Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 30, 2021
Case Laws in this Newsletter:
GST
Income Tax
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
GST
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Seeking grant of Bail - availment of fraudulent credit - no further investigation is either carried out or recorded - In the instant case, taking into account the alleged amount of evasion of tax, the case falls under Section 132(1)(i) of the AGST Act and the punishment prescribed for such an offence may extend to imprisonment for 5 (five) years and with fine - the accused-petitioner, named above, be released on bail, subject to conditions - HC
Income Tax
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Recovery of outstanding tax demands from the director of a private company in liquidation - Joint or severe liability - As per the MOU / Settlement agreement, all the income tax liabilities will be borne and paid by one of the Directors (Not the present petitioner) - It is a settled law that while rights in personam are arbitrable, rights in rem are unsuited for private arbitration and can only be adjudicated by the Courts or Tribunals - private parties cannot apportion Income Tax liability by private agreement as the petitioner has sought to do in the present case. - HC
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Rejection of declaration u/s 5 of the Direct Tax Vivad Se Vishwas Act, 2020 (‘VSV Scheme’) - Case was pending or not - there remains no shadow of doubt that appeal could be said to be pending, even if the delay occurred in filing the same was not condoned and even if it was allegedly irregular or incompetent. In the instant case therefore also, the Respondent could not have rejected the Declaration Form of the Petitioner filed under the said Act merely on the ground that the Appeal was not valid or competent, as the delay occurred in filing the Appeal was not condoned by the Appellate Authority. - HC
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Fresh registration u/s 12AB - Notice seeking cancellation of earlier registration u/s 12A / 12AA pursuance of search proceedings u/s 132 and assessment u/s 153C as on 10.8.2021 - the impugned notice dated 10.08.2021 issued under Section 12AA(3) of the Act, as such, cannot be proceeded further and it can be kept in abeyance for the time being, till an order is passed by the Principal Commissioner/Commissioner as the case may be on the application of the petitioner dated 04.05.2021 under Section 12AB(1)(a) - HC
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TDS u/s 194H - commission or discount - the sale of recharge voucher coupons and starter kits and the discount offered to the distributors would not attract TDS provisions u/s 194H of the Act and as such no default u/s 201(1) of the Act can be attributed to the assessee. - AT
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Exemption u/s 54 - denial of claim on purchase of property abroad - the investment in purchase of residential house in UK was made in July, 2013 and as such the claim of exemption u/s 54 of the Act in respect of such investment is allowable. Accordingly, we find no reason to take a view different from the view taken by the Ld. CIT(A) on the issue and we uphold the same. - AT
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TDS u/s 194A - interest payment to APIIC[State Government undertaking] - we are in concurrence with the conclusion of the ld. Commissioner for covering the APIIC u/sec. 194A(3)(iii)(f) of the Act and to the effect as well that APIIC is an organization exempted u/sec. 11 of the Act having filed ‘NIL’ taxable income, is not liable to tax and, therefore, deduction of tax at source qua APIIC is not attracted. - AT
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Penalty u/s. 271(1)(c) - assessee has purchased a vacant land for which he is not entitled for deduction u/s. 54F - the assessee has neither concealed the income nor furnished inaccurate particulars in this case and therefore, the penalty levied by the A.O and confirmed by the CIT(A) is not correct. - AT
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Addition u/s 41(1) - benefit by way of remission or cessation of liability - In the instant case, the first mentioned person is the assessee, but not the creditor. In the instant case, the assessee has not written off the liability, though the creditor has written off the debt. Though the debtor has no legal right to enforce the debt, still the assessee is having liability to make the payment, till the assessee writes off the debt. - There is no case for invoking the provision u/s 41(1) - AT
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Business and Promotion expenses - The expenditure incurred by the assessee towards, Bangalore Orthopaedic Society – Conference for practical use of products and Payments made towards travelling expense of doctors for attending the workshops organized at France a/w the expenditure incurred towards their stay, honorarium fees would not be hit by the “Explanation” to Sec. 37 - A.O was not justified in disallowing the aforesaid expenses that were incurred by the assessee wholly and exclusively in the normal course of its business - AT
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Additions u/s 69A - Cash deposits made during demonetization period - there is no dispute that the assessee is running Petrol and Diesel retail outlet and he is the dealer of HPCL and the Govt. of India has permitted during the demonetization period to accept the specified bank notes in the case of petrol bunks. There is no dispute that the cash deposits made were relatable to sales and duly accounted in the books of accounts and the same were deposited in the bank account - Deposit of cash cannot be said as unexplained - there is no case for making the addition u/s 69A - AT
Service Tax
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CENVAT Credit - input services - Irrespective of the person whether it is service recipient or service provider is liable to pay the service tax but so long the service tax was admittedly paid even by the recipient of the service, the Cenvat credit cannot be denied. This issue is no longer res Integra as this tribunal in following judgments for categorically hold that even though the portion of the service tax which was supposed to be paid by the some other person, so long the service tax was paid, the credit of said service tax cannot be denied to the recipient of service. - AT
Central Excise
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Recovery of Interest and penalty - Rrejection of SVLDRS-1 - unquatified "amount in arrears" - no interest or penalty came to be adjudicated before introduction of the Scheme. Infact, no adjudication notice was issued in that regard - Benefit of SVLDRS not available to the petitioner - on the other hand without adjudication, garnishee proceeding for recovery of interest and penalty is not maintainable - HC
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CENVAT Credit - input services - Outward transportation of Hazardous Waste - In fact this activity is though the way of transportation but it is the disposal of Hazardous waste which is generating during the course of manufacture. In this fact the service of transportation is covered under the main clause of dentition provided under Rule 2(l) of Cenvat Credit Rules, 2004. Therefore, the judgment of ultratech of the Apex Court is not at all relevant in the facts of the present case. - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (9) TMI 1235
Seeking grant of Bail - availment of fraudulent credit - issuance of fake bills without supply of coal - retraction of statements - Compoundable offences or not - HELD THAT:- The statement of the accused-petitioner was recorded under Section 70 of the CGST Act and the retraction of the same would definitely be considered by the appropriate court at appropriate stage. Be that as it may, the position as of now is that the petitioner not only made statement under Section 70 of the CGST Act but he made implicating statement. It also appears from such statement that he has co-operated with the investigation and there is no allegation that he has not co-operated with the investigation of the case. There is no dispute at the bar that the offence involved in this case is compoundable. On perusal of the record, it is found that there is no entry/note in the record after 06.09.2021, meaning thereby that no further investigation is either carried out or recorded thereafter. In the meantime, the accused-petitioner has been in custody for 30 (thirty) days, as on date. In the instant case, taking into account the alleged amount of evasion of tax, the case falls under Section 132(1)(i) of the AGST Act and the punishment prescribed for such an offence may extend to imprisonment for 5 (five) years and with fine - the accused-petitioner, named above, be released on bail in connection with the abovementioned case on furnishing bail bond of ₹ 1,00,000/- with two suitable sureties of the like amount, to the satisfaction of the learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati. Bail application allowed.
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Income Tax
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2021 (9) TMI 1240
Review petition on Reopening of assessment - re-opening of the proceedings was undertaken based on information received from office of the DCIT Circle, New Delhi and not on the Shah Commission Report - Review of judgment [ 2019 (8) TMI 16 - BOMBAY HIGH COURT ] - HELD THAT:- entire exercise of re-opening the assessment was undertaken with reference to the Shah Commission Report pertaining to under invoicing in connection with the export of iron ore. We are satisfied that the issue arising in Writ Petition [ 2019 (8) TMI 16 - BOMBAY HIGH COURT ] was the same as the issue raised in the other Writ Petitions and that it was correctly clubbed with them and disposed of. Therefore, there is no substance in the contention raised in the present Review application. There is no error apparent on the face of the record demonstrated by the applicant. Hence, the Review application is dismissed.
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2021 (9) TMI 1238
Recovery of outstanding tax demands from the director of a private company in liquidation - Joint or severe liability - As per the MOU / Settlement agreement, all the income tax liabilities will be borne and paid by one of the Directors (Not the present petitioner) - HELD THAT:- Section 179 of the Act imposes a vicarious responsibility on the Directors for the dues of the company. It has, therefore, to be interpreted rigidly, subject to conditions, for application under Section 179. The primary condition is that the tax dues could not be recovered from the company before Section 179 could be invoked. The director of the private company can avoid his joint and several liability for payment of taxes if he proves that the non-recovery cannot be attributed to his gross neglect, misfeasance or breach of any duty on his part in relation to the affairs of a company. The contention of the petitioner that no action to recover the demand from the Realtech Group of Companies was taken by the Assessing Officer is not correct - as mentioned in the impugned order dated 29th January, 2018 under Section 179(1) that the demand notices were served upon the said companies on 29th March, 2014. Thereafter, notices under Section 221(1) of the Act were issued to the companies on 14th November, 2014. It was only when the demand was not paid, bank accounts of the companies were attached and partial recovery was made through the said attachments. In fact, the impugned order passed under Section 179(1) of the Act dated 29th January, 2018, as well as the Order passed under Section 264 dated 01st April, 2021 clearly demonstrate that only a small part of the demand was recovered despite all possible efforts by the Department including action of attachment of bank accounts of the Realtech Group of companies. Tax dues against Realtech Construction Pvt. Ltd. which was developing The City Emporio Mall was only ₹ 12.17 lakhs. The tax demand against the other companies could not be recovered from the assets of that company. Section 179 only permits recovery against a director and not against other group companies which are distinct legal entities. In the impugned order dated 01st April, 2021 there is a specific finding that despite issuing notices and attachment orders the entire outstanding tax dues could not be recovered from the Realtech Group of companies leaving the Department with no other option, but to recover the same from the Directors including the petitioner. The submission of petitioner that it is for the respondent-Revenue to demonstrate that the petitioner Director was guilty of gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company is contrary to the explicit language used in Section 179. The burden is on the individual Director to prove that the non-recovery was not due to his gross negligence, misfeasance or breach of duty on his part. MOU, Settlement Deed and an Arbitral Award govern rights in personam and cannot bind a statutory authority like the respondent-Revenue. It is a settled law that while rights in personam are arbitrable, rights in rem are unsuited for private arbitration and can only be adjudicated by the Courts or Tribunals - private parties cannot apportion Income Tax liability by private agreement as the petitioner has sought to do in the present case. WP dismissed.
