is at liberty to prefer appeals against the orders impugned passed by the 1st respondent within a period of 30 days from the date of receipt of a copy of this order in the prescribed format and by complying with the provisions as contemplated under the Act. Petition disposed off.

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• 2021 (9) TMI 870
  Seeking grant of Bail - involvement in evasion of taxes and Cess - supply of goods without issuing invoices - period of 2019 to 2021 - cognizable offence under Section 132(1)(i) AGST Act - HELD THAT:- In the instant case, taking into account the alleged amount of evasion of tax, the case falls under Section 132(1)(i) of the AGST Act and the punishment prescribed for such an offence may extend to 5 (five) years and with fine - that apart, the offence report has already been laid in the instant case, and therefore, the undisputed position is that for the purpose of further investigation, custodial detention of the petitioner is not essential. As per the materials on record, there is no indication that the petitioner, if granted bail, is likely to evade the trial or there is an apprehension of his tampering with the witnesses. Apart from all these, this Court has also taken into fact that during the period of entire investigation, the petitioner has been in custody for 65 (sixty five) days. In the considered view of this Court, the petitioner deserves to be granted bail - the accused-petitioner, named above, shall be released on bail in connection with the abovementioned case on furnishing bail bond of ₹ 1,00,000/- with two suitable sureties of the like amount, to the satisfaction of the learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati and other conditions imposed - application allowed.

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• 2021 (9) TMI 864
  Validity of SCN - Direction for conducting appropriate enquiry against the concern officer, who bypassing the law just to obtain undue benefits from the petitioner - Section 65(6) of GST Act read with Rule 101(5) of CGST Rules - HELD THAT:- Considering the fact that the petitioner has already filed reply to the show cause notice, which has been impugned in the present petition, we are not inclined to entertain the petition at this stage against the show cause notice. It is deemed proper to dispose of the petition with a direction to the competent authority to consider the reply of the petitioner especially the objection that audit report was not supplied to him within 30 days as mandated by Section 65(6) of the GST Act and pass a speaking order thereafter on the show cause notice in accordance with law.

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• 2021 (9) TMI 862
  Release of confiscated goods - pending conclusion of delayed confiscation proceedings - whether pending conclusion of delayed confiscation proceedings in terms of Sec.130 of CGST Act, 2017, the subject goods can be released to the apparent owner thereof on his depositing the amount that may become payable by him in terms of demand notice, of course subject to outcome of the said proceedings? - HELD THAT:-The first second Proviso of section 130(2) of CGST Act provide for levy of fine penalty which the owner of the goods has to pay for seeking redemption; the third Proviso gives similar right to the owner of the conveyance/transport vehicle; thus, the confiscation is in the nature of mala prohibita as contradistinguished from mala in se; in other words, the confiscation of the goods and the conveyances does not render them res extra commercium or res nullius; even after confiscation order is passed, thus, it is open to the owner to seek redemption of the confiscated goods/conveyance. This writ petition is allowed in part - a Writ of Mandamus is issued to the respondent to release the goods and the conveyance in detention immediately to the petitioner after ascertaining his prima facie ownership and on his depositing the total amount comprised in Sec.130 Notice dated 13.08.2021 in GST MOV 10, subject to outcome of the confiscation proceedings; petitioner shall not put forth any grounds of equity by virtue of this order and the release of subject goods and the conveyance.

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• Income Tax

• 2021 (9) TMI 875
  Interest u/s 234B - Shortfall in payment of advance tax - TDS was not deducted on the income received by the payer - whether the levy of interest under Section 234B of the Act for short deduction of tax at source is mandatory and is leviable automatically? - interpretation of Section 209 (1) (d) of the Act, with stress on the words deductible or collectible at source - HELD THAT:- The proviso is in the nature of an exception to Section 209 (1) (d), as an assessee, who has received any income without deduction or collection of tax, is made liable to pay advance tax in respect of such income. It is relevant to note that the amendment was brought into effect from 1st April, 2012 and was made applicable to cases of advance tax payable in the financial year 2012-13 and thereafter. All the appeals before us pertain to the period prior to assessment year 2013-14. Interpretation of the words would be deductible or collectible in Section 209 (1) (d) of the Act can be resolved by referring to the proviso to Section 209 (1) (d), which was inserted by the Finance Act, 2012. The proviso makes it clear that the assessee cannot reduce the amounts of income-tax paid to it by the payer without deduction, while computing liability for advance tax. The memorandum explaining the provisions of the Finance Bill, 2012 provides necessary context that the amendment was warranted due to the judgements of courts, interpreting Section 209 (1) (d) of the Act to permit computation of advance tax by the assessee by reducing the amount of income-tax which is deductible or collectible during the financial year. No force in the contention of the Revenue that Section 234B should be read in isolation without reference to the other provisions of Chapter XVII. The liability for payment of interest as provided in Section 234B is for default in payment of advance tax. While the definition of assessed tax under Section 234B pertains to tax deducted or collected at source, the pre-conditions of Section 234B, viz. liability to pay advance tax and non- payment or short payment of such tax, have to be satisfied, after which interest can be levied taking into account the assessed tax. Therefore, Section 209 of the Act which relates to the computation of advance tax payable by the assessee cannot be ignored while construing the contents of Section 234B. As we have already held that prior to the financial year 2012-13, the amount of income-tax which is deductible or collectible at source can be reduced by the assessee while calculating advance tax, the Respondent cannot be held to have defaulted in payment of its advance tax liability -There is no doubt that the position has changed since the financial year 2012-13, in view of the proviso to Section 209 (1) (d), pursuant to which if the assessee receives any amount, including the tax deductible at source on such amount, the assessee cannot reduce such tax while computing its advance tax liability. - Decided against revenue.

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• 2021 (9) TMI 874
  Sales tax set off as deduction u/s 43B - whether the set off or adjustment amounts to deemed payment? - as per appellant, the sales tax set off represents that part of the purchase tax paid by appellant on purchase of raw materials and packing materials, which is allowed to be retained by it as the materials purchased are consumed in the manufacture of finished goods which are again liable to sales tax - HELD THAT:- Rule 41D of the Bombay Sales Tax Rules allowed incentive by way of exemption of sales tax to the extent of payment of sales tax on purchase of raw material used for the product. Rule 45(3) entitles the assessee to adjust or set off the amount in the return itself. It is a provision parallel to Sections 199 and 245 of the Income-tax Act creating a legal fiction. Therefore, this sum, which is subject to adjustment or set off, is a liability adjusted deeming actual payment by legal fiction. The Sales Tax Rules have allowed an incentive by way of adjustment of sales tax or in other words, the liability is being adjusted as actual payment. Section 43B of the Income-tax Act allows deduction on tax payable by the assessee. When the assessee purchases raw materials, it is liable to pay purchase tax on the purchase. An equivalent of this amount is adjusted towards the liability on the sale of the product produced out of the raw materials purchased. This adjustment, by legal fiction, is deemed to be an actual payment of the tax liability. Admittedly, this amount is a tax payable. If it is a tax liability on being set off or adjusted, deemed actual payment by legal fiction, it is deductible under Section 43B of the Act. Disallowance for sales tax set off was not correct - Question answered accordingly.

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• 2021 (9) TMI 872
  Breach of the principles of natural justice - Glitch in e-filing portal of the Income Tax Department - Demand raised as disallowance under Section 14A and being unexplained loan under Section 68 - As argued assessment order has been passed without taking into consideration the issues faced by the taxpayers with the new e-filing portal of the Income Tax Department and without taking into consideration that the e-portal mentioned the response date was 21st July 2021 - HELD THAT:- As respondents themselves have admitted that there was a technical glitch, in our view, it is a fit case to set aside the assessment order and remand the matter for de novo consideration. Accordingly, the assessment order and consequential demand notice dated 8th July 2021 under Section 156 and notice of penalty also dated 8th July 2021 issued under Section 271(1)(c) of the Act are set aside and remanded for de novo consideration.

