TMI Tax Updates - e-Newsletter
September 23, 2019

Case Laws in this Newsletter:

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

TMI SMS

• Income-tax (9th Amendment) Rules, 2019 - Additional depreciation on motor cars and motor vehicles shall be allowed in certain conditions

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• Exemption from TDS on cash withdrawal u/s194N for making payment to farmers - commission agent or trader, operating under APMC specified.

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Articles

1. PROFITEERING ON SUPPLY OF GOODS (GLASS KIT HOOD)

   By: Dr. Sanjiv Agarwal

News

1. Commerce & Industry Minister to Visit UAE for meeting of High Level Task Force on Investment

Notifications

Income Tax

1. 71/2019 - dated 20-9-2019 - IT

Seeks to amend Notification No. 50 of 2014 dated the 22nd October, 2014 - Jurisdiction of Income-tax authorities

2. 70/2019 - dated 20-9-2019 - IT

Exemption from TDS on cash withdrawal u/s194N for making payment to farmers - Central Government specifies the commission agent or trader, operating under Agriculture Produce Market Committee (APMC)

3. 69/2019 - dated 20-9-2019 - IT

Income-tax (9th Amendment) Rules, 2019 - Additional depreciation on motor cars and motor vehicles shall be allowed in certain conditions.

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/IMD/DF2/CIR/P/2019/101 - dated 20-9-2019

Risk management framework for liquid and overnight funds and norms governing investment in short term deposits

DGFT

2. TRADE NOTICE No. 34/(2015-2020) - dated 19-9-2019

Online filing and Issuance of Preferential Certificate of Origin through the Common Digital Platform

Customs

3. 32/2019 - dated 20-9-2019

Disposal of Unmanned Aircraft System(UAS)/Unmanned Aerial Vehicle (UAVs)/remotely piloted Aircrafts (RPAS)/Drones

Highlights / Catch Notes

GST

• Reduced Tax Rate for Low-Cost Houses in Affordable Projects: Applies to Supplies After Jan 25, 2018, Not Limited to Developers.

  Case-Laws - AAR : Rate of tax - Low cost houses up to a carpet area of 60 Square meters per house in an affordable housing project - Notification no-where restricts the benefit to a ‘Developer’ only. - the benefit of reduced rate would be available to them only in the cases of supply effected after 25.01.2018 - AAR
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• Court Dismisses Petition for GSTR-3B Late Fee Refund Due to Lack of Initial Application to Respondents.

  Case-Laws - HC : Refund of late fee collected - in Form GSTR-3B - The petition filed by the petitioner seeking directions as aforesaid for the refund of the amount without approaching the respondents by way of appropriate application/representation, cannot be entertained by this court. - HC
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• High Court Dismisses Petition Challenging State Authority's Jurisdiction Under GST Act Section 6(1); Alternative Remedy Exists.

  Case-Laws - HC : Proper officer under GST - Vires of Section 6(1) of the Goods and Service Tax Act, 2017 - it is submitted that the State authority lacks jurisdiction to investigate and bring to assessment any amounts having regard to the peculiar circumstances of the case - Petition dismissed since an alternative remedy is available - HC
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Income Tax

• Income-tax (9th Amendment) Rules, 2019: New Depreciation Benefits for Motor Vehicles to Reduce Taxable Income and Boost Economy.

  Notifications : Income-tax (9th Amendment) Rules, 2019 - Additional depreciation on motor cars and motor vehicles shall be allowed in certain conditions.
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• APMC Commission Agents Exempt from TDS on Cash Withdrawals to Farmers u/s 194N of Income Tax Act.

  Notifications : Exemption from TDS on cash withdrawal u/s194N for making payment to farmers - Central Government specifies the commission agent or trader, operating under Agriculture Produce Market Committee (APMC)
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• Tax Refund Withholding Invalid: Return Not Processed u/s 143(1), Section 241A Application Premature.

  Case-Laws - HC : Withhold the refund - neither the original or the revised return of income has been processed u/s 143(1) - the occasion to withhold any refund u/s 241A at this stage does not arise. Therefore, on the admitted facts the application/invocation of Section 241A is premature - HC
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• Penalty u/s 271(1)(c) Requires Contextual Analysis Amid Differing Interpretations in Income Tax Cases.

  Case-Laws - AT : Penalty u/s. 271(1)(c) - the action of the assessee cannot be discarded summarily on the face of divergent views prevailing on the subject. - AT
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• Assessee Eligible for Deduction u/s 80IE After Substantial Expansion in Designated Regions for Industrial Growth.

  Case-Laws - AT : Deduction u/s 80-IE - fresh claim after substantial expansion - assessee had earlier claimed deduction u/s 80IB and also u/s 10C - assessee is entitled to claim deduction u/s 80IE which is for making specific states industrially advanced States as well - AT
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• Court Overturns Interest Expense Disallowance After Proving Business Necessity for Interest-Free Loan.

  Case-Laws - AT : Disallowance of interest expense - appellant has been able to prove the business exigency of giving loan of such a huge amount without interest after borrowing the same at huge interest expenses - Additions deleted - AT
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• Surplus Stock Not Unexplained Investment: Treated as Regular Business Income u/s 69 of Income Tax Act.

  Case-Laws - AT : Additions against Excess stock found - the value of surplus stock in the facts and circumstances of the assessee’s case did not represent assessee’s unexplained investment u/s 69 and it constituted its regular business income for the year under consideration. - AT
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• Excess Cash Additions Confirmed Despite Telescoping Claims from Income Offered in Solitaire Project Survey.

  Case-Laws - AT : Additions towards excess cash found - although the assessee claims to have taken the benefit of telescoping towards income offered from Solitaire Project, but while recording statement during the course of survey it was the case of the assessee that excess cash found during the course of survey represents unaccounted income - additions confirmed - AT
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• Party Deemed Assessee in Default u/s 206C(6A) for Not Collecting Tax on Scrap Sales; Timeliness Concerns Raised.

  Case-Laws - AT : Assessee in default u/s. 206C(6A) - non-collection of tax at source on sale of heavy scrap - SCN in the instant case has been issued after five years - Thus, in the absence of statutory time limit prescribed for passing order with reference to collection of taxes, principle of reasonable time limit to be followed - AT
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Customs

• Penalty Imposed for Incorrect Form V Bill of Entry on Import of Used CPU Boards; Confiscation Confirmed.

  Case-Laws - AT : Confiscation - imposition of penalty - import of CPU Board - old and second hand goods - appellant instead of filing regular Bill of Entry chose to file Form V Bill of Entry - redemption fine and penalty confirmed - AT
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DGFT

• DGFT Launches Online System for Issuing Preferential Certificates of Origin to Boost Trade Efficiency and Transparency.

  Circulars : Online filing and Issuance of Preferential Certificate of Origin through the Common Digital Platform
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Indian Laws

• Court to Decide on Plaintiff's Right to Recover Service Tax Paid, Including CENVAT Credit, After Defendant's Objections Addressed.

  Case-Laws - HC : Recovery of service tax paid - The CENVAT credit would form an integral component of the service tax amount which the Plaintiff could claim recovery of, subject to the objections of the DDA being adjudicated by the Court - HC
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• High Court: Inter-corporate loans/deposits not "deposits" under Maharashtra Depositors Act; Companies Act governs these transactions.

  Case-Laws - HC : Deposit - the inter­corporate deposit/loan, i.e., a loan advanced/deposit made by a company with another company registered under the provisions of the Companies Act, 1956/2013 would not amount to a “deposit” within the meaning and for the purpose of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999- HC
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• High Court Rules Statements Without Supporting Testimony Are Not Valid Evidence in Cheque Dishonor Case u/ss 281, 313 CrPC.

  Case-Laws - HC : Dishonor of Cheque - instruction issued for Stop Payment - the petitioner did not step into the witness box to stand by his defence. The defence taken by the petitioner at the time of framing of notice and while recording the statement of petitioner under Section 281 Cr.P.C. read with Section 313 Cr.P.C. cannot be considered as evidence.- HC
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IBC

• MSME Promoters Can Regain Control Without Competing; Creditors May Delay Info Release for Viable Plans.

  Case-Laws - AT : If the ‘Corporate Debtor’ is MSME, it is not necessary for the Promoters to compete with other ‘Resolution Applicants’ to regain the control of the ‘Corporate Debtor’ - it is open to the ‘Committee of Creditors’ to defer the process of issuance of ‘Information Memorandum’, if the Promoter of MSME offers a viable and feasible plan maximising the assets of the ‘Corporate Debtor’ and balancing all the stakeholders. - AT
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SEBI

• SEBI Issues New Risk Management Framework for Liquid and Overnight Funds to Enhance Safety and Efficiency in Investments.

  Circulars : Risk management framework for liquid and overnight funds and norms governing investment in short term deposits
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Central Excise

• CENVAT Credit Dispute Over EOU Inputs Resolved; Calculation Error Acknowledged, Extended Demand Deemed Unsustainable Based on Revised Rules.

  Case-Laws - AT : CENVAT Credit - inputs received from EOU - the contention, that this was a mistake in calculation and that they were not aware of the revised formula prescribed in the Rules is acceptable - the demand raised for the extended period cannot sustain and requires to be set aside. - AT
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Case Laws:

• GST

• 2019 (9) TMI 878
  Rate of tax - Low cost houses up to a carpet area of 60 Square meters per house in an affordable housing project - Benefit of reduced rate of GST is available to sub-contractors or not - construction service provided by M/s. Yash Nirman Engineers and Contractors to M/s. Lakhani Builders Pvt. Ltd under the project La-Riveria - taxable at lower rate of CGST@ 6% and SGST @ 6% as provided in SI. No: 3- Item (V) - sub item(da) vide notification no: 01/2018-CT (Rate) dated 25-01-2018? HELD THAT:- The applicant has not been given the entire contract for construction of complete houses. Probably the carpentry work like making of doors, etc, electrical work, etc does not seem to have been given to them. However, the job allotted to them are pertaining to affordable housing since the each and every one of the apartments are less than 60 sq. mtrs. The entry (v) (da) of Notification 01/2018, mentioned above, no-where restricts the benefit to a Developer only. The Notification entry is qua the supply of service and not qua the person and therefore once a project qualifies as an AHP, the benefit of concessional rate of tax would be available in respect of works contract services pertaining to Low Cost Houses, irrespective of it being supplied by the Developer or the Contractor. The applicant s case is covered under the tax rate of 12%, under Heading 9954 (Construction Services), (v) (da) of above mentioned Notification No. 11/2017, as amended since the project undertaken by them falls under the definition of Affordable Housing as also claimed by them in their application, the benefit of reduced rate would be available to them only in the cases of supply effected after 25.01.2018 i.e. the date on which Notification 1/2018-Central Tax (Rate) was issued and the benefit of this reduced rate would be applicable in case of only those flats which are of carpet area upto 60 sq mtrs., in this scheme, which is covered in the category of affordable housing. Answered in the affirmative.

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• 2019 (9) TMI 877
  Levy of GST - value of material supplied by the recipient of service - mechanism to calculate the taxable value as per section 15 of the Act - HELD THAT:- Section 15 of CGST Act, 2017 contains provisions with respect to Valuation of taxable supply - In the subject case, the material is supplied by the contractee and therefore the question raised by the applicant as to whether they can charge GST on the same is irrelevant. The applicant, on this issue of supply of concerned materials, is not a supplier of goods/services and as per the provisions of section 95 of the CGST Act, they cannot raise this question - the question not answered. Mechanism to calculate the taxable value as per section 15 of the Act - HELD THAT:- The concerned material supplied by the contractee are essential components for supply of Construction service i.e. Construction of Main Factory Building. As per section 15, any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both shall be included in the value of taxable supply. The amount certified by the architect for the invoice to be issued before deducting the value of Cement, Mild Steel, Tor Steel and Structural Steel shall be the value of supply for the purpose of Levy of tax as per section 15 of the Act.

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• 2019 (9) TMI 876
  Whether any goods had been sold by the applicants to the respondent? HELD THAT:- It is left open to the applicants to make an application to the Assessing Officer under the UP VAT Act, 2008 and the UP GST Act, 2017 alongwith the copies of the invoice claimed to have been issued by the applicants against goods sold to the respondent. If such application would be filed on 24.09.2019, the concerned Assessing Officer/s may issue a necessary letter of confirmation or denial to the applicants within next two days after looking into the relevant returns of the respondent. Put up on 23.09.2019.

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• 2019 (9) TMI 875
  Grant of Regular Bail - offences under Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017 - HELD THAT:- Considering the nature of allegations made against the applicant in the FIR and considering the admitted position that the applicant is arrested on 08.07.2019 and the fact that till date even after passage of 60 days, neither any complaint nor charge-sheet is filed and therefore, the applicant would be entitled for default bail, without going into detail at this stage, prima facie, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail. The applicant is ordered to be released on regular bail in connection with an offence - Application allowed.

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• 2019 (9) TMI 874
  Difficulties being faced in entertainment, processing and allowance of the refund claims made under Section 54 of the Central Goods and Services Tax Act, read with Section 16 of the Integrated Goods and Services Tax Act - grievance of the petitioners is also that the statutory mechanism created for entertaining refund claims is not being implemented, and that there are some inherent lacunas in the scheme formulated by the Respondents to process the refund claims. HELD THAT:- The meetings should be held between all stakeholders, wherein representatives of the petitioners, and all the respondents are present so that all the issues raised in the present petition, and such other issues as are faced by the trade and industry, though not forming part of the petition, are taken up in the spirit of resolving the same for the better administration and implementation of the indirect tax regime in the larger interest of the nation. The petitioners are directed to make a bullet point presentation, listing all the issues as are raised in the present petition, and such other issues as may be outstanding. The said representation shall be circulated amongst the respondents, as well as the counsel for the respondents within a week. Within a week of the representation being made, a meeting shall be arranged to be held at the office of the GST Council at Janpath, New Delhi. List on 15.10.2019.

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• 2019 (9) TMI 873
  Refund of late fee collected - delay in Form GSTR-3B - CGST Act, 2017 - legality of N/N. 76/2018 dated 31.12.18 - HELD THAT:- If the petitioner is entitled for the refund of the late fee already deposited, nothing prevented him from making an application claiming the refund to the concerned authority in accordance with law - The petition filed by the petitioner seeking directions as aforesaid for the refund of the amount without approaching the respondents by way of appropriate application/representation, cannot be entertained by this court. Legality of N/N. 76/2018 dated 31.12.18 - HELD THAT:- Indisputably, the impugned notification is issued by the Central Government in exercise of the power conferred under Section 120 of the Act, which already stands published in the official gazette. The notification issued being a statutory notification, the validity thereof is not open to be examined by the Single Bench. It is always open for the petitioner to file the petition challenging the notification before the Division Bench, if so advised. Petition dismissed.

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• 2019 (9) TMI 872
  Proper officer under GST - Vires of Section 6(1) of the Goods and Service Tax Act, 2017 - it is submitted that the State authority lacks jurisdiction to investigate and bring to assessment any amounts having regard to the peculiar circumstances of the case - basic ground on which Section 6 has been challenged is that Section 6(1) is arbitrary. HELD THAT:- This Court is of the opinion that challenge to the provisions i.e. Section 6(1), has not been made at all. The GST Act, which was enacted pursuant to 101st amendment to the Constitution, completely changed the tax structure in the country and unified the tax levied by the Centre and State for the first time, in terms of principles of taxation as well as the common provisions. The constitutional authority such as the Goods and Service Tax (GST) Council was created, to lay down the policy which are binding on all States and the Union, which are authorised to collect the levies under the GST. The Act also unifies levies, such as Central Excise Service Tax and State VAT enactments under one regime. The Court is of the opinion that the circular merely works out the authorisation under Section 6(1). It is also a matter of policy. Furthermore, the Court was informed that assessment has been completed pursuant to the show-cause notice on 22.03.2019. It is not appropriate for the Court, to consider the validity or otherwise of the show-cause notice having regard to the fact that an alternative remedy by way of an appeal exists in favour of the petitioner. In case, if so advised, the petitioner prefers such an appeal, the same shall be decided on merits - Petition dismissed.

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• Income Tax

• 2019 (9) TMI 880
  Transfer pricing adjustment in respect of the international transaction OR on the entire sales - HELD THAT:- Transfer Pricing adjustment has to be done only in respect of related party transactions and not on all transactions. See SANDVIK ASIA PVT. LTD., [ 2018 (5) TMI 262 - BOMBAY HIGH COURT] Exclude Genesys International Corp Ltd. from the set of comparable - HELD THAT:- M/s. Genesys is engaged in a different business and, therefore, not functionally similar. This finding of fact is not shown to be perverse in any manner by the Revenue. Risk adjustment - only grievance of the Revenue before the Tribunal was the appropriate grant of risk adjustment to determine the ALP is to be decided by the Adjudicating Authority - HELD THAT:- Impugned order of the Tribunal has accepted the grievance of the Revenue and restored the issue to the TPO/Assessing Officer with direction to examine the allowability of risk adjustment as claimed. In the above facts and circumstances, the question as proposed is pre-mature and does not give rise to any substantial question of law.

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• 2019 (9) TMI 879
  Addition in respect of Prior period expenses - HELD THAT:- Such ground has been dismissed by the Tribunal in earlier years. Following the same, we dismiss this ground of appeal as well. Confirmation of sales commission @10% - HELD THAT:- Unlike the immediately preceding year, the assessee did produce books of account before the AO for the year under consideration, who had full opportunity of examining the same and finding out anything adverse before making any addition out of the expenses. Despite that, the AO could not point out any specific defect qua the expense and chose to make an ad hoc addition. Following the view taken by the Tribunal in earlier years deleting such ad hoc additions, except the immediately preceding year for the special reasons as discussed in our order for the A.Y 2006-07, we order to delete the sustenance of ad hoc disallowance out of the Commission expense. Addition towards legal and professional fees paid to Baker Mckinsey LLP and others - HELD THAT:- It is an admitted position that the assessee incurred Rs. 8.42 crore to defend the litigation created by Purolite. Such litigation was initiated not only against the assessee but also its USA subsidiary. The benefit of such expenditure in the shape of fee paid to Baker and Mckinsey LLP and others, has obviously gone to the assessee in asmuchas it had defended itself. The mere fact that the subsidiary in the USA also got benefitted by the expenditure, cannot come in the way of allowing deduction in the hands of the assessee. Even in the absence of its USA entity being a party to the litigation, the assessee was bound to incur such expenditure to defend itself. The Hon ble Supreme Court in Sassoon J. David Company Private Limited Vs. CIT [ 1979 (5) TMI 3 - SUPREME COURT] has held that deduction has to be allowed for the expenditure incurred wholly and exclusively for the purpose of business even if benefit of such expenditure percolates to someone else also Disallowances made on account of Public Relation expenses, Membership subscription, Garden expenses, Misc. Expense, House Magazine expenses, Vehicle expenses, Misc Foreign Travel Expenses and Telephone expenses - HELD THAT:- Both the sides agree that this ground is similar to the grounds taken by the Revenue in earlier years in which the ad hoc additions made by the AO have been finally deleted by the Tribunal. Following the orders of the Tribunal in the assessee s own case for earlier years, this ground of Revenue is not allowed. Addition on account of Provision for Medical and LTA expenses - HELD THAT:- Both the sides agree that the facts and circumstances of this ground are similar to the Ground No.6 of the Revenue s appeal for the A.Y. 2004-05. Addition of liquidated damages towards invocation of Bank Guarantee by the Arsmeta Captive Power Company - HELD THAT:- It is noticed that the assessee claimed deduction on a mere invocation of performance bank guarantee on 28-04- 2007. Thereafter, the assessee sought legal remedy and the injunction granted by the City Civil Court was vacated. The matter was finally settled in a later year on the assessee paying a sum of Rs. 6.00 crore to Arsmeta Captive Power Company. Till that time, the assessee could not have claimed deduction of contractual liquidated damages to Arsmeta Captive Power Company. No deduction of Rs. 6.98 crore is permissible for the year under consideration as no liability on account of liquidated damages was finally incurred. AR contended that the assessee voluntarily credited Rs. 6.98 crore to its Profit and loss account in succeeding year when it claimed deduction of payment of Rs. 6.00 crore. If the assessee had erroneously credited its income in the succeeding year, the same can be reversed subject to the relevant provision. We, therefore, uphold the impugned order on this score. Disallowance of depreciation at 80% in respect of certain items of plant and machinery instead of allowing depreciation @25% - HELD THAT:- It is found as an admitted position that similar issue has been decided by the Tribunal in the assessee s favour for the immediately preceding assessment year and earlier years. Respectfully following the precedent, we decide this issue in assessee s favour. Disallowance u/s.14A - HELD THAT:- CIT(A) restored the matter to the file of AO with direction to recompute the disallowance by holding that in computing the average value of investments, the investments which yield taxable income, should be excluded. He jettisoned the contention of the assessee that the fixed assets should be considered at their gross value without excluding depreciation. He further directed the AO to exclude interest of Rs. 19.99 lakh incurred in Post Shipment packing credit. All the above three directions given by the ld. CIT(A) are perfectly in order. Since the issue has been restored to the AO, we uphold the impugned order to this extent thereby affirming the specific directions given in the impugned order.