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2021 (9) TMI 1237
Participation in the process under the VsV Scheme - Condonation of delay - whether in case of the present petitioner, any such appeal was pending or can he be said to be an appellant within the meaning of the VsV Act? - HELD THAT:- Time period for filing the appeal, if has already expired before 31st January, 2020, but an application for condonation of delay has already been filed, a deeming fiction is provided. According to the Revenue if the time for filing of the appeal expired during the period from 1st April, 2919 to 31st January, 2020( both the dates included in the period) and if the application for condonation of delay is filed before the date of issuance of this circular and if the appeal is admitted by the appellate authority before the date of filing of the declaration, such appeal is deemed to be pending as on 31.01.2020. As rightly contended on the strength of the decision rendered in the case of Boddu Ramesh ( 2021 (6) TMI 1054 - TELANGANA HIGH COURT ) by the learned advocate for the petitioner that condonation of delay whenever is accepted by the appellate authority, the same would relate back to the original date of filing of the appeal, as if the appeal is filed within the time period given under the statute. The Telengana High Court also has taken into consideration the Finance Bill memorandum containing explanation of every clause, intent and purpose for the proposal while laying the said Bill along with the circular of the CBDT which explained each clause while issuing the Circular. The Finance Minister s speech, its intent and purpose as also the insertion, amendment and modifications have been regarded. The Apex Court has held that the CBDT under section 119 is conferred the powers with the general objective for use of powers and proper administration of this Act. Therefore, when the Circular has been issued by the CBDT on 04.12.2020 answering to one of the Frequently Asked Questions, it is not expected of the Revenue to contend contrary to the said guidelines in the answer given in the Circular. Obviously, the Circular cannot override the express provisions of the Act and they are to be considered clarificatory in nature. They are basically meant to guide the officers and those, who execute the law in the field. They may not also bind the Court while it interprets statutory provisions. Court when regards and takes into consideration the fundamental principles along with the provision of Limitation Act, particularly Section 5 of the Limitation Act seeking condonation of delay in preferring any petition, appeal or litigation or proceedings, it is meant for exercise of discretion by the adjudicatory authority, which, if is satisfied with the sufficiency of cause, is expected to condone the delay. And, once the application for condonation of delay in any such matter is preferred and the same is allowed, it would be construed as if there is no delay and the appeal is preferred well within time.
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2021 (9) TMI 1236
Faceless assessment u/s 144B - violation of principle of natural justice - HELD THAT:- As in the present case, there has been a violation of principle of natural justice as well as Section 144B(1)(xvi)(b) of the Act inasmuch as the impugned draft assessment order under Section 144C(1) of the Act has been passed five days prior to the last date for filing of the reply/objections to the Show Cause notice by the petitioner. Consequently, the draft assessment order dated 29th August, 2021 passed by respondent u/s 144C(1) of the Act is hereby quashed - This Court directs that the Petitioner shall file its reply/objections to the Show Cause Notice dated 27th August, 2021 on or before 24th September, 2021 and the Assessing Officer shall pass a fresh draft assessment order in terms of Section 144C(1) of the Act on or before 30th September, 2021. To facilitate the filing of the reply/objections by the petitioner, the Assessing Officer is directed to open functionality on the online portal. The Petitioner is also directed to file its reply/objections to the Show Cause Notice by email.
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2021 (9) TMI 1233
Validity of Reopening of assessment u/s 147 - notice as admittedly issued only in the name of the deceased person and not in the name of the legal representatives - HELD THAT:- In Savita Kapila [ 2020 (7) TMI 441 - DELHI HIGH COURT] this Court has held that the sine qua non for acquiring jurisdiction to reopen an assessment is that notice under Section 148 of the Act should be issued to a correct person and not to a dead person. This Court further held that Section 159 of the Act applies to a situation where the proceedings are initiated/pending against the assessee when he is alive. Section 159(3) of the Act can come to the aid of the respondent only if the notice is issued in the name of the legal representative of the deceased as an assessee. In the present case, notice is admittedly issued only in the name of the deceased person and not in the name of the legal representatives and therefore, no reliance can be placed by the respondent on Section 159(3) of the Act. Accordingly, the impugned notice dated 30.03.2019 is quashed and set aside. All proceedings consequent to the impugned notice are also set aside.
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2021 (9) TMI 1231
Rejection of declaration u/s 5 of the Direct Tax Vivad Se Vishwas Act, 2020 ( VSV Scheme ) - Case was pending or not - where the appeal was file beyond the prescribed time limit and delay was not condoned - HELD THAT:- there remains no shadow of doubt that appeal could be said to be pending, even if the delay occurred in filing the same was not condoned and even if it was allegedly irregular or incompetent. In the instant case therefore also, the Respondent could not have rejected the Declaration Form of the Petitioner filed under the said Act merely on the ground that the Appeal was not valid or competent, as the delay occurred in filing the Appeal was not condoned by the Appellate Authority. As communication displayed at the portal of the department rejecting the declaration of the petitioner by orders dated 23rd February, 2021 and 12th April, 2021 are quashed and set aside. The respondent is directed to accept the declaration under the said Act for the A.Y. 2014-15. Let the declaration be accepted by the respondent on or before the 27th September, 2021. The payment allowed to be made on or before 30th September, 2021 considering the outer time limit set under the scheme. Any other consequential declarations if needed to be allowed, no delay shall be caused by the authority concerned.
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2021 (9) TMI 1230
Faceless assessment - denial of natural justice - Penalty u/s 274 read with Section 271AAC(1) imposed - impugned assessment order passed is jurisdictionally flawed and bad in law since it is violative of the mandatory and binding natural justice requirements stipulated - whether no mandatory valid show cause notice as well as draft assessment order had been issued to the Petitioner before drawing an adverse inference against the Petitioner and creating a tax demand? - HELD THAT:- Since in the present case no prior show cause notice as well as draft assessment order had been issued, there has been a violation of the mandatory procedure prescribed in law. This Court is of the view that once the assessment has been done by the Respondent No. 1 in accordance with Section 144B of the Act, it has to be done in accordance with the procedure prescribed therein alone. It is settled law that when power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are forbidden - even if it is assumed that the principles of natural justice have been complied with in the present case, then also the mandate of the statute would have to be complied with. Keeping in view the aforesaid, the impugned assessment order and notice of demand and the impugned show cause notice for imposition of penalty under Section 274 read with Section 271AAC(1) are set aside and the matter is remanded back to the Assessing Officer, who shall issue a show cause notice and draft assessment order and thereafter pass a reasoned order in accordance with law.
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2021 (9) TMI 1229
Maintainability of the Writ Petitions - lack of territorial jurisdiction - Whether the petitioners as well as the Settlement Commission are not falling with the territorial jurisdiction of the High Court of Madras? - HELD THAT:- As relying on M/S. MULBERRY SILKS LTD [ 2020 (9) TMI 771 - MADRAS HIGH COURT] the Writ Petitions stand dismissed. Leaving it open to the petitioners to move the High Court of Kerala having jurisdiction if they are so advised. It is made clear that the Writ Petitions have been dismissed solely on the ground of lack of territorial jurisdiction to entertain the Writ Petitions and the merits of the case of the petitioners have not been dealt with.
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2021 (9) TMI 1228
Excess depreciation u/s 32 - as per revenue depreciation at 30% in respect of motor buses/lorries/taxi used in the assessee's business of running them on hire, whereas in the instant case, the vehicles are used for assessee's own business and therefore, will not be eligible for higher rate of depreciation - assessee claims to be a C F agent involved in stevedoring, clearing and forwarding agency, custom house agency, steamer agency and is rendering services in New Mangalore Port - HELD THAT:- As per Supreme Court in 'RADHASOAMI SATSANG [ 1991 (11) TMI 2 - SUPREME COURT] has held that even though principles of res judicata do not apply to income tax proceedings, but where a fundamental aspect permeating through the different Assessment Years has been found as the fact one way or the other and the parties have allowed the position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in subsequent year. Thus in view of the law laid down by the Supreme Court in RADHASOAMI SATSANG, supra and taking into account that the identical issue has been held in favour of the assessee by the Tribunal vide order dated 07.09.2013 in respect of Assessment Years 1993-94 and 1995-96 and the parties have allowed it to attain finality, it is not appropriate to allow the position to be changed in subsequent year. In the result, the substantial question of law framed in this appeal is answered against the revenue
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2021 (9) TMI 1227
Fresh registration u/s 12AB - Notice seeking cancellation of earlier registration u/s 12A / 12AA pursuance of search proceedings u/s 132 and assessment u/s 153C as on 10.8.2021 - applicability of overriding provisions of section 12AB w.e.f. 1.4.2021 - Online submission of application for fresh registration u/s 12AB as on 4.5.2021 - HELD THAT:- under Sub-Clause (ac) of Clause (1) of Section 12A, the trust or institution registered under Section 12A or 12AA shall make an application within three months from the 1st April, 2021 in the prescribed form and manner to the Principal Commissioner/ Commissioner for registration of trust or institution. If any such application is made under Section 12A(1)(ac), how such application is to be dealt with has been provided under Section 12AB(1)(a), which has also been quoted hereinabove, where, on receipt of application submitted under Section 12A(1)(ac), the Principal Commissioner/Commissioner shall pass an order in writing registering the trust or institution for a period of five years. The procedure of cancellation of the registration already enjoyed either under 12A regime or 12AA regime in the case of the petitioner, in view of the new regime having been introduced, shall take place only after disposing the application made by the trust or institution, under the new regime, as contemplated under Section 12AB(1)(a). Since it is the claim of the petitioner that the application has been made only through online and for which, acknowledgment number has also been generated and it is also printed and the same has been filed by way of hard copies before this Court, we cannot doubt the application submitted by the petitioner on 04.05.2021. Assuming that such application submitted by the petitioner has not reached the concerned authority of the Income Tax Department for taking action, still the petitioner has got time to make such an application, because, the original period of three months with effect from 01.04.2021 as provided under the new regime has been subsequently, extended by the notification issued in this regard by Central Board of Direct Taxes, Department of revenue, dated 25.06.2021, under which, the time period has been extended upto 31st August, 2021. The objection raised by the petitioner side by pointing out the legal position, in view of the new regime introduced with effect from 01.04.2021 in the Finance Act, 2021, as against the impugned notice, is well found. This Court feels that, the impugned notice dated 10.08.2021 issued under Section 12AA(3) of the Act, as such, cannot be proceeded further and it can be kept in abeyance for the time being, till an order is passed by the Principal Commissioner/Commissioner as the case may be on the application of the petitioner dated 04.05.2021 under Section 12AB(1)(a) of the Act and once such an order is passed granting such registration for another terms of five years as referred to or contemplated under the new regime, then, it is open to the respondent revenue to proceed against the petitioner and therefore, from that stage, the impugned proceedings dated 10.08.2021 can be proceeded in accordance with law, especially under Sub-Section 4 of Section 12AB of the Act. Writ petition disposed of with necessary directions.
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2021 (9) TMI 1225
Penalty u/s 271(1 )(c) - disallowance of depreciation - defective notice u/s 274 - bonafide mistake on part of the assessee - Whether the appellant company has not concealed the income or furnished inaccurate particulars of Income? - HELD THAT:- Assessing Officer was not sure under which limb of provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. Besides that the Assessment Order also did not specify the charge as to whether there is concealment of income or furnishing of inaccurate particulars of income in assessee s case. Besides this, the present case is relating to wrong claim of depreciation which was a bonafide mistake on part of the assessee for which it cannot be said that it is concealment of income or furnishing of inaccurate particular of income. This issue is squarely covered by the decision of the Hon ble Supreme Court in case of M/s SSA Emerald Meadow.[ 2016 (8) TMI 1145 - SC ORDER] . As the inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s 271(1)(c) is not sustainable and has to be deleted. - Decided in favour of assessee.
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2021 (9) TMI 1224
Penalty u/s 271(1) (C) - no specific charges as relates to concealment of income or furnishing of inaccurate particulars of income - whether the penalty is for concealment of income or furnishing of inaccurate particulars of income was not evident from the notice nor from the penalty order as well? - HELD THAT:- In the instant case the inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s 271(1)(c) is not sustainable and has to be deleted. Although the Ld. DR submitted that mere non-striking off of the inappropriate words will not invalidate the penalty proceedings, however, the decision of the Hon ble Karnataka High Court in the case of SSA S Emerald Meadows [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT ] where the SLP filed by the Revenue has been dismissed is directly on the issue contested herein by the Assessee. Further, when the notice is not mentioning the concealment or the furnishing of inaccurate particulars, the ratio laid down by the Hon ble High Court in case of M/s. Sahara India Life Insurance Company Ltd. [ 2019 (8) TMI 409 - DELHI HIGH COURT ] will be applicable in the present case. Thus, notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law. We, therefore, set-aside the order of the CIT(A) and direct the Assessing Officer to cancel the penalty so levied. - Decided in favour of assessee.
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2021 (9) TMI 1223
Assessment u/s 153A - unexplained investment - HELD THAT:- As on the date of search, assessment for assessment year 2003 04 was not pending. Such assessment could have been disturbed only based on incriminating material found during the course of search. However, the learned assessing officer has made addition based on his statement recorded during the course of assessment proceedings and there is no reference of any incriminating material found during the course of search. Therefore, the issue is squarely covered in favour of the assessee by the decision of Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT] - the fact also shows that the assessee has not purchased this vehicle during the impugned assessment year. Therefore, we reverse the order of the lower authorities and direct the ld AO to delete the addition - Decided in favour of assessee. Addition on purchase of car - HELD THAT:- As addition has been made in the hands of the assessee based on statement recorded during the course of assessment proceedings. There is no reference of any incriminating material found during the course of search - even otherwise the assessee has shown that the Maruti Zen Car was purchased on 01.03.2005 and therefore, could not have been added in the hands of the assessee even otherwise for Assessment Year 2004-05. Thus no addition can be made in the case of concluded assessment pursuant to search in absence of any incriminating material. No incriminating material is shown to us by the learned departmental representative and not referred by the learned assessing officer in the assessment order. Addition on account of purchase of one Maruti car - HELD THAT:- As in the present case the learned assessing officer was having a power to make an addition based on examination of the return of income by the assessee. In the present case, the learned AO recorded the statement of the assessee on 11/12/2008 by issue of summons u/s 131 of the act - AO was having almost seven vehicles out of which the assessee could not give the adequate evidence with respect to the purchase of Maruti 800 car - AO made the addition of the above sum estimating the cost of the vehicle of ₹ 185,000. As before the lower authorities the assessee could not furnish any explanation with respect to the source of the fund available for purchasing the above car, no evidences are also furnished before us. Even out of the declared income in the return of an assessee as well as his wife, it could not be explained that the car was purchased from the declared source of income of the assessee. It was merely an argument made by the assessee, which is not supported by any documentary evidence - Decided against assessee. Addition of foreign tour of the minor son of the assessee - HELD THAT:- In this case, the assessee was issued notice on 3/11/2008 for giving the complete details. Further, during the course of search, the assessee was examined and he disclosed in a statement u/s 132 of the income tax act on 12/12/2016 that he has invested approximately ₹ 15 lakhs on complete renovation of the house including furniture and fixtures. Further, the statement was also corroborated when it was taken during the course of assessment proceedings on 11/12/2008. The assessee once again confirmed the same. There is no evidence of any retraction made by the assessee. Merely because the assessee has not offered the above income in the return of income, it cannot be stated that the assessee has retracted the above statement. No evidences produced before us that the statement given by the assessee during the course of search as well as during the course of assessment proceedings was because of any threat/coercion. Therefore it can be merely an argument for deletion of the addition which needs to be brushed aside - We do not find any infirmity in the orders of the lower authorities.
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2021 (9) TMI 1222
TDS u/s 194H - discount allowed to distributors/channel partners on the sale of recharge coupon vouchers and the starter kits for telecommunication services - Addition u/s 201(1) - whether the transaction of sale of recharge coupon vouchers and starter kits was done on principal to principal basis? - HELD THAT:- As in the case of TTSL [ 2015 (3) TMI 1023 - ITAT JAIPUR] followed the judgment of Bharti Airtel vs. DCIT [ 2014 (12) TMI 642 - KARNATAKA HIGH COURT] and held that the discount on sale of recharge vouchers and SIM cards by telecommunication company to its distributors did not amount to commission in terms of section 194H of the Act. Also in the case of Tata Tele Services Ltd.[ 2015 (3) TMI 1023 - ITAT JAIPUR] and Vodafone Cellular Ltd [ 2009 (4) TMI 209 - ITAT COCHIN] have also decided the issue in favour of the assessee by holding that the provisions of section 194H were not applicable to the transaction of sale of starter kits and pre-paid SIMs to distributors on principal to principal basis. Under such circumstances and taking guidance from the judgment of the Hon ble Apex Court in the case of Vegetable Products [ 1973 (1) TMI 1 - SUPREME COURT] we hold that the view favouring the assessee needs to be taken. Thus we hold that the sale of recharge voucher coupons and starter kits and the discount offered to the distributors would not attract TDS provisions u/s 194H of the Act and as such no default u/s 201(1) of the Act can be attributed to the assessee. Accordingly, the order of the Ld. CIT(A), allowing relief to the assessee, is upheld and the grounds raised by the Department are dismissed.