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• 2021 (9) TMI 871
  Validity of assessment - Whether Assessment order passed without application of mind and on incorrect reasons - as per AO assessee not responded to any of the notices u/s 142(1) and the petitioner was not traceable at any of the addresses, and therefore, the order has been passed based on material which has been gathered and other information available on record - HELD THAT:- Petitioner had received a notice dated 22nd September 2019 under Section 143(2), to which there is no reference in the impugned order, seeking further details. Petitioner filed its reply dated 7th October 2019 to this notice as per the evidence available in the e-proceedings, response acknowledgment of the department. There is no reference to this reply in the impugned order. Thereafter petitioner received another notice dated 17th January 2020 under Section 142(1) of the Act to which according to petitioner, a reply dated 23rd January 2020 has been filed. It is Respondent s case that it was filed only on 30th April 2021 and not on 23rd January 2020. Petitioner later received a notice dated 12th February 2020 under Section 142(1) followed by a reminder dated 14th December 2020. Admittedly, no response was filed by petitioner to these two notices. Petitioner thereafter received a notice dated 7th April 2021 to which a partial response has been filed on 30th April 2021. In view of this background, for the Assessing Officer to say that the notices issued by respondents under Section 142(1) of the Act were left unheeded or the assessee was unresponsive is not correct. For respondent to also say that the verification unit for physical service of notice reported that petitioner could not be located in the three addresses also is not acceptable because petitioner is a company registered under the Companies Act, 1956 and the address mentioned in Exh.R-1 to the reply at page 376 is the registered office address of the company. It is stated in the report that it is the residential apartment and the address was found but details of the specified person could not be ascertained also is unacceptable. Next address is a commercial address belonging to petitioner from where petitioner was carrying on his business and this address can also be found in the return filed, but for the Income-tax Inspector who filed a report to say that address found, but details of the specified person could not be ascertained again is unacceptable. There is a third address in which service has been attempted, but petitioner says that address does not belong to petitioner and it is so mentioned in the rejoinder. AO to say that no response was received from the petitioner or petitioner could not be traced is certainly not acceptable to the Court. Therefore, the assessment order dated 30th April 2021 is quashed and set aside.

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• 2021 (9) TMI 867
  Release the gold jewellery which were seized during the course of search - HELD THAT:- It is the failure on the part of the respective parties to the lis in placing the correct facts before this Court. If the order already passed on 04.11.2019 is allowed to be executed then prejudice would be caused to the interest of the Revenue. Once an error apparent is brought to the notice of this Court at the instance of the parties, and further such a fact is important for the purpose of determining the issues, then it is necessary to review the order passed. As brought to the notice of this Court that as per the seizure Mahazar, the jewellery seized from the writ petitioner's premises is valued more than ₹ 8 crores. Thus, the respondent-Department is directed to consider the applications filed by the writ petitioner on 13.11.2017 and on 28.11.2017 for release of jewellery. While considering such applications, the respondent- Department is directed to retain the jewellery worth equal to the tax liability along with the interest and consider releasing of the remaining jewellery by following the procedures as contemplated under law. The said exercise is directed to be done as expeditiously as possible and preferably, within a period of four weeks from the date of receipt of a copy of this order.

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• 2021 (9) TMI 866
  Long term capital asset as per Section 2(42A) - period of holding - Whether Tribunal was right in holding that the shares/debentures not listed in the recognized stock exchange could be treated as a long term capital asset as per Section 2(42A)? - HELD THAT:- The expression listed in a recognized stock exchange in India is only used for category of 'any other security' and not for the category of 'share held in a company'. Further after taking into consideration that the condition for the period of holding was curtailed from 36 months to 12 months by the Finance Act, 1987, it was only for 'share held in a company' - when the amendment by the Finance Act 1994 was brought in the statute so far as the category 'shares held in a company' was concerned, the same was not disturbed, albeit, new category was included like 'any other security listed in recognized stock exchange in India'. ITAT took note of the Memorandum explaining the provision in the Finance Bill and observed that the Memorandum clearly makes a distinction that there are many financial instruments other than the company shares through which the investor are entering capital market and in order to provide such units and all securities traded in the recognized stock exchange, a level playing field with the company's share is proposed to be amended and thus, the said Memorandum clearly makes a distinction between the company shares and other than company shares.The above decision of the ITAT has laid down the correct legal principle which we have discussed in the preceding paragraphs. On a search made, we find that the Revenue has not challenged the order of the ITAT before the Court, but it is the assessee, who has challenged it before the High Court of Delhi and obviously not against the above finding, which was rendered in favour of the assessee. The above Circular issued by the CBDT will clearly indicate that all shares whether listed or unlisted have enjoyed the benefit of shorter period of holding and even any investment in shares of private limited companies enjoyed long-term capital gains on its transfer after twelve months. - Decided against revenue.

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• 2021 (9) TMI 860
  Assessment completed u/s.144 - assessment on the basis of incriminating materials unearthed at the time of search action in the premises of a third party - HELD THAT:- In this case, it is the assessee. However, such is not the position since in the instant case before us, ADIT, Nashik had reported these informations to the Assessing Officer of the assessee and he is not the Assessing Officer of such searched party and hence, requirement of provisions of section 153C of the Act is not fulfilled in this case. When no return was filed by the assessee section 144(1)(a) of the Act was already triggered and therefore, the Assessing Officer has correctly resorted to complete assessment u/s.144 of the Act. We also find that in the non obstante clause in Section 153A of the Act, Section 144 is not mentioned. Thus, Additional ground No.1 raised in appeal by the assessee is dismissed. Capital gain computation - applicability of section 50C - Whether the provisions of Section 50C of the Act, were applicable only in respect of transfer of land or building and the same were not attracted in respect of transfer of development rights in land - HELD THAT:- Assessee has not brought out any cogent reason or any logical basis for such determination of the fair market value. Alternatively, it was prayed by the Ld. AR for the assessee that the issue may be restore to the file of the Assessing Officer for fresh determination of the fair market value and that the assessee may be given another opportunity in this regard.DR did not raise any objection with regard to the submissions put forth by the Ld. AR of the assessee. We are of the considered view, in the interest of justice that the fair market value of the land has to be adopted on a reasonable basis and it must be reflected from the order of the Assessing Officer itself. Reasons behind such determination of the fair market value should be clearly spelled out in the order. Therefore, we set aside the order of the Ld. CIT(Appeal) on this issue and restore the same to the file of the Assessing Officer for adjudication as per law. Recalculate LTCG by applying provisions of Section 50C of the Act by adopting sale consideration as determined by DVO in his valuation report - HELD THAT:- Admittedly, the assessee received only ₹ 36 lakhs which covered not only the consideration for transfer of development rights on 18.04.2006 but also for transfer of ownership rights in the year 2009. The year under consideration has only relevance with the transfer of development rights, in respect of which section 50C of the Act has been held supra to be not applicable. In that view of the matter, the computation of capital gain for the extant year has to be done u/s 48 of the Act sans provisions of section 50C of the Act. As regards the transfer of ownership rights in the year 2009, the capital gains on such transfer can be the subject matter of consideration by the AO only for such later year and not under the year in question. Thus, the ground No.1 taken in the Memorandum of appeal challenging the adoption of stamp value as full value of consideration is hereby allowed.

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• 2021 (9) TMI 858
  Assessment u/s 153A - proof of incrementing material found in search or not? - validity of the additions under section 68 in absence of incriminating evidence found during search - HELD THAT:- We find there is no reference in the Panchnama about incriminating evidence qua the share application money or share premium for all the impugned assessment years - assessee while filing reply before AO on 14.12.2018, in response to the show cause notice dated 29.08.2018, clearly stated there is no incriminating evidences against the assessee for making the said additions. We find that the AO passed the assessment order on 14.12.2018 and placed the same before JCIT for his approval, thus there is no consideration of material facts by A.O. with regard to the assessee s reply dated 14.12.2018 filed before the AO in response to the show cause notice dated 29.11.2018. Delhi High Court in celebrated case of CIT Vs Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] held that completed assessment can be interfered with by the AO while making assessment under section 153A only on the basis of some incriminating material unearthed during the course of search which was not produced or not already disclosed or made known in course of original assessment - no addition under section 68 was warranted in absence of incriminating evidence, in the abated assessment - Decided in favour of assessee. Validity of approval under section 153D - ground of appeal in granting bulk approval of the assessment under section 153A - JCIT approved the assessment order by presuming that the necessary opportunity has been given to the assessee and all the records, evidences and materials have been thoroughly verified. The JCIT granted bulk approval of 95 assessment orders which clearly defeats the intent and purpose behind insertion of section 153D brought in the statute by the Finance Act, 2007. JCIT while granting approval, presumed that Assessing Officer has given proper hearing to the assessee and thoroughly verified seized material and there are no adverse findings, satisfied himself that all the issues emanating from the records have been verified and additions wherever required have been proposed. We further find that there is no independent application of mind on the part of ld.JCIT while granting the approval. Mumbai Tribunal while considering the similar ground of appeal in granting bulk approval of the assessment under section 153A, in case of Arch Pharmalabs Ltd Vs ACIT[ [ 2021 (4) TMI 533 - ITAT MUMBAI] held that the approval accorded under section 153D is without any occasion to refer to the assessment records and seized material, if any, incriminating the assessee and hence such approval is in the realm of an abstract approval of draft assessment orders which was unsubstantiated and unsupported and consequently suffered from total non-application of mind. No satisfaction in the approval order that draft assessment after considering the material placed before him, rather the ld JCIT recorded that it is presumed that the AO granted proper opportunity to the assessee etc. Also see Sanjay Duggal others[ 2021 (1) TMI 909 - ITAT DELHI] We find convincing force in the submissions of the assessee that the approval granted by JCIT suffer from non-application of mind and depends on presumption of proper performance of duty by A.O. such per functionary approval under section 153D cannot termed as legitimate. The consequential assessment orders based on non-est approval under section 153D, thus are void-abinitio on this ground alone. - Decided in favour of assessee.

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• 2021 (9) TMI 857
  Assessment u/s 153A - Whether any incriminating material find by the ld AO in search? - HELD THAT:- Assessment has already been made u/s 143(3) of the Act on 02.09.2011. Search took place on the other party on 06.05.2014 and survey u/s 133A of the Act took place on the assessee s premises on that date. AO assessment has already been made u/s 143(3) of the Act on 02.09.2011. Search took place on the other party on 06.05.2014 and survey u/s 133A of the Act took place on the assessee s premises on that date. AO has stated that on perusal of the survey report regarding survey u/s 133A of the Act there is an error higher discount and rebate debited by the assessee in its books of account. There is no reference of any incriminating material found during the course of search in case of 3rd party. The assessment is also passed by issuance of notice u/s 153A of the Act and not u/s 153C - there is no search in case of the assessee but there was only a survey u/s 133A of the Act. There is no reference of any incriminating material by the ld AO in the whole of the assessment order. The ld DR also could not show us whether any incriminating material was found during the course of search. Admittedly the addition was made only on the basis of survey report.- Decided in favour of assessee.

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• 2021 (9) TMI 856
  Revision u/s 263 by CIT - case of the assessee was selected for scrutiny by CASS under Limited Scrutiny for the reason that Whether the funds received in the form of share premium are from disclosed sources and have been correctly offered to tax. - HELD THAT:- AR produced books of account including cash book, ledger, subsidiary records and filed various other details as required, which were duly examined. AO made all the inquiries, sought clarifications on all the relevant aspects to the extent he was supposed looking to the nature of the issue involved the past accepted history of the case and the evidences and material already available therein together with the material provided during the assessment proceedings - AO was having complete details of the identity in the shape of PAN number address - He was also having conformation of the parties duly signed by the shareholder. As stated, he was able and he looked into the file of the shareholders in the portal of the department. AO raised very specific and directly relevant queries/called for explanation and evidences w.r.t. source of amount received by the company from three. Assessee had already submitted complete addresses of all the three shareholders as also their Permanent Account Number (PAN) which is the best evidence to prove the identity of a shareholder, in the records of AO itself. Moreover, all the transactions with all the shareholders were admittedly made through banking channels only. Thus, their identity is fully established. The genuineness of the transaction is fully established inasmuch as all the borrowings were made through account payee cheque only and the same was duly verified by the AO from the bank statement of the assessee company filed before him, wherein the fact and the receipt of the subjected amount towards the allotment of share, was clearly visible and was duly verified by the AO. Apart from the bank statement, the AO was also having the ledger accounts of the bank in the account books maintained by the assessee and produced before him as also through the confirmation of all the three shareholders containing complete details i.e. the amount, date, cheque number etc. It is not the case of the revenue that the borrowing was made in cash so as to justify any suspicion. There was no cash deposit made in their bank A/C just prior to issue of cheque to the assessee company. CIT also alleged that the AO did not make enquiries and verification on the issue of large share premium received by the assesse and the applicability of S.56(2)(viib) and other relevant sections even though this was not the reason for scrutiny selection. Alternatively and without prejudice to above, even otherwise on merits, there has been due and proper application of mind inasmuch as the AO raised directly relevant queries which were duly replied by the assessee as well. In addition, thereto, the assessee also submitted a report of the expert dated 10.10.2015 under Rule 11UA which are at page Nos. 46-58 of the paper book which fully justified charging premium @ ₹ 50 per share. Hence, the AO was fully justified in not applying in S. 56(2)(viib). There appears no valid basis to compute excessive value of ₹ 1.73 per share which is not supported by any expert report but mere suspicion. In other words, it was nothing but a substitution of opinion by the Ld. Pr.CIT. Therefore, on this aspect also the subjected assessment order could not be covered u/s 263 as it was neither erroneous nor prejudicial to the interest of the revenue. The consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity - we quash the order passed by the ld. Pr.CIT U/s 263. Appeal of the assessee is allowed.

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• 2021 (9) TMI 854
  Addition of cash credit u/s. 68 - share application and premium from directors their concerns - onus to prove - HELD THAT:- Section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source shall be assessed as its undisclosed income. In the facts of the present case, both the nature and source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO's record. Without doing so, the addition made by the AO is based on conjectures and surmises cannot be justified. In the facts and circumstances of the case as discussed above, no addition was warranted under Section 68 of the Act. Therefore, we delete the addition made by the assessing officer - Decided in favour of assessee.

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• 2021 (9) TMI 853
  Revision u/s 263 - initiating the proceedings under section 147 - deduction claimed u/s 54B - HELD THAT:- Whether the error highlighted by the learned Pr. CIT under section 263 of the Act causes any prejudice to the interest of revenue. In the case on hand the assessee has declared her amount of share in the sale consideration in the joint property under dispute amounting to ₹ 36 lakh- whereas the learned Pr. CIT has held that the amount attributable to the assessee in the sale consideration stands only. Admittedly, there is no dispute in the total value of the sale consideration as well as the cost of acquisition - if we increased the sale consideration in the hands of the assessee then simultaneously effect should also be given in the hands of the co-owner being the father of the assessee by decreasing the corresponding sale consideration in his hands. Thus effectively, there will not be any benefit to the revenue. Accordingly, there is no prejudice to the revenue even if there is error in the assessment order and consequently no revision is required under section 263 of the Act. Reopening was made on the allegation that the assessee has understated the amount of sale consideration of the property and therefore the AO framed the assessment under section 143(3) read with section 147 of the Act considering the sale consideration declared by the assessee viz a viz the value adopted for the stamp duty purposes under section 50C of the Act. As such, there was no issue in the re-assessment proceedings with respect to the provisions of section 54B of the Act. Now the controversy arises whether the learned Principal CIT can widen the scope of the assessment which was framed under section 147 of the Act by including any other income chargeable to tax which has escape assessment. We note that such power for expanding the scope of the proceedings under section 147 of the Act does not lie with the Principal Commissioner of Income Tax. Therefore, in our considered view the learned Principal CIT cannot expand the scope of the proceedings under section 47 of the Act by raising the issue of deduction under section 54B of the Act. Thus, in the case on hand, we find that there was no issue with respect to the exemption/deduction claimed by the assessee under section 54B of the Act in the proceedings initiated under section 147 of the Act. Accordingly, we find that the learned Principal CIT has exceeded his jurisdiction by holding the order of the AO as erroneous insofar prejudicial to the interest of revenue on this count i.e. deduction/exemption under section 54B of the Act. In view of the above, we hold that the order passed by the ld. Principal CIT under threat 263 of the Act is not sustainable and therefore we quash the same. Hence the ground of appeal of the assessee is allowed.

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• 2021 (9) TMI 852
  TDS u/s 195 - Consideration for advertisement is paid to the overseas bank account of Non-resident - DTAA entered between India and Ireland, the AO held that the above said payments are taxable in India primarily as 'royalty' and alternatively as FTS/FIS - demand u/s. 201(1) @ 20% of the payments and also charged interest u/s. 201(1A) - HELD THAT:- The facts prevailing in the instant cases are identical with the facts of M/s. Urban Ladder [ 2021 (8) TMI 927 - ITAT BANGALORE] with regard to the payments made to M/s. Facebook, Ireland towards advertisement charges. Accordingly, following above said decision, we hold that the payments made by the assessee the non-resident company M/s. Facebook, Ireland cannot be considered ad royalty payments and hence they do not give rise any income chargeable in India under Indian Income tax Act in all the three years under consideration. There is no requirement to deduct tax at source from those payments u/s. 195 - Hence the assessee herein cannot be considered as an assessee in default u/s. 201(1) of the Act. Accordingly, we set aside the orders passed by Ld. CIT(A) for the years under consideration and direct the AO to delete the demand raised u/s. 201(1) of the Act and also the consequential interest charged u/s. 201(1A) of the Act - Decided in favour of assessee.

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• 2021 (9) TMI 851
  TDS u/s 195 - addition u/s 40(a)(ia) - export commission to non-residents - HELD THAT:- This issue is covered in favour of the assessee by the order of the ITAT in the case of IDS Infotech Ltd. [ 2016 (6) TMI 98 - ITAT CHANDIGARH] and the findings of the ld. CIT(A) are in accordance with the decision of Tribunal. Further, the ld. CIT(A) has followed the decision of the CIT(A) Gurgaon in the assessee's own case for the A.Y. 2012-13 and his predecessor, CIT(A) Chandigarh-2 in assessee's own case for A.Y. 2013-14. Since the Ld. CIT(A) has decided this issue in favour of the assessee by following the decision of the ITAT, we do not find any reason to interfere with the findings of the Ld. CIT(A) - we dismiss this ground of appeal of the Revenue and uphold the findings of the ld. CIT(A). Addition u/s.36(1) (va) on account of employees share paid after due date - non-payment of employees contribution to welfare funds on or before the due date as per the relevant Act - HELD THAT:- The case of the assessee is directly covered by the decision of Hon'ble Punjab Haryana High Court in the case of Commissioner of Income Tax Vs Mark Auto Industries Ltd. [ 2013 (1) TMI 448 - PUNJAB AND HARYANA HIGH COURT] . Since in the present case the assessee has deposited the ESI/PF before the due date of filing of the return, respectfully following the decision of Mark Auto Industries (supra) the addition made by the AO is deleted. Ground of appeal no. 2 is allowed. Addition u/s.14A r.w.r. 8D - HELD THAT:- As during the course of appellate proceedings specifically pleaded that it had made investment in the shares, which was made out of the internal accruals and not out of borrowed funds, however, no dividend was received on the said investment - findings of the ld. CIT(A) are based on the judgement in the case of CIT Vs M/s. Lakhani Marketing [ 2014 (7) TMI 44 - PUNJAB AND HARYANA HIGH COURT] wherein it has been held that unless and until there is receipt of exempt income during the year relevant to the assessment year under consideration, section 14A cannot be invoked. No merit in the contention of the Revenue that the ld. CIT(A) has wrongly deleted the addition - Decided in favour of assessee.

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• 2021 (9) TMI 850
  Revision u/s 263 - relevant date for the applicability of stamp duty valuation - addition in the form of difference between stamp duty value on the date of registration of the property as against stamp duty valuation on the date of booking of the flats and the actual consideration - when there is a time lag between the date of booking of the flat and the final registration of the flat in favour of the prospective buyers by the assessee, then whether the stamp duty value on the date of booking of the flat or on the date of actual registration of the flat should be considered in terms of Section 43CA ? - HELD THAT:- As per provisions of 43CA(3) of the Act, it is very clear that stamp duty valuation on the date of booking is to be considered and the said stamp duty valuation shall have to be compared with actual sale consideration. This has been done by the ld. AO and hence, it could be safely concluded that the ld. AO had taken a plausible view in the matter by applying the provisions of the Act. We find that there is no incorrect application of law on the part of the ld. AO as alleged by the ld. PCIT. Having brought on record the time lag between the date of booking and the date of actual registration of the flats, the ld. PCIT ought not to have directed the ld. AO to take the stamp duty valuation on the date of registration of the flat which is completely in contradiction of provisions of Section 43CA(3). AO having taken a plausible view in the matter and the ld. PCIT is only trying to substitute his view in place of the view already taken by the ld. AO. This, in our considered opinion, cannot be done by the ld. PCIT by invoking his revision jurisdiction u/s.263 - AO had not committed any error in the order as he had apparently applied the provisions of Section 43CA(3) of the Act. - Decided in favour of assessee.

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• 2021 (9) TMI 849
  TP Adjustment - Comparable selection - exclusion of Acropetal Technologies Ltd. - HELD THAT:- As regards allegation of fraud against the company in light of notice issued by SEBI, we find that the notice was issued in financial year 2016-17, whereas the assessment year in question pertains to 2012-13. The assessee has not filed any evidences to demonstrate the disciplinary proceedings initiated by SEBI is having any bearing on financial results of assessment year 2012-13, but the assessee is supporting its arguments only on the basis of certain newspaper reports. Although, the assessee has referred the investigation report of SEBI, but on perusal of report issued by SEBI, we could not find any adverse comments on financial results for the relevant assessment year except violation of certain regulatory guidelines in respect of trading of shares in stock market. Therefore, we are of the considered view that unless the assessee demonstrate with evidences that disciplinary proceedings initiated by certain agencies are having bearing on financial results of the company for relevant assessment year, the company cannot be excluded from the list of comparables, more particularly when the assessee itself had included said company in the list of final comparables in its TP documentation. Therefore, on this count also, exclusion of Acropetal Technologies Ltd., is rejected. Bloom Energy India Pvt. Ltd - No merit in arguments of the assessee to exclude Acropetal Technologies Ltd., from the list of comparables and hence, we are inclined to uphold the findings of ld. DRP and reject ground taken by the assessee. Onward Technologies Ltd.- In light of reasons given by the ld. DRP to exclude Onward Technologies Ltd., from the list of comparables and find that one side, the ld. DRP is accepting the fact that the company is engaged in engineering design services and IT consulting, but on the other side, rejected objection filed by the assessee only for the reason that segmental data is not available in the financial years. Therefore, once the DRP having accepted fact that functions performed by Onward Technologies Ltd., is similar to functions performed by the assessee, it ought not to have rejected inclusion of said company, merely for non-availability of segmental data - we are of the considered view that the ld. TPO needs to re-examine the claim of the assessee for inclusion of Onward Technologies Ltd., in the list of comparables by analyzing FAR studies of both companies - we set aside the issue to the file of the ld. TPO and direct him to reconsider the claim of the assessee in light of various averments made and in accordance with law.

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• 2021 (9) TMI 848
  Reopening of assessment u/s 147 - non-issuance of notice u/s. 143(2) in the re-assessment proceedings - HELD THAT:- It is settled law that issuance of notice u/s. 143(2) of the Act in re-assessment proceedings for the purpose of making adjustments to return filed by the assessee in response to notice u/s. 148 of the Act is a mandatory requirement. The section itself mandates this requirement and even courts have held so. This proposition has been laid down by the Hon'ble High court of Delhi in the case of Pr. CIT Anr vs Silver Line Anr [ 2015 (11) TMI 809 - DELHI HIGH COURT ] Since in the present case it is fact on record that no notice u/s. 143(2) of the Act was issued, after return was filed by the assessee in response to notice issued u/s. 148 of the Act, the assessment order framed in both the cases is not sustainable in law. - Decided in favour of assessee.

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• 2021 (9) TMI 847
  Revision u/s 263 by CIT - AO failure in not examining the taxpayers sale promotion expenses - AO disallowed 12% of the assessee s sale promotion expenses - HELD THAT:- CIT-DR fails to dispute that the Assessing Officer had very much disallowed 12% of the assessee s sale promotion expenses and therefore, it is not an instance of lack of inquiry as has been projected in the revision under challenge. AO directing the assessee to produce bills and vouchers relating to the impugned expenses and on examining the same finding them as being not completely verifiable. AO states that the assessee was unable to produce the bills /vouchers for the expenses so debited, and he further notes that the assessee expressed his inability to produce any further documentary evidences. Faced with these facts the AO proceeds to make an adhoc disallowance of 12% of the expenses. It is abundantly clear therefore that it cannot be said to be a case of no inquiry. Further no case has been made out by the Ld.CIT of inadequacy of inquiry conducted by the AO on the issue. Appeal of the assessee is allowed.

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• 2021 (9) TMI 846
  Capital gain from sale of agriculture land was taxable in the assessment year under consideration i.e., A.Y. 2008-09 or the A.Y. 2009-10 - Admission of admission evidence - HELD THAT:- In the present case, it appears that the bank statement now furnished by the assessee showing that the amount of ₹ 21,03,125/- vide Cheque no. 10951 was credited in the account of the assessee on 01/10/2008 was neither before the A.O. who passed the assessment order ex parte nor before the Ld. CIT(A). It is also not clear as to whether the judgment of the Hon'ble Jurisdictional High Court now relied by the Ld. Counsel for the assessee was brought to the notice of the Ld. CIT(A). Therefore, by considering the totality of the facts, deem it appropriate to set aside this issue back to the file of the A.O. to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard and by considering the documents now furnished by the assessee before this Bench of the Tribunal. Appeal of the Assessee is allowed for statistical purposes.

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• 2021 (9) TMI 845
  Bogus purchases - AO had not issued the notices u/s 133(6) of the Act by summoning M/s. Asian Tube Trading and verifying about the bogus bills issued by the said company - HELD THAT:- AO while passing the assessment order had issued the notices under section 133(6) to Asian tube trading, Mumbai however the notices sent were written undelivered on account of known was available at the premises to receive the notices. Moreover in reply submitted to the AO, on 21 January 2014, assessee, had admitted that bills issued by Asian tube trading were fictitious and the assessee had deposited the sale tax demand of M/s. Asian Tube Trading with the department so that the demand against M/s. Asian Tube Trading be not enforced and recovered from the assessee. It was also the case of the assessee that the first information report was registered against the company on the complaint of the assessee. All the above said aspects were required to be examined and considered by the CIT(A) while passing the impugned order, however none were considered by CIT(A) and he had passed order in stero type and criptic manner - As the order was passed by the CIT(A), in stero type and criptic manner, after ignoring the important admitted facts regarding the issuing of notices under section 133(6) of the Act, admissions of assessee of paying the Sales tax on behalf of Asian Tube Trading, registration of FIR, etc therefore In our considered opinion, the matter is required to be remanded back to the file of CIT(A) to decide the grounds raised by the assessee, a fresh following law. We set aside the order passed by the Commissioner and remand the matter to CIT (A). CIT(A) is directed to decide the Novo all the grounds raised by the assessee in the memo of appeal filled before him, after following the principle of natural justice and affording the opportunity of hearing to the assessee and to AO. As we are remanding back the entire matter to the CIT(A) file, we deem it appropriate not to adjudicate the other grounds raised by the revenue and assessee.