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• 2019 (9) TMI 871
  Reopening of assessment u/s 147 - change in method of accounting in relation to NPAs - Provision for fraud cases treated as expenditure in the profit and loss account - HELD THAT:- SLP dismissed.

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• 2019 (9) TMI 870
  Addition due to discrepancy found in stock statements - Addition on the basis of inflated stock statement submitted to bank - Addition under Section 69B - Learned Additional Solicitor General invited our attention to orders C .I.T AHMEDABAD III VERSUS RIDDHI STEEL AND TUBES P. LTD. [ 2014 (9) TMI 1204 - SC ORDER] HELD THAT:- Delay condoned. Leave granted.

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• 2019 (9) TMI 869
  Withhold the refund due to the Petitioner u/s 241A - neither the original or the revised return of income has been processed under Section 143(1) - HELD THAT:- Section 241A of the Act empowers the Assessing Officer to withhold the refund which has become due for reasons stated therein, this only after determining the refund due under Section 143(1) of the Act. It is an undisputed position before us that neither the regular return of income dated 30 November 2017 nor the revised return of income dated 27 March 2019 for the subject Assessment Year has been processed under Section 143(1) of the Act till date. Consequently, the occasion to withhold any refund under Section 241A of the Act at this stage does not arise. Therefore, on the admitted facts the application/invocation of Section 241A of the Act is premature. In view of the admitted position that neither the original or the revised return of income for the Assessment Year 2017-18 has been processed under Section 143(1) of the Act, invoking of Section 241A of the Act would be without authority of law. Thus, the impugned show cause notice dated 14 November 2018 is quashed and set aside not only on the above ground but also as the affidavit in reply states that the original return of income stands abandoned, on filing of revised return of income. The impugned notice is in pursuance of the original return of income filed on 30 November 20917. Similarly, the communication dated 18 July 2019 addressed by the Office of Respondent No.3 Principal Commissioner of Income Tax to the Deputy Commissioner of Income Tax - Assessing Officer approving to the proposal to withhold the refund due for the Assessment Year 2017-18 under Section 143(1) of the Act is also without jurisdiction. This as the refund due has admittedly not been determined under Section 143(1) of the Act. Therefore, quashed and set aside.

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• 2019 (9) TMI 868
  Penalty levied u/s. 271(1)(c) - additions towards partners remuneration, interest income and capital gain on redemption of mutual fund - HELD THAT:- Disallowance of partners remuneration was made only for the reason that interest income was considered as income from other sources which in the opinion of AO did not qualify for book profit so as to compute partner s remuneration under s. 40(b). We notice that co-ordinate bench of Tribunal in some cases, namely, Akshar Associates [ 2015 (12) TMI 123 - ITAT AHMEDABAD] and Horizan Motors [ 2015 (11) TMI 1789 - ITAT AHMEDABAD] have taken a view that income under all the heads of income are eligible for computing partners remuneration. Without going to the correctness of the eligibility of remuneration from income generated under the head income from other sources , we firmly think that the action of the assessee cannot be discarded summarily on the face of divergent views prevailing on the subject. Thus, as claimed, the issue thus not free of debate at the time of filing of return by the assessee. The action of the assessee thus falls within the bracket of bonafide belief. In such circumstances, furnishing inaccurate particulars of income by the assessee cannot be alleged as contemplated under s. 271(1)(c) of the Act. In so far as inclusion of capital gains of maturity of mutual funds is concerned, it is noticed that the assessee has explained the sources of such investment but the effect of redemption was left out to be given in the books of accounts. The assessee has pleaded oversight and mistake. It was pointed out that mistake was committed as it was assumed that long term capital gains from units of mutual funds is exempt from taxation. The other additions towards interest income was on account of mistake in showing correct income due to non-availability of interest income arising from IDBI Ltd. The action of the assessee was however in conformity with the TDS certificate. The assessee has thus discharged the burden of explaining the circumstances of omission or mistakes. Assessee has acted bonafide and there appears to be no falsity in the explanation offered by the assessee. Imposition of penalty on fastening of tax liability is not automatic. The fulfillment of conditions stipulated in Section 271(1)(c) of the Act is a sin qua non for imposition of penalty u/s 271(1)(c) of the Act. The existence of conditions is not discernable from the case records - Decided in favour of assessee.

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• 2019 (9) TMI 867
  Penalty levied u/s 271(1)(c) - assessee had filed return u/s 153A - HELD THAT:- The revenue has not brought any contrary binding precedent to our notice. It is transpired from the assessment order that the assessee has filed the return for the first time u/s 153A of the Act and no return was filed before initiation of search. Therefore, in terms of section 153A of the Act, return filed u/s 153A of the Act would be deemed to be return filed u/s 139 of the Act and all consequential provisions would apply. The Ld. D.R. has not rebutted this fact. I therefore, respectfully following judgement of Hon ble Gujarat High Court rendered in the case of Kirit Dahyabhai Patel Vs. ACIT [ 2015 (1) TMI 201 - GUJARAT HIGH COURT ] and other case laws as relied by the assessee, direct the A.O. to delete the penalty. The appeal of the assessee is allowed.

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• 2019 (9) TMI 866
  Violation of section 153D - approval is granted by the superior authorities for extraneous reasons, without application of mind - HELD THAT:- Approval is lacking under section 153D granted by the superior authorities, then the assessment order is liable to be quashed being passed in violation of section 153D. If the approval is granted by the superior authority without looking into the material, without application of mind and merely relying upon the understanding of the assessing officer, then in that eventuality the said approval ceases to be approval in the eyes of law. Approval as envisaged under section 153D of the Act is not empty formality and there is a rational and reason for mandating the approval before passing the assessment order under the Act. If it was merely a formality and the superior authority is not required to apply its mind then there was no reason to incorporate even for approval of the superior authority and it would not have been worded in the mandatory manner. Because the language used in the provision is in the form of mandatory direction therefore it cannot be argued that even if the approval is granted without application of mind then also it is valid in the eyes of law Civil and penal consequences would flow from completion of assessment and therefore if the approval is denied then crystallize right will accrue in favour of the assessee and the assessee will have a right to assert that the assessment made is bad in law. Similarly if the approval is granted without application of mind which is discernible from the record then the said approval loses its character to be approval in the eyes of law. We had already mentioned that the assessee is not entitled to any personal hearing before passing of the approval order by the authority under section 153D of the Act. But, while holding this in favour of the revenue, we cannot close our eyes and close the right of the assessee to challenge the approval granted by the superior authority in violation of the basic fundamental principle enshrined in the income tax Act as well as in general law whereby, it has been held that the authority while granting the approval should not grant the approval mechanically without even looking into the document and without applying its mind. The right to challenge the approval, is also based on various principal including the non-application of mind by the superior authority or granting approval by an authority which is not vested with the power to grant the approval or the approval granted was after the passing of the assessment order in all these cases and any other cases the direction of the tribunal and also the other courts are not barred and the tribunal and the other courts can very well examine the approval granted by the superior authority in the context of our aforesaid observation and also the other preparation of law laid down by the high courts and the tribunal . If the approval is granted by the superior authorities for extraneous reasons, without application of mind or without looking into the record, then the approval loses its character of an approval in the eyes of law. Accordingly we have no hesitation in declaring that the approval granted by the higher authorities on 27 March 2014 is no approval in the eyes of law and accordingly the assessment made by the assessing officer based on such an approval is also declared to be null and void. There is a statutory duty on the additional Commissioner of income tax with a corresponding obligation on him to examine the record and thereafter accord the approval. The reason for granting the approval may not be subject matter of the proceedings but the manner and the material on the basis of which the approval was granted can always be examined by the tribunal and also by the other courts to come to the conclusion whether the approval was granted in a mechanical manner or after applying mind looking into the record. No evidences required to be appreciated as the approval is self-evident, i.e., that it was granted by the additional Commissioner of income tax without application of mind and without looking into the record. In view of the above the assessment order passed by the assessing officer is void and accordingly all the appeals of the assessee are allowed. Revenue is not entitled to 2nd inning, in the matter as the non grant of approval/grant of approval in a mechanical manner takes out the direction of the assessing officer to pass the assessment order and the same cannot be rectified or improved by the revenue in the 2nd round of litigation. Undoubtedly the assessee is contesting the matter from the date of search before various forms including before the Hon ble High court and the assessee cannot be made to run again for many more years for contesting the litigation. In view of these peculiarity of the facts we are of the opinion that 2nd inning for rectifying or removing the defects cannot be granted to the revenue. - Decided in favour of assessee

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• 2019 (9) TMI 865
  Reopening of assessment u/s 147 - HELD THAT:- Reopening the assessment under section 147 of the Act, we note that there was no tangible material gathered by the AO from the outside source. As such, the reopening was initiated on verification of the assessment records. There was no assessment carried out under section 143(3) of the Act for the year under consideration. As such the return was processed under section 143(1) of the Act. Thus it is clear that the return of income filed by the assessee for the year under consideration was not examined by the Revenue. Therefore, the question of change of opinion does not arise in the given facts and circumstances. Besides the above, we also note that the conditions attached in the 1st proviso to section 147 of the Act that there was failure on the part of the assessee to disclose truly and fully the material facts does not apply to it. It is because there was no scrutiny assessment under section 143(3) of the Act for the year under consideration. We are not impressed with the arguments of the learned AR for the assessee and accordingly we do not find any reason to interfere in the finding of the learned CIT (A). Hence, the additional ground of appeal of the assessee is dismissed. Disallowance under section 80JJA - HELD THAT:- It is very clear that the purpose behind the provision of section 80JJA of the Act was to extend the benefit to the organisations from the commencement of business. It is beyond doubt that the assessee commenced its business much before the introduction of the provisions of section 80JJA of the Act in the statute. There was no mention under the provisions of section 80JJA of the Act for extending benefit to the assessee which have commenced their business much before the introduction of such provision. Thus, the provision itself vividly reflects the intent of lawmakers that the benefit of section 80JJA shall begin from the commencement of the business. We are also conscious to the fact that the learned AR for the assessee has placed various orders before the authorities below but on perusal of the same, we note that none of them is applicable to the case on hand. We also note that the assessee has also enjoyed the benefit of deduction under section 80 IA of the Act after the commencement of production for a period of 10 years. Accordingly, we do not find any infirmity in the order of the authorities below. Hence the ground of appeal of the assessee is dismissed. Charging tax under section 115JB along with the interest under section 234A and 234B - AO worked the liability of tax under the provisions of section 115 JB of the Act along with the interest under section 234A/B confirmed by CIT-A - HELD THAT:- As there was no defect pointed out by the learned AR for the assessee in the order of the authorities below. Therefore, we do not find any infirmity in the order of the authorities below. Hence the ground of appeal of the assessee is dismissed.

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• 2019 (9) TMI 864
  Deduction u/s 80-IE - fresh claim after substantial expansion - assessee had earlier claimed deduction u/s 80IB and also u/s 10C - HELD THAT:- The assessee availed benefit of Income Tax exemption in terms of Sec. 80-IA and 80IB and 10C in the earlier assessment years and availed benefit of exemption under Chapter VIA of the Income Tax Act 1961 and after undergoing substantial expansion of its existing plant and machinery and production capacity by investing more than 25 % of its existing capital investment in terms of NEIIP,2007 in the Financial Year 2008-09. The other one M/s. Charu Innovation Department and Industries, a new Industrial Undertaking, established in the year 2011-12 and commenced its commercial production w.e.f 23.11.2011, engaged in production of polyethylene Water Storage Tank and other plastic articles such as, Dustbin, Traffic Signal Point and injunction moulded Item and moulded filter etc. We note that after implementation of North-East Industries Investment Promotion Policy (NEIIP), 2007, the Assessee undergone modernization of its unit M/s. Charu Engineering Industries, in the year 2008, w.e.f 02.05.2008 by additional capital outlay in plant machinery amounting to Rs. 29,85,611/- in comparison to the previous capital outlay in plant machinery (i.e prior to the expansion/ modernization) Rs. 22,51,982/-, an increase in capital outlay by 133 % of the initial capital outlay in the financial year 2008-09. Therefore, the Assessee is eligible for income tax exemption from the Financial year 2008-09 and onwards due to modernization in its plant machinery by infusing additional capital investment by more than 25 % of the initial investment in plant machinery as envisaged in clause (iii) of sub-sec. 7 of Sec. 80-IE of the Income Tax Act, 1961, effective from 01.04.2008.We note that the purpose of section 80IE was to establish the business of the nature specified in the said provision in the specified States. This provision was, thus, aimed at encouraging the undertakings or enterprises to establish and set up such units in the aforesaid States to make them industrially advanced States as well.Hence, we note that assessee is entitled to claim deduction under section 80IE We note that assessee is entitled to deduction under section 80IE with respect to its above industrial undertakings M/s. Charu Engineering Industries Ms. Charu Innovation Department and Industries - Decided in favour of assessee.

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• 2019 (9) TMI 863
  Addition u/s 68 - disallowing unsecured loan - HELD THAT:- A.O. has not established as to how the documentary evidences furnished by the assessee were contrary to the human probabilities and circumstantial evidences. The Assessing Officer has not established as to what are the reasons and evidences on the basis of which he is alleging the loan creditors as paper companies and the transactions as fake loans. No parity in the facts of the decisions relied upon with the peculiar facts of the case in hand. Therefore, in view of the aforesaid factual matrix and legal position, the addition made by Assessing Officer was rightly deleted by the Ld. CIT(A), which does not need any interference on our part - Decided in favour of assessee Addition on account of Commission paid - HELD THAT:- In view of findings given for ground No. 1 as aforesaid, the addition made by the Assessing Officer was rightly deleted by the Ld. CIT(A), which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute and accordingly, reject the ground no. 2 raised by the revenue.

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• 2019 (9) TMI 862
  Disallowance of interest expense paid to India Infoline Financial Services by A.O . - HELD THAT:- Appellant did not furnish any documentary evidence to prove that the loan taken from 1IFSL and transferred directly to MIPL was for the purpose of the business of the appellant though it was the onus of the appellant to prove the business exigency of giving loan of such a huge amount without interest after borrowing the same on huge interest expenses. Now during the appellate proceedings the appellant has been able to prove the business exigency of giving loan of such a huge amount without interest after borrowing the same at huge interest expenses. Thus the basis of disallowance by the AO has been addressed by the appellant and therefore the addition by way of disallowance of interest has to be deleted.

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• 2019 (9) TMI 861
  Addition u/s.153A - Disallowance u/s.40(a)(ia) - failure to deduct tax at source on payment towards Transportation receipts - HELD THAT:- The instant case falls under the completed assessment category, for which though the return was filed u/s.139(1) but the assessment was not taken up and further the time limit for issuing notice u/s.143(2) had already expired. The extant addition has been made by invoking the provisions of section 40(a)(ia) - assessee debited its Profit and loss account with a sum of Rs. 3,46,64,154/- on account of Earth moving charges. AO found that the assessee did not deduct any tax at source on this amount u/s.194C of the Act. Following his order for the A.Y. 2005-06, he considered 25% of the payments made on Earth moving charges as towards transportation of sand etc. on which it was opined that tax was liable to be deducted at source. Having not deducted tax at source, the AO held that the amount was disallowable u/s.40(a)(ia). It is observed from the above discussion that the disallowance in question is not based on any incriminating material found during the course of search and assessment year under consideration is that of completed assessment, and not that of abated assessment. In our considered opinion and respectfully following the above precedents of the Hon ble jurisdictional High Court, we hold that the disallowance in question cannot be sustained because no incriminating material was found on this score. We, therefore, order to delete the above disallowance. Estimation of income at 10% of receipts - number of incriminating documents were found during the course of search, which were seized - HELD THAT:- Section 44AD though the section strictly applied only where the gross receipts did not exceed an amount of Rs. 40.00 lakh, but at any rate, it gave hint about the appropriate percentage of profit in the business of Civil Construction. Even though this section technically does not apply to the assessee because of the amount of gross receipts exceeding Rs. 40.00 lakh, still we can find out a reasonable net profit percentage to be applied in the given circumstances at 8%. We, therefore, hold that a net profit rate of 8% be applied to the Total receipts as against 7.49% declared by the assessee and 10% estimated by the ld. CIT(A). However, in applying this percentage, income in the nature of interest received on income-tax amounting to Rs. 6,994/- and office rent received amounting to Rs. 1,75,500/- which are items of subject matter of Ground No.1 of the Revenue s appeal, should be excluded. Interest received on income-tax should be separately included in the total income of the assessee under the head Income from other sources . Office rent should be considered for the purposes of computation of income under the head Income from house property . These two amounts of receipts, however, are directed to be excluded while applying the percentage of net profit at 8% on the gross contract receipts. The other two items in Ground No.1 of the Revenue s appeal, namely, Discount received and Miscellaneous receipts are related to the contract receipts of the assessee which cannot be separately excluded.

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• 2019 (9) TMI 860
  Profit rate determination - non production of books of accounts - HELD THAT:- Assessee failed to produce books of account before any of the authorities below and whatever claim was made, has not been substantiated through any evidence or material on record. Therefore, authorities below were justified in estimating the income of assessee by applying higher profit rate. Considering the smallness of the total turnover of the assessee and nature of business of assessee, it would be reasonable and proper if the income be assessed by applying profit rate of 8% as against 12% applied by the authorities below. Thus confirm the finding of fact recorded by the authorities below to estimate income. However, direct the assessing officer to modify the application of profit rate by applying profit rate of 8% against total receipts of Rs. 58,43,303/- and compute income of assessee accordingly instead of 12% - Appeal of the Assessee partly allowed.

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• 2019 (9) TMI 859
  Excess stock found from seized documents during search - Unexplained investment - HELD THAT:- Physical verification of stock was carried out by the assesese-company on its own as a matter of internal control in the month of January and February, 2015 well before the search and the surplus stock found on such physical verification having been accounted for by the assessee-company in its books of account in the month of March, 2015 itself, the same, in our opinion, cannot be treated as unexplained investment of the assessee, which is chargeable to tax under section 69. The amount in question representing excess stock found on physical verification carried out by the assessee-company on its own well before the search action and duly accounted for in the books of account of the assessee-company constituted its business income. As noted by the CIT(Appeals) AO himself in the case of M/s. Industrial Safety Products Pvt. Limited, a sister concern of the assessee had brought to tax the value of similar excess stock in identical facts and circumstances as regular business income of the assessee. We, therefore, find ourselves in agreement with the CIT(Appeals) that the value of surplus stock in the facts and circumstances of the assessee s case did not represent assessee s unexplained investment under section 69 and it constituted its regular business income for the year under consideration. Set off current year s business loss against the income on account of surplus value of stock - HELD THAT:- We also agree with the alternative basis given by the CIT(Appeals) for giving relief to the assessee by holding that the assessee was entitled to set off current year s business loss of Rs. 1,17,55,657/- against the income on account of surplus value of stock even if it is presumed for the sake of argument that the same was assessable under section 69 as the same is duly supported by the decision of the Hon ble Madras High Court in the case of CIT vs.-Chensing Ventures [ 2007 (4) TMI 204 - MADRAS HIGH COURT] and CIT vs.- Shilpa Dyeing Printing Mills (P) Limited [ 2015 (7) TMI 691 - GUJARAT HIGH COURT] The prohibition against allowing such set off was statutorily provided by the Finance Act, 2016 w.e.f. 1st April, 2017 and there was thus no such prohibition or restriction in allowing the claim of the assessee for the set off for the year under consideration, i.e. A.Y. 2015-16. We, therefore, find no infirmity in the impugned order of the ld. CIT(Appeals) giving relief to the assessee - Decided against revenue

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• 2019 (9) TMI 858
  Nature of expenditure - Treatment of expenditure - expenditure pertaining to commercial project and capitalized to work in progress - revenue or capital expenditure - HELD THAT:- It is not in dispute that the commercial project had been undertaken by the assessee from the earlier years and had not been completed during the year under consideration. The aforesaid treatment of expenditure i.e partly towards capital work in progress in respect of direct project related expenses and partly towards revenue expenditure in respect of routine administrative expenses has been consistently followed by the assessee in the earlier years also and the same stand was taken by the assessee during the year under consideration. There is no reason for the ld AO to take a divergent stand with regard to the treatment of expenditure given by the assessee in the books which is similar to treatment for income tax purposes also. In any case, we find that these administrative expenses, even if transferred to capital work in progress, would eventually find its way to the profit and loss account in the year of completion of project , in view of the fact that the revenue had not doubted the genuineness of incurrence of those expenditure and the business nexus of the same. Lower authorities had not appreciated the action of the assessee wherein the routine administrative expenses that are not directly connected with the project, need to be charged off as revenue expenditure. Hence we direct the AO to grant deduction of the revenue expenditure that were debited to profit and loss account by the assessee. - Decided in favour of assessee.

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• 2019 (9) TMI 857
  Reopening of assessment u/s 147 - as alleged notice issued mechanically without application of mind and the satisfaction by the Assessing Officer is only the borrowed satisfaction of the Investigation Wing - HELD THAT:- From the perusal of reasons, find no application of mind by the AO for reaching to the conclusion that there was escapement of income except the information from the Investigation Wing. Considerable cogency in the contention of the assessee that AO has completed the assessment in dispute u/s. 147/143(3) of the Act without appreciating the facts and circumstances of the case and wrongly assumed the jurisdiction u/s. 148 of the Act, 1961, which is in violation of mandatory jurisdictional conditions as stipulated under the Act. First Appellate Authority has wrongly upheld the order of the AO and dismissed the appeal of the assessee without passing any reasonable and elaborate finding as well as legal without properly adjudicating the legal ground as per the written submissions filed by the assessee, which is against the law and facts on the file. AO has completed the assessment and Ld. CIT(A) has wrongly upheld the order of the Ld. CIT(A) without appreciating that the reasons in this case are based on borrowed satisfaction and without independent application of mind - See M/S SBS REALTORS (P) LTD. VERSUS INCOME TAX OFFICER, WARD-22 (4) , NEW DELHI [ 2019 (4) TMI 357 - ITAT DELHI] - Decided in favour of assessee.

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• 2019 (9) TMI 856
  Undisclosed income during the reassessment proceedings - basis of the addition was a loose paper found during survey operations - HELD THAT:- Except for this loose paper, there is nothing in record which corroborate the stand of revenue. This paper was found at the premises of a third party and the complete onus to prove that certain cash got exchanged between M/s Matrix and the assessee, was on revenue. This become all the more important since all the concerned parties viz. Ms. Sandhya, M/s Matrix, Ms. Katrina Kaif, ATN or the assessee, denied having entered into any such cash transactions. No cogent material has been brought on record to rebut the denial made by these parties. It is trite law that addition could not be made merely on the basis of presumption, guess-work, conjectures or surmises. The revenue, in our considered opinion, could not succeed in bringing any corroborative or circumstantial evidence to lend any credence to the contents of the loose paper. In fact, for the aforesaid very reasons, the additions made by AO on the basis of loose paper, in the hands of M/s Matrix and Ms. Katrina Kaif were deleted by first appellate authority in their respective appeals. In the present case, first appellate authority has merely followed the decision in those cases. In MS. KATRINA ROSEMARY TURCOTTE [ 2017 (11) TMI 669 - ITAT MUMBAI] no material in the possession of the AO to demonstrate that the assessee has received any amount in cash from M/s. Matrix India Entertainment P. Ltd. For Dhaka event. On the contrary, the evidences on record do indicate, though, the assessee appeared in the Dhaka event conducted through M/s. ATN Records Ltd., however, she has received her fees fully in cheque and has offered it as income in the relevant assessment year. As no material has been brought before us by the Revenue to controvert the aforesaid facts we are inclined to affirm the order of the CIT(A) on this issue by dismissing the ground raised by the Revenue.

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• 2019 (9) TMI 855
  Revision u/s.263 - although the assessment order dated 25.3.2015 was passed u/s.143(3) but there is no enquiry by the Assessing officer on the issue of interest of bank deposits which were picked up by Pr.CIT for invoking the jurisdiction of section 263 - HELD THAT:- Tribunal has taken a view on the issue of interest earned by the assessee on short term fixed deposit in favour of the assessee but this order of the Tribunal was not in existence when the ld Pr. CIT invoked powers u/s.263 of the Act and passed the impugned order revising the assessment. Subsequent Tribunal order defines favours the assessee s stand on the issue of interest earned by the assessee from short term fixed deposit but while evaluating the legality of the revisional order passed by Pr CIT u/s.263 the Tribunal order (supra) cannot be taken into consideration as has been passed anti-dated. As brought to our notice by ld A.R. that the Assessing Officer has made addition in the reassessment order passed in pursuance to the impugned order of Pr. CIT u/s.263 of the Act, wherein, addition has been made in the hands of the assessee. Ld A.R. informed the bench that the appeal of the assessee is pending before the CIT(A). We are of the view that Pr. CIT has proceeded to invoke the powers available to him u/s.263 of the Act and after perusal of the assessment records, he found that there was no enquiry by the Assessing Officer on the issue of interest earned by the assessee on short term fixed deposit with the bank. Thereafter, ld Pr. CIT issued notice u/s.263 of the Act and after considering the reply of the assessee and after allowing opportunity of being heard to the assessee, passed the impugned order by holding that the Assessing Officer has failed to bring to tax the interest received as income of the assessee from other sources and, thus, the assessment order is set aside to the file of the AO on the above issue with a direction to examine same afresh and do the assessment denovo. These findings and observations of Pr. CIT in the order dated 22.2.2017 are quite correct and in accordance with the mandate of section 263 of the Act as there was no enquiry by the AO on the issue of interest earned by the assessee on short term fixed deposit with the bank. Therefore, Pr. CIT was right in holding that the order of the AO is erroneous and prejudicial to the interest of the revenue. The cognizance of the subsequent order dated 31.8.2018 of the Tribunal (supra) was not practically possible as this order was not in existence when Pr. CIT passed the impugned revisional order. Pr. CIT was right in revising the assessment order passed u/s.143(3) of the Act and directing the AO to pass the denovo assessment order on the said issue. - Decided against assessee

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• 2019 (9) TMI 854
  Excess cash found during the course of survey action - benefit of telescoping towards income offered from Solitaire Project - HELD THAT:- AO as well as the Ld. CIT(A) had recorded categorical finding in the light of statement of Shri Kamlesh Shah, Director of the company that the assessee was having excess cash during the course of survey for which no explanation has been offered. We further noted that although the assessee claims to have taken the benefit of telescoping towards income offered from Solitaire Project, but while recording statement during the course of survey it was the case of the assessee that excess cash found during the course of survey represents unaccounted income. We, therefore are of the considered view that there is no error in the findings of fact recorded by the lower authorities and hence, we agree with the finding of the CIT(A) and reject ground taken by the assessee Entitlement for deduction 80IA(4)(iii) - withdrawal of approval granted - HELD THAT:- We find that although Ministry of Commerce and Industry, Government of India vide letter dated 24/07/2006 granted approval to the said park stating that the project is covered under the Industrial Park Scheme, 2002 and accordingly, entitled for deduction 80IA(4)(iii) but subsequently approval granted by the Empowered Committee has been withdrawn vide their letter dated 06/01/2009, on the ground that the assessee is not eligible under Industrial Park Scheme, 2002. Although the assessee has got relief from Hon ble Bombay High Court against the order of the Empowered Committee, in respect of withdrawal of approval granted under Industrial Park Scheme, 2002 but such relief has been granted on technical grounds for not allowing reasonable opportunity being heard to the assessee. Except this, the findings of the empowered committee of Ministry of Commerce and Industry was not negated by the Hon ble Bombay High Court in respect of eligibility for deduction u/s 80IA(4)(iii) - AO as well as the Ld. CIT(A) had categorically recorded the fact that the assessee has not fulfilled conditions prescribed u/s 80IA(4) in order to be eligible for deduction in respect of profit derived from its industrial project - Decided against assessee

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• 2019 (9) TMI 853
  Disallowance u/s 14A - expenditure having direct or indirect nexus for earning the exempt income - HELD THAT:- The assessee company has earned dividend income from its equity investment in Gillette Group India Pvt. Ltd., that too from the old investment and no investment has been made during the year under assessment as is evident form audited balance sheet. Even otherwise, it is settled principle of law that only actual expenditure having direct or indirect nexus for earning the exempt income can be disallowed u/s 14A of the Act. So, in these circumstances, we find no illegality or perversity in the impugned order passed by the ld. CIT (A) restricting the disallowance from Rs. 2,69,64,423/- to Rs. 25,28,619/- u/s 14A of the Act. Consequently, the appeal filed by the Revenue is hereby dismissed

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• 2019 (9) TMI 852
  Disallowance of expenses paid to TACO u/s 40A(2)(b) - Administrative Support Services paid to holding company - HELD THAT:- We find that Ld.CIT(A) after relying on the decision in the case of assessee s sister concern i.e., Tata Johnson Automotive Ltd., [ 2016 (4) TMI 963 - ITAT PUNE] and other decisions referred to in her order, decided the issue in favour of the assessee. Before us, Revenue has not pointed out any distinguishing feature in the facts of the case in the year under consideration and in the case of assessee s sister concern i.e., Tata Johnson Automotive Ltd., (supra) nor has pointed out any fallacy in the findings of Ld.CIT(A). Further the Tribunal s decision in the case of Tata Johnson Automotive Ltd., (supra) has been upheld by Hon ble Bombay High Court INDO SAUDI SERVICES (TRAVEL) P. LTD. [ 2008 (8) TMI 208 - BOMBAY HIGH COURT] . In view of the aforesaid facts, ground of the Revenue is dismissed.

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• 2019 (9) TMI 851
  Assessee in default u/s. 206C(6A) - non-collection of tax at source on sale of heavy scrap - Period of limitation - as alleged default u/s 206C after the end of four years from the financial year in which the default was allegedly committed - as contented by assessee scrap imported from other countries have been sold in the domestic market without involving any manufacture or mechanical working of materials carried out by the assessee and thus do not fall within the sweep of Explanation (b) to Section 206C - HELD THAT:- No such limitation provision has been enacted with regard to tax collection at source as provided in Section 206C till date. Under the circumstances, where no time limit has been prescribed by the statute for passing order in respect of default in collection of tax at source, a guidance can be possibly obtained from judicial precedents laying down a reasonable time limit as implicit for imposition of levy of tax at source. We notice that the judicial precedents cited on behalf of the assessee have read a period of four years to be reasonable time limit. The liability of the Collector of tax on behalf of the Government (assessee herein) is a vicarious liability and cannot be allowed to remain hanging on his head for all times to come where the department decides not to take action either by proceedings u/s 206C or by making assessment on the deductee. The show cause notice in the instant case has been issued after five years from the end of the relevant F.Y. 2008-09. Thus, in the absence of statutory time limit prescribed for passing order with reference to collection of taxes, we follow the suit and read reasonable time limit to be four years from the end of the financial year for passing the order under sec. 206C in tune with the judicial precedents in NHK Japan Broadcasting Corpn. s case [2008 (4) TMI 182 - DELHI HIGH COURT ] and Hutchison Essar Telecom Ltd. s case [2010 (4) TMI 45 - DELHI HIGH COURT] In view of the judicial fiat available in this regard which is beneficial to the assessee qua the time period prescribed for deduction of tax at source in Section 201(3) of the Act, we would give primacy to the judicial precedents in the absence of express statutory provision towards time limit in respect of obligation attached to Section 206C - Decided in favour of assessee

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• 2019 (9) TMI 850
  Disallowance u/s 40(a)(ia) - non-deduction of TDS on payment of interest - Assessee s case is that the aforesaid interest paid by the assessee has been considered as income by M/s. Sun Infrastructure Pvt. Ltd., in its return of income and has also paid taxes on the same - HELD THAT:- Decision of CIT Vs. Ansal Land Mark Township Pvt. Ltd. [ 2015 (9) TMI 79 - DELHI HIGH COURT] held that insertion of second proviso to Sec.40(a)(ia) of the Act is declaratory and curative in nature and has retrospective effect from 01.04.2005. CIT(A) relying on the decision in the case of CIT Vs. Ansal Land Mark Township Pvt. Ltd., (supra) has given a finding that M/s. Sun Infrastructure Pvt. Ltd., has included the amount of interest paid by the assessee in its return of income and has paid taxes on the same. Considering the aforesaid facts, CIT(A) has rightly deleted the addition - Decided in favour of assessee.

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• 2019 (9) TMI 825
  Addition on account of commission paid being 10% of the remaining domestic commission - HELD THAT:- It is observed from the factual narration made above that the assessee adopted a non co-operative attitude and did not produce books of account and other relevant bills before the AO. Since the AO was debarred from examining the details of commission along with necessary details, he could not have made a specific disallowance for want of evidence or genuineness etc. It is in such backdrop of the facts that he made disallowance on ad hoc basis. CIT(A), too, reduced the disallowance to 10% without giving any reasons. We have already vacated the finding of the CIT(A) in holding that the AO should have acceded to the assessee s request for going ahead with partial books and truncated details. In view of the fact that the AO was not allowed access to the books of account and other relevant bills, we set-aside the impugned order and remit the matter to the file of AO for fresh consideration of the issue and then decide it after allowing reasonable opportunity of hearing to the assessee. Thus, the grounds raised by the assessee as well as the Revenue are allowed for statistical purposes. Disallowance of depreciation at 80% in respect of certain items of plant and machinery and instead allowing depreciation @ 25% - HELD THAT:- It is found as an admitted position that similar issue has been decided in favour of the assessee by the Tribunal in the assessee s own case for the immediately preceding assessment year 2005-06 vide order. Both the sides are in agreement that the facts and circumstances of this ground are mutatis mutandis similar to those of the preceding year. Respectfully following the precedent, we decide this issue in the assessee s favour. This ground is allowed. Disallowance under the head Repairs to machinery - HELD THAT:- CIT(A) sustained the above additions on the ground that the assessee could not produce any document to substantiate such claim. AR fairly conceded that no such document was still available with the assessee. In the absence of any substantiation of the claim of deduction for such expenses, we uphold the impugned order. Thus, the two grounds stand dismissed. Deduction on account of bad debts - HELD THAT:- It is found as an admitted position that the assessee, in fact, wrote off the amount of bad debts in its books of account. The Hon ble Supreme Court in TRF Ltd. Vs. CIT [ 2010 (2) TMI 211 - SUPREME COURT] has held that after 01-04-1989, the assessee is not required to establish that the debt had became bad in the previous year. It was further held that the deduction has to be allowed on a mere write off. Since in the instant case, admittedly the assessee wrote off the amount in its books of account and it is not the case of the Revenue that the conditions stipulated u/s.36(2) were not satisfied, we uphold the impugned order in deleting the addition. Disallowing 5% of balance Legal and Professional charges - CIT(A) deleted the addition - HELD THAT:- The factual position in the year under consideration is different inasmuch as the assessee turned hostile and went to the extent of not producing the books of account etc. before the AO despite repeated reminders, thereby depriving the latter from examining the details. In line with our decision on restoring the issue of commission for a fresh decision , which was disallowed by the AO at 30% and reduced to 10% by the ld. CIT(A), we set aside the impugned order on this score and send the matter back to the AO with a direction to the assessee to produce the books of account and other relevant evidence etc. as directed by the AO, who, in turn, will specifically point out defects in the books of account and relevant evidence qua this expense before making any disallowance. No ad hoc addition should be made. Addition on stamp expenses - HELD THAT:- It is found as an admitted position that the stamp expenses in question do not relate to increase in the authorised share capital of the company and hence the judgment in the case of Punjab Industrial Development Corporation Ltd. [ 1996 (12) TMI 6 - SUPREME COURT] is not attracted to the facts of the instant case. Since such expenses are in relation to conducting business of the company, we uphold the impugned order in deleting the disallowance. Disallowance made on account of Public Relation expenses, Miscellaneous expenses, Vehicle expenses, Telephone expenses, Miscellaneous Foreign Travel expenses, Staff Welfare and Freight expenses - HELD THAT:- We find that the facts of this ground are similar to ground for commission and legal expenses discussed above, which we have restored to the AO for a fresh consideration and decision after examining the books of account and relevant documents. Adopting the same reasoning, we set aside the impugned order and send the matter to the AO for deciding it afresh. Needless to say, the assessee will produce the books of account and the relevant details, as called for by the AO.

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• Customs

• 2019 (9) TMI 849
  Served from India scheme - incentive for a brand which is created outside India - Petitioner has challenged the decision of the Policy Interpretation Committee holding that the Foreign Trade Policy did not intend to incentivize any brand which is created outside India - matter of judicial discipline - HELD THAT:- Division Bench of this Court in SHRI. NAMAN HOTELS PRIVATE LTD., JUNIPER HOTELS PVT LTD, JOHNSON JOHNSON PVT. LTD., THYSSENKRUPP INDUSTRIAL SOLUTIONS (INDIA) PRIVATE LIMITED (ERSTWHILE KNOWN AS UHDE INDIA PRIVATE LIMITED) VERSUS THE UNION OF INDIA AND OTHERS [ 2015 (9) TMI 564 - BOMBAY HIGH COURT] is considered - It is not disputed that before the Division Bench the very issue sought to be raised in the present Petition was under consideration. The Division Bench considered the Foreign Trade Policy and the Served From India scheme. After considering the matter in detail the Division Bench dismissed the Writ Petitions filed by the Petitioners. The learned counsel for the Petitioner contends that the Supreme Court, noticing the divergent views expressed by this Court and the Delhi High Court, has issued a notice on 6 November 2017. As a matter of judicial discipline, petition dismissed.

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• 2019 (9) TMI 848
  Seizure of imported goods - mis-declaration of goods - Section 110-A of the Customs Act, 1962 - HELD THAT:- During pendency of the present writ petition, final adjudication had taken place, whereby the seized goods have been released on payment of tax, penalty and fine - the present writ petition has become infructuous. Petition dismissed as infructuous.

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• 2019 (9) TMI 847
  Maintainability of petition - alternate remedy of appeal - Confiscation - Ketamine Hydrochloride - Indian Currency - Foreign Currency - Gold Jewellery - adjudication passed belatedly - Demand based on confessional statements - HELD THAT:- In this case, the very order of adjudication, while discussing the narration of the facts, the order of adjudication, would disclose that this is not the matter where this Court can exercise the discretionary jurisdiction and entertain the writ petition, solely on the technical reason that the order of adjudication came to be passed belatedly. It is seen that based on intelligence that a gang was attempting to smuggle Ketamine Hydrochloride in bulk quantity and have transported the same to Chennai from Mumbai, the Officers of Directorate of Revenue Intelligence (DRI), Chennai, intercepted one S.P.Rajapandian, the main person in the gang at the Domestic Airport, who was travelling by flight IC 173 from Mumbai to Chennai after booking the Ketamine in various transports in the guise of lactose and other medicines and who was also carrying the lorry transport Receipts with him on 05.08.2010. The narration of the facts, thus, goes further and link the role of the petitioner herein as well in this illegal transaction, based on his confessional statement dated 01.10.2010. This Court is of the view that when such serious allegation was made against the petitioner and others and such allegation has also resulted in passing the impugned order of adjudication, I do not propose to entertain this writ petition only on the technical ground of delay in passing the order of adjudication, more particularly, when the case laws relied on by the learned Senior Counsel are distinguishable on facts and circumstances. This writ petition need not be entertained, as the petitioner is having an effective alternative remedy by way of filing an appeal before the concerned Appellate Forum to challenge the order of adjudication - petition dismissed.

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• 2019 (9) TMI 846
  Rectification application - mistake apparent on the face of record - invocation of power u/s 129B of the CA 1962 - HELD THAT:- There are no good reason to interfere with the impugned order, as in any case the appeals are to be reheard now on merits. It would be still open to the petitioner to canvass before the Tribunal as to how this matter is covered by the judgment of Delhi High Court in M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 2016 (5) TMI 225 - DELHI HIGH COURT] and therefore was required to be remanded back to the Adjudicating Authority. If the Tribunal is persuaded, in that event, it would be passing order on merits of the case rather than on the basis of consent of the parties. Petition dismissed.

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• 2019 (9) TMI 845
  Confiscation - imposition of penalty - import of CPU Board - old and second hand goods - Revenue has submitted that even though the value of the imported goods was more than Rs. 2.00 lakhs, the appellant instead of filing regular Bill of Entry chose to file Form V Bill of Entry even though the imported goods were old and second hand goods - HELD THAT:- The appellant has made an attempt to make out a case that imposition of penalty on them is arbitrary and harsh, as they did not have any intention for evasion of duty on account of revisions of assessable value. Also, referring to the meaning of old and second hand machinery, they were of the view that no restriction is provided in the policy and it is freely importable. Appeal dismissed.

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• Insolvency & Bankruptcy

• 2019 (9) TMI 844
  Constitutional validity of amendment introduced to the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations 2016 (IBBI Regulations, 2016) notified on 27.03.2018 - HELD THAT:- Having regard to the fact that the applicant made the application on 29.03.2018 which was received by respondent No. 2 prior to the last date before the amendment came into effect, but the applicant could not be enrolled only for the reason that 30th 31st March were holidays, respondent No. 2 is directed to enrol the applicant as an insolvency professional on requisite fees being deposited within 3 days from today. The application would be forwarded to respondent No. 2 who would consider the same as having been received prior to the cut-off date. Petition disposed off.

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• 2019 (9) TMI 843
  Maintainability of application - initiation of CIRP - Corporate Debtor - existence of dispute or not - HELD THAT:- Once an application under Sections 7 or 9 is filed by the Adjudicating Authority, it is not necessary for the Adjudicating Authority to await hearing of the parties for passing order of Moratorium under Section 14 of the I B Code . To ensure that one or other party may not abuse the process of the Tribunal or for meeting the ends of justice, it is always open to the Tribunal to pass appropriate interim order. The Appellant having not given any undertaking or made any specific reply and refused to say that they have no such intention, we are of the view that it is always open to the Adjudicating Authority to pass ad-interim order before admitting any application under Sections 7 or 9 or 10 of the I B Code - if application under Sections 7 or 9 or 10 is rejected, the interim order will automatically stands vacated. Appeal dismissed.

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• 2019 (9) TMI 842
  Admissibility of application - Initiation of CIRP - Section 9 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In exercise of powers conferred under Rule 11 of the NCLAT Rules, 2016, we accept the terms of settlement and set-aside the impugned order dated 4th December, 2018. So far as the fee and cost of the Resolution Professional is concerned, the Corporate Debtor will pay a sum of Rs. 3.5 lakhs in favour of Resolution Professional within three weeks, failing which, it will be open to the Resolution Professional to bring the same to the notice of this Appellate Tribunal. Appeal allowed.

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• 2019 (9) TMI 841
  Maintainability of petition - initiation of CIRP - Corporate Debtor - Approval of Resolution plan without complying the mandatory provisions of the I B Code - HELD THAT:- It is clear that I B Code envisages maximization of value of the assets of the Corporate Debtor so that they are efficiently run as going concerns and in turn, will promote entrepreneurship. The preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no Resolution Plan or the Resolution Plan s submitted are not up to the mark - Admittedly, the Corporate Debtor is a MSME and the promoters are not ineligible in terms of Section 29A of the I B Code . Therefore, it is not necessary for the Committee of Creditors to find out whether the Resolution Applicant is ineligible in terms of Section 29A or not. If the Corporate Debtor is MSME, it is not necessary for the Promoters to compete with other Resolution Applicants to regain the control of the Corporate Debtor - it is open to the Committee of Creditors to defer the process of issuance of Information Memorandum , if the Promoter of MSME offers a viable and feasible plan maximising the assets of the Corporate Debtor and balancing all the stakeholders. Appeal dismissed.

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• 2019 (9) TMI 840
  Maintainability of petition - initiation of CIRP - pre-existing disputes or not - section 9 of the Insolvency and Bankruptcy Code - HELD THAT:- There is a pre-existing dispute about the work which were brought to the notice of the Appellant prior to the Demand Notice dated 10.05.2017. The emails dated 03.04.2017, 05.05.2017 and 09.05.2017 is by the Respondent taking step for award for imposition of penalty for damage and having taken adverse action has also not been disputed. Appeal dismissed.

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• 2019 (9) TMI 839
  Admissibility of application - Initiation of CIRP - Corporate Debtor had issued post-dated cheques which got dishonoured - Existence of dispute or not - HELD THAT:- There is existence of dispute and the application u/s 9 was not maintainable. However, further the counsel for the Appellant has handed over the draft of Rs. 2,81,250/- dated 8th March, 2019 issued by the IDBI Bank, Chandrapur, Maharashtra. We are of the view that it is a fit case to close the proceedings. Application dismissed.

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• Service Tax

• 2019 (9) TMI 838
  Taxability - freight charged by the Petitioner s to its customers - CENVAT Credit u/r 6(3)(i) of the Cenvat Credit Rules, 2004, read with Section 73 (1) of the Finance Act, 1994 - HELD THAT:- On the face of it the two impugned orders in respect of similar period has taken a contrary stand. If the freight charges are exempt as held in the impugned order dated 18 March 2019, then the demand of Service Tax as made in the impugned order dated 28 February 2019 cannot stand and vice versa. Revenue can be correct or rather on facts can only take one of the two stands and not confirm the notices taking a dramatically opposite views. At the request of Mr.Jetly the Petition is adjourned to 27 September 2019.

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• 2019 (9) TMI 837
  CENVAT credit - input/input services used for commissioning and erection of BTS towers/ shelters - construction services - erection, commissioning installation services - technical testing analysis services - Difference of Opinion - HELD THAT:- Since on the issue there is the decision of the Bombay High Court which is binding on the bench in Mumbai, we refer the matter to President for constituting a larger bench to decide the controversy. The matter is referred to President for constitution of larger bench to consider following questions of law:- Whether the CENVAT Credit in respect of input services namely construction services, erection, commissioning installation services, technical testing analysis services which were used by the telecom service providers for commissioning and erection of BTS towers/ shelters used for providing telecom services is admissible or otherwise?

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• Central Excise

• 2019 (9) TMI 836
  Demand and levy of Interest - short payment of duty - In the absence of levy of interest in the substantive provision of Section 3A of the Central Excise Act, 1944, whether interest can be levied under Rule 96 ZO which has been framed in exercise of power conferred under the aforesaid Section 3A? HELD THAT:- There are no ground to interfere with the impugned order(s) passed by the High Court - SLP dismissed.

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• 2019 (9) TMI 835
  Rejection of Rectification Application - Valuation of free physician samples - time limitation - HELD THAT:- On perusal of the impugned order, we find that the grievance of the Petitioner that it is entirely unreasoned, is justified - In the Rectification application the Petitioner has stated that the ground of limitation was taken up in the Appeal Memo and Written submission but has not been considered. The impugned order dated 20 November 2018 passed by the Tribunal is set aside. The Rectification application stands restored to the file of the Tribunal to be decided as per law - Petition allowed.

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• 2019 (9) TMI 834
  Maintainability of Settlement Application - It is the case of the petitioner that the Settlement Commission directed the revenue to submit a report on the Cenvat credit by 30th October, 2017 and to forward the same to the petitioner company as well - Whether the Settlement Commission was justified in holding that there was non-cooperation on the part of the petitioner? HELD THAT:- The Settlement Commission has not recorded any finding that the petitioner has not made a true and full disclosure of the facts pertaining to it. More importantly, the Settlement Commission has relegated the matter to the adjudicating authority not on account of failure to make a full and true disclosure on the part of the petitioner but because it was of the view that the case will necessarily involve proper appreciation of facts and circumstances based on documents and records available with the petitioner and correct interpretation of law and procedure. In this view of the matter, when having regard to the totality of the facts of the case, the conduct of the petitioner cannot be said to amount to non-cooperation and the fact that the Settlement Commission has thought it fit to send the matter to the adjudicating authority as it was of the view that it does not have the jurisdiction to decide the dispute with regard to either applicability of service tax and/or entering into the questions raised before it, in the opinion of this court the Settlement Commission was not justified in sending the matter to the adjudicating authority under section 32-L of the Act which has serious consequences in view of the provisions of section 32-O(1)(iii) which postulate that where the case of such person is sent back to the Central Excise Officer having jurisdiction by the Settlement Commission under section 32L, then he shall not be entitled to apply for settlement under section 32E in relation to any other matter. In the opinion of this court, if the Settlement Commission was of the opinion that considering the nature of the dispute raised before it, the matter was required to be remitted to the adjudicating authority, it should have done so in the exercise of powers under section 32F(5) of the Act which empowers it to pass such orders on the application as it thinks fit. The impugned order passed by the Settlement Commission, to the extent it holds that the conduct of the petitioner in the proceedings before it amounts to non-cooperation and, therefore, is liable to be rejected and sent back to the adjudicating authority on this ground alone is hereby quashed and set aside - Petition allowed in part.

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• 2019 (9) TMI 833
  CENVAT Credit - inputs received from EOU - Rule 3(7)(a) of CCR 2004 - Department was of the view that the appellants have not complied with the provisions of Rule 3(7)(a) of CENVAT Credit Rules 2004 and availed excess credit besides wrongly availing credit of SAD - HELD THAT:- The excess credit on this account is only Rs. 2,28,722/- for the period April 2006 to March 2009 and Rs. 1,23,835 for the period April 2009 to February 2010 where the total credit availed for these periods is above Rs. 3 crores. Therefore the contention of the appellant that this was a mistake in calculation and that they were not aware of the revised formula prescribed in the Rules is acceptable - the demand raised for the extended period cannot sustain and requires to be set aside. Liability for Interest and penalty - HELD THAT:- The appellant is liable to pay interest - However with regard to penalties, since this has been reversed, penalties imposed in this regard are unwarranted and requires to be set aside. CENVAT Credit of SAD - HELD THAT:- Reliance placed in the case of M/S METACLAD INDUSTRIES VERSUS CCE, MUMBAI-II [ 2012 (11) TMI 244 - CESTAT MUMBAI ] where it was held that there is no warrant to restrict the scope of the term additional duty of customs occurring in the formula to only the additional duty leviable under sub-section (1) of section 3 and not to the additional duty leviable under sub section (5) thereof. The impugned orders are modified to the extent of setting aside the credit availed on SAD as well as credit availed on inputs for the extended period - demand of credit availed on inputs for the normal period as well as interest thereof is upheld - penalties set aside. Appeal allowed in part.

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• 2019 (9) TMI 832
  Interest on refund - duty paid on the inputs utilized in the manufacture of exported detergent - Section 11BB of CEA - HELD THAT:- The proviso to the said Section lays down that where the refund application stands made before the date on which the Finance Bill, 1995 receives the assent of the president and is not refunded within 3 months from such date, the appellant shall be paid interest under the said Section from the date immediately after three months from such date, till the date of refund of such amount - In terms of the said proviso, which applies to all the refund applications pending on the date of introduction of said Section 11BB, all such refund applications are supposed to be decided within a period of 3 months and if the amount is not refunded, the assessee shall be entitled to interest on the said refund, from the expiry of period of three months till the actual date of payment of such refund amount. The Learned Commissioner (Appeals) has merely rejected the claim of interest on the sole ground that the provisions of Section 11-BB were introduced in the Act only w.e.f. 26 May, 1995 and as the application for refund was made on 29.12.1989, the same would not apply to the said refund application - but in terms of the proviso to said Section 11-BB, the revenues interest liability would start accruing after the expiry of period of 3 months from 26 May, 1995. Matter remanded to Original Adjudicating Authority for calculation of the interest to be paid to the appellant - appeal allowed by way of remand.

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• 2019 (9) TMI 831
  Maintainability of appeal - non-prosecution of appeal - HELD THAT:- The appellants are not interested in pursuing the appeals. Accordingly, we dismiss the appeals for non-prosecution.

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• Indian Laws

• 2019 (9) TMI 830
  Offences punishable under Section 8(c) read with 29, 21 and 23(c) and 27(A) of the NDPS Act - punishment for financing illicit traffic and harbouring offenders - confessional statement - HELD THAT:- We proceed on the premise that the confession is admissible. Even if it is admissible, the Court has to be satisfied that it is a voluntary statement, free from any pressure and also that the accused was apprised of his rights before recording the confession. No such material has been brought on the record of this case. It is also well settled that a confession, especially a confession recorded when the accused is in custody, is a weak piece of evidence and there must be some corroborative evidence - The confession of the co-accused, which was said to be a corroborative piece of evidence, has been discussed above and is of no material value. Therefore, other than the two confessional statements one of the co-accused and the other of the accused, the prosecution has gathered no evidence to link the appellant with the commission of the offence. As such, without going into the legality of the admissibility of the confession, it is held that even if these confessions are admissible then also the evidence is not sufficient to convict the accused. The Trial Court and the High Court wrongly convicted the accused - appeal allowed.

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• 2019 (9) TMI 829
  Recovery of service tax paid - whether the DDA would be liable to reimburse service tax deposited by the Plaintiff with the Government? - HELD THAT:- This Court, after seeing the impugned order and the chart is convinced that nothing new is being claimed in the present suit by the addition of the CENVAT credit amount. If the Plaintiff has, in fact, made payments, towards CENVAT credit, which would have to be proved by the Plaintiff in accordance with law, the addition of the same would not create a new cause of action. Insofar as the objection of limitation and Order II Rule 2 CPC is concerned, the ld. Trial Court has held that there is no new cause of action which has been pleaded and has now become time barred. The question of limitation is a mixed question of fact and law which requires to be adjudicated at the final stage. The CENVAT credit would form an integral component of the service tax amount which the Plaintiff could claim recovery of, subject to the objections of the DDA being adjudicated by the Court - the application under Order VI Rule 17 CPC has being rightly allowed.

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• 2019 (9) TMI 828
  Scope of Deposit for the purpose of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 - Whether the definition of deposit under section 2(c) of the MPID Act covers in its fold inter corporate deposits and can the MPID Act be said to have been enacted to protect the interest of the corporate depositors as well? HELD THAT:- The MPID Act and the enactments passed by the other State Legislatures were with the avowed object of protecting the interest of the depositors. The Legislatures had noticed a pattern of collecting money or deposits from unsuspecting investors after painting a rosy picture of return. The Legislature, thus, provided a special mechanism of attachment of properties and unearthing the money which was swindled so as to ensure that the investors are not left in the lurch by such unscrupulous persons and financial establishments. The legislative prescription, needs to be carefully appreciated in the backdrop of the object of the MPID Act. Indubitably, the MPID Act does not make a distinction between the corporate and ordinary deposit. In fact, the MPID Act only defines deposit . It does not define depositor . Albiet, section 4 of the Act provides for issuance of an order of attachment of the properties on default in return of deposits upon complaints received from the depositors or otherwise. The constitutional validity of the MPID Act has been upheld, including the legislative competence of the State legislature to enact MPID Act. We are also conscious of the fact that it is neither permissible, nor do we propose, to delve into the said aspect of the matter. Thus, the inter corporate deposit/loan, i.e., a loan advanced / deposit made by a company with another company registered under the provisions of the Companies Act would not amount to a deposit within the meaning and for the purpose of the MPID Act. It is hereby declared that the inter corporate deposit/loan, i.e., a loan advanced/deposit made by a company with another company registered under the provisions of the Companies Act, 1956/2013 would not amount to a deposit within the meaning and for the purpose of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 - petition allowed.

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• 2019 (9) TMI 827
  Dishonor of Cheque - instruction issued for Stop Payment - insufficiency of funds - the petitioner has admitted the business transaction with the respondent No. 2 but he also alleged that he had not issued the cheques in question in favour of the respondent No. 2/ complainant - section 138 of NI Act - HELD THAT:- No cogent evidence has been led by the petitioner in support of the said claim. The reason for dishonour of cheque is insufficiency of funds. No explanation was given by the petitioner as to why he did give stop payment instructions regarding the cheques in question, if, cheques were misplaced. Further, the petitioner did not step into the witness box to stand by his defence. The defence taken by the petitioner at the time of framing of notice and while recording the statement of petitioner under Section 281 Cr.P.C. read with Section 313 Cr.P.C. cannot be considered as evidence. There are no merit in the petition - petition dismissed.

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• 2019 (9) TMI 826
  Appointment as an Assistant Teacher in Arabic In Jiaruddintola High School, District- Malda - Cancellation of recommendation/ empanelment and his selection to the School on the ground that he had opted for a Bengali medium school though he did not have Bengali as a subject either at the Secondary or the Higher Secondary or the graduation level - HELD THAT:- In this case, it is not in dispute that the Respondent No.1 who had been educated outside the State of West Bengal, did not have Bengali as a subject at the Secondary, Higher Secondary, graduation or post graduation level. The interpretation of the last Clause of Paragraph 2 of the advertisement and/or Rule 5 (c) of the Rules, which reads must have succeeded in higher level of education in that language paper by the authorities as success in the language paper at the graduation level or the post graduation level, or alternatively an examination in the language paper of a level which is equivalent to the level of the language as taught in the graduation level and not any part time course conducted by a University is a plausible if not possible interpretation which ought not to have been interfered with by the Writ Court. This Court cannot but take judicial notice of the fact that universities do not usually allow students to opt for a language subject at the graduation level if the subject was not cleared at the Higher Secondary level - the documents annexed by the Respondent No.1 reveals that candidates who have studied the language at some level before the graduate level are debarred from admission to the Certificate Course, which makes it obvious that the course is of elementary level - Significantly, the Respondent No.1 has not produced any document or certificate of the Delhi University certifying that the certificate course in Bengali is of a standard equivalent to Bengali language at the post Higher Secondary level. Appeal allowed.

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