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2021 (9) TMI 1221
Exemption u/s 54 - denial of claim on purchase of property abroad - Scope of amendment to Act - investment made in purchasing the residential house outside India prior to the amendment to section 54 vide Finance Act, 2014 - CIT(A) allowing the benefit of exemption, placed reliance on the judgment of Leena Jugalkishor Shah v. ACIT [ 2016 (12) TMI 351 - GUJARAT HIGH COURT ] - HELD THAT:- Amendment introduced in Section 54 of the Act vide Finance Act, 2014, which mandates purchase or construction of residential house in India, is prospective in nature operational only with effect from 1st April, 2015 i.e., Assessment Year 2015-16 and it will not affect the eligibility of claim in respect of investment made outside India prior to such amendment. In the present appeal, the investment in purchase of residential house in UK was made in July, 2013 and as such the claim of exemption u/s 54 of the Act in respect of such investment is allowable. Accordingly, we find no reason to take a view different from the view taken by the Ld. CIT(A) on the issue and we uphold the same. The grounds raised by the Department are dismissed. Disallowance of expenses claimed by the assessee towards cost of improvement - HELD THAT:- Costs incurred towards stamp duty and registration of the gift in the name of the assessee was an essential pre-condition for the purpose of obtaining the legal title of the property and its further sale - charges incurred for conversion of leasehold to freehold also had to be incurred for the purpose of enhancing the sales consideration value of the property sold and, therefore, it can be safely concluded that the impugned expenditure was a legitimate cost of improvement. We are of the considered opinion that cost of improvement is of wide amplitude and it would take into its fold all kinds of expenses incurred for the improvement of the impugned property. Therefore, we set aside the order of the Ld. CIT(A) on the issue and direct the Assessing Officer to allow the claim of assessee
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2021 (9) TMI 1220
Proceedings u/s 153C - Addition of purchase price of land AND Cost of acquisition of land - Addition on the basis of the incriminating material found during the course of search or not? - Assessee argued that assessment year 2006 07 is a concluded assessment on the date of the search and no addition could have been made in the hands of the assessee in absence of any incriminating material found during the course of search - Assessment year 2006 07 - HELD THAT:- In the order of the ld AO as well as the ld CIT(A), we do not find that any incriminating material found during the course of search which even remotely shown that assessee has made a payment beyond what is recorded in her books of account for purchase of land and shown in the purchase deed of the property. The total addition made by the ld AO based on the report of the DVO. Further, the addition on account of cost of construction was also made on the basis of estimation of DVO determining the cost of construction. Hon'ble Delhi High Court in CIT Vs. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT ] categorically stated that in concluded assessment no addition could have been made in the hands of the assessee in absence of any incriminating material found during the course of search. The ld CIT(A) also called for remand report where the ld AO records that no incriminating material was found during the course of search. We delete the addition made on account of purchase price of land as well as the addition on account of cost of construction for the reason that there is absence of any incriminating material found during the course of search supporting the above addition. - Decided in favour of assessee. Addition based on the DVO s report - Assessment Year 2010-11 - HELD THAT:- Reference to learned DVO was made without first verifying the cost of construction shown by the assessee and without first making a specific observation that assessing officer does not have any confidence in the cost of construction submitted by the assessee. Unless the assessee is found to have incurred some additional expenditure which are not recorded in the books of accounts or for which source of withdrawal from the bank or the cash available with the assessee is found to be not reliable, then only the learned assessing officer would have been justified in referring the matter to the learned DVO. This is also the dictum of the decision relied upon by the learned authorised representative. No reason to sustain the addition made by the learned assessing officer of difference in house property cost of construction. Accordingly, the orders of the lower authorities are reversed and the appeal of the assessee is allowed.
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2021 (9) TMI 1219
TDS u/s 194A - interest payment to APIIC[State Government undertaking] - 2nd round of litigation - whether the APIIC is covered u/sec. 194A(3)(iii)(b) of Act - Commissioner deleted the addition made by the AO u/sec. 201(1) 201(1A) of the Act by accepting the claim of the Assessee - HELD THAT:- APIIC, the payee company has been incorporated under the Companies Act, 1966 holding of which is entirely held by the Government of Andhra Pradesh and, therefore, the provisions of section 194(A)(1) of the Act are not applicable qua interest paid/payable by the Assessee to the said organization APIIC as per section 194(3)(iii)(f) of the Act. Considering the peculiar facts and circumstances in totality, we are in concurrence with the conclusion of the ld. Commissioner for covering the APIIC u/sec. 194A(3)(iii)(f) of the Act and to the effect as well that APIIC is an organization exempted u/sec. 11 of the Act having filed NIL taxable income, is not liable to tax and, therefore, deduction of tax at source qua APIIC is not attracted. Consequently, the conclusion drawn by the ld. Commissioner, whereby deleted the addition made by the AO u/sec. 201(1) 201(1A) of the Act is liable to be affirmed. Whether APIIC is a financial corporation or not within the meaning of section 194A(3)(iii)(b)? - whether the ld. Commissioner was empowered to adjudicate the issue which was not the subject matter of the appeal and/or the original claim of the Assessee? - HELD THAT:- APIIC is also exempt from TDS provisions as APIIC is held by GoAP and is the State Government undertaking thereby covered as per section 194(3)(iii)(f) of the Act, however, this fact was not considered by the ld. Commissioner. In appeal before the Hon'ble Tribunal in the first round of litigation, the said fact was not brought to the knowledge of the Bench and therefore the same remained un-noticed, which resulted into remanding the issue to the file of the AO by the Hon'ble Tribunal to find out the applicability of section 194(3)(iii)(b) instead of section 194(3)(iii)(f) of the Act. Therefore, all sequences resulted into multi and prolonged litigations. However as the controversy has been settled by the Ld. Commissioner while considering and allowing the alternative claim of the Assessee raised by ground no. 7 wherein it was claimed that without prejudice, the AO failed to consider the submission of the appellant that the interest paid to APIIC in which all the shares are held by the Government of Andhra Pradesh is an entity covered u/s 194A(3)(iii)(f) is exempted from TDS vide notification No. SO 3489, dated 22/10/1970, therefore there is no need to adjudicate ground Nos. 2 specifically as the same become infructuous hence dismissed.
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2021 (9) TMI 1218
Undisclosed investment - Addition made on the basis of two seized documents - HELD THAT:- AO has made the above addition in the hands of the assessee on protective basis. He further noted that as the documents has been found from the assessee s premises and are in handwriting of the assessee, substantive addition is deserves to be made in the hands of the assessee - as the complete amount involved in those documents covers the disclosure made by the assessee , which is in excess of the sum declared by the assessee, the impugned amount of income comprised in the seized documents subsumed in the amount of the total disclosure - addition was deleted. DR could not show us any reason to deviate from him. Accordingly, Ground No. 1 of the appeal is dismissed. Undisclosed income - addition arises from the disclosure made by Shri Rajiv Gupta on behalf of the entire group - main reason for deleting the addition was that overall disclosure was given on estimated basis and on actual subsequent analysis, it has been found to be on the lower side than what was disclosed - HELD THAT:- AO did not investigate that as there is any further income over and above the income disclosed sum by the assessee in his return of income such addition could not have been made. DR could not show any infirmity in the order of the ld CIT(A). We also find Mr. Rajiv Gupta disclosed ₹ 10 crores in the hands of the assessee which was found to be actually only ₹ 9,33,11,511/- which was disclosed by the assessee in his return of income. Therefore, to make any further addition same should have been substantiated by the ld AO with evidences after proper investigation and putting cogent material on record with the disclosure made by the assessee holding that it is not ₹ 9.33 crores but ₹ 10 crores. Such effort has not been made. No evidence is recorded in the assessment order as well as before the ld CIT(A). In view of this, we do not find any infirmity in deleting the above addition. Unaccounted cash - seized documents about money received by him on account of sale of property - HELD THAT:- We also found that four different companies have accepted the receipt in cash towards sale consideration of the property which is duly reflected in their books of account and therefore, addition has rightly been deleted by the ld CIT(A). With respect to cash found it is subsumed by the overall disclosure. Further, the ld AO failed to telescopic the above addition which was given by the ld CIT (A). Accordingly, we confirm the order of the ld CIT(A) deleting the above addition. - Decided against revenue.
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2021 (9) TMI 1217
Unexplained receipts u/s 68 - Sum received from 5 farmers and the balance sum received from the two directors of the assessee company - CIT-A deleted the addition - HELD THAT:- Assessee has discharged initial onus cast upon him to prove the identity of the depositors, creditworthiness, and the genuineness of the transaction. The learned assessing officer did not make any enquiry on the evidences filed by the assessee and further he has not also acted upon the request of the assessee for examining all the agriculturist. In view of this, we do not find any infirmity in the order of the learned CIT-A deleting the addition made in the hands of the assessee with respect to 5 agriculturists. Addition with respect to the 2 directors of the assessee company itself - AO carried out the investigation and after that the learned AO has accepted that the amount invested by the directors of the company that it satisfies the condition of proving the identity, creditworthiness, and genuineness. In view of this, we do not find any reason to upset the order of the learned CIT A with respect to the above investment made by Mr. Gaurav Aseem, director of the company in the share capital of the company. With respect to another director Mr. Kalwa Singh share capital - this director was holding at the beginning of the year the share capital to the extent of ₹ 238,09,800. The share capital in the earlier years issued in the name of the same director has been accepted by the learned assessing officer. The assessee also provided with the permanent account number of the above director, confirmation and also the bank account of the director as well as the certificate from the bank with respect to the above share capital issued. Assessee has also produced the balance sheet of the director wherein as on 31st of March 2012 the shares in the name of the company amounting to ₹ 79,500,000 are outstanding. Therefore, it is apparent that assessee has discharged its onus of proving the identity, creditworthiness, and genuineness of the transactions. - Decided in favour of assessee.
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2021 (9) TMI 1216
Addition u/s 14A r.w.r.8D - CIT(A) deleted the addition by following the decision of his predecessor in assessee s own case in the preceding years - HELD THAT:- We find, the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee s own case in various assessment years starting from A.Y. 2000-01 and onwards. We find, the Hon ble Delhi High Court [ 2020 (3) TMI 507 - DELHI HIGH COURT] has dismissed the appeal filed by the Revenue in assessee s own case where the Tribunal had held that in view of the provisions of section 44 r.w. the First Schedule, the provisions of section 14A are to be excluded in relation to computation of income of an insurance company. As already decided the issue in favour of the assessee, therefore, in absence of any contrary material brought to our notice, the order of the CIT(A) on this issue is upheld and the ground raised by the Revenue is dismissed. 50% disallowance on account of expenses incurred on Guest House made by the AO - expenditure on the maintenance and upkeep of the guest houses - HELD THAT:- CIT(A), following the order for preceding assessment year i.e., 2014-15, deleted the disallowances. We do not find any infirmity in the order of the CIT(A) on this issue. We find, the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee s own case. We find, the Tribunal [ 2019 (4) TMI 959 - ITAT DELHI] has dismissed the appeal filed by the Revenue wherein the CIT(A) had deleted 50% of disallowance on account of guest houses - Decided against revenue. Addition being disallowance u/s 14A for the purpose of 115 JB - HELD THAT:- We find, the AO, in the instant case, made addition which was disallowed by him u/s 14A of the Act for computation of the book profit u/s 115JB of the IT Act. We find, the ld.CIT(A), following the orders of his predecessor, deleted the addition being the disallowance u/s 14A of the Act made by the AO for the purpose of section 115JB of the Act. We do not find any infirmity in the order of the CIT(A) on this issue. We find, in the case of Shobha Developers Ltd.[ 2021 (1) TMI 378 - KARNATAKA HIGH COURT] has held that disallowance made u/s 14A could not be added to book profit of the assessee u/s 115JB - Decided against revenue.
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2021 (9) TMI 1215
Exemption u/s 54 - whether the sale agreement entered into by the assessee on 08.04.2015 is genuine or not? - HELD THAT:- As gone through the sale agreement, which do not bear the signature of the assessee and also translated copy of the sale agreement into English dated 08.04.2015 and found that nowhere in the sale agreement it is mentioned that the possession was given to the assessee. In the alleged letter filed by the assessee that the amount was paid and possession was handed over to the assessee, neither date is mentioned nor there is signature from the sellers of the property. As per the sale deed dated 04.07.2016, the entire amount was received by the sellers on 04.07.2016 and possession was also handed over to the assessee on 04.07.2016. Under the above facts and circumstances, we are of the opinion that the sale agreement dated 08.04.2015 is not genuine. Accordingly, the benefits under section 54 of the Act cannot be granted to the assessee for the main reason that the sale deed clearly mentions that the entire sale consideration was received on the same day and possession was also handed over. - Decided against assessee.
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2021 (9) TMI 1214
Penalty u/s. 271(1)(c) - assessee has purchased a vacant land for which he is not entitled for deduction u/s. 54F - HELD THAT:- The assessee has sold a property and purchased another property and claimed deduction u/s. 54F - AO has called the details of the purchased property. After examining the sale deed, the AO noticed that the house purchased by the assessee is not a residential house and it is only for the purpose of for running the industry and other connected activities and therefore, the very nature of the property purchased by the assessee is only industrial property not a residential house and levied penalty u/s. 271(1)(c) - It is a fact that the assessee has not purchased a residential house. It is a bonafide claim of the assessee that on sale of the property he can purchase another property, but, the fact remains that another property which is supposed to be purchased only residential house and not an industrial property. Therefore, the assessee is not entitled for the deduction u/s. 54. So far as penalty is concerned, the assessee simply made a claim, which is not acceptable to the A.O, penalty cannot be levied u/s. 271(1)(c) of the Act automatically as has been held in the case of CIT vs. Reliance Petroproducts (P) Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] , wherein, explained that whether a claim simply not accepted by the AO., it does not mean that it is a concealment of income or furnishing of inaccurate particulars of income so that penalty can be levied - following the judgment of the Hon ble Supreme Court, we are of the opinion that the assessee has neither concealed the income nor furnished inaccurate particulars in this case and therefore, the penalty levied by the A.O and confirmed by the CIT(A) is not correct. In view of the above, we cancel the penalty levied under section 271(1)(c) of the Act by the AO. - Decided in favour of assessee.
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2021 (9) TMI 1213
Addition u/s 41(1) - benefit by way of remission or cessation of liability - HELD THAT:- There is no dispute that there was a liability in existence in the books of the assessee. The AO has to go according to the books of accounts of the assessee, while computing the income of the assessee but not as per the books of accounts of the creditor. As per section 41(1) of the Act any allowance or deduction made in the assessment year in respect of loss or expenditure or trading liability incurred by the assessee and subsequently obtained the benefit by way of remission or cessation, the same required to be taxed under the profits and gains of the business of income of that person of the previous year The expression loss or expenditure or some benefit in respect of any such trading liability by any unilateral act by the first mentioned person under clause(a) or the successor in business under clause (b) of section 41(1) of the Act. In the instant case, the first mentioned person is the assessee, but not the creditor. In the instant case, the assessee has not written off the liability, though the creditor has written off the debt. Though the debtor has no legal right to enforce the debt, still the assessee is having liability to make the payment, till the assessee writes off the debt. In these facts and circumstances there is no case for making addition u/s 41(1) of the Act. ITAT Kolkata in the case of M/s Sonodyne Television Co. Ltd [ 2018 (1) TMI 1454 - ITAT KOLKATA ] dismissed the appeal of the revenue on similar fact - There is no case for invoking the provision u/s 41(1) in the case of the assessee. Accordingly, appeal of the assessee is allowed.
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2021 (9) TMI 1212
Addition u/s 68 - Addition pertaining to cash deposits in bank account - HELD THAT:- No dispute that the cash deposits were made in the bank account and there were no cash credits in the books of accounts. AO did not bring any material to show that the assessee has brought cash credits in the books of accounts for which the source was not explained. As per section 68, cash credits made in the books of accounts for which the assessee could not explain the source to the satisfaction of the AO, required to be brought to tax u/s 68 of the Act. In the instant case, the deposits were made in the bank account. As per the settled issue, the bank deposits required to be made addition u/s 69 but not u/s 68 of the Act. The bank passbook or bank statement does not amount to the books of accounts of the assessee. As in the case of Babbal Bhatia [ 2018 (6) TMI 1030 - ITAT DELHI] held that the bank is different from books of accounts of the assessee and credit in the bank account of the assessee cannot be construed as credit in the books of accounts of the assessee - Tribunal in the case of Asha Sanghavi [ 2019 (11) TMI 868 - ITAT VISAKHAPATNAM] has taken similar view and held that cash deposits made in the bank account cannot be brought to tax u/s 68. In the instant case, there is no dispute that the deposits were made in the bank account and there were no entries in the books of accounts. The deposits made in Bank account are not permissible to tax u/s 68 - addition made by the AO u/s 68 in respect of cash deposits made in the bank are unsustainable, accordingly deleted. Appeal of the assessee is allowed.
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2021 (9) TMI 1211
Revision u/s 263 by CIT - AO did not make any reference to the facts that transpired in the course of assessment proceedings and make a reference to those facts in the assessment order - HELD THAT:- AO accepting the return of income does not make any reference to any of the arguments put forward on behalf of the assessee and has merely accepted the return of income filed by the assessee -The entire details were filed and the order itself indicates that it can be inferred that the Assessing Officer not only made enquiries, but satisfied himself with the assessee's replies furnished from time to time in support of its stand. As decided in Infosys Technologies Ltd [ 2012 (1) TMI 76 - KARNATAKA HIGH COURT ] if the order of the AO does not disclose the basis of his conclusion, then jurisdiction u/s. 263 of the Act can be ignored. In the present case, the order of the AO is silent on his conclusions on issues raised by him in the notice u/s. 143(2) of the Act and merely accepted the returned income. Therefore, the CIT was justified in directing the AO to examine the issues that were set out for limited scrutiny under CASS afresh. The assessee is always at liberty to show as to how no adverse inference or addition is called for. We, therefore, confirm the order of the CIT. - Decided against assessee.
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2021 (9) TMI 1210
Addition made by the CPC u/s 143(1) - disallowance of employees contribution to PF and ESI while processing the return of income u/s 143(1) - HELD THAT:- There is no dispute that the return was processed u/s 143(1) and there was no scrutiny assessment made u/s 143(3) of the act. It is settled issue that no debatable issues are permitted to be made adjustments u/s 143(1) of the Act. In the instant case, what was added in the intimation u/s 143(1) was the employees contribution to PF and ESI. Hon ble Madras High Court in the case of Redington (India) Ltd. [ 2020 (12) TMI 516 - MADRAS HIGH COURT] held that employees contribution to PF and ESI is also allowable deduction if the same is paid before the due date for filing the return of income. This Tribunal in the case of Andhra Trade Development Corporation [ 2021 (5) TMI 263 - ITAT VISAKHAPATNAM] held that debatable issues are not permitted to be made adjustments while processing the return of income u/s 143(1) of the Act - we hold that the addition made by the CPC u/s 143(1) is unsustainable, accordingly deleted. The appeal of the assessee is allowed. Employees contribution to PF and ESI is allowable deduction if the same is paid before the due date of filing the return of income. See M/S. EASTERN POWER DISTRIBUTION COMPANY OF A.P. LTD. AND VICA-VERSA [ 2016 (9) TMI 1040 - ITAT VISAKHAPATNAM] - Decided in favour of assessee.
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2021 (9) TMI 1205
Disallowance out of Business and Promotion expenses - disallowing payments made towards conferences and promotion of products under the head Business and Promotion expenses u/s 37 - Scope of MCI regulation - as per revenue expenses incurred by the assessee were in violation of the CBDT Circular No. 5/2012, dated 01.08.2012 which was based on the notification of the Medical Council of India (MCI) - expenses wholly and exclusively incurred by a pharmaceutical company or a health sector industry - HELD THAT:- Enlargement of the scope of MCI regulation to the pharmaceutical companies or other health sector industry by the CBDT is de hors any enabling provision either under the Income Tax Act or under the Indian Medical Council Regulations. In our considered view, though the CBDT can tone down the rigours of law in order to ensure a fair enforcement of the provisions by issuing circulars for clarifying the statutory provisions, however, it is divested of its powers to create a new impairment adverse to an assessee, or to a class of assesses, without any sanction or authority of law. We find that the aspect that the CBDT is divested of its powers to enlarge the scope of MCI regulation by extending the same to pharmaceutical companies without any enabling provision either under the Income tax Act or the Indian Medical Regulations was also deliberated upon by the Tribunal in the case of Aristo Pharmaceuticals Pvt. ltd. Vs. ACIT . [ 2018 (7) TMI 1883 - ITAT MUMBAI] . The expenditure incurred by the assessee towards, Bangalore Orthopaedic Society Conference for practical use of products and Payments made towards travelling expense of doctors for attending the workshops organized at France a/w the expenditure incurred towards their stay, honorarium fees would not be hit by the Explanation to Sec. 37 - A.O was not justified in disallowing the aforesaid expenses that were incurred by the assessee wholly and exclusively in the normal course of its business by bringing the same within the realm of the Explanation to Sec. 37(1) - Decided in favour of assessee.
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2021 (9) TMI 1204
Exemption u/s 11 - addition to total income being accumulation pertaining to FY 2003-04 - benefit under either section 11 of the Act or section 10(23C) - HELD THAT:- The provision of section 11 and 10(23C) are two parallel regimes which do not overlap with each other. We therefore, find substantial merit in the case made out by the appellant that for examining utilization period of amount set aside and accumulated in excess of 15% pertaining to FY 2003-04 when it was not registered u/s 10(23C) of the Act will have to be examined only as per provision of section 11(3) of the Act and not as per provision of section 10(23C). The legislature in its wisdom has vide Finance Act, 2020 has now eliminated the scope of two parallel regimes as noted above. It is now very clearly provided that a trust can only obtained benefit of under either section 11 of the Act or section 10(23C) of the Act. In this regard, initially section 11(7) was inserted by Finance (No. 2) Act 2014 w.e.f 01-04-2015 and now first and second proviso s have been inserted to section 11(7) by Finance Act 2020 w.e.f 01-06-2020. We are presently concern with a case for AY 2009-10 and the surplus pertains to FY 2009-10 when the appellant was not registered under provision of section 10(23C). The subsequent insertion of section 11(7) and its further amendment are though not applicable but are supportive to our interpretation that earlier provisions of sections 11 and 10(23C) were two parallel regimes which operated independently in their respective realms. As a result, the addition made by the AO is deleted. - Decided in favour of assessee.
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2021 (9) TMI 1203
Rejection of books of account - Computation of the income by invoking provisions of section 145(3) - as per CIT-A AO is justified in rejecting the book results and computing the income by invoking provisions of section 145(3) - HELD THAT:- We find no infirmity in the action of the CIT(A) in confirming the order of the AO by holding that appellant did not produce any convincing explanation with regard to non-production of all the material required for the purpose computation of income. Therefore, we confirm the order of the CIT(A) and dismiss the grounds raised by the assessee on this issue. Rejecting the loss claimed - HELD THAT:- CIT(A)'s reasoning by considering the reconstructed trading account is proper and we do not find any reason to interfere with decision of CIT(A). Accordingly, we uphold the order of the CIT(A) and dismiss the ground. Addition made towards income on speculative business - CIT(A) deleted the same observing that since the said amount already brought into the constructed trading account and decided to ignore the resultant loss, the question with regard to head of that income is only academic interest - HELD THAT:- We are in agreement with the CIT(A)'s observations and, therefore, the ground raised by the revenue is dismissed on this issue.
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2021 (9) TMI 1200
Disallowance u/s. 36(1)(iii) - interest disallowance qua advances made to the assessee's associated entities - business expediency - HELD THAT:- As funds sanctioned by the bank were utilized in other group companies on the direction of the holding company. These funds were not utilized for any purpose of the object of the assessee company. Hence, the exclusive utilisation of these funds were not for the purpose of the assessee's business and the expenditure of interest is not for the purpose of assessee's business and clearly for the purpose of other group companies. Coming to the question of business expediency in this transaction, any act carried out for the purpose of its own business or carried out for the benefit of the subsidiary as a share holder can be referred to as business expediency. In the given case, the assessee is in the business of consultancy and no business commitment to fund other sister concern and the action of the assessee to fund step down subsidiary will not fit into representing any share holder commitment. The actual share holders are the holding company, any holding company diverting its own funds to the subsidiaries will fit into business expediency as held in the case of SA Builders [ 2006 (12) TMI 82 - SUPREME COURT ] The assessee company was used as a source for funding the step down subsidiaries and the cost should also be transferred to the subsidiary who has utilized the funds and the burden of cost of funds on the assessee is unwarranted, may be beneficial to the overall group but not on the assessee. It clearly indicates that the transaction of funding the sister companies are not exclusively for the purpose of assessee's business. Therefore, the ground raised by the assessee is dismissed.
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2021 (9) TMI 1199
Reopening of assessment u/s 147 - unexplained cash deposits - as contended AO had failed to discharge burden of proof with regard to alleged cash transactions reflected in the bank accounts of the assessee - DR submitted that the assessee has not carried any business activity for the past 10 years, but, the cash has been deposited into the assessee's bank account - HELD THAT:- As per the findings of the AO, the assessee has not carried out any business activity and has deposited cash in his bank account. DR also contended that the CIT(A) allowed the appeal of the assessee without addressing the issues raised by the AO in his order. Therefore, considering the totality of the case of the case, we remit the issue back to the file of the AO with a direction to decide the appeal taking into consideration the observations of the CIT(A) and contentions of the assessee before the CIT(A) as well as before him in accordance with law after providing reasonable opportunity of hearing to the assessee - Appeal of the revenue is allowed for statistical purposes.
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2021 (9) TMI 1196
Proportionate deduction u/s. 80IB - deduction proportionately on all flats except these 7 flats where 1500 s.ft. exceeded - HELD THAT:- Before giving direction to AO to allow proportionate deduction u/s. 80IB, the CIT(A) relied on the decision of the coordinate bench in the case of M/s. Kura Homes Pvt. Ltd. [ 2012 (11) TMI 466 - ITAT HYDERABAD] - Therefore, the decision of the CIT(A) is in consonance with the decision of the coordinate bench, hence, we do not find any error in the order of the CIT(A) and upholding the same, we dismiss the grounds raised by both the assessee and revenue on this issue.
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2021 (9) TMI 1192
Disallowance of expenditure u/s 40(a)(ia) - expenditure under the head, commission and painting was subject to TDS - HELD THAT:- Assessee has deducted the TDS on payment of commission and on painting works. The assessee has maintained the regular books of accounts and produced before the AO. AO did not make out a case that each payment made under various heads i.e. salaries, electrical charges-flats, NMR workers etc. to each person was more than the prescribed limit for deduction of TDS. AO did not identify each payment made to the recipient and the quantum of TDS that is required to be deducted. There is no material to suggest that the payments made under the heads salaries, electrical charges-flats, NMR workers etc. to each individual was more than the limit prescribed under the act for deduction of TDS. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. Appeal of the revenue on this ground is dismissed. Interest payment paid to Vasantha Vihar Construction India Pvt. Ltd.(VVCIPL) - AO found that assessee had borrowed the sums for interest and paid the interest on the loans taken by the him - HELD THAT:- In the instant case, there is no doubt that the assessee had incurred the interest expenditure and also received the equal amount of interest from VVCIPL, which was offered to tax. Thus, there was no excess expenditure incurred by the assess on account of amounts given to VVCIPL and hence no addition is called for. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. Cash deposits made during demonetization period, which was added back to income u/s 69A - HELD THAT:- CIT(A) observed that the assessee is maintaining regular books of accounts and the deposits were made out of the book balances and therefore, following the decision of Karthik Constructions [ 2018 (3) TMI 39 - ITAT MUMBAI] the Ld.CIT(A) held that there is no case for making the addition, accordingly deleted the addition. Deposits made in respect of proprietary concern - HELD THAT:- Total cash deposits in respect of Housing Development business for the whole year and the entire cash deposits made in the bank account were sourced from the cash book or books of accounts maintained by the assessee. Therefore, the entire cash deposits stand explained in the books of accounts. DR during the appeal hearing did not place any material to controvert the findings of the Ld.CIT(A) that the cash deposits were made out of balances available in books of accounts. Since the assessee is maintaining regular books of accounts and no defects were noticed in the books of accounts and the cash deposits were sourced from the books of accounts, we find no reason to interfere with the order of the Ld.CIT(A) and the same is upheld. In the instant case, there is no dispute that the assessee is running Petrol and Diesel retail outlet and he is the dealer of HPCL and the Govt. of India has permitted during the demonetization period to accept the specified bank notes in the case of petrol bunks. There is no dispute that the cash deposits made were relatable to sales and duly accounted in the books of accounts and the same were deposited in the bank account. The Ld.DR did not place any material to show that the source of cash deposits were unexplained. As per section 69A if the assessee is found to be the owner of the money, bullion, jewellery and the same was not recorded in the books of accounts for which the source was not explained the same required to be brought to tax u/s 69A. In the case of the assessee the source of deposit was sales and the same was recoded in the books of accounts. Therefore, there is no case for making the addition u/s 69A. - Decided against revenue.
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Corporate Laws
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2021 (9) TMI 1202
Seeking amendment in the scheme of amalgamation - Rules 11 and 32 of National Company Law Tribunal Rules, 2016 - HELD THAT:- A scheme of arrangement approved between or among companies is required to comply with the provisions of Sections 230-232 of the Act. On a perusal of the Ministry of Corporate Affairs (MCA) Circular dated 21st August 2019, it is clear that the companies may choose the appointed date of the merger/amalgamation based on occurrence of an event, which is relevant to the merger between the companies. This would allow the companies concerned to function independently till such event is actually materialised. The circular further clarifies that the term appointed date used in Section 232(6) shall be deemed to be the acquisition date for the purpose of conforming to Indian Accounting Standards 103 dealing with business combinations. Since the applicant want to amend the CA (CAA) based on the clarificatory circular of Ministry of Corporate Affairs and also amend the reliefs sought therein, the reliefs sought for by the applicant may be granted - Application allowed.
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Insolvency & Bankruptcy
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2021 (9) TMI 1209
Seeking direction against admission of claim as per the FORM C - onus to prove claim - seeking to update the Committee of Creditors voting share ratio after admitting the claim of the Applicant - Section 60 (5) of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is observed that the Applicant is conveniently trying to escape from the onus of proving its claim rather than expecting the Respondent / RP to the same without any application of mind, which is a clear mis-interpretation of the provisions of Section 18 of the Code. The RP is duty bound to apply his mind while collating and verifying the information to justify the claim and where the said claim is not supported with documentary evidences, the RP ought to refrain from admitting such claims. The Applicant fails to appreciate that an IRP/RP is not a mere rubber stamp to keep admitting claims without any verifications. Form the facts of the case it is clear that RP has conscientiously reached at conclusion not admitting partial claim of the Respondent which was not supported by documents - Application rejected.
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2021 (9) TMI 1208
Seeking liquidation of Corporate Debtor - Section 33(4) of the Insolvency Bankruptcy Code, 2016 - HELD THAT:- In the Present case contention of Applicant is that Total outstanding to the tune of ₹ 87,39,196/- were not admitted, instead only ₹ 70,00,000/- were admitted. Applicant also plead that they were not aware about this fact that there claim were not admitted in totality - When the resolution Plan is approved with ₹ 70,00,000/- out of ₹ 87,39,196/- of Applicants claim, now at this juncture it can t be reverse by virtue of Section 32A of the IBC, there could be no question as to the successful Resolution Applicant, being saddled with the outstanding dues. Section 32A is retrospective in operation. The accepting and modifying terms and conditions laid down in the Resolution Plan fall within the domain of commercial wisdom of the CoC and this Adjudicating Authority is not expected to substitute its view in such Resolution plan approved by the CoC. Hence such prayer cannot be allowed and is rejected. Application rejected.
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2021 (9) TMI 1207
Preferential transaction or not - transfer of amount by Corporate Debtor - Section 43 (1) and 44 of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Applicant has failed to provide substantial proof to term the transaction as the preferential transaction. Moreover, the amount paid to Respondent No. 1 was a mere refund of amount that was advanced to M/s Mind Estates Private Limited for booking of office premises for the Corporate Debtor Company even before the initiation of CIRP proceedings. Respondent No. 1 had ordinarily been providing loans and getting repaid which proves that the Corporate Debtor Company and the Respondent No. 1 were into business transactions on regular basis - the Resolution Professional has himself not made out his case and the transaction in question fails to be that of a Preferential Transaction, having been made in Ordinary course of business. There was no intent to deceive the company through this transaction nor the Corporate debtor Company had any other ulterior motive other than merely re-paying the Respondent her advanced amount for booking of office premise with M/s Mind Estates Private Limited - Moreover, the Applicant has failed to conduct Forensic Audit which he was supposed to do, to bring out the relevant facts for moving this Application forward. Application allowed.
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2021 (9) TMI 1206
Permission for exclusion of a period of 146 days pursuant to the stay granted by the Hon ble NCLAT - stay was granted on the constitution of CoC so that it could finalise the settlement - HELD THAT:- There aredirections for keeping the Corporate Debtor as a going concern . Therefore, there are no strength in the argument of the Ld. Counsel of Appellant that the orders/directors are only contained in this paragraph which is reproduced above and it does not contain reference to stay for constitution of CoC. Respondent No. 1 (Resolution Professional) has submitted that the IRP received the order dated 23.7.2020 of Hon ble NCLAT on 27.7.2020 from ICICI Bank, which is member of the CoC. Thereafter, as per directions contained in this order, the IRP constituted the CoC on 29.7.2020 - the order passed by the Adjudicating Authority regarding exclusion of period from 4.3.2020 till 27.7.2020 (146 days) pursuant to the stay imposed by Hon ble NCLAT is in accordance with law and requires no intervention. Appeal dismissed.
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2021 (9) TMI 1195
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Applicant has established the existence of debt and default on the part of the Respondent and the Respondent has not availed the opportunities provided by this Tribunal to defend the arguments made by the Applicant. This Tribunal admits this petition and initiates CIRP on the Respondent with immediate effect. Application allowed - moratorium declared.
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2021 (9) TMI 1194
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - service of demand notice - HELD THAT:- The Applicant filed the present Application under section 9 of IBC, 2016 and served the copy of this application via speed post to the registered office, site office and the addresses of directors of corporate debtor which was returned undelivered. The petition was also served at the registered email address of the corporate debtor as per the master data which was duly delivered to the corporate debtor as it dint bounce back. The service affidavits have been duly filed. Considering that notice was sent at the registered address of the company as reflected on the MCA website and the same was returned with the remark Addressee left without instructions , shall be considered served, because the same can be manipulated by the corporate debtor - The service of Section 9 is complete. Moreover, the email service is complete. The corporate debtor in spite of service did not appear, neither any reply filed. Hence, the corporate debtor has been proceeded ex-parte vide order dated 19.01.2020 of the Hon'ble Bench, NCLT. As per Form V, the total debt outstanding is ₹ 4,66,285/-, which includes the principal amount of ₹ 4,01,970/- along with interest @ 24% per annum of ₹ 64,315/- till date of filling of application which is due and payable by the corporate debtor to the applicant - The date of default is 12.09.2019 and the present application is filed on 28.02.2020. 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 Applicant has filed an affidavit in compliance of section 9(3)(b).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 - the applicant is entitled to claim its dues, establishing the default in payment of the operational debt. Moreover, the contentions of the applicant have remained uncontroverted and undisputed by the corporate debtor proving the debt becoming due. Hence, the application is admitted. Application admitted - moratorium declared.
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Service Tax
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2021 (9) TMI 1201
CENVAT Credit - input services - payment of service tax by different person other than who was liable to pay - contention of the revenue is that as per Proviso to Rule 4 (7) of Cenvat Credit Rules, 2004 credit of service tax paid by the recipient shall be allowed only if the service tax is paid by the recipient as a person liable to pay the service tax - HELD THAT:- There is no dispute that the service tax was indeed paid by the appellant being a service recipient even though it was supposed to be paid by the service provider. Irrespective of the person whether it is service recipient or service provider is liable to pay the service tax but so long the service tax was admittedly paid even by the recipient of the service, the Cenvat credit cannot be denied. This issue is no longer res Integra as this tribunal in following judgments for categorically hold that even though the portion of the service tax which was supposed to be paid by the some other person, so long the service tax was paid, the credit of said service tax cannot be denied to the recipient of service. This issue is no longer res-Integra as the same has been settled in favour of the assessee - Appeal allowed - decided in favor of appellant.
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Central Excise
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2021 (9) TMI 1232
Recovery of Interest and penalty - Rrejection of SVLDRS-1 - unquatified amount in arrears - no interest or penalty came to be adjudicated before introduction of the Scheme. Infact, no adjudication notice was issued in that regard - HELD THAT:- Once a valid settlement is reached, then, by way of a consequence provided under Section 129(1)(a) of the Scheme no interest or penalty liability may exist. Consequently, for the purposes of Sections 121(1)(c), 123(e), 124(1)(c) and 125(1)(f) also, the amount in arrears would be referable only to duty liability outstanding and not to interest or penalty liability, where only that liability may exist. If no amount of the Central Excise duty or Service Tax was due on the date of filing the declaration on SVLDRS-1, the fact that interest or penalty alone may have been claimed on that date, may not give rise to an eligibility under the Scheme. Here, admittedly, the entire Central Excise duty demand stood satisfied on 11.09.2018 and the entire Service Tax demand stood satisfied on 13.06.2019. In the present case, though the petitioner no.1 had deposited the entire duty demand, however, on its own showing, there did not exist any adjudication order with respect to the same, let alone any demand of interest and/or penalty - this is also not a case under Section 123(c) of the Scheme, inasmuch as, the petitioner no.1 does not contend that the amount of penalty and interest had ever been quantified in writing, by any means. The procedure i.e. manner of filling up the statutory Form SVLDRS-1 or the explanations furnished cannot create any right to the relief claimed that otherwise does not exist under the Scheme. Even if there were any doubt in that regard, undisputedly according to the petitioners themselves, no show cause notice came to be issued to them before the cut off date 30 June 2019 to confirm, either any amount of interest or penalty. Those amounts were otherwise never quantified in writing either by any statutory authority or the petitioners. In view of the above reasons, the first submission advanced by learned counsel for the petitioners cannot be accepted. For the same reasons, no recoveries are possible to be made pursuant to any determination made under the Scheme Regarding recovery notices issued - HELD THAT:- before any recovery of interest or penalty may be enforced against the petitioners it would have to be first adjudicated. Consequently, the communications dated 17.03.2020 and 07.04.2020 issued by respondent no.6 are found to be wanting in jurisdiction and wholly pre-mature. Any amount that may have been recovered pursuant to those communications may be refunded within a period of one month from today. Petition allowed in part.
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2021 (9) TMI 1198
CENVAT Credit - input services - common input service for taxable as well as exempt units - whether the appellant in their Koshamba Unit is eligible for credit only proportion of the common input service attributed to the said unit only and they are not entitle for the Cenvat credit to the proportion attributed to Jambusar Unit? - Rule 7(d) of Cenvat Credit Rules, 2004 - HELD THAT:- Reliance placed in the case of GLOSTER CABLES LTD. UNIT I VERSUS COMMISSIONER OF CENTRAL TAX, MEDCHAL COMMISSIONERATE, [ 2018 (5) TMI 660 - CESTAT HYDERABAD] where it was held that the assessee has not violated the CENVAT Credit Rules as they existed during the period by not distributing the credit of Service Tax for common services between two Units. It is settled that even though there is a provision for proportionate distribution of Cenvat Credit Rule 7(d) of Cenvat Credit Rule, 2004 during the relevant period but as per the interpretation it was held that since the word may was there in the Rule which was substituted with word shall from the amendment in 2006, it was option for the Assessee either to avail the entire credit in one unit or distribute the same proportionately to different unit, therefore even if the appellant have availed the Cenvat Credit in respect of common input service in one unit only, the same is not in correct or illegal. The credit is allowed - appeal allowed - decided in favor of appellant.
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2021 (9) TMI 1197
CENVAT Credit - duty paying documents - bill of entry which is though in the name of the Head Office but as per the appellant the goods were received in the factory of Silvasa Unit - credit is denied on the ground that since the bill of entry is not in the name of Silvasa Unit and the appellant could not establish the receipt/consumption of the inputs in the factory of Silvasa - HELD THAT:- Even though the bill of entry is bearing the name and address of the Head office the only criteria to be satisfied is that the goods under the said bill of entry has been received by a unit of the appellant company and the same is used by in the manufacture . Therefore, on the ground of the bill of entry bearing in the name of Head office, credit cannot be denied. As regard the receipt and use of the goods in the appellant s factory, it is found that the adjudicating authority as well as the commissioner (Appeals) given the finding that the appellant could not satisfy the Audit Officer with the documents regarding receipt and use of the goods. I completely disagree with the adjudicating authority for the reason that once the show cause notice was issued, it is the adjudicating authority to satisfy himself that whether the charge made in the show cause notice is established or not. He cannot depend on the Audit Officers view otherwise whole purpose of adjudication will be of no use. As submitted by the Learned Counsel and referred to the various documents that the documents were produced before the adjudicating authority it was incumbent on the adjudicating authority to verify those documents and give an independent finding without referring to the objection raised by the Audit Officer which the adjudicating authority has filed to do so - Since, all the documents are not produced and verification was not done at the adjudication stage the only option left is to remand the matter to the adjudicating authority. Appeal allowed by way of remand.
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2021 (9) TMI 1193
CENVAT Credit - input services - Outward transportation of Hazardous Waste - waste transported from the factory to the M/S Satyen Flourine Industires and Gujarat Paper Mills Association who is supposed to handle the Hazardous waste - transportation cost for disposal of Hazardous waste, borne by the appellant as per the clause in the tri- parte agreement - HELD THAT:- Both the Lower Authorities have denied the Cenvat Credit on Outward Transportation of Hazardous waste relying on Hon ble Supreme Court Judgment in the case of the COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [ 2018 (2) TMI 117 - SUPREME COURT] - However, in the present case the facts are entirely different, as in Ultratech judgment the fact was removal of Excisable Goods and payment of duty however, in the present case the disposal of Hazardous waste is as per the requirement of Gujarat Pollution Control Board and the cost of transportation for disposal of such waste is borne by the appellant. In fact this activity is though the way of transportation but it is the disposal of Hazardous waste which is generating during the course of manufacture. In this fact the service of transportation is covered under the main clause of dentition provided under Rule 2(l) of Cenvat Credit Rules, 2004. Therefore, the judgment of ultratech of the Apex Court is not at all relevant in the facts of the present case. Even though it is a transportation service, but in respect of disposal of Hazardous waste that is the activity related to manufacturing, it is covered under input services definition - the credit is admissible - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2021 (9) TMI 1239
Seeking direction to respondents to enable the issuance of Form F by unblocking the online Form F facility of the petitioner - Time limitation of assessment orders - Section 34(2) of the Delhi Value Added Tax Act, 2004 - HELD THAT:- Admittedly, in the present case, the respondents have not issued any Show Cause Notice and/or granted an opportunity of hearing to the petitioner before debarring it from issuing Form F from the online portal. In INFINITI RETAIL LIMITED VERSUS GOVERNMENT OF NCT OF DELHI ANR. [ 2020 (7) TMI 181 - DELHI HIGH COURT] , this Court had considered the effect of Rule 5(4)(ii) of the CST (Delhi) Rules and held that the Commissioner cannot withhold issuance of declaration Form C to an assessee/applicant without passing a reasoned order, after affording an opportunity of hearing to the assessee/applicant. In terms of Rule 8(2) of the CST (Delhi) Rules, the provisions of sub-Rule 4 of Rule 5 in relation to the declaration Form C applies also to certificate in Form F - A conjoint reading of Rule 5(4)(ii) and Rule 8(2) of the CST (Delhi) Rules would make it clear that issuance of Form F can be withheld by the Commissioner only after granting an opportunity of hearing to the assessee and passing a reasoned order for the same. In the present case, both the above pre-conditions have admittedly not been complied with by the respondents. Therefore, the Commissioner could not have debarred the petitioner from issuing Form F from its online portal - the respondents are directed to enable the issuance of Form F facility on its online portal for the petitioner forthwith. Petition allowed.
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2021 (9) TMI 1234
Refund of tax alongwith interest - tax periods, 4th Quarter of 2008-2009, for all the quarters of 2009-2010, 4th Quarter of 2010-2011 for 1st Quarter of 2011-2012 - DVAT Act - HELD THAT:- The concerned Respondent Authority is directed to decide the claim, as and when the same is preferred by the Petitioner, for refund as stated in the memo of this petition, in accordance with law, rules, regulations, Government policies applicable to the facts and circumstances of this case and on the basis of the evidence on record and also keeping in mind the law of limitation for getting the refund and also keeping in mind the principles of unjust enrichment . The decision shall be taken by the concerned Respondent Authorities as stated, as expeditiously as possible and practicable - petition disposed off.
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2021 (9) TMI 1226
Benefit of Concessional rate of duty denied - inclusion of freight in the taxable turnover, challenged - levy of higher rate of tax - denial on the ground of want of C-Form - HELD THAT:- The Tamil Nadu Sales Tax Appellate Tribunal is a specialized institution created to deal with the Sales Tax Appeals, under the provisions of the Act. Thus, the Tribunal is an appropriate authority for redressal of the grievances, if any exist, through the writ petitioner. Contrarily, certain disputed facts which deserves an adjudication with reference to the documents and evidences, cannot be done by the High Court, under Article 226 of the Constitution of India. The power of judicial review under Article 226 of the Constitution of India is to be exercised to scrutinise the processes through which a decision is taken by the competent authority in consonance with the provisions of the Act, but not the decision itself. Thus, the petitioner is bound to prefer an appeal before the Tamil Nadu Sales Tax Appellate Tribunal, under the provisions of the Act, in a prescribed format, by complying with the procedures contemplated - the petitioner is at liberty to prefer an appeal before the Tamil Nadu Sale Tax Appellate Tribunal and in the event of preferring any such appeal by the petitioner, the Tribunal may condone the delay, taking note the period of pendency of the Writ Petition before this Court, and entertain the appeal and decide the same on merits and in accordance with law, by affording opportunity to the writ petitioner. Petition disposed off.
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