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• 2021 (9) TMI 844
  Rectification of mistake u/s 254 - Disallowance u/s 14A - argument was advanced by the assessee that since audited financial statement showing availability of surplus fund was available on record, there is no need for restoring the issue to the assessing officer for verifying the availability of surplus funds - HELD THAT:- Availability of surplus funds in the context of disallowance of interest expenditure u/r 8D(2)(ii), the Tribunal clearly observed that in case surplus fund was available, no disallowance of interest expenditure can be made - Tribunal had directed the assessing officer to verify the availability of surplus interest free funds and delete the disallowance made u/r 8D(2)(ii). While doing so, the Tribunal has specifically observed that neither the assessing officer nor the learned Dispute Resolution Panel has properly appreciated assessee s contention regarding availability of surplus interest free funds - No rectifiable mistake as the assessee tries to make out. The assessee, in our view, wants the Tribunal to pass an order according to its own liking. Thus, in our view, there is no mistake in the order of the Tribunal as contemplated under section 254(2) of the Act on this issue. Accordingly, we decline to entertain assessee s plea in this regard. Disallowance under section 14A r.w.r. 8D while computing book profit under section 115JB of the Act - Tribunal, though, has agreed with the legal principle enunciated in the case of ACIT vs Vireet Investments P Ltd .[ 2017 (6) TMI 1124 - ITAT DELHI] that, while computing book profit under section 115JB of the Act, no adjustment/disallowance can be made with reference to section 14A r.w.r.8D of the I.T. Rules, 1962, however, considering the fact that the assessing officer retains his power to make adjustment under Explanation 1(f) of section 115JB of the Act, the Tribunal has directed the assessing officer to compute book profit under section 115JB of the Act. Pertinently, in case of ACIT vs Vireet Investments P Ltd (supra), the Special Bench of the Tribunal has also expressed similar view by holding that the assessing officer can make adjustment under Explanation I(f) under section 115JB. That being the case, we do not find any mistake apparent on record as per section 254(2) of the Act. This plea of the assessee is rejected. Adjustment made on account of provision of corporate guarantee - While deciding the issue relating to adjustment on account of provision of corporate guarantee, the Tribunal has followed the orders passed by it in assessee s own case in assessment years 2008-09, 2009-10 and 2010-11 and restricted the disallowance to 0.5%. While deciding the issue in the preceding assessment years, the Tribunal had rejected assessee s pleading that provision of corporate guarantee does not come within the purview of international transaction. In the appellate order of the impugned assessment year, the Tribunal has simply followed its earlier decision. Thus, it has to be presumed that assessee s contention that provision of corporate guarantee is not an international transaction was deemed to have been rejected and the Tribunal proceeded on the footing that it is an international transaction. Thus, in view of our observation above, there is no need for any rectification / recall of the earlier order of the Tribunal. Rectification application dismissed.

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• 2021 (9) TMI 843
  Deduction u/s 14A r.w.r. 8D - not allowing deduction towards suo motu disallowance computed by the assessee - As argued no satisfaction from the AO as required u/s.14A(2) of the Act having regard to books of account of the assessee that suo motu disallowance made is not correct - HELD THAT:- CIT(A) has rectified said mistake and allowed deduction towards suo motu disallowance computed by the assessee and confirmed of net disallowance of ₹ 7,08,80,379/-. Hence, we are inclined to uphold findings of the CIT(A) and reject ground taken by the assessee. Disallowance of depreciation on leasehold improvements under normal provisions of the Act and computation of book profit u/s. 115JB - AO expenditure incurred for improvements to leasehold building on the ground that said expenditure is in the nature of capital expenditure which cannot be allowed as deduction - HELD THAT:- The issue needs to go back to the file of Assessing Officer to reconsider the issue in light of claim of the assessee that it has spent for improvements to leasehold building, which is in the nature of temporary structures. Therefore, we set aside the issue and direct the Assessing Officer to re-examine the issue and decide in accordance with law. Similarly, ground taken by the assessee challenging adjustments made by the Assessing Officer towards disallowance of depreciation on leasehold improvements to book profit computed u/s. 115JB of the Act is also set aside to file of the Assessing Officer and direct him to reconsider the issue in light of our observations given hereinabove. Disallowance of interest on TDS u/s. 40(a)(ii) under MAT provisions of the Income Tax Act, 1961 - HELD THAT:- CIT(A) has set aside issue of disallowance of interest on TDS under normal provisions of the Act to the file of Assessing Officer to ascertain fact whether the assessee has debited said expenditure into profit loss account or not in light of various evidences filed by the assessee, including copy of tax audit report as well as financial statements, where no such expenditure was debited into profit loss account. Since the issue has been set aside to the file of AO, additions made towards said expenditure under MAT provisions also needs to go back to the file of the Assessing Officer, because additions if any, needs to be made to MAT provisions is fully depends upon additions made towards said expenditure under normal provisions of the Act. Hence, we set aside this issue also to the file of the Assessing Officer and direct him to reconsider the issue along with disallowances made under normal provisions of the I.T. Act, 1961. Deduction towards education cess secondary and higher education cess u/s. 37(1) - HELD THAT:- We find that the Hon'ble Bombay High Court has considered an identical issue in the case of Sesa Goa Ltd.( 2020 (3) TMI 347 - BOMBAY HIGH COURT ] and held that education cess secondary and higher education cess are liable for deduction in computing income chargeable under head of 'profits and gains of business or profession' - There is merit in the additional grounds filed by the assessee requesting deduction for education cess secondary and higher education cess, as business expenditure deductible u/s. 37(1) - But, fact remains that assessee has taken up this issue for the first time by filing additional grounds and the Assessing Officer did not have any occasion to examine claim of the assessee. Therefore, we are of the considered view that issue needs to go back to file of the Assessing Officer and hence, we set aside this issue to file of the Assessing Officer and direct him to re-examine claim of the assessee.

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• 2021 (9) TMI 842
  Application of second proviso to section 40(a)(ia) - Retrospective or prospective effect - assessee has submitted that the recipients have already offered the entire payments made by the assessee in their returns of income and therefore, as per second proviso to section 40(a)(ia) of the Act, the assessee cannot be considered as assessee in default for not deducting TDS - HELD THAT:- We find that the assessee has neither filed the details before the Assessing Officer in respect of the recipients offering the entire income for taxation nor before the ld. CIT(A) or even filed before the ITAT. However, we are of the opinion that the ld. CIT(A) has correctly decided the legal issue i.e., the application of second proviso to section 40(a)(ia) of the Act is retrospective in nature. On very same issue in the case of Smt. Manimegalai Ganesan v. DCIT [ 2021 (8) TMI 1147 - ITAT CHENNAI ] held that the application of second proviso to section 40(a)(ia) of the Act is retrospective Application of second proviso to section 40(a)(ia) of the Act is retrospective in nature and directed the Assessing Officer to provide an opportunity to the assessee to furnish Form 26A from the recipients of the payments made without TDS and to delete the addition to the extent the recipients have offered the above payments in their respective returns of income - assessee is directed to file all the details in respect of the payments made to various parties and offering the same by all the recipients in their returns of income before the Assessing Officer and the Assessing Officer shall decide the issue in view of our findings stated hereinabove.- Decided against revenue.

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• 2021 (9) TMI 841
  Validity of assessment - no valid notice u/s. 143(2) - Jurisdiction of AO to issue notice - intimation of change in address - issue of notice u/s. 143(2) of the Act by ITO, Ward 1(1) the case was transferred to ITO, Ward- 3(1), Kanpur - HELD THAT:- Undisputed fact that the notice u/s. 143(2) of the Act was issued by ITO, Ward-1(1) which fact is apparent from the copy of assessment order itself wherein the AO has noted this fact. This is also an admitted fact that after issue of notice u/s. 143(2) of the Act by ITO, Ward 1(1) the case was transferred to ITO, Ward- 3(1), Kanpur on 09.09.2014 and notice u/s. 142(1) of the Act along with questioner was issued to the assessee on 10.10.2014 by the ITO of Ward 3(5). It is also not disputed that ITO 3(1) or 3(5) did not issue fresh notice u/s. 143(2) of the Act. From the copies of returns for AYs. 2010-11 and 2013-14 it is observed that the assessee has been filing its return of income from address of 7/186A-1, Swaroop Nagar, Kanpur and the jurisdiction mentioned on the I.T. return is Ward 3(1). The assessee vide application dated 17.11.2012 requested the Income Tax PAN Services Unit to change his address from Swaroop Nagar, Kanpur to Tilak Nagar and it was accepted also and was conveyed to the assessee by the Income Tax Service Unit and copy of such application and its acceptance. On this acceptance letter the date of change is not mentioned however the fact remains that assessee had filed application for change of address on 17.11.2012 and Form No. 26AS generated by Income Tax Department also contains the new address which means that the department had taken note of the new address and the new address also falls within the jurisdiction of Assessing Officer Ward- 3(1). Therefore, the notice u/s. 143(2) of the Act should have been issued by the AO having jurisdiction over the assessee which has not been done and similarly the orders should have been passed by the same AO who had issued notice u/s. 143(2) - Decided in favour of assessee.

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• 2021 (9) TMI 840
  Exemption u/s 11 - denial of registration 12AA - proof of charitable activity u/s 2(15) - Activity of running a school - showing the admission fees under the head reserve and surplus - HELD THAT:- CIT(E), admittedly in the order has not objected to the charitable object of the society. In fact the applicant society is running school in the name and style of Sarashwati Public Senior Secondary School, and is registered with Punjab School Education Board. Thus the assessee's society is purely into imparting the education which is discernible from the activities undertaken by the society namely to run the educational school. The running of the school is undoubtedly a charitable purpose and falls within the four corner of section 2(15) of the IT Act. The objection raised by the ld. CIT(E) was with respect to showing the admission fees under the head reserve and surplus. The ld. CIT(E) was of the opinion that by showing the admission fees under the head reserve and surplus, the assessee has diverted the receipt to the balance sheet which should have been taken in the income and expenditure account. The above said wrong treatment of the admission fees under the head reserve and surplus, would not disentitle the assessee from getting the registration 12AA of the IT Act. As it is not the case of the CIT(E) that the activities of the assessee ceased to be charitable on account of the above said wrong diversion of admission fees in the balance sheet. For the purposes of registration, u/s. 12AA of the IT Act it is essential for the registration authorities to examine that the object of the assessee should be charitable and the activities of the assessee are genuine. In our view, in the present case the objects of the assessee are charitable and further the activities of the assessee are genuine. The wrong treatment of the assessee of the admission fees under the head reserve and surplus, undoubtedly an issue which the AO was required to be examined. It has a direct bearing on the eligibility of the assessee u/s. 10(23C) (iiiad). The financial year 2016-17 to 2018-19, are on record which shows that even if the admission fees is taken into the profit and loss account instead of balance sheet, then also the total aggregate receipt for the financial year 2016-17 and 2017-18 would below ₹ 1 crore. For the financial year 2018-19 the admission fees during the year was ₹ 506910/- and the total income for the year was 9240017/- thus the total aggregate annual receipt was ₹ 97,46927/-. (Page-22 and 23 of the paper book) thus even for the financial year 2018-19 relevant to the assessment year under consideration the assessee was eligible for u/s. 10(23C)(iiiad). As relying on DOCTOR MADAN LAL ATRI CHARITABLE TRUST VERSUS CIT EXMP. LUCKNOW (U.P.) [ 2021 (6) TMI 358 - ITAT AGRA] we are of the opinion that the assessee is entitled registration accordingly we direct the CIT(E) to grant registration to the society from the date of application. - Decided in favour of assessee.

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• 2021 (9) TMI 839
  Depreciation on apple ipad - at the general rate of 15% OR 60% - whether the iPad falls in the definition of computer or mobile phone? - whether the definition of computer given under the information technology Act can be utilised for the purpose of providing the depreciation to the computers under the income tax act or not? - HELD THAT:- Predominate purpose of iPad is a communication and not a computing device, as its main features are email, whatspp, Facetime calls, calls, music, films etc though iPad may discharge some of the functions of computers. In our view iPad is not a substitution of computer/laptop, which have various utilities/functions, though some functions may be common with Ipad. In common parlance also, iPad is considered as communicating device with the some additional features of computer and lastly Apple store do not sell Ipad as computer device rather it is selling it as communicating/entertainment devise. Another reason for holding that the iPad is a communication device, as it is having IMEA number, though assessee had denied to have IMEI number, in the subject matter of iPad, however no concrete evidence has been produced on record in this regard. Lastly we are also of the opinion that in case the assessee wishes to claim that iPad is a computer and is required to have depreciation at the higher rate, then in our opinion, the onus is on the assessee to prove that the assessee is entitled to higher depreciation and merely on the basis of deduction/assumption it cannot be held that the iPad is computer. Hence iPad is not a computer, hence depreciation at low rate is applicable. Hence this ground of the assessee is dismissed. Disallowance of foreign travelling expenses @ 5% (excluding air ticket visa fee) - HELD THAT:- Admittedly some vouchers for the expenditure incurred by the assessee was missing and as such the lower authorities have taken a view of restricting the expenditure to 5%. In our considered opinion the expenditure restricted by the lower authority, in the absence of the supporting document was reasonable and no interference is called for at available.In the result the appeal of the assessee is devoid of merit in the same is dismissed.

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• 2021 (9) TMI 838
  Penalty u/s 271(1)(c) - Estimation of income on bogus purchases - HELD THAT:- AO has admitted that the assessee alternatively made purchases from the parties but only some profit element is not disclosed. AO by levying the penalty has nowhere proved purchases are bogus because the assessee has filed explanation that it had made purchases from registered dealers and also produced bills and vouchers along with payment details and the payments are made through account payee cheques - assessee is able to produce stock tally and also the transactions which are recorded in the book of accounts but could not be verified as the assessee was unable to produce documentary evidences of transportation of goods. In identical facts Nokia India Pvt. Ltd [ 2012 (7) TMI 35 - DELHI HIGH COURT ] has already decided the issue that in the case of estimation of bogus purchases penalty under section 271(1)(c) of the cannot be sustained - Decided against revenue.

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• 2021 (9) TMI 837
  Capital gain - Dishonour of cheque for sale consideration - In the sale deed, there was condition that in case of dis- honoured of cheque, the sale deed shall become null and void automatically without any action and shall be deemed to be null and void - HELD THAT:- Entire transaction has been recalled, the sale deed has been made null and void and the assessee has been also directed to refund the amount received from M/s Goel Flexible Packaging Pvt. Ltd. It is also the fact that the asset in sale is still in the possession of the assessee. On going through the entire factum of the issue, we hold that the decision of the revenue was based on the evidences before them and since the matter has been settled finally by the order of the Hon ble High Court, at this juncture, we have no hesitation to hold that no capital gains are taxable in the hands of the assessee as there was neither transfer of any capital asset nor absolute receipt of any amount. - Appeal allowed.

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• 2021 (9) TMI 836
  Disallowance u/s 14A - Allowability of interest expenses - HELD THAT:- Disallowance by taking resort to section 14A cannot be made as the assessee has not earned any exempt income, secondly when the assessee is having interest free fund the expenditure of interest incurred on borrowed funds, cannot be disallowed merely on the ground that the assessee is required to prove nexus between the interest free advances/loan given to the related parties; and thirdly without prejudice to other submissions, the interest earned by the assessee to the extent is eligible for set off against interest payment - Thus, the addition could be made. CIT(A) dismissed the appeal purely on the basis that the assessee failed to establish that borrowed fund was utilized for the purpose of business.As noticed even before CIT(A), it was submitted that the assessee had sufficient interest free fund available for making advances. It was also stated that since no tax free income is earned, hence no disallowance could be made. Lastly, it was also stated that the assessee is eligible for setting off interest earned and offered for taxation. Admittedly, no finding is recorded by the Ld.CIT(A) on these submissions. Revenue has not disputed the fact that the authorities below have not allowed set off of the interest earned and offered for tax. Moreover, the assessee has not earned any exempt income under these undisputed facts, the additions made by invoking the provision of section 14A of the Act is hereby restricted to a sum of ₹ 7,14,646/- as prayed by the assessee. Thus, grounds raised by the assessee in this appeal are allowed.

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• 2021 (9) TMI 835
  Unexplained cash credit - addition to 50% of the cash deposits in bank account - CIT(A) deleted the addition to the extent of amount received through cheques and transfers - HELD THAT:- CIT(A) has not rebutted the contention of the assessee that estimated income of ₹ 25,000/- per acre rate was the rate of lease of land for agriculture purposes in the year under consideration. CIT(A) has observed that the department has not been able to establish the possible source of cash generated. We further notice that the estimation of income @ 25,000/- per acre by the CIT(A) is not based on evidence on record or report of the authority concerned. CIT(A) not pointed out any reason for rejecting the contents of the affidavit of the father of the assessee submitted by the assessee in support of his claim. CIT(A) has not pointed out any clinching evidence on record to justify his action. In our considered view, the addition of 50% of the cash deposited based on assumption and presumption is not sustainable in law. We accordingly set aside the impugned order passed by the Ld. CIT(A) and direct the AO to deleted the addition sustained by the Ld. CIT(A). - Decided in favour of assessee.

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• Customs

• 2021 (9) TMI 869
  Amendment of Bill of Entry - seeking amendment in GSTIN and the address in the BOE dated August 07, 2020 - section 149 of the Customs Act, 1962 - HELD THAT:- The decision in MICROMAX INFORMATICS LIMITED VERSUS THE UNION OF INDIA AND ORS. [ 2018 (12) TMI 802 - BOMBAY HIGH COURT] , with due respect, proceeds to read the only proviso to section 149 (as it then stood) in a constricted manner as if the words except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the case may be are not there in such proviso. However, it could be so that the interpretation placed by the Court on the first proviso is correct for the purpose of determination of the issue arising for decision therein, i.e., rejection of the petitioner s refund claims for the period between July 2014 and June 2015. We, therefore, hold that such interpretation of section 149 as made by the coordinate Bench turns on the facts and circumstances of the case before it. The decision in DIMENSION DATA INDIA PRIVATE LTD. VERSUS COMMISSIONER OF CUSTOMS AND ANR. [ 2021 (1) TMI 1042 - BOMBAY HIGH COURT] correctly interprets section 149 and we share the view expressed therein that amendment to the Bill of Entry is clearly permissible even in a situation where the goods are cleared. The petitioners had prayed for amendment of documents only, which is squarely covered under section 149 of the Act, any deficiency in the system cannot be used by the respondents as a shield so as to deny relief to a party; if indeed the system does not permit, the deficiency has to be covered up manually until improvements are effected in the system for such amendment. We also record not having been shown from the reply-affidavit that even a manual amendment is not possible - the grounds for not allowing amendments are clearly untenable and hence, judicial interdiction for securing justice in the present cases is considered necessary. Petition disposed of by directing the concerned respondent to consider the applications for amendment of the documents of the respective petitioners in accordance with law, upon granting the authorized representative of the petitioners an opportunity of hearing, as early as possible but not later than four weeks of receipt of a copy of this order.

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• 2021 (9) TMI 834
  Benefit of exemption - Import of Camera - Extended period of limitation - Jurisdiction of DRI to issue Show Cause Notice (SCN) - Proper Officer - Validity of proceeding initiated for Recovery of duty not paid - clearance of the cameras on the basis that they were exempted from levy of basic Customs duty under Notification No.15/2012 - HELD THAT:- Learned advocate Mr.Trivedi objects on the ground that decision in the case of COMMISSIONER OF CUSTOMS, KANDLA VERSUS M/S. AGARWAL METALS AND ALLOYS [ 2021 (9) TMI 316 - SUPREME COURT] has followed the decision in the case of M/s. Agarwal Metals and Alloys where it was held that In view of decision in CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [ 2021 (3) TMI 384 - SUPREME COURT] these appeals must fail as the show cause notice(s) in the present cases was also issued by Additional Director General (ADG), Directorate of Revenue Intelligence (DRI), who is not a proper officer within the meaning of Section 28(4) read with Section 2(34) of the Customs Act, 1962. Matter shall proceed on 16/09/2021, by then, necessary instructions may be obtained.

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• Insolvency & Bankruptcy

• 2021 (9) TMI 861
  Sanction of scheme of amalgamation and arrangement - rejection of Scheme of Amalgamation and Arrangement which had been approved by NCLT - inherent powers under Rule 11 of NCLAT Rules, 2016 - HELD THAT:- The concerned order of this Tribunal sought to be modified/ clarified has dealt with the scheme as a whole which was proposed and which was challenged and after going into the various details and the objections raised by the Regional Director, the Appeal was allowed. The Appellant challenging the Scheme of Arrangement and Amalgamation claimed that the scheme was impermissibly promoter oriented, anti-minority, anti-public shareholders, illegal, unlawful, unjust and against the public policy. The Appellant claimed that the Scheme of Arrangement and Amalgamation inter se the Respondent Companies is illegal and bad in law. This Tribunal considered the grievances of the Appellant as well as Intervenors and inter alia this Tribunal referred to the Valuation Report - It is clear that even the Regional Director looked at the scheme as a composite scheme of arrangement/ merger/ amalgamation filed with the applications and thus we do not find that the argument that the scheme should be segregated in the context of Private Limited vis- -vis Public Limited Companies. It is quite clear that the Section applies if order has been made under Section 230 sanctioning compromise or arrangement, modification can be done if it is necessary for proper working of the scheme. In the present matter even if NCLT had passed order under Section 230, said order was reversed by this Tribunal. When the scheme has been rejected, Section 231 cannot be relied upon to seek a modification. The Application is rejected.

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• Service Tax

• 2021 (9) TMI 859
  Levy of Service Tax - foreign remittances - duly discharged by the Appellant, but the same has not been accepted by the Adjudicating Authority - difference in challan amount due to exchange rate difference and TDS payments - Certain entries could not be traced at the Appellant's end - non-production of documentary evidence (challans etc.) indicating payment of service tax on impugned services - market research and exploration executed outside India - Extended period of limitation - suppression of facts or not - HELD THAT:- For the demand of service tax of ₹ 1,17,157/- on foreign remittance of ₹ 11,37,450/-, the Appellant paid service tax of ₹ 1,76,328/- towards the services received from the service provider mentioned at Serial. No. 64. The service tax paid by the Appellant is more than the service tax pointed out by the Department for the reason that actual remittance is more on account of exchange rate difference and substantial TDS. It has also been pointed out by the Appellant that there are no other remittances of the service provider M/s Stephenson Harwood Office No. 2 and, therefore, the service tax payment pertains to this very transaction - Appellant has paid the service tax, though on a higher value than proposed by the Department. The show cause notice for the demand, in view of the provisions of section 73(3) of the Finance Act, should not have been issued. Demand of service tax of ₹ 1,57,748/- on foreign remittance of ₹ 15,31,530/- - HELD THAT:- It has been pointed out by the Appellant that since the records were quite old, the challans evidencing such payment were not available at the end of the Appellant, but as the demand of service tax of ₹ 82651 with respect to Serial No. 139 for the year 2010-2011 was dropped by the Adjudicating Authority the demand of ₹ 1,57,748/- for the year 2009-2010 was also liable to be dropped on similar grounds - if the demand has been dropped for the year 2010-2011, there is no reason why it should not be dropped for the year 2009-2010. Thus, the demand of service tax of ₹ 2,74,905/- on foreign remittance of ₹ 26,68,980 cannot be sustained. Demand of service tax - Certain entries could not be traced at the Appellant's end - non-production of documentary evidence (challans etc.) indicating payment of service tax on impugned services - discharge of burden of proving taxability - contention of the Appellant is that the entries relating to the said demand do not pertain to the Appellant - HELD THAT:- The Appellant could not produce any document which may indicate that service tax had been paid in respect of these entries. It has further been noticed in the order that details were provided to the Appellant during the course of personal hearing on 17.02.2020 - contention of the learned Counsel for the Appellant is that since the details were provided during the course of personal hearing on 17.02.2015, it did not have sufficient time to trace out the requisite documents and that too only a calculation sheet of taxable value for the period 2009-2010 and 2010-2011 was provided. If the Department had proposed the demand, it was for the Department to substantiate from the records that the proposed demand was justified. In the present case the contention of the Appellant is that its records do not indicate that the foreign remittances amounting to ₹ 8,36,968/- on which service tax of ₹ 86,208/- was demanded could be related to the Appellant. There is nothing on the record which may conclusively establish that the aforesaid foreign remittances are in respect of the Appellant - Demand do not sustain. Levy of service tax - market research and exploration executed outside India - HELD THAT:- Though market research and exploration have not been specifically stated in the contract, but still the scope of the work clearly suggests that the contract is basically for the work of market research and exploration which would be taxable under section 65(105)(y) of the Finance Act but in view of the provisions of rule 3(ii) of the Import Rules, no service tax would be payable. Extended period of limitation - suppression of facts or not - HELD THAT:- When there was some ambiguity regarding levy of service tax on services received from abroad under the reserve charge mechanism and it was clarified later, it cannot be said that the appellant had suppressed any material fact from the department with intention to avoid payment of service tax - extended period cannot be invoked. The order dated 26.05.2015 passed by the Commissioner cannot be sustained and is set aside - Appeal allowed.

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• Central Excise

• 2021 (9) TMI 868
  Seeking to Issuance of directions to re-dispose the application for settlement filed by the petitioner - transparency in the matter of conducting an investigation by the Department Officials or not - grievance of the petitioner is that the two seized hard disks are not produced before the Settlement Commission for investigation - present writ petition is the second writ petition filed by the petitioner-Company - Section 32-E of the Central Excise Act - HELD THAT:- For entertaining an application under Section 32-E of the Act, the application must contain full and true disclosure of duty liability, which had not been disclosed before the Central Excise officer having jurisdiction. Secondly, sub-section (1) of Section 32-L of the Act contemplates that any person who made an application for settlement under Section 32-E has not cooperated with the Settlement Commission in the proceedings before it - Unless the first condition is satisfied, the application cannot be admitted. Once the application is admitted, till the end of the proceedings, the person who submits an application has to cooperate with the Settlement Commission for the purpose of settling the issues. The twin conditions admitted in the two conditions are of paramount importance. In view of the fact that once the issues are settled before the Settlement Commission, then there is no scope for reopening by the authorities and under those circumstances, these conditions are to be considered as vital in order to protect both the interest of the Department as well as the interest of the persons, who submits an application - it is sufficient if the findings of the Settlement Commission are considered. In the present case, the Revenue could establish their position based on Investigation Report along with the primary evidences recovered from the premises of the petitioner. However, the petitioner had neither agreed to the Revenue's stand nor produced any fresh evidences for the purpose of reconsidering the issues, as the said exercise was done by the Settlement Commission pursuant to the directions issued by this Court - the scope of settlement of issues are confined with reference to the scope available under the provisions of the Act. The Settlement Commission is not empowered to go beyond the procedures contemplated as well as the scope enumerated. This Court is of an opinion that the petitioner has failed in extending their cooperation for the purpose of settling the issues by the Settlement Commission and thus, the petitioner is not entitled for the relief, as such, sought for in the present writ petition - Petition dismissed.

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• 2021 (9) TMI 855
  Reversal of CENVAT Credit - value of goods cleared under N/N. 82/84 to M/s HSL claiming exemption - whether provisions of Rule 6 (3) of Cenvat Credit Rules shall be applicable to the present transactions? - HELD THAT:- A perusal of the Rule makes it clear that it applies in cases where manufacturer is engaged in manufacture of any final product which is chargeable to duty as well as the manufacturers another final product which is exempted from payment of duty or chargeable to Nil rate of duty and the manufacturer takes credit of the specified duty on any inputs, which is used in manufacture of both the above kind of final products - The facts of the present case are that there is one final product of the appellant herein i.e. is dissolved acetylene gas which is cleared by the appellant on payment of requisite excise duty except for M/s HSL being entitled for exemption under Notification No. 82/84 provided it fulfills the procedure mentioned therein. Delhi Bench of this Tribunal also in the case of AUREOLA CHEMICALS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [ 2004 (1) TMI 244 - CESTAT, NEW DELHI] has held that the goods cleared by the then appellant i.e. spent sulphuric acid was cleared against CT-3 bond to the fertilizer manufacturer. The sulphuric acid was denied to be called as exempted product or the product chargeable to NIL rate of duty. Provisions of erstwhile Rule 57CC/Rule 6 of CENVAT Credit Rules were not held applicable. As per provisions of Chapter X Central Excise Rules 1944 and Rule 6 of CENVAT Credit Rules, anyone who wants to seek benefit of the provisions has to make an application in a proper form. On being satisfied, the Commissioner may extend the benefit of provision to the said specified industry. Thus the object of both the provisions is clear and the only difference is that Chapter X uses the word remission of duty on excisable goods and Central Excise Rules 2001 used the word exemption of duty to excisable goods . None of these words have been defined in the Central Excise Act. From the definition of exempted goods, it is clear that good may either be exempted from payment of any duty or was not charged to duty. In the present case, admittedly, dissolved acetylene gas as per tariff, is being charged to duty @ 14%. Notification 82/84 apparently does not extend exemption to dissolved acetylene gas as such it does extend the benefit to the specified industry buying this product . Hence the product cannot be held to have been covered under the definition of Rule 2(d) of CENVAT Credit Rules. Accordingly, applicability of Rules 6(3)(b) of CENVAT Credit Rules is not at all sustainable. Thus, the adjudicating authority has failed to appreciate that Rule 6(3)(b) is applicable where the manufacturer is manufacturing two separate products one being charged to duty and another being exempt from payment of duty or is charged with NIL rate of duty. Apparently, the same is not the fact for the present case. The product in question is one and only one i.e. dissolved acetylene gas which is charged to duty @ 14% - appeal allowed.

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• Indian Laws

• 2021 (9) TMI 865
  Dishonor of Cheque - Discharge of legally enforceable debt or not - preponderance of probabilities - rebuttal of presumption u/s 139 of NI Act - HELD THAT:- In order to hold the accused guilty under Section 138 of the Negotiable Instruments Act, it is mandatory that the complainant should prove that the cheque in question was issued as against the legally enforceable debt or liability - Here, in this case, it was stated that the cheque in question was issued to one Radhakrishnan. However, in respect of the alleged signature of the revision petitioner found in the cheque, there was no denial on his side. Though it was stated that the particular cheque was obtained by one Radhakrishnan, in order to substantiate the same, no substantial evidence has been let in before the Courts below. Further, in the complaint lodged before the Superintendent of Police, Theni District, the respondent/complainant was not arrayed as a party. Further, in his cross-examination, D.W.1 had admitted that in respect of presentation of the cheque, there was no acknowledgement available with him. In the instant case, as rightly pointed out by the learned counsel appearing for the respondent there was no denial on the side of the petitioner that the signature found in the cheque does not belong to him. Therefore, the respondent is entitled to invoke the presumption of Section 139 of the Negotiable Instruments Act that the cheque has been issued for discharging the legally subsisting liability, which is a rebuttable presumption. As already observed, the presumption has not been rebutted by the petitioner/accused. He has not probabilised his defence by preponderance of probabilities. Hence, in view of the same, this Court holds that the cheque has been issued for discharging the legally enforceable debt. In respect of the presentation of the cheque, P.W.1 had given evidence as the cheque was presented on 02.11.2007 and thereafter, on 03.11.2007 the same was returned with an endorsement as ''Account closed''. Thus, the statutory notice has been issued to the respondent on 16.11.2007 and the same was returned as could be evidenced from the return cover and postal receipt. The said circumstances reveal the fact that by following the ingredients of Section 138 of the Negotiable Instruments Act, the case has been presented before the trial Court for initiating action against the petitioner under Section 138 of the Negotiable Instruments Act. The evidence given by the revision petitioner before the trial Court makes it clear that he does not know the date on which the cheque has been issued to the said Radhakrishnan. Therefore, in the absence of the details in respect of the date on which the said cheque was issued to the said Radhakrishnan, this Court cannot hold that the said Radhakrishnan has filed the complaint through the complainant. This Criminal Revision is dismissed, confirming the conviction and sentence imposed by the Courts below on the revision petitioner.

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• 2021 (9) TMI 863
  Dishonor of Cheque - insufficiency of funds - acquittal of the accused - discharge of legally enforceable debt or not - rebuttal of presumption - Section 139 of N.I. Act - HELD THAT:- It is to be noted here that, loan is said to have been advanced in 2009, but however, in the entire complaint there is absolutely no reference as to the date of advancement of loan for ₹ 2,00,000/-. It is hard to accept the contention that such a huge loan is being advanced and the complainant does not remember the date of advancement of loan. Even in the examination-in-chief P.W. 1 has not stated regarding date of advancement of loan. In the cross-examination, P.W. 1 has admitted that he has advanced the loan without obtaining any document. The evidence of P.W. 1 itself disclose that his monthly income is ₹ 5,000/- to ₹ 6,000/-. Further, in his cross-examination, he claimed he had withdrawn the amount from the bank and paid it to the accused. But to substantiate the said contention that he has bank account and was having balance of more than ₹ 2,00,000/- as on that particular date, no documents have been produced by the complainant - Admittedly, the accused is neither a friend nor relative of the complainant. Hence, the financial status of the complainant itself is in doubt and as such, the accused has created a dent in the case of the complainant. Considering these facts and circumstances, it is evident that the accused has rebutted the presumption available in favour of the complainant. Thereafter, the burden again shifts on the complainant to establish his financial status, but the complainant has not placed on record any document in this regard so as to prove financial status and to advance huge loan of ₹ 2,00,000/- to a person, who is not a close relative or close friend and without any security. Under these circumstances, looking to the facts, it is evident that the complainant has failed to establish the fact that Ex. P1 is issued in discharge of a legally enforceable debt. The learned Magistrate has considered all these aspects and appreciated oral and documentary evidence in detail. The judgment of acquittal passed by the learned Magistrate is neither perverse nor capricious so as to call for any interference by this court. Hence, the appeal is devoid of any merits and needs to be dismissed - Appeal dismissed.

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