TMI Tax Updates - e-Newsletter
September 4, 2020

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Central Excise Indian Laws

TMI SMS

• No stamp duty is payable in case of change of name of the Company to update the entries in the revenue record pertaining to the land with the new name - HC

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Articles

1. Companies Act, 2013 Free Reserves and some related issues to find out circumstances in which revaluation gains can be considered as ‘free reserve’ and ‘net worth’.

   By: DEVKUMAR KOTHARI

News

1. CCI approves incremental acquisition by SABIC International Holdings B.V. (SABIC BV) in ClariantAGunder

2. Shri Piyush Goyal says that New-age entrepreneurs are going to change the fortune of India;

3. Finance Minister holds meeting with lenders for expediting resolution of loan accounts and reviewing progress of Emergency Credit Line Guarantee Scheme (ECLGS), Partial Credit Guarantee Scheme (PCGS) 2.0 and Sub-ordinate Debