TMI Tax Updates - e-Newsletter
September 26, 2020

Case Laws in this Newsletter:

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

Articles

1. GROUNDS OF DEFENCE – WHY IGST @ 3% IS NOT LEVIABLE ON RE-IMPORT OF JEWELERY BROUGHT BACK FROM EXHIBITION ABROAD

   By: pooja jajwani and Rakesh Chitkara

2. NON MENTIONING GST RATE IN TENDER DOCUMENTS

   By: DR.MARIAPPAN GOVINDARAJAN

3. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

News

1. Government to study the arbitration case award in Vodafone International Holding BV

2. Faceless Appeals launched by CBDT today- Honoring The Honest

Notifications

Customs

1. 91/2020 - dated 24-9-2020 - Cus (NT)

Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver

GST - States

2. G.O. Ms. No. 130 - dated 1-9-2020 - Tamil Nadu SGST

Amendment in Notification No. II(2)/CTR/301(f-2)/2019 dated 23rd April, 2019

3. 690/2020/5(120)/XXVII(8)/2020/CT-62 - dated 16-9-2020 - Uttarakhand SGST

Uttarakhand Goods and Services Tax (Tenth Amendment) Rules, 2020

4. 689/2020/6(120)/XXVII(8)/2020/CT-61 - dated 16-9-2020 - Uttarakhand SGST

Amendment in Notification No. 330/2020/5/(120)/XXVII(8)2020/CT-13 dated 20 May, 2020

5. 688/2020/6(120)/XXVII(8)/2020/CT-60 - dated 16-9-2020 - Uttarakhand SGST

Uttarakhand Goods and Services Tax (Ninth Amendment) Rules, 2020

IBC

6. G.S.R. 583 (E) - dated 24-9-2020 - IBC

Insolvency and Bankruptcy (Application to Adjudicating Authority) (Amendment) Rules, 2020

Income Tax

7. 79/2020 - dated 25-9-2020 - IT

CBDT authorises the Assistant Commissioner/Deputy Commissioner of Income-tax (National e-Assessment Centre)

8. 78/2020 - dated 25-9-2020 - IT

Seeks to amend Notification No. 51/2014 dated 22nd October, 2014

9. 77/2020 - dated 25-9-2020 - IT

Central Government notifies directions giving effect to the Faceless Appeal Scheme, 2020

10. 76/2020 - dated 25-9-2020 - IT

Faceless Appeal Scheme, 2020.

Circulars / Instructions / Orders

Companies Law

1. RoC Goa - dated 8-9-2020

Extension of time for holding of Annual General Meeting (AGM) for the financial year ended on 31.03.2020 - RoC Goa

2. ROC/GHY/ Order - dated 8-9-2020

EXTENSION OF TIME FOR HOLDING OF ANNUAL GENERAL MEETING (AGM) FOR THE FINANCIAL YEAR ENDED ON 31.03.2020 - RoC Guwahati

3. ROC-G/ Extension of AGM /2020/926 - dated 8-9-2020

Extension of time for holding of Annual General Meeting (AGM) for the financial year ended on 31.03.2020 - RoC Gwalior

4. Extension AGM/ROC-CHD/345 - dated 8-9-2020

Extension of time for holding of Annual General Meeting (AGM) for the financial year ended on 31.03.2020 - RoC Himachal Pradesh

5. RoC UT of J&K and UT of Ladakh - dated 8-9-2020

Extension of time for holding of Annual General Meeting (AGM) for the financial year ended on 31.03.2020 - RoC UT of J&K and UT of Ladakh

6. ROC-cum-OL/PAT/Admn(28)Vol-II/405 - dated 8-9-2020

Extension of time for holding of Annual General Meeting (AGM) for the financial year ended on 31.03.2020 - RoC Patna

7. Extension AGM/ROC-JPR/1149 - dated 8-9-2020

Extension of time for holding of Annual General Meeting (AGM) for the financial year ended on 31.03.2020 - RoC Jaipur

8. ROC/KAN/AGM EXTN./202/1105 - dated 8-9-2020

Extension of time for holding of Annual General Meeting (AGM) for the financial year ended on 31.03.2020 - RoC Kanpur

Highlights / Catch Notes

GST

• Duty Free Shops at Cochin and Calicut Airports Exempt from CGST and IGST, Ruled Outside India's Customs Frontiers.

  Case-Laws - HC : Levy of CGST and IGST - Duty Free Shops (DFS) at Airport - All the DFSs are situated at international airports i.e. at Cochin and Calicut, which are beyond the customs frontiers of India and would not be within the customs frontiers of India. When any transaction takes place outside the customs frontiers of India, of course the transaction is said to have taken place outside India, though the transaction might take place within India. Examining the provisions of Section 2(11) of the Act of 1962 read with Section 286 of the Constitution of India, the said transaction would be said to have taken place outside India. - GST not applicable - HC
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• Court Denies Anticipatory Bail for Excise Officer in Bribery and GST Evasion Case Involving Complex Supply Chain Issues.

  Case-Laws - HC : Grant of Anticipatory Bail - Allegation of Bribery - Excise and Taxation (GST) officer - evasion of GST - The evasion of tax is by connivance of transporters, officers/officials of Excise and Taxation Department and the passers - Considering the complexity of the issue, the tax impact on chain of sellers and purchasers, the material as on date with the investigating agency, the multi dimensional aspects involved which needs a deeper probe, no case is made out for grant of pre-arrest bail - HC
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Income Tax

• Assessee's Late Request for Reasons u/s 147 Notice; Provided by Assessing Officer in 35 Days Post-Appeal.

  Case-Laws - AT : Reopening of assessment u/s 147 - non-supply of reasons recorded for issuance of notice u/s 148 - In the instant case, it is an admitted position that the assessee for the first time applied for the copy of the reasons after passing of appellate order by ld. CIT(A) and the same was provided by the AO in 35 days and therefore, it is crystal clear on facts that the assessee never asked for the copy of the reasons during the entire assessment and appellate proceedings, and therefore, there was no obligation as well as occasion for the AO to supply copy of the reasons to the assessee. - AT
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• POA Holder Not Legal Owner Without Formal Transfer: Section 2(47) Requires Proper Documentation for Capital Gains Tax.

  Case-Laws - AT : Long term capital gain - actual owner of the property - Holder of Power Of Attorney (POA) - Transfer of asset u/s 2(47) - In the absence of any transfer document coupled with transfer of possession it cannot be concluded that the assessee was owner of the property in law.- AT
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• Taxpayer Denied Loss Set-Off u/s 10B Due to Missing Audit Report; Section 70 Provisions Apply.

  Case-Laws - HC : Non setting off the losses from Export Oriented Unit (Section 10B unit) against the income earned in the Domestic Tariff Area Unit - Admittedly, in the instant case, the assessee has not filed any audit report in Form-56G which is a mandatory requirement for claiming deduction u/s 10B of the Act. Therefore, the deduction under Section 10B of the Act cannot be thirst upon the assessee. - The provisions of Section 70 of the Act have to be given effect to. - HC
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• High Court Supports Tribunal: No Substantial Question of Law in Penalty Deletion u/s 271(1)(c) for Inaccurate Income Reporting.

  Case-Laws - HC : Penalty u/s. 271(1)(c) - advances shown as purchases - furnishing inaccurate particulars of income - On taking note of the factual position, the CIT(A) exercised its discretion and granted relief to the assessee. The factual situation was examined by the Tribunal and it came to a conclusion that the CIT(A) was right in deleting the penalty. - No substantial question of law - HC
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• Assessee's Data Processing and Legal Database Activities Qualify for Section 10A Deduction, Says CBDT Notification.

  Case-Laws - HC : Eligibility of deduction u/s 10A - The activities of the assessee can be classified as Data Processing, Legal Databases and remote maintenance under the Notification issued by the CBDT. The assessee is transmitting the patent application and related data, which is stored in electronic form and therefore, such data, is customized data and is eligible for deduction under Section 10A of the Act. - HC
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• Court Rules Only Profit Portion of Unrecorded "On Money" Receipts is Taxable, Not Entire Amount.

  Case-Laws - HC : Business income receipt of On Money received out of books of account - Addition on the basis of the extrapolation of the clinching evidences seized/impounded which has the part of cash and cheque payments receipts - Not the entire receipts, but the profit element embedded in such receipts can be brought to tax - HC
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• Scientific Research Expenses Allowed u/s 35, Not Disallowed by Section 37 Unless Creating Enduring Assets.

  Case-Laws - HC : Scientific Research Expenditure u/s 35 - Unless the expenditure is of the capital in nature, resulting in creation of assets of enduring nature, the same cannot be disallowed under Section 37. There is no dispute that the said expenditure was incurred in the ordinary course of business. - HC
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• High Court Upholds ITAT Decision: Deemed Dividends u/s 2(22)(e) Not Taxable as Loans or Advances to Shareholders.

  Case-Laws - HC : Deemed dividend u/s 2(22) (e) - to be assessed in the hands of the share holder or in the hands of the firm - the nature of transaction between the firm and the company and it is neither a loan nor an advance, but a deferred liability. - ITAT rightly deleted the additions - HC
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• Agricultural Lease Income Tax Exemption Requires Evidence of Cultivation and Skilled Labor u/s 10(1) of Income Tax Act.

  Case-Laws - AT : Lease income derived from the agricultural land - "income from other source" OR “agricultural income” which is exempt from tax u/s.10(1) - unless there is some measure of cultivation of land and some skilled labour is performed on the land for cultivation, the land cannot be said to have been used for agricultural purposes. - AT
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• Tax Officer to Review Deduction Claims on Education Cess; Aligns with Ruling on Business Income Calculations.

  Case-Laws - AT : Deduction in respect of education cess - AO directed to consider the claim of assessee and allow appropriate relief in accordance with the decision above wherein it was held that Education Cess and Higher and Secondary Education Cess are liable for deduction in computing income chargeable under head of 'profits and gains of business or profession’. - AT
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• Rental Income Taxable as 'Income from House Properties'; No Depreciation Deduction Allowed u/s 32 for Rented Period.

  Case-Laws - AT : Correct head of income - Taxability of rental income - there is no question of allowing any deduction as depreciation under section 32 for the period for which this property was let out and income thereof was offered for tax under the head 'income from house properties' - AT
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• Section 274 Notice Invalidated for Not Specifying Charges u/s 271AAB; Penalty Notice Quashed.

  Case-Laws - AT : Penalty u/s 271AAB - Defective notice - in the given facts and circumstances of the case wherein the matter written in the body of the notice issued u/s 274 of the Act does not refer to the charges of provision of Section 271AAB of the Act makes the alleged notice defective and invalid and thus deserves to be quashed. - AT
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Customs

• Court Rules on Duty-Free Wheat Gluten Imports for Biscuit Manufacturing; Appellants Not Liable for Misalignment with Export Composition.

  Case-Laws - AT : Legality of import of ‘wheat gluten amygluten 160’ - production of ‘duty-free import authorization (DFIA)’ licenses, permitting import of ‘flour’ for the manufacture of ‘biscuits’ - There is no evidence on record that the appellants were aware of the composition of the exported goods. Hence, the appellant cannot be expected to conform to such imports as they are not cognizant of. From the available records and submissions made, we are unable to conclude if any of the inputs permitted for import to enable manufacture of biscuits are enumerated among the goods specified for conformity in the Handbook of Procedures. - AT
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• Imported Split Air-Conditioners Classified Under Tariff Item 84151010, Not Residuary, Per Customs Tariff Act, 1975 Rules.

  Case-Laws - AT : Classification of imported goods - split air-conditioners - These operate together to cool space. Likewise, it may heat space also - The General Rules of Interpretation, with emphasis on hierarchical elimination of non-conformity, precluded classification of the impugned goods under the general residuary description when conformity with the specific is not established as incorrect - the impugned goods are classifiable under tariff item no. 84151010 of First Schedule to Customs Tariff Act, 1975. - AT
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IBC

• Inactive Directors Face Legal Action for Non-Cooperation with Resolution Professional u/s 19 of Insolvency and Bankruptcy Code.

  Case-Laws - AT : Prosecution proceedings against sleeping directors for failure to assist RP - Non supply of Documents / Account Books - A mere running of the eye of the ingredients of Section 19 of the Code latently and patently imposes an obligation on the personnel and promoters of the ‘Corporate Debtor’ to extend all assistance and cooperation which the ‘Interim Resolution Professional’ will require in running / managing the affairs of the CD. In fact, the term ‘personnel’ is defined to mean the employees, directors, mangers, key managerial personnel etc., if any of the ‘Corporate Debtor’ and this is meant to render assistance to the ‘Interim Resolution Professional’ in carrying out his duties in an effective and efficacious manner. - Order of NCLT confirmed - AT
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• NCLT's order admitting CIRP application set aside due to pre-existing dispute over supply quality, evidenced by 2017 email.

  Case-Laws - AT : Initiation of CIRP - “IBC is not a recovery law”. Its purpose is to save the companies and also to allow them to be going concern. Again, email dated 06.07.2017 does show pre-existing dispute regarding quality of supply. - Order of NCLT admitting the application set aside - AT
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Service Tax

• CENVAT Credit Approved for Hotel Stays, Rent-a-Cab, Catering, and Housekeeping Services on Various Grounds.

  Case-Laws - AT : CENVAT Credit - input services - Short term hotel accommodation service - rent-a-cab service - outdoor catering and housekeeping services - Credit allowed on different grounds for each service - AT
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• Court Allows Service Tax Refund; Department's Initial Non-Dispute of Credit Availment Found Compelling by Appellant.

  Case-Laws - AT : Refund of Service Tax - nexus with output service - there is force in the appellant’s arguments that the Department did not dispute the availment of credit in the first instant and therefore, it is not open for them to deny the same when a refund is filed - refund allowed - AT
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Case Laws:

• GST

• 2020 (9) TMI 984
  Detention of goods - there exists valid tax invoice and e-way bill - Contention is that merely because certain loose invoices were also found, the liability cannot be converted into one under Section 129(1)(b) of the Act - HELD THAT:- Matter requires consideration. In the event, petitioner deposits the disputed amount of tax and penalty in terms of Section 129(1)(a) and also furnishes security in respect of the remaining amount found due and payable under the order of Appellate Authority, the detained goods shall be released to the petitioner subject to final outcome of this petition.

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• 2020 (9) TMI 983
  Grant of Anticipatory Bail - Allegation of Bribery - Excise and Taxation (GST) officer - evasion of GST - The evasion of tax is by connivance of transporters, officers/officials of Excise and Taxation Department and the passers - It is alleged that the tax was being evaded by ensuring that there was no checking or verification of the documents or goods, while being transported to from State of Punjab - HELD THAT:- The nature of allegation in present case of evasion of GST requires a deeper probe. There are far reaching ramifications which may vary from allowing of input credit/ MODVAT of tax not paid to the Government to an eventuality that the credit of tax paid on some other product is used for something else. Not only this, someone later in chain in spite of being a bona fide purchaser not aware of the earlier misdeed in the chain yet will have to suffer the consequences - The term passer has been repeatedly used. He is a person who acts as a Mediator between the dealers, transporters and the officers. He ensures the ground level implementation that the goods in transport reach the destination without checking. It is for this facility that the amount is charged and the said bounty is shared and distributed. The allegation in the present case are very serious. There is alleged connivance of the transporters, passers and the officials to facilitate the evasion of tax. The investigation is going on, it appears that the officials were being paid bribe on monthly basis - There is no quibble that the liberty of a person is of utmost importance. But when personal liberty is pitted against a sovereign function i.e. collection of tax which is life blood of the economy, the latter would prevail. Present is a case where arrest is imperative for fair and full investigation. The official position of petitioner can be used to influence witness or temper with evidence. Considering the complexity of the issue, the tax impact on chain of sellers and purchasers, the material as on date with the investigating agency, the multi dimensional aspects involved which needs a deeper probe, no case is made out for grant of pre-arrest bail - Petition dismissed.

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• 2020 (9) TMI 982
  Profiteering - service of notice - grievance of the petitioner is that the notice dated 7th February, 2020 issued by the respondent No.2 DG to the petitioner is not in compliance with Rule 129(3)(a) (b) of the Central Goods and Services Tax Rules, 2017 - HELD THAT:- The counsel for the respondents appearing on advance notice though has sought to contend by reading of Rule 129(2) that the proceedings still are at the stage thereof and the stage of issuance of notice under Rule 129(3) has not reached but prima facie it does not appear to be correct inasmuch as Rule 129(1) as well as Rule 129(2) use the word investigation and Rule 129(3) provides that, before initiation of investigation, notice containing the aforesaid particulars will be issued. It thus appears that before the investigation under Rule 129(2) is initiated, notice containing the particulars described in Rule 129(3) has to be issued. Also, this is not the right stage for the petitioner to make other challenges to the proceedings and right to make which challenges can be reserved, if pursuant to the investigation, any adverse report is submitted by DG to respondent No.1 NAPA or if respondent No.1 NAPA initiates any proceedings against the petitioner or may be, even after the order, if any of respondent No.1 NAPA. Issue notice limited to the aforesaid confines - List on 30th September, 2020.

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• 2020 (9) TMI 981
  Levy of CGST and IGST - Duty Free Shops (DFS) at Airport - Refund of the Input Tax Credit - supply of goods and services effected by the petitioner in the arrival and departure Duty Free Shops (DFS) at Calicut International Airport in terms of the Concession Agreement - applicability of Central Goods and Service Tax Act, 2017, the Integrated Goods and Service Tax Act, 2017 and the Kerala State Goods and Service Tax Act, 2017 and the rules thereunder - levy of CGST and IGST on the revenue sharing in terms of the Concession Agreement dated 22.04.2016. HELD THAT:- The question posed qua entitlement of refund of taxes in respect of goods and services provided at international airport would be applicable to outgoing international tourist i.e. departure area in view of the Circular dated 29.06.2020 as has been argued by the Revenue, would also not be required to be answered by this Court, as the aforementioned circular has also been discussed in the judgment rendered by the High Court of Bombay in the case of SANDEEP PATIL, FLEMINGO TRAVEL RETAIL LIMITED ANR., VERSUS UNION OF INDIA AND OTHERS. [ 2019 (10) TMI 360 - BOMBAY HIGH COURT] - Once there is no dichotomy regarding the contents of letter and as well as the reference of circular in the judgment, then it is a fit case where same benefit is required to extend to the petitioner(s) herein as has been extended to similarly situated DFSs in the State of Karnataka as well as in the State of Maharashtra and other states referred by petitioners counsel and remained unrebutted. It is a matter of record that the petitioner(s) sell goods to the international passengers i.e. departing passengers or passengers arriving into India (arriving passengers) like cigarettes, alcohol, perfumes, chocolates and cosmetics etc. The expressions import and export defined under Customs Act, 1962 have been identically defined in IGST Act, 2017 - Invoices issued by DFSs at the time of sale of goods to the outgoing passengers are duly signed by both the passengers and the cashier. No doubt, it envisages a condition that the passenger will not consume the goods until he lands at the final destination outside India. In other words, the passenger shall become owner of the goods only upon reaching of final destination - It is a matter of record that all the goods which are sold at the DFSs are either imported or purchased from Indian market and are stored in a customs bonded warehouses and are removed from such warehouses only under the supervision of the Jurisdictional Commissioner, thus, for all intents and purposes are not sold for domestic purposes. The goods which are brought from customs warehouses do not cross customs frontiers, thus, before the goods are imported in the country, they had been sold at DFSs. If the transaction of sale or purchase takes place when the goods are imported in India or they are being exported from India, no State can impose any tax thereon . It is also not in dispute that all the DFSs are situated at international airports i.e. at Cochin and Calicut, which are beyond the customs frontiers of India and would not be within the customs frontiers of India. When any transaction takes place outside the customs frontiers of India, of course the transaction is said to have taken place outside India, though the transaction might take place within India. Examining the provisions of Section 2(11) of the Act of 1962 read with Section 286 of the Constitution of India, the said transaction would be said to have taken place outside India. GST will not be applicable. Petitions allowed.

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• 2020 (9) TMI 980
  Maintainability of petition - alternative remedy is available for the petitioner against the impugned orders - appealable order or not - HELD THAT:- The present writ petition is disposed of with the direction that the petitioner shall file an appeal against the impugned assessment orders under Annexures-2, 3 and 4 within a period of 15 days from today before the appellate authority under Section 107 of the CGST Act, 2017. In the event the appeal is filed, the appellate authority shall dispose of the same on merits and in accordance with law, as expeditiously as possible, preferably within a period of eight weeks. Simultaneously, if the petitioner files an application before the competent authority within the period as stated above for revocation of cancellation of registration as per the procedure prescribed under Section 30 of the CGST Act, 2017 read with Rule 23 of the CGST Rules, 2017, the competent authority shall decide the same on merits. The writ petition stands disposed of.

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• 2020 (9) TMI 979
  Revocation of cancellation of registration - filing of return with part payment of tax or with outstanding tax liability - manual filing of GSTR 3B till August 2020 and from September 2020 onwards electronically - permission of payment of GST liabilities in accordance with the undertaking attached - HELD THAT:- It appears from the materials on record that the GST registration of the writ applicant has been cancelled for failure to file appropriate returns. We take notice of the fact that entire issue has been brought to the notice of the Commissioner of SGST by way of representation dated 26th August 2020 addressed to the Commissioner, SGST, Ahmedabad. In the said representation, the request is two-fold; first to revoke the cancellation of registration as according to the writ applicant, it is causing unnecessary hardship in the current situation of slowdown and secondly to permit the writ applicant manual filing of the GSTR 3B. This writ application is disposed off with a direction to the Commissioner, SGST, Ahmedabad to immediately look into the representation dated 26th August 2020 and take appropriate decision in accordance with law within a period of 15 days from the receipt of the writ of this order.

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• 2020 (9) TMI 978
  Maintainability of petition - availability of alternative remedy - Refund of unutilized ITC - inverted duty structure - Circular No.59/33/2018-GST dated 04.09.2018 (Annexure-4) issued by the Central Board of Indirect Taxes and Customs - HELD THAT:- Since an efficacious statutory remedy is available to the petitioner to assail the legality and validity of the order passed under Annexure-5, this Court should be slow in entertaining the writ petition at this stage. The petitioner has also not made out any ground for interference with the order under Annexure-5 in a writ petition which he cannot raise before the Appellate Authority. The grounds raised by the petitioner can be considered by the Appellate Authority in exercise of power under Section 107 of the Act. This Court without interfering with the impugned order under Annexure-5, disposes of this writ petition granting liberty to the petitioner-Company to assail the legality and validity of Annexure-5 under Section 107 of the Act - Petition disposed off.

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• Income Tax

• 2020 (9) TMI 977
  Deemed dividend u/s 2(22) (e) - to be assessed in the hands of the share holder or in the hands of the firm - share holder of the company had substantial interest in the firm - HELD THAT:- Section 2(22)(e) provision would stand attracted when a payment is made by a company, in which public are not substantial interested by way of advance or loan to a share holder, being a person who is the beneficial owner of the shares. On facts, it is clear that the payment has been made to the assessee, a partnership firm. The partnership firm is not a share holder in the company. If such is the factual position, the decision in the case of National Travel Services relied on by the revenue cannot be applied, nor the case of Gopal and Sons, as they are factually distinguishable. The records placed before the assessing officer clearly shows the nature of transaction between the firm and the company and it is neither a loan nor an advance, but a deferred liability. These facts have been noted by the assessing officer. Tribunal rightly reversed the order passed by the CIT(A) affirming the order of the assessing officer. - Decided against revenue.

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• 2020 (9) TMI 976
  Disallowance u/s 40(a)(ia) - Whether provision of section u/s.40(a)(ia) cover only amounts which are payable as on 31st March of a previous year relevant to the assessment year under consideration and not amounts which are payable at any time during the relevant previous year? - HELD THAT:- Tax effect is said to be less than the monetary limit imposed and therefore, the Appeal filed by the Revenue is dismissed, as withdrawn, keeping open the substantial questions of law for determination in appropriate cases.

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• 2020 (9) TMI 975
  Expenditure as Scientific Research Expenditure u/s 35 - neither the project was approved by the Competent Authority, as required u/s 35 nor the payment in question was made to any approved organization for research purposes - whether Assessee was entitled to claim the said expenditure in the Residuary Provisions of Section 37? - HELD THAT:- The conditions required for claiming the same under Section 35 was not satisfied by the Assessee. Nonetheless, the Assessee was entitled to claim the said expenditure in the Residuary Provisions of Section 37. Section 37 permits such allowance of Business Expenditure incurred in the ordinary course of business, if they are not allowable otherwise by Section 30 to 36. Unless the expenditure is of the capital in nature, resulting in creation of assets of enduring nature, the same cannot be disallowed under Section 37. There is no dispute that the said expenditure was incurred in the ordinary course of business. No material on record which would indicate any capital expenditure incurred in the details of said sum by the Assessee. The redesigning of the moulds to create new designs of the components manufactured by the Assessee, to the satisfaction of the customer M/s. Hyundai Motors is nothing but Revenue Expenditure incurred in the ordinary course of business of the Assessee. Therefore, finding of the CIT (Appeals) as well as the Tribunal are findings of fact, which cannot be said to be wrong or perverse in any manner. No substantial question of law.

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• 2020 (9) TMI 974
  Deduction u/s 10B - Whether expenditure incurred in foreign exchange for providing technical services outside India could not be excluded from the export turnover for the purpose of computing deduction? - HELD THAT:- As decided in own case [2020 (3) TMI 181 - MADRAS HIGH COURT] when the statute prescribes a formula and in the said formula, export turnover is defined, and when the total turnover includes export turnover, the very same meaning given to the export turnover by the legislature is to be adopted while understanding the meaning of the total turnover, when the total turnover includes export turnover. If what is excluded in computing the export turnover is included while arriving at the total turnover, when the export turnover is a component of total turnover, such an interpretation would run counter to the legislative intent and impermissible. If that were the intention of the legislature, they would have expressly stated so. If they have not chosen to expressly define what the total turnover means, then, when the total turnover includes export turnover, the meaning assigned by the legislature to the export turnover is to be respected and given effect to, while interpreting the total turnover which is inclusive of the export turnover. - Decided in favour of assessee. Amortization of capital expenditure - Tribunal was right in restoring the issue with regard to amortization of capital expenditure to the file of the assessing officer for fresh adjudication in the light of the Special Bench decision in the assessee s own case when the issue of disallowance of amortised business acquisition expenses has not been dealt in the Special Bench decision? - HELD THAT:- Question No.2 remit back to the learned Tribunal for deciding the issue once again on merits and in accordance with law after giving opportunity to both the sides.

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• 2020 (9) TMI 973
  Business income receipt of On Money received out of books of account - Addition on the basis of the extrapolation of the clinching evidences seized/impounded which has the part of cash and cheque payments receipts in respect of Anupam Square project of the Assessee Group - statement on oath u/s.132(4 ) - HELD THAT:- Question are no longer res integra in view of the order passed in PANNA CORPORATION [ 2014 (11) TMI 797 - GUJARAT HIGH COURT] held Tribunal was justified in considering that the respondent assessee ought to have spent reasonable amount for the purpose of receiving such gross receipt. As seen consistently, this Court and some other Courts have been following the principle that even upon detection of on money receipt or unaccounted cash receipt, what can be brought to tax is the profit embedded in such receipts and not the entire receipts themselves. If that be the legal position, what should be estimated as a reasonable profit out of such receipts, must bear an element of estimation. Not the entire receipts, but the profit element embedded in such receipts can be brought to tax, in our view, no interference is called for in the decision of the Tribunal accepting such element of profit at Rs. 26 lakhs out of total undisclosed receipt of Rs. 62 lakhs. We accept the legal proposition, the Tribunal accepting Rs. 26 lakhs disclosed by the assessee as profit out of total undisclosed receipt of Rs. 62 lakhs, would not give rise to any question of law.

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• 2020 (9) TMI 972
  Eligibility of deduction u/s 10A - Whether the services of the assessee were limited to drafting of patent application and their submission to the US patent office and as such the assessee was not entitled to claim deduction? - HELD THAT:- Notification No.890 dated 26.09.2008 specifies that information and technology enabled products or services mentioned in the Notification shall be treated as Information Technology enabled products or services for the purposes of Explanation 2(i)(b) of Section 10A of the Act, which includes Back Office Operations and Data processing as well. The activities of the assessee can be classified as Data Processing, Legal Databases and remote maintenance under the Notification issued by the CBDT. The assessee is transmitting the patent application and related data, which is stored in electronic form and therefore, such data, is customized data and is eligible for deduction under Section 10A of the Act. Therefore, it is evident that assessee is engaged in back office operations, which is prescribed as information technology enabled services in the Notification dated 26.09.2000. It is pertinent to note that the revenue itself has granted the benefit of deduction to the assessee vide order dated 27.01.2006 in respect of Assessment Year 2003-04 under Section 80HHE of the Act, which is a pari materia to Section 10A of the Act. It is well settled legal proposition that tribunal is a fact finding authority and decision on facts rendered by the tribunal can be gone into by High Court only if a question is referred to it, which says the finding is perverse [See: SANTHOSH HAZARI VS. PURUSHOTTAM TIWARI [ 2001 (2) TMI 131 - SUPREME COURT] and SOFT BRANDS (P) LTD. [ 2018 (6) TMI 1327 - KARNATAKA HIGH COURT] ] Concurrent findings of fact recorded by the revenue that assessee is entitled to benefit of deduction under Section 10A of the Act is based on meticulous appreciation of evidence on record. The aforesaid findings, by no stretch of imagination can be said to be perverse. - Decided against revenue.

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• 2020 (9) TMI 971
  Penalty u/s. 271(1)(c) - advances shown as purchases - furnishing inaccurate particulars of income - gross negligence in not making necessary adjustments, additions and disallowance in the accounts which resulted in incorrect income being shown - CIT(A) and the Tribunal held in favour of the assessee by examining his conduct - HELD THAT: -Assessment was completed and the case on hand is not the case where the assessment was re-opened under Section 147 - On taking note of the factual position, the CIT(A) exercised its discretion and granted relief to the assessee. The factual situation was examined by the Tribunal and it came to a conclusion that the CIT(A) was right in deleting the penalty. With regard to the non-inclusion of Rs. 22 lakhs in the closing stock, the Tribunal remanded the matter to the Assessing Officer for proper verification and fresh adjudication as per law. Thus, taking into consideration that the entire issue before us is factual, we decline to exercise our jurisdiction under Section 260-A of the Act, as we are not expected to examine the correctness of the order of the Tribunal, as being a third Appellate Authority. No substantial question of law.

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• 2020 (9) TMI 970
  Disallowance of business loss written off on account of loss arising out of business investment from WOS in USA - HELD THAT:- It is well settled legal proposition that while deciding the question whether a receipt is a capital or income, it is not possible to lay down any single test as infallible or any single criteria as decisive. The question must ultimately depend on fact of particular case and authorities bearing on the question are valuable only as indicating the matters that have to be taken into account in reaching a decision - for determining the question of capital and incomes, trading profit or non trading profit are questions do involve a question of law to be drawn from the facts. In the instant case, the assessee made investment in the shares of WOS for the business purpose i.e., for the enhancement of business activity of the assessee in global market which primarily related to business operation of the assessee. WOS suffered losses and therefore the assessee wrote off the assessment as business loss. The investment was made for the purpose of extension of business activity and not with a view to creating capital asset in the form of holding shares. It is also pertinent to note that the assessee never acquired any capital asset or expenditure of enduring benefits to WOS and there is no relinquishment or transfer of capital asset to any third party. In view of preceding analysis, the first substantial question of law is answered in the negative and in favour of the assessee.

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• 2020 (9) TMI 969
  Computation of deduction u/s 10B - Whether expenditure towards telecommunication charges and expenditure incurred in foreign currency reduced from export turnover has to be reduced from total turnover for computing deduction? - ITAT held that the expenditure excluded from the export turnover has to be excluded from total turnover. It was further held that the other income included in the total turnover has to be included in export turnover - HELD THAT:- The issue involved in this appeal, is covered by a decision of the Supreme Court in COMMISSIONER OF INCOME-TAX, CENTRAL-III Vs. HCL TECHNOLOGIES LTD. [ 2018 (5) TMI 357 - SUPREME COURT] . The aforesaid contention cannot be reputed by the learned counsel for the revenue. Therefore, the first substantial question of law is answered against the revenue and in favour of the assessee. Income received by the assessee by way of notice pay from its employees leaving the service contrary to agreement - whether to be included in export turnover when such income is not derived from the activity of export and recorded a perverse finding?. - HELD THAT:- Second substantial question of law is covered by a decision of the Supreme Court in COMMMISSIONER OF INCOME-TAX Vs. PUNJAB STAINLESS STEEL INDUSTRIES [ 2014 (5) TMI 238 - SUPREME COURT ] . Order passed by the Income Tax Appellate Tribunal is modified and it is directed that the income received by the assessee by way of notice pay from its employees leaving the service contrary to the agreement, can neither be included in the total turnover nor the same be included in the export turnover.

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• 2020 (9) TMI 968
  Non setting off the losses from Export Oriented Unit (Section 10B unit) against the income earned in the Domestic Tariff Area Unit - return which was filed beyond the prescribed time limit - assessee has neither claimed any deduction under Section 10B of the Act in respect of any of the three units of the assessee nor has filed any audit report in Form 56G in accordance with Section 10B(5) of the Act read with Rule 16E for the Assessment year 2008-09, which is a mandatory requirement - HELD THAT:- The business income can be computed only after set off of business loss against the business income in the year as per provisions of Section 70 of the Act. Section 10A of the Act is a code by itself and it is pertinent to note that Section 10A(6)(ii) does not preclude the operation of Sections 70 and 71 of the Act. Para 5.2 of the Circular issued by the Central Board of Direct Taxes dated 16.07.2013 clearly provides that income / loss from various sources i.e. eligible and ineligible units under the same head are aggregated in accordance with provisions of Section 70. Where the assessee does not want the benefit of deduction from the taxable income, the same cannot be thirst upon it. There is no provision which makes compulsory on the part of income tax officer to make deduction in all cases. Admittedly, in the instant case, the assessee has not filed any audit report in Form-56G which is a mandatory requirement for claiming deduction under Section 10B of the Act. Therefore, the deduction under Section 10B of the Act cannot be thirst upon the assessee. Admittedly, in the instant case, two units of the assessee namely unit No.II and unit No.III were export oriented units and were eligible for exemption. The assessee had sustained loss in respect of unit No.I and therefore, the assessee had claimed set off, as permissible under Section 70 of the Act and had offered the balance as income taxable under the head income from business which has been declared in the return. The provisions of Section 70 of the Act have to be given effect to. - See MINDTREE CONSULTING (P) LIMITED. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX. [ 2005 (11) TMI 176 - ITAT BANGALORE-B] AND YOKOGAWA INDIA LTD. [ 2011 (8) TMI 845 - KARNATAKA HIGH COURT] - Decided in favour of assessee.

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• 2020 (9) TMI 967
  Disallowance of interest of labour expenditure - Disallowance based on mathematical calculations/formula based on earlier years data - expenditure on packing material is proportionately higher this year - HELD THAT:- Disallowance was made on the ground that the assessee could not establish the requirement of expenditure and that this was inflated expenditure to reduce profits. We are of the view that these disclosures are based on presumptions and assumptions. The assessee explained before the ld. authorities the reasons for the increase in the expenditure. Disallowance was not based on evidence. It is not the case of the AO that such expenditure was not incurred or was bogus expenditure. This is a surmise. The fact of the assessee incurring this expenditure is not challenged by the AO. Hence, we are unable to sustain the addition in question. So, we delete the same. Addition on account of finance cost - Capital work in progress is a fraction of interest free funds held by the company. The propositions of law laid down in the case of Reliance Utilities Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] is that, in such circumstances interest free funds will be presumed to have been utilized for investing in non-income yielding assets. Applying this proposition of law to the facts of this case we hold that disallowance in question of interest is bad in law. In the result, this ground of the assessee is allowed.

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• 2020 (9) TMI 966
  Addition u/s 68 - unexplained cash credits - HELD THAT:- Unexplained cash credits can very well be added even if they have not credited in the relevant previous year in issue cannot be accepted in view of decision of Shri Ivan Singh [ 2020 (2) TMI 850 - BOMBAY HIGH COURT] making it clear that the clinching statutory expression that previous year in sec. 68 of the Act has to be interpreted the previous year relevant to the assessment year in issue only. We therefore see no merit in Revenue s instant first substantive grievance. The same stand rejected therefore. Disallowance of expenditure @ 10% - CIT-A partly / restricting assessee s expenditure addition - HELD THAT:- There is no rebuttal coming from the Revenue s side that the assessee had very well filed all the corresponding details and evidence on records and the Assessing Officer had disallowed the entire claim amount under various head(s). We therefore see no merit in the Revenue s second substantive grievance as well. Unexplained cash credits addition - HELD THAT:- The able assistance of both the learned representative(s)that the assessee s cash-in-hand-cum-books of account as on 01.04.2012 was Rs. 3,98,519/- followed by similar withdrawals / deposit his cash-in-hand on 31.03.2013 was at Rs. 2 ,06,974/- only remaining unexplained from the taxpayer s side. This is what appears to have been prompted the CIT(A) could add the balance figure of Rs. 2,06,974/- only. All these facts and figures have remained undisputed from the Revenue s side. We thus see no reasons to revive the entire addition figure in question. This third and last substantive ground is also rejected therefore. - Revenue appeal dismissed.

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• 2020 (9) TMI 965
  Validity of assessment u/s 147 - no notice u/s 143(2) was issued to the assessee - HELD THAT:- The admitted fact is that no notice u/s 143(2) was issued to the assessee for both the assessment years. Only a notice u/s 148 and Section 143(2)(1) was issued. Under these circumstances we have to hold that the assessment orders for both the assessment years are bad in law and have to be quashed by following the judgement of the jurisdictional High Court in the case of Pr. CIT vs. Oberoi Hotels Pvt. Ltd. [ 2018 (6) TMI 1472 - CALCUTTA HIGH COURT] - Decided in favour of assessee.

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• 2020 (9) TMI 964
  Revision u/s 263 - Deduction u/s 80P(2) denied - interest earned from co-operative banks - Assessee received interest from a co-operative bank and not a co-operative society - As per assessee he is eligible for deduction on such interest u/s.80P(2)(a)(i) of the Act inasmuch as the assessee was engaged in providing credit facility to its members - HELD THAT:- The term profits and gains of business attributable to providing credit facilities has a wider connotation. So long as there exists a live link, not necessarily direct, between the income and carrying on of the business of providing credit facilities, the resultant income qualifies for deduction. If a particular amount is received by a co-operative society from its members as deposits and a part of the same has been provided as a credit facility to its members, the unspent amount for the time being not required by the members as loan, if utilised elsewhere, will nonetheless lead to generation of profits and gains of business of providing credit facilities to its members. The thread of link between income and business of providing credit facilities to the members will be broken if despite there being the members wanting to avail credit facilities, the cooperative society chooses to prefer making deposits with banks etc. rather than advancing sums to its members. CIT has not returned any contrary finding. In such a scenario, the entire interest income - not only the one derived from its members by providing credit facilities but also that earned by utilizing the surplus available funds for the time being at some places like investment in FDR etc. Exercise of such a power u/s 263 is ousted in case of a debatable issue. An assessment order can be termed as erroneous and prejudicial to the interest of the Revenue if the AO has taken a view which is not legally sustainable. Per contra , if two views are available on a particular issue and the AO adopts one of such possible views, the case goes outside the purview of revisional power to be exercised by the Pr.CIT u/s.263 of the Act. So many decisions relied on by the AR amply go to prove that the view taken by the AO, cannot by any standard, be construed as not a possible view. CIT was not justified in exercising the revisional power anent to interest income earned on investments made with co-operative banks. - Decided in favour of assessee. Interest income received by the assessee on refunds u/s.244A - HELD THAT:- This issue is fully and directly covered by the Special Bench order passed in the case of Maharashtra State Cooperative Bank Ltd. Vs. ACIT [2010 (1) TMI 851 - ITAT, MUMBAI] holding that interest on income-tax refund u/s.244A is covered within the expression profits and gains of business occurring in section 80P(2)(a) and ergo eligible for deduction u/s.80P(2)(a)(i) of the Act. Albeit interest received u/s.244A of the Act is chargeable to tax but at the same time the same is also deductible in full u/s.80P(2)(a)(i) of the Act. The assessment order in not adding such interest to the total income, cannot be construed as prejudicial to the interest of revenue because such interest income is tax-neutral in the context of the assessee due to the simultaneous availability of deduction u/s.80P(2)(a)(i) on such amount. CIT was not justified in revising the assessment order on this point also. - Decided in favour of assessee.

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• 2020 (9) TMI 963
  Addition u/s 68 - CIT-A deleted the addition - whether according to Section 250(6) CIT(A) is required to mention point for determination and reasons for decision in the appellate order while deciding the appeal? - HELD THAT:- D.R, rightly contended that since the CIT(A) has not recorded any finding of fact for assessment year under appeal i.e., A.Y. 2013-2014, therefore, the matter requires reconsideration at the level of the Ld. CIT(A). In view of the above discussion and without deciding the issue on merits, we set aside the Order of the Ld. CIT(A) and restore the matter in issue to his file with a direction to re-decide the appeal of assessee in accordance with Law by giving reasons for decision in appellate order based on the evidences on record in the light of finding of fact recorded by the A.O, by giving reasonable, sufficient opportunity of being heard to the assessee and the A.O - Appeal of Revenue allowed for statistical purposes.

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• 2020 (9) TMI 962
  Assessment of trust - anonymous donations receipts - AO invoking the provisions of section 115BBC in absence of requisite details of the donors which have contributed the said amount to the assessee trust - HELD THAT:- Ledger contains the identity of the donors in terms of name and address and other requisite particulars as prescribed as so sought by the AO is not clear but it is a matter of record that the said ledger was produced before AO and is part of the assessment records and therefore, doesn t qualify as an additional evidence. T These details so submitted by the assessee needs to be duly examined and basis such examination, a finding should be clearly recorded as to whether and to what extent, the donations so received qualify as anonymous donations or not - we set aside the matter to the file of ld. CIT(A) to consider the details so submitted by the assessee and decide the matter afresh on merits as per law including the contention of the assessee regarding applicability of section 115BBC after providing reasonable opportunity to the assessee. Computation of income in terms of section 11 and 12 - This matter is also set aside to the file of the ld. CIT(A) to decide the same afresh after providing reasonable opportunity to the assessee.

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• 2020 (9) TMI 961
  Long term capital gain - actual owner of the property - Holder of Power Of Attorney (POA) - Transfer of asset u/s 2(47) - as per assessee he executed the sale deed in the capacity of agent/ power of attorney holder on behalf of six principal co-owners - AO recorded statements of the persons who had issued the power of Attorney and submitted that the land was sold to the appellant earlier for Rs. 2,50,000/- and they have not received the consideration in respect of the sale made by the appellant - DR submitted that the assessee was actual owner of the property and the assessee has not come forward to explain his conduct for the last 5 years after getting the power Attorney from the said 6 persons - HELD THAT:- Admittedly, immovable property can only be transferred by a person for a consideration by transferring the possession of property through a registered written document as per section 54 of the Transfer Of Property Act read with the corresponding provisions of Stamp Duty And Registration Act . In the present case the revenue has failed to bring on record any document demonstrating handing over of possession / transfer of possession from alleged seller to the assessee either by transfer of title from them to the assessee either by way of a gift or by way of a sale deed. In the absence of any transfer document coupled with transfer of possession it cannot be concluded that the assessee was owner of the property in law. Reliance by the assessing officer on Power Of Attorney, is misplaced as there is neither the handing over of the possession from these persons to the power Attorney holder (assessee) took place nor there is a reference of any sale consideration in the power Attorney. We are also of the opinion that the power Attorney was also revocable. It cannot be inferred or concluded that the 6 persons have transferred the property to the assessee or in other but the assessee was the owner of the property which was sold by the assessee for a consideration of Rs. 10 lakhs on which the long-term capital gain had arisen as the guidance value was more than 69 lakhs. Assessee has set up his case being that of the power Attorney holder, but the Assessing Officer has failed to bring on record the chain of the title document in the form of registered sale deed etc , which can prove that apprent was not real or in other words transfer took place within four corner of law by virtue of POA. In the present case needful has not been done by the assessing officer to bring on record the title of the assessee, by virtue of which the assessee became owner of the property . In the light of the above we are of the opinion that the assessee is able to make out a case for grant of relief favour and accordingly the case of the assessee is required to be allowed and the assessment made by the revenue is required to be deleted. As relying on cases M/S SESHASAYEE STEELS P. LTD. [ 2019 (12) TMI 702 - SUPREME COURT] and SURAJ LAMP INDUSTRIES PVT. LTD [ 2011 (10) TMI 8 - SUPREME COURT] no transfer of property had taken place from these persons to the assessee, the addition in the hands of the assessee is bad in law and accordingly the appeal of the assessee is allowed .

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• 2020 (9) TMI 960
  Exemption u/s 11 - registration u/s 12AA and approval u/s 80G denied - assessee has not carried out any charitable activities - Whether grant of registration u/s 12AA does not automatically lead to the approval u/s 80G? - HELD THAT:- CIT DR, had raised some objection to activities and sought to justify the act of the CIT exemption. In our view the order impugned before us is conspicuous silent on the carrying out of the activities by the assessee rather the order has not dealt with any of the activities carried out by the assessee. The interest of justice requires that the ld. CIT(E) should examine the documents (already on record) mentioned hereinabove and other documents which according to the assessee shows that, the assessee was involved in its own capacity of doing the charitable activity . For the purposes of granting the registration, if the CIT exemption on examination of the document satisfy that the assessee was involved in carried out a charitable activities then the CIT(E) individually as well, then the CIT exemption, shall assess the impact of carrying out of these activities and also contributing substantially to other trust for carrying out of the charitable activities in accordance with law. CIT exemption shall also examine in other attending Circumstances Like the major activities of the charitable work carried out by the other charitable institute and only part of it were carried out by the assessee by doing three activities namely i) Warne Baby Fold ii) Salaam Balaak Trust iii) Jeevan Dhara Trust. - Decided in favour of assessee for statistical purposes.

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• 2020 (9) TMI 959
  Exemption u/s 11 - registration u/s 12AA - grant of exemption u/s 80G - charitable nature of activities of the trust or genuineness of its activities - return u/s 139(4A) was not filed by the assessee - HELD THAT:- The objects of the trust were not disputed by the Department nor they have disputed the genuineness of the activities conducted by the assessee trust. The only reason for not granting exemption u/s 12AA was that the return u/s.139(4A) was not filed by the assessee and in our considered view, merely non-filing of return under the said provision cannot be the ground to deny registration u/s 12AA to the assessee when the genuineness of the activities is not disputed by the Department and when the objects are clearly laid out and all the details were uploaded by the assessee trust in the ITBA Portal. Departmental Representative could not refute these facts on record. It is well settled law that at the time of granting registration of the Trust u/s 12AA CIT(Exemption) is required to look into the objects of the trust and the activities carried out by the trust whether genuine or not and nothing else. Non-filing of return under Sec.139(4A) cannot be the ground to demonstrate that the activities of the trust were not genuine. Since the assessee has not filed any return therefore there is no question of getting any exemption under Sec.10 and 11 of the Act and hence, there is no jeopardy caused to the Revenue. AO at the time of assessment proceedings, can take appropriate steps as per law regarding the non-filing of return under Sec.139(4A) - registration u/s 12AA should be granted to the assessee trust. Accordingly, we reverse the order of the ld. CIT(Exemption) and direct him to grant registration u/s 12AA. Exemption u/s 80G(5)(vi) rejected - In this case, the assessee has failed to furnish requisite details and supporting evidences to the revenue authorities for verification and substantiating its charitable activities. That at the time of hearing before us, the learned Authorised Representative prayed for one final opportunity so that he will produce all the relevant details as called for before the ld. CIT(Exemption). That considering our decision, directing the ld. CIT(Exemption) to grant registration u/s 12AA we find it appropriate to provide another opportunity to the assessee and therefore we set aside the order of the ld. CIT(Exemption) dated 29.05.2019 and restore the matter back to his file to adjudicate the issue and we direct the assessee at the same time to represent the case on merits and substantiate the genuineness of the charitable activities before ld. CIT(Exemption) by filing supporting documents / evidences / relevant documents as and when called for by him. CIT(Exemption) shall comply with the principles of natural justice while deciding the matter. Appeal of the assessee allowed for statistical purposes.

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• 2020 (9) TMI 958
  Reopening of assessment u/s 147 - non-supply of reasons recorded for issuance of notice u/s 148 - HELD THAT:- There is nothing on record and which has been brought to our notice that in the entire assessment proceedings, the assessee objected to the issuance of notice u/s 148 and has sought copy of the reasons so recorded for the reopening the assessment proceedings. We find that there is no prejudice which is caused to the assessee in terms of denial of any opportunity to the assessee to object to the reassessment proceedings by non-supply of the reasons so recorded by the AO where the same were never asked for by the assessee at first place. There is thus no violation of the directives as laid down in the case of GKN Driveshaft [ 2002 (11) TMI 7 - SUPREME COURT] wherein it was held that recorded reasons must be furnished to the assessee when the assessee sought for the said reasons. In the instant case, it is an admitted position that the assessee for the first time applied for the copy of the reasons on 14.11.2019 i.e. after passing of appellate order by ld. CIT(A), Jaipur and the same was provided by the AO to her on 18.12.2019 and therefore, it is crystal clear on facts that the assessee never asked for the copy of the reasons during the entire assessment and appellate proceedings, and therefore, there was no obligation as well as occasion for the AO to supply copy of the reasons to the assessee. In the result, the ground so taken by the assessee is hereby dismissed. Action of the JCIT, Range-04, Jaipur in giving the approval and sanction before issuance of notice u/s 148 - HELD THAT:- Review of the reasons so recorded by the AO and perusal of the assessment and other records so submitted by the AO, the JCIT has recorded his satisfaction and endorsed the satisfaction so recorded by the AO and held that it is a fit case for issuance of notice u/s 148. JCIT has gone through the reasoning and the satisfaction so recorded by the AO and finding the same to be in conformity with the provisions of law and the facts and circumstances of the case, has accorded his sanction. We therefore find that it is not a case where the approval has been granted mechanically or without application of mind, rather he has gone through the AO s proposal, his reasoning so recorded in the proposal, the assessment and other records and finding the reasons so recorded to be in conformity with the assessment and other records has accorded his approval. Cash in hand unexplained - HELD THAT:- Where the assessee is working out the availability of cash at the start and close of the financial year, such availability is of physical cash in hand and not the cash accrual from business which is not yet realized. Therefore, as far as entries pertaining to cash accruals in respective financial years are concerned, the same needs to be excluded as the effect of the same would be automatically taken in subsequent bank/cash deposits. Subject to such exclusion, we find that the cash summary for the last four years provides a reasonable basis for arriving at the opening cash in hand at the start of the financial year and the explanation of the assessee to that extent therefore found is satisfactory. The matter is accordingly set-aside to the file of the AO for the limited purpose of determination of opening cash in hand after exclusion of entries in respect of cash accruals in the respective financial years and the AO is hereby directed to grant relief to the assessee to the extent of opening cash in hand so worked out by him at the start of the impugned financial year. In the result, the ground is disposed off in light of aforesaid directions.

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• 2020 (9) TMI 957
  Exemption u/s 11 - applications of the assessee for granting registration u/s.12AA and recognition u/s 80G - whether assessee Society was benefiting only the Doctors community, it cannot be treated as an entity imparting charitable activity? - HELD THAT:- Though the objectives of the assessee society is to encourage knowledge in a particular field of Science. Such knowledge is beneficial to the general public. Therefore, it is obvious that the object of the assessee society falls under the limb objects of general public utility as enshrined u/s. 2(15) of the Act. As ANESTHESIA SOCIETY, JAWAHAR NAGAR, MEERA MARG. SRI GANGANAGAR. [ 2018 (12) TMI 604 - RAJASTHAN HIGH COURT] we are of the view that the assessee is entitled for registration U/s. 12AA of the Act. Therefore, we hereby direct the Ld. CIT (E) to grant registration U/s. 12AA of the Act. Further, on perusing the facts of the case, we do not find that the assessee has violated any of the provisions stipulated u/s. 80G(5) of the Act. Therefore, we also hereby direct the Ld. CIT (E) to grant recognition to the assessee u/s. 80G - Decided in favour of assessee.

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• 2020 (9) TMI 956
  Penalty u/s 271AAB - Defective notice - whether penalty notice apparent to have nowhere specified as to under which limb the he sought to invoke sec. 271AAB penal action? - undisclosed income unearthed during the course of search u/s 132 - HELD THAT:- Respectfully following the judgment of jurisdictional High Court in the case of PCIT V/s Kulwant Singh Bhatia [ 2018 (5) TMI 960 - MADHYA PRADESH HIGH COURT] , DCIT V/s R. Elangovan [ 2018 (4) TMI 1553 - ITAT CHENNAI] and SHRI RAVI MATHUR, VERSUS THE DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-4, [ 2018 (6) TMI 1128 - ITAT JAIPUR] and in the given facts and circumstances of the case wherein the matter written in the body of the notice issued u/s 274 of the Act does not refer to the charges of provision of Section 271AAB of the Act makes the alleged notice defective and invalid and thus deserves to be quashed. Since the penalty proceedings itself has been quashed the impugned penalty stands deleted. Thus assessee succeeds on legal ground challenging the validity of notice issued u/s 274 r.w.s. 271AAB of the Act. - Decided in favour of assessee.

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• 2020 (9) TMI 955
  Correct head of income - Taxability of rental income in respect of the property at Fort (Mumbai) under the head Profits and gains of business or profession OR Income from house property - Whether letting out of the property is not the part of business activity of the assessee and that letting out of property was an isolated activity of the assessee? - HELD THAT:- The assessee has declared its income from letting out of house properties under the head Income from House Property which falls under Chapter IV-C of the 1961 Act containing Section 22 to 27.Thus, the assessee will be entitled only for deductions prescribed under sections 22 to 27 of Chapter IV-C of the Act, while computing income from house property chargeable to tax. This chapter IV-C of the Act does not provide for depreciation on immovable properties as one of deductions from income earned by assessee from letting out of such house property. However, section 32 of the Act provides for depreciation and falls under Chapter IV-D which concerns itself with computation of income from Profits or Gains from Business or Profession . Thus, there is no question of allowing any deduction as depreciation under section 32 for the period for which this property was let out and income thereof was offered for tax under the head income from house properties . Thus, we concur with the finding of the assessing officer. Office house property (office premises) earlier used for the purpose of business is not used for the purpose of business during the year under consideration and that the assessee has let out the same for the first time on rent and assessing officer may restrict to a fair proportionate part of asset for the purpose of depreciation - We find convincing force in the contention of assessee and restore back this issue to file of assessing officer to examine the issue afresh on this contention and pass the order in accordance with law. Needless to order that before passing the order the assessing officer shall grant opportunity to the assessee as per the new procedure of assessment. The assessee is also directed to provide all information and evidence to the assessing officer. - Decided in favour of assessee for statistical purpose. Disallowance under section 14A in respect of expenditure attributable to earning of exempt income - HELD THAT:- Assessee fairly conceded that ground is covered against the assessee by the decision of Hon ble Apex Court in Maxopp Investment Ltd Vs CIT [ 2018 (3) TMI 805 - SUPREME COURT] . - Decided against assessee. Disallowance under Rule 8D(iii) - Assessee limited prayer that only those investment which yielded the exempt income during the year may be considered for computing the average value of investment which yielded exempt income during the year - HELD THAT:- We find convincing force in Assessee s submission that only those investments which yielded exempt income during the year be considered for computing the average value of investment. Therefore, the assessing officer is directed to re-compute the disallowance under Rule 8D(2)(iii) by following the decision of Special Bench of Delhi Tribunal in Vireet Investment P. Ltd.[ 2017 (6) TMI 1124 - ITAT DELHI] Deduction in respect of education cess - admission of additional ground of appeal - HELD THAT:- Considering the fact that the ground of appeal raised by assessee is purely legal in nature and no new facts are necessary to be brought on record for considering the relief claimed under this grounds of appeal and further, considering the decision of Sesa Goa [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] we admit the ground of appeal and direct the AO to consider the claim of assessee and allow appropriate relief in accordance with the decision above wherein it was held that Education Cess and Higher and Secondary Education Cess are liable for deduction in computing income chargeable under head of profits and gains of business or profession . Hence, this ground of appeal is admitted and restored to the file of assessing officer to consider and allow appropriate relief to the assessee.

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• 2020 (9) TMI 954
  Lease income derived from the agricultural land - income from other source OR agricultural income which is exempt from tax u/s.10(1) - HELD THAT:- Land from which rent is received should be used for agricultural purposes. In the case of assessee, it is evident that the land was either used for research and development or kept vacant but not used for agricultural purposes. As in the case CAT vs. Raja Benoy Kumar Sahas Roy [1957 (5) TMI 6 - SUPREME COURT] has held that unless there is some measure of cultivation of land and some skilled labour is performed on the land for cultivation, the land cannot be said to have been used for agricultural purposes. It is essential that basic primary operation, prior to germination of the produce, involving expenditure of human skill and labour on the land and subsequent post-germination operations such as weeding, digging of the soil around the growth, etc., should be performed in order to constitute agricultural activity. In the case of assessee, the company which had obtained the land on lease from the assessee has apparently not indulged in any such activities. - Decided against assessee.

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• Customs

• 2020 (9) TMI 953
  Grant of Bail - smuggling of Gold - breach of Section 135(1)(b) of the Customs Act, 1962 - HELD THAT:- In the present case as well, learned counsel for the nonapplicant has infact admitted that investigation as against the applicant has already been completed and only sanction to prosecute the applicant is remained to be obtained and it is only then the charge-sheet would be filed - It is true that no gold has been seized from the possession of the applicant, as per own admissions made by the counsel for the non-applicant, as investigation in respect of applicant has already been completed hence, in view of such situation, the bail application is liable to be allowed. Without commenting upon the merits of the case, this bail application is allowed and it is directed that applicant Rajesh Neema shall be released on bail subject to his furnishing a personal bond in the sum of Rs. 2,00,000/- with one local surety to the satisfaction of the concerned Trial Court/Committal Court for his regular appearance before the Trial Court/Committal Court on all dates of hearing as may be fixed in this behalf by the Court concerned during trial. Application allowed.

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• 2020 (9) TMI 952
  Classification of imported goods - heavy melting scrap - benefit of concessional rate of duty - serial no. 368 in N/N. 50/2017-Cus dated 30th June 2017 - applicability of note no. 7 in Section XV of the First Schedule to Customs Tariff Act, 1975 - Difference of Opinion - matter placed before Hon ble President for reference. HELD THAT:- In view of difference of opinion as to allowing of appeal, as held by Member (Technical), and remanding the matter for re-test, as held by Member (Judicial) in appeal no C/88315/2019, Registry is directed to place the records before Hon ble President for reference, under section 129C (5) of Customs Act, 1962, to Third Member for answering the following points: i. In the light of concurrence of finding that the impugned goods are not copper alloy in paragraph no.13, and the show cause notice proposing classification in tariff item no. 74040029 below sub-heading for copper alloy in chapter 74 of First Schedule to Customs Tariff Act, 1975, whether the decision of Member (Technical) that incorrectness thereof of proposed classification leaves no option but to accept the declared classification against tariff item no. 72044900 in chapter 72 of First Schedule to Customs Tariff Act, 1975 for concluding proceedings OR whether the decision of Member (Judicial) that inappropriateness of the classification proposed in the show cause notice notwithstanding re-test and consideration of other submissions made by noticee is warranted is the correct position in law?; ii. Whether direction for re-testing of fresh samples during adjudication proceedings, that may have the consequence of helping the adjuidcator to arrive at the proper decision of the matter, as decided by Member (Judicial), will have the effect of adding facts to the show cause notice? OR that the resolution of dispute cannot go beyond the facts recorded in the show cause notice, as decided by Member (Technical) reflects the statutory competence, under Customs Act, 1962, of the Tribunal in exercise of authority to remand matter back to the original authority? iii. Whether, on the conclusion in the show cause notice, in the light of recorded declining by all laboratories to re-test the samples, the decision of Member (Technical) that no purpose will be served by insisting on re-test OR the decision of Member (Judicial) that re-test must necessarily be carried out in the laboratories suggested by the appellant or at any other laboratory. is the proper procedure to be adopted? iv. Whether, on the facts available on record, the view of the Member (Technical) that the inability expressed by National Metallurgical Laboratory arises reports lack of capacity to perform test sought by customs officers OR that of Member (Judicial) that it should be presumed that it was declined only owing to non-availability of samples is the appropriate conclusion? v. Whether circular no. 30/2017-Cus dated 18th July 2017, relied upon by the adjudicating authority to accept the first report of National Metallurgical Laboratory, authorizes such option where the second report is inconclusive as held by Member (Judicial) OR recourse to choose between tests only when two complete test reports are available as held by Member (Technical), AND vi. Whether the second test report, referred in paragraph no.13, had given erroneous findings, as held by Member (Judicial), in the context of their clarification furnished on 22nd February 2019 OR Whether the result was not erroneous but inconclusive, as held by Member (Technical), in the context of response and clarifications furnished on the reference made by the department.

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• 2020 (9) TMI 951
  Classification of imported goods - split air-conditioners - classified at sub-heading no. 841510 of First Schedule Customs Tariff Act, 1975 at serial no. 49 or not - benefit of N/N. 85/2004-Cus dated 31st August 2004 denied - HELD THAT:- From heading no. 8415 of First Schedule to the Customs Tariff Act, 1975, it is seen that air conditioning machines comprise of a motor driven fan and elements for controlling humidity and temperature. Generally, and more particularly in the retail segment, such machines are either of window or self-contained or split system types. There are several other equipment which are designed for larger spaces and for applications that go beyond residential or commercial. In the structuring of the sub-headings, emphasis is placed on the split system and, by default, the window types. All other air-conditioning equipment are relegated to the residuary categorization and it is within such that split air-conditioners finds deployment. From this, it can be inferred that split system air conditioning machines and split air-conditioners are distinct. Neither has the show cause notice nor the adjudicating authority forayed an elaboration of either; that these existed at the eight digit level under different sub-headings did not appear to have impressed itself, let alone the need for appreciating the distinction on the adjudicating authority - The additional feature, whose presence or absence, determines the sub-heading within the residuary category, has not been established as incorporated in the impugned goods. In the absence of such, customs authorities are not enabled to proceed to the tariff item below the sub-heading. The impugned order is flawed for that reason. The classification declared by the appellant at the time of import corresponds to the description of split system and the scope of split system is elaborated in the subheading notes in the Explanatory Notes to the Harmonised System of Nomenclature. From this, it can be inferred that the description corresponding to sub-heading 841510 is intended for window and split system air-conditioning machines - Undoubtedly, every article under heading no. 8415 has to have a cooling facility. Nevertheless, the adjudicating authority set out with the assumption that, irrespective of the cooling equipment in split systems , the cooling system in the impugned goods was a refrigerant unit. Neither is there any ground for such supposition in the show cause notice nor is there reason to conclude that the cooling source in the split system was absent in the impugned goods and substituted by another. There is no descriptive restriction in sub-heading no. 841510 to conclude that heating capability is not intended for coverage by that tariff entry. The impugned order has failed to exclude applicability of description of split systems to the impugned goods which would have entailed some knowledge of what that is. Split systems are air conditioners that have two parts and these operate together to cool space. Likewise, it may heat space also without compromising conformity with the description corresponding to heading no. 84151010 of the First Schedule to Customs Tariff Act, 1975. It is only by exclusion from this description that the impugned order could have attempted an alternative classification. The General Rules of Interpretation, with emphasis on hierarchical elimination of non-conformity, precluded classification of the impugned goods under the general residuary description when conformity with the specific is not established as incorrect - the impugned goods are classifiable under tariff item no. 84151010 of First Schedule to Customs Tariff Act, 1975. Appeal allowed - decided in favor of appellant.

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• 2020 (9) TMI 950
  Conversion of shipping Bills - conversion of free shipping bills into drawback shipping bills - duty drawback - rejection on the ground of non-fulfillment of conditions of Notification No. 158/95 dated 14.11.1995 - HELD THAT:- The appellant initially exported Phycocyanin and a part quantity of the same was rejected for quality reasons which was re-imported by him without payment of duty in terms of Notification No. 158/95-Cus dated 14.11.1995 on executing Bond with Bank Guarantee. Also the appellant have re-exported the said goods after rectifying the defect and the identification of the re-exported goods is not disputed by the Department. Further, we find that the appellant also paid an amount of Rs. 13,81,543/- as demanded by the Department. Further, it is found that after payment of the duty along with interest, the appellant sought suitable amendment to the re-exported shipping documents to enable the appellant to claim drawback in terms of Section 74 but the same was not considered and his request was rejected without affording him an opportunity of hearing which is in violation of the principles of natural justice. Also, it is substantive right of the exporter to claim drawback and it has been consistently held by various High Courts that substantive right should not be denied on account of procedural irregularities. CBEC issued Circular No. 1063/2/2018-CX dated 16.02.2018 whereby they have compiled orders of Hon ble Supreme Court High Courts and CESTAT which have been accepted by the Department on which no review petitions have been filed by the Department. The Communication dated 12.03.2019 is set aside and the matter remanded back to the Commissioner to consider the claim of the appellant for conversion of free shipping bills into drawback shipping bills, after following the principles of natural justice and after affording an opportunity of hearing to the appellant - appeal allowed by way of remand.

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• 2020 (9) TMI 949
  Legality of import of wheat gluten amygluten 160 - production of duty-free import authorization (DFIA) licenses, permitting import of flour for the manufacture of biscuits - N/N. 40/2006-Cus dated 1st May 2006 or of notification no. 98/2009-Cus dated 11th September 2009 - period between November 2011 and September 2012 - HELD THAT:- With the removal of starch from dough made of flour , the resultant product is wheat gluten. Hard wheat flour is hydrated to activate the gluten within it, processed for removal of the inherent starch by washing which, after dehydrating, is then powdered. Thus the composition of wheat, in a depleted form, in the flour does not appear, to us, to be an alteration of the essence of the product. With the threshold eligibility thus settled, the allegation pertaining to ineligibility arising from import by an entity other than actual user and of ineligibility arising from utilization of a different ingredient in the exports effected by the original license holder remain to be evaluated. The duty-free import authorizations procured by the appellant-importer had been made transferable in accordance with the provisions of the Foreign Trade Policy and there is no whiff of allegation that the said endorsements had been procured unlawfully. The prescription of actual user condition in the Foreign Trade Policy, and reflected in the corresponding notification issued under section 25 of Customs Act, 1962, cannot be said to be extended to transferees of such licences unless particularly specified, either in the policy prescriptions or in the notification, for that would be tantamount to imposing a condition that was not intended by the Central Government. Neither the adjudicating authority nor Learned Authorised Representative have been able to establish that post-export, endorsed for transfer license continued to be entailed with such actual user condition. In any case, the ultimate usage of such goods by an actual user renders the logic of Revenue to be unacceptable. There is no evidence on record that the appellants were aware of the composition of the exported goods. Hence, the appellant cannot be expected to conform to such imports as they are not cognizant of. From the available records and submissions made, we are unable to conclude if any of the inputs permitted for import to enable manufacture of biscuits are enumerated among the goods specified for conformity in the Handbook of Procedures. On the inadequacy of credible evidence of the ingredients used in the exported goods, the essential nature of the impugned goods, the apparent conformity with the conditions of the Foreign Trade Policy and the precedent decision in the dispute of the appellant herein - Appeal allowed - decided in favor of appellant.

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• Insolvency & Bankruptcy

• 2020 (9) TMI 948
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- All problems have started from June 2017 from the time the quality of material supplied in few lots were of inferior quality leading to production disruption to the Corporate Debtor. It is also clear that the dispute has been raised also against the reply to the demand notice and the demand notice was replied within due time as per the provisions of the Code. The Hon ble Apex Court has observed in Mobilox Innovative Private Limited Vs. Kirusa Software Private Limited [ 2017 (9) TMI 1270 - SUPREME COURT ] that It is clear, therefore that once the Operational Creditor has filed an application, which is otherwise complete, the Adjudicating Authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the Operational Creditor or there is a record of dispute in the information utility - In the present case, it is clear that such notice must bring to the notice of Operational Creditor the existence of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the Adjudicating Authority is to see at this stage is whether there is a plausible contention which required further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. Section 9(5) (ii) (d) of the Code, specifically provides for considering Dispute by the Adjudicating Authority, empowering it to reject the Application and communicate the decision to the Operational Creditor and Corporate Debtor, if notice of dispute has been received by the Operational Creditor - IBC is not a recovery law . Its purpose is to save the companies and also to allow them to be going concern. Again, email dated 06.07.2017 does show pre-existing dispute regarding quality of supply. The impugned order dated 19.02.2020 passed by Adjudicating Authority ( National Company Law Tribunal, Ahmedabad Bench, Ahmedabad ) is set aside - appeal allowed.

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• 2020 (9) TMI 947
  Prosecution proceedings against sleeping directors for failure to assist RP - Non supply of Documents / Account Books - Principles of Natural Justice - SCN not properly appreciated - Appellants submits that the Adjudicating Authority (NCLT, Chandigarh) while passing the impugned order dated 23.03.2020 had not considered the circular dated 02.03.2020 issued by the Government of India whereby a clarification was given in regard to the prosecution filed or internal adjudication proceedings initiated against the Independent Directors , Non-Promoters and Non-KMP , Non-Executive Directors and this had resulted in miscarriage of Justice. HELD THAT:- It comes to be known that the 1st Respondent / Resolution Professional filed application under Section 19 of the I B Code r/w relevant Rules and Regulations seeking directions to the effect that the Members of the Suspended Board of Directors of the Corporate Debtor and their Associates be directed to submit / hand over all the requisite books, financial debtor, returns and assets to the Resolution Professional immediately and also provide necessary assistance/cooperation in smooth conduct of Corporate Insolvency Resolution Process - The 1st Respondent / Resolution Professional in CA 3/2019 before the Adjudicating Authority had stated that the Corporate Debtor is a public limited company with its shares closely held within family members and that sufficient time was given to the members suspended Board of Directors of the Corporate Debtor to provide all necessary Books, Financial Data, Information and Returns. However, they had failed to comply with the directions given by the 1st Respondent / Interim Resolution Professional in this regard and hence the said application was filed. I B Code - HELD THAT:- It cannot be lost sight of that where any personnel of the Corporate Debtor does not render assistance or cooperation to the Interim Resolution Professional , the National Company Law Tribunal / Adjudicating Authority on the application projected by the Interim Resolution Professional is empowered to pass an order and direct the person(s) to comply with the instructions of the Interim Resolution Professional and cooperate with him in the collection of information and management of the Corporate Debtor - In so far as Section 236 of the I B Code is concerned, it speaks of Trial Of Offences by Special Court . In reality, no Court shall take cognisance of any offence punishable under this Act save on a complaint made by the IBBI or the Central Government or any person authorised by the Central Government in this behalf. To put it precisely, for prosecution of offences under the I B Code, lodging of complaint by the IBBI , the Central Government or any other officer authorised by the Central Government in this behalf is required. Independent Director - HELD THAT:- The burden of proof to establish that act of commission or omission by a company which are contrary to Law was carried out without his knowledge lies on the Independent Director . Continuing further, an Independent Director and a non-executive Director other than promoter or key managerial personnel shall be held liable for such acts of commission(s) or omission(s) in relation to any actions of the company, which is within its knowledge and could be attributed to him through Board Processes - In the instant case on hand, it cannot be said that the Appellant(s) (in both the Appeals) were not provided with the opportunities relating to furnishing of information in respect of books and assets, financial data, returns etc. to the Resolution Professional . To put it succinctly, on 12.10.2019 a notice was issued by the 1st Respondent / Resolution Professional to the Directors of Corporate Debtor wherein specific information was sought for in respect of (i) all books of accounts, financial statements, returns w.e.f. 01.04.2014 till date (ii) computer systems containing accounting records along with software being used w.e.f. 01.04.2014 till date etc. A mere running of the eye of the ingredients of Section 19 of the Code latently and patently imposes an obligation on the personnel and promoters of the Corporate Debtor to extend all assistance and cooperation which the Interim Resolution Professional will require in running / managing the affairs of the CD. In fact, the term personnel is defined to mean the employees, directors, mangers, key managerial personnel etc., if any of the Corporate Debtor and this is meant to render assistance to the Interim Resolution Professional in carrying out his duties in an effective and efficacious manner. This Tribunal, on going through the Impugned Order dated 23.03.2020 passed by the Adjudicating Authority in CA No. 3/2019 in CP (IB) No. 70/Chd/Hry/2018 comes to a resultant conclusion that the Adjudicating Authority in Law, is well within its ambit to make a recommendation for considering the aspect of commencement of proceedings and not a recommendation for initiation of criminal proceedings and in this regard it is for the Insolvency Bankruptcy Board of India to take a final call, of course, after applying its independent overall assessment in an objective and dispassionate manner and to act accordingly, in the subject matter in issue - the Adjudicating Authority while passing the impugned order had not exceeded its jurisdiction. The impugned order passed by the Adjudicating Authority does not suffer from any patent illegality in the eye of Law - Appeal dismissed.

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• 2020 (9) TMI 946
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT:- There was no pre-existing dispute between the parties with regards the debt which has become due and remained unpaid for more than 1 Lakh as the corporate debtor has failed to present any document to support its averment - The corporate debtor has not placed on record any communication or document which exhibits the plausible dispute between the parties. There is no merit in the so-called dispute raised by the corporate debtor as mere reply filed by the corporate debtor to the present application, is unable to establish any pre-existing dispute of genuine nature. On the contrary the decree for recovery of dues passed by the Ld. ADJ Rohini Court, New Delhi dated 08.09.2016, belies its story of dispute and confirms the admission of liability of the corporate debtor. This leaves no doubt that the default has occurred for the payment of the operational debt for which the invoices were raised by the applicant and the so called dispute raised by the corporate debtor is merely a moonshine dispute. The dispute raised by the corporate debtor, is spurious, plainly frivolous and unable to categorize as genuine dispute as reproduced above. Hence, contention of the corporate debtor, of a pre existing dispute without any evidence and merit is a clear after thought to defeat the claim of the applicant - the present application is complete and the Applicant has established its claim which is payable and due by the corporate debtor. Time Limitation - HELD THAT:- The date of decree passed by the Ld. ADJ Rohini Courts New Delhi is 08.09.2016, as the date of default and the present application is filed on 06/06/2019. Hence the application is not time barred and filed within the period of limitation - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. Application admitted - moratorium declared.

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• 2020 (9) TMI 945
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT:- The corporate debtor has not placed on record any document which exhibits the plausible dispute with respect to the quality of the materials supplied by the applicant nor with respect to the existence of the amount of alleged debt. Moreover, the notice under section 8 of code has not been disputed by the corporate debtor. It is only when application under section 9 is filed, the corporate debtor has come foreword with lame defence and without any evidence. It can be thus inferred that there is no merit in the so-called dispute raised by the corporate debtor in reply to the application. Therefore, it goes beyond doubt that the Applicant is entitled to claim its dues. Time Limitation - HELD THAT:- The date of default is occurred from 01.09.2018 and application is filed on 01.11.2018 hence the debt is not time barred and the application is filed within the period of limitation. Jurisdiction - HELD THAT:- The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. The present application is complete and the applicant has established the default in payment of the operational debt, hence is entitled to claim. The present application is admitted - Application admitted - moratorium declared.

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• 2020 (9) TMI 944
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Time Limitation - HELD THAT:- It is pertinent to note that the corporate debtor has failed to appear and present his defense hence has been proceeded ex-parte vide order dated 12.02.2020 - The date of default is 22.12.2016 and the present application is filed on 17.12.2019. Hence the application is not time barred and filed within the period of limitation - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. The present application is filed on the Performa prescribed under Rule 6 of the Insolvency and Bankruptcy Code, 2016 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 r/w Section 9 of the code and is complete. Considering the submission of counsel and documents on record the applicant is entitled to claim its dues, establishing the default in payment of the operational debt. Hence, the application is admitted - application admitted - moratorium declared.

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• 2020 (9) TMI 943
  Directions to the Resolution professional to provide or furnish the details of fair value/liquidation value of the assets of the corporate debtor - Direction to Respondent to provide the information pertaining to claims submitted by the secured and unsecured creditors to the Resolution professional/Interim Resolution Professional - section 60(5) of Insolvency and Bankruptcy Code, 2016 Read with Rule 11 of NCLT Rules, 2016 - HELD THAT:- Regarding claims admitted by the RP the applicant wanted directions to RP to furnish the information with regard to those claims. In fact applicant has participated in the COC meetings and the issue of claims were placed for consideration. The RP has filed minutes of the COC meetings. The applicant participated in all the COC meetings and applicant should have been informed of all the claims admitted having attended the COC meetings. It is not true that RP has not disclosed the information about the admission of the claims since claims which were admitted will be disclosed in the website of the corporate debtor. Therefore, applicant has knowledge about the claims admitted by the RP. Since he attended the COC meetings. Accordingly, no direction need be given to the RP in this regard. The contention of learned counsel for RP is that the erst while members of Board are only entitled to look into the plan as soon as resolution plan is filed with the COC it will be given to the applicant and there is no question of disclosing any information regarding Fair value and liquidation value. Application dismissed.

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• 2020 (9) TMI 942
  Liquidation of Corporate Debtor - requisite documents not submitted - HELD THAT:- In order to consider any claim of a Party, concerned Party has to submit the requisite document(s) to the Concerned Authority to consider its claim. An Authority, which is required to consider a claim of a party, is entitled to ask the Party to substantiate its claim by producing relevant document(s) in addition to document(s) already furnished along with Claim. The contention of Applicant that documents already furnished along with its claim would suffice to accept its claim is not at all tenable, and it is liable to be rejected. The Liquidator is having every right to ask the Applicant to submit requisite documents as he thought it relevant to the issue in question. Moreover, the documents in question, asked for by the Liquidator, are prima facie, found to be relevant to the issue in question. Since the Corporate Debtor is in liquidation, the Liquidator is under statutory Obligation to scrutinise the Claims as per available records of Corporate Debtor with reference to the documents filed by respective claimants. Therefore, the stand Of the Liquidator in asking the Applicant to substantiate its claim by producing the requisite documents in question, is to be held within his rights. The Applicant, if so advised, can submit a suitable Representation to Liquidator, along with requisite documents as asked for, within a period of two weeks from the date of receipt of copy of this order - On receipt of above representation, the Learned Liquidator is directed to re-consider the claim as per law, and pass speaking order within two weeks thereafter, and communicate the same to the Applicant, immediately. Application disposed off.

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• 2020 (9) TMI 941
  Maintainability of application - Initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial debt or not - Aggrieved Person or not - HELD THAT:- It is to be borne in mind that in a subsisting application, liability to pay a sum of money is condition precedent of a Financial Debt . The Financial Debt represents the money payable in respect of loan borrowing made by a Corporate Debtor. In short, the sum of money is certainly and in all events payable is a Debt , disregard to the fact whether it is payable now or at a later point of time, in the considered opinion of this Tribunal. Indeed, in Part II of the IBC, Section 63 expressly oust the Jurisdiction of a Civil Court or an Authority and specifies that such Civil Court or an Authority cannot entertain any suit or proceedings which are in the nature of a lis in respect of which the National Company Law Tribunal or National Company Law Appellate Tribunal has jurisdiction. As per Section 7 of the Code, a Financial Creditor can initiate Insolvency Proceedings against the Corporate Debtor before the Adjudicating Authority . Section 4 of the Code says that Part II applies to all matters relating to Insolvency and Liquidation of Corporate Debtors where the minimum amount of the default is Rs. One Lakh. In terms of Section 9 of the Code, an Operational Creditor after fulfilling the requirements of Section 8, can initiate the CIRP against the Corporate Debtor before an Adjudicating Authority. In pith and substance if the Debt due and payable is above One lakh rupees, then the Application for Corporate Insolvency Resolution can be filed before the Adjudicating Authority i.e. NCLT and not before any other fora. Furthermore, the ingredients of Section 238 of the Code operates against other laws when they are in conflict with the Code - the Application (under Section 7 of the Code) filed by the 1st Respondent/Applicant (Financial creditor) is perfectly per se maintainable in Law. As far as the present case is concerned, the Memorandum of Understanding consists of two transactions i.e. one is related to the granting of loan and the other is in regard to formation of SPV. These transactions are quite independent of each other. The Loan was given by the Respondent to the Corporate Debtor and its group Companies and for which promissory notes were executed. Section 5(7) of the Code defines Financial Creditor meaning any person to whom a Financial Debt is owed and includes a person to whom such debt has been legally assigned or transferred - Considering the fact that in the instant case, there is a Debt and Due payable by the Corporate Debtor and a default was committed by the Corporate Debtor, this Tribunal without any haziness holds that the impugned order of the Adjudicating Authority ( National Company Law Tribunal, Kolkata Bench) dated 25.10.2019 in admitting the Section 7 Application filed by the Respondent/Financial Creditor is free from any patent illegalities. Appeal dismissed.

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• 2020 (9) TMI 940
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Debt or not - existence of debt and dispute or not - HELD THAT:- The debt arising out of non-payment of lease rent does not fall under the definition of operational debt as defined under Section 5(21) of the Code (even though it may otherwise be a debt), and the Petitioner cannot be termed as an Operational Creditor within the meaning of Section 5(20) and for the purpose of the Code. It is also seen from the Petition that there existed a substantial dispute over the debt in question, prior to the filing of this Petition. It had filed a suit before the Court of City Civil Judge at Bengaluru under the Code of Civil Procedure on 1st October, 2018. The matter went to the Lok Adalat. Some payments were made but later the cheques paid towards rent were dishonoured on 31st January, 2019. The settlement was got annulled through the Civil Court. The Demand Notice as prescribed under the Code was issued on 11th October, 2019. This Petition was filed even later. There was therefore a pre-existing dispute, and was still pending in the Hon ble Civil Court at Bengaluru - In the instant case, neither could the debt be considered to be an Operational debt for the reasons mentioned in the foregoing paragraphs, nor was there a clear undisputed debt as there was a pre-existing dispute taken to the Hon ble Civil Court, much prior to the issue of the Demand Notice in Form 3 and Form 4 as prescribed under the Code on 11th October, 2019, which was received by the Corporate Debtor on 14th October, 2019. For this reason, also, the Petition has to be dismissed. Petition dismissed.

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• Service Tax

• 2020 (9) TMI 939
  Recovery of tax dues - rendering of erection, commissioning or installation service - wrongly availled CENVAT Credit - services provided from outside India to the appellant - reverse charge mechanism - period April 2009 and March 2012. Demand of Rs. 17,55,58,713 has been confirmed to be due from the appellant company as tax on services procured from outside India for execution of the contract with M/s Oil and Natural Gas Corporation Ltd. - HELD THAT:- The appellant is not provider of service from outside India but an assessee within the meaning of Finance Act, 1994, the correctness of taxability, under challenge by the appellant company, must be decided in terms of section 66A of Finance Act, 1994 read with Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 - It is contended on behalf of the appellant company that the substantial portion of the demand, relating to charter of a vessel, is not leviable as the vessel was not operational for the entire period in India. Undisputedly, as pointed out by Mr Mondal, evidence of such is not available; nevertheless, it would appear that the contention arising from the delivery, and the handing over, having occurred outside the country was not considered before crystalizing the demand. Furthermore, it is claimed that two other taxable activities would, in terms of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, not be leviable to tax as these were performance-based and to be taxed accordingly. These appear to be pleadings made for the first time ever. Naturally, these need to be attended to before the appellate jurisdiction can decide on the correctness, or otherwise, thereof. Imposition of various penalties - HELD THAT:- The adjudicating authority itself appears to have been uncertain of the provision under which tax levy arose; attribution of more certainty to the appellant company does not appear to be equitable. In such circumstances, it is difficult to conclude, with absolute sureness, that intent to evade taxes was manifest in the actions of the appellant company. No evidence to the contrary is adduced in the show cause notice. The site of the revamp, far beyond the territorial waters, may well have given rise to misconceptions about taxability at the place at which service was rendered. Errors in computation of demand has been admitted to in the crystalization of revised demand. Towards the liability in the second notice, Rs. 17,55,26,556 has been deposited before issue of show cause notice on account of tax and Rs. 11,79,54,465 on account of interest - in terms of section 73(3) of Finance Act, 1994, with no dues apparently pending, there is no scope for imposition of penalty under section 78 of Finance Act, 1994. We, therefore, set aside the penalties imposed on the appellant company. Appeal of Revenue against the restricted penalty is, thus, infructuous and is dismissed. The claim of the appellant to lower tax liability on output service, owing to eligibility for abating of material cost from the taxable value of services, must be responded to. Likewise, the appellant must be given an opportunity to validate claim for availment of CENVAT credit of Rs. 2,88,93,108. The claim of the appellant company to exclude the value of supply of tangible goods service , survey and exploration of mineral, oil and gas service and technical inspection and certification service , for the reasons specified in the appeal, needs to be scrutinized. Remand is warranted for the purpose. With the finding that service provided under contract to M/s Oil and Natural Gas Corporation Ltd is liable to tax from M/s Sarku Engineering Services as also on the services procured from outside India to the extent permissible, and in accordance with Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 we direct that the matter revert to the original authority for fresh quantification net of the exclusions, to the extent available to them, after affording opportunity to assessee for exercise of option to claim abatement of value of material used for rendering output service and to furnish data in support of the several claims recorded - Appeal allowed by way of remand.

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• 2020 (9) TMI 938
  Refund of Service Tax - Information Technology Software Services - Department contends that the Information Technology Software Services was not taxable for the relevant period and it became taxable only w.e.f. 16.05.2008 hence refund under Rule 5 of CCR, 2004 is not available - unregistered premises - nexus between the output services provided and input services availed - HELD THAT:- Notification No. 5/2006 has been amended by the Finance Act, 2010 substituting the words used for in place of used in . It is also found that it has been clarified that the retrospective changes are made to ensure that the provisions of refund Notification and the CCR are aligned - also, most of the services utilized by the appellants are held to be input services for providing output services in the field Information Technology Services. Moreover, going by the explanation submitted by the appellants before the lower authorities it is found that the services are integral and required for the rendering of output services. Further, as elucidated in CBEC vide Circular No. 120/1/2010 dated 19.01.2010, input services and their nexus with output service needs to be construed in a harmonious manner. Also, there is force in the appellant s arguments that the Department did not dispute the availment of credit in the first instant and therefore, it is not open for them to deny the same when a refund is filed. Therefore, the appellants are entitled for refund and the impugned orders are not sustainable to that extent. Appeal allowed - decided in favor of appellant.

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• 2020 (9) TMI 937
  CENVAT Credit - input services - Short term hotel accommodation service - rent-a-cab service - outdoor catering and housekeeping services - period from April 2016 to June 2017. Short term accommodation in hotels - HELD THAT:- The Appellant s personnel necessarily had to undergo the required training to obtain the necessary permissions and approvals for the service recipient to avail the services of the Appellant. Had such training not been completed before such personnel were deployed at the rig, the service recipient would have deducted a certain amount at the time of payment to the Appellant. In any case, the Appellant could not afford to deploy people without the required police clearance certificate and Safety training. Therefore, the Appellant had no choice but to accommodate its personnel for the time impending the said approvals and permissions. The said service extended to its personnel by the Appellant would not qualify as a service availed for personal consumption - the said service is in relation to and in pursuance of the service being provided by the Appellant - Credit allowed. Rent-a-cab Service - HELD THAT:- As an operational requirement, they are required to send surveyors, naval officers for surveys and naval security clearance on their rigs. In this regard, they are required to hire vehicles for transporting such officers. Further, the Appellant is also required to provide conveyance for inspection agencies for various inspections such as Fire safety, underwater inspection, tubular inspection, thickness gauging inspection, etc. Therefore, the Appellant has availed Cenvat credit on the said input service - Tribunal in M/S. MARVEL VINYLS LTD. VERSUS C.C.E. INDORE [ 2016 (11) TMI 1126 - CESTAT NEW DELHI] while considering the amended definition of input service has already decided the matter in favour of the assessee and held that the definition does not provides for total exclusion but only restricts those cases where the vehicles do not qualify as capital goods. From recipient point of view, motor vehicle can never be capital goods and he would never be eligible for credit if a narrow interpretation is given - Credit allowed. Outdoor Catering Service - HELD THAT:- As the personnel working at the rig have been deployed by the Appellant, it is the Appellant s responsibility to ensure healthy working conditions for such personnel. Therefore, the Appellant had availed the said service to prevent food from getting spoilt. The access to proper food is the most basic requirement for any person to carry out a task - The Commissioner (Appeals) ought to have appreciated the facts of the present case, wherein the personnel have been deployed on a rig and away from the coastal area. The said personnel do not have access to food other than what is available on the rig and therefore, it is apposite in the given circumstances for the Appellant to ensure that its personnel remain healthy - The Hon ble Rajasthan High Court in COMMISSIONER, CENTRAL EXCISE VERSUS M/S MANGLAM CEMENT LTD. [ 2017 (11) TMI 483 - RAJASTHAN HIGH COURT] , for a period post the amendment of the definition of input service (w.e.f. 01.04.2011) and has held that Outdoor Catering services are required to be carried out for the process of manufacture and delivery and hence eligible for credit - Credit allowed. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2020 (9) TMI 936
  Benefit of concessional rate of tax - difficulty in obtaining C forms - purchase of High Speed Diesel from suppliers in other States - HELD THAT:- The petitioner is entitled to the inclusion of High Speed Diesel Oil as a commodity in the registration certificate. The issue involved in the Writ Petition is squarely covered by a decision of this Court in M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [ 2019 (2) TMI 1850 - MADRAS HIGH COURT] , wherein it was held that The Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the C forms from the websites as the same stand blocked from use. Upon enquiry with the Assessing Authorities, they have been informed that the benefit of the decision in M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) [ 2018 (10) TMI 1529 - MADRAS HIGH COURT] Ltd can be extended only to those dealers in that are party to the decision. This stand is unacceptable in so far as the decision of this Court as well as other High Courts, one of which has been confirmed by the Supreme Court, are decisions in rem, applicable to all dealers that seek benefit thereunder, of course, in accordance with law. The State has, after the date of the above order, filed a Writ Appeal in THE COMMISSIONER OF COMMERCIAL TAXES, CHEPAUK, CHENNAI, THE ADDITIONAL COMMISSIONER (CT) VERSUS THE RAMCO CEMENTS LTD. AND THE STATE TAX OFFICER, THE JOINT COMMISSIONER (CS) (SYSTEMS) VERSUS SUNDARAM FASTENERS LIMITED [ 2020 (3) TMI 450 - MADRAS HIGH COURT] challenging the decision in the case of Ramco Cements that has been considered and dismissed by a Division Bench of this Court. Mrs.G.Dhanamadhri, submits that the State intends to challenge the order in Writ Appeal by way of a Special Leave Petition. As on date, the order in Writ Appeal is final, and following the rationale thereof, the Writ Petition is allowed.

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• 2020 (9) TMI 935
  Benefit of concessional rate of tax - difficulty in obtaining C forms - purchase of High Speed Diesel from suppliers in other States - HELD THAT:- The petitioner is entitled to the inclusion of High Speed Diesel Oil as a commodity in the registration certificate. The issue involved in the Writ Petition is squarely covered by a decision of this Court in M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [ 2019 (2) TMI 1850 - MADRAS HIGH COURT] , wherein it was held that The Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the C forms from the websites as the same stand blocked from use. Upon enquiry with the Assessing Authorities, they have been informed that the benefit of the decision in M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) [ 2018 (10) TMI 1529 - MADRAS HIGH COURT] Ltd can be extended only to those dealers in that are party to the decision. This stand is unacceptable in so far as the decision of this Court as well as other High Courts, one of which has been confirmed by the Supreme Court, are decisions in rem, applicable to all dealers that seek benefit thereunder, of course, in accordance with law. The State has, after the date of the above order, filed a Writ Appeal in THE COMMISSIONER OF COMMERCIAL TAXES, CHEPAUK, CHENNAI, THE ADDITIONAL COMMISSIONER (CT) VERSUS THE RAMCO CEMENTS LTD. AND THE STATE TAX OFFICER, THE JOINT COMMISSIONER (CS) (SYSTEMS) VERSUS SUNDARAM FASTENERS LIMITED [ 2020 (3) TMI 450 - MADRAS HIGH COURT] challenging the decision in the case of Ramco Cements that has been considered and dismissed by a Division Bench of this Court. Mrs.G.Dhanamadhri, submits that the State intends to challenge the order in Writ Appeal by way of a Special Leave Petition. As on date, the order in Writ Appeal is final, and following the rationale thereof, the Writ Petition is allowed.

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• 2020 (9) TMI 934
  Validity of assessment proceedings - time limitation - non- consideration of F-Forms - period April, 2015 to February, 2016 - HELD THAT:- The impugned Assessment Order dt.11.03.2020 passed by the 1st respondent is set aside; the matter is remitted back to the 1st respondent for fresh consideration; the 1st respondent shall consider the F-Forms which have also been filed by the petitioner before him; the petitioner is entitled to make submissions on the aspect of bar of limitation of the assessment proceedings for the period April, 2015 to February, 2016 invoking Sub- Rule (5A) of Rule 14A of the Central Sales Tax (Telangana) Rules, 1957; the 1st respondent shall also provide a personal hearing to the petitioner; and then pass a reasoned order in accordance with law and communicate it to the petitioner. Petition allowed by way of remand.

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• 2020 (9) TMI 933
  Principles of Natural Justice - Validity of Assessment Order - order of the Tribunal is assailed on the ground that opportunity of hearing is denied to revisionist - HELD THAT:- Admittedly the order of the Tribunal is ex-parte inasmuch as it is recorded that none has appeared on behalf of the revisionist. This observation is assailed by contending in para 14 to 16 that in fact the Tribunal observed in open Court that matter was complicated and, therefore, the appeal would be adjourned to the some other date. Letter of the counsel date 25.6.2020 has also been annexed as annexure no.5 which contains the communication of lawyer to the revisionist in that regard. The order of the Tribunal otherwise appears to have been passed essentially relying upon the remand report 6.3.2020 which has also been quoted in the order itself - The contention advanced on behalf of the revisionist that the order is vitiated for denial of reasonable opportunity of contest in the matter, therefore, is clearly substantiated. The matter stands remitted to the Tribunal for affording an opportunity of hearing to the revisionist and for deciding the matter afresh in accordance with law - Appeal allowed by way of remand.

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• Indian Laws

• 2020 (9) TMI 932
  Dishonor of Cheque - issuance of summons - primary ground of challenge as contended by the learned counsel for the petitioner is that the petitioner was not the Director when the underlying contract was executed between the respondent No.1 and respondent No.2, nor when the cheques were issued and when they were presented, inasmuch as the petitioner had resigned from the respondent No.2 much before, on October 27, 2010. HELD THAT:- This Court is conscious of the settled position of law that the High Court while entertaining a petition of this nature shall not consider the defence of the accused or conduct a roving inquiry in respect to the merits of the accusation/s but if the documents filed by the accused / petitioner are beyond suspicion or doubt and upon consideration, demolish the very foundation of the the accusation/s levelled against the accused then in such a matter it is incumbent for the Court to look into the said document/s which are germane even at the initial stage and grant relief to the person concerned under Section 482 CrPC in order to prevent injustice or abuse of process of law. In my opinion the present petition would fall within the aforesaid parameters. The proceedings initiated by the respondent No.1 against the petitioner under Section 138 of the NI Act, pending before the learned Metropolitan Magistrate, Saket Courts, and the resultant proceedings including summons issued thereon are quashed - Petition allowed.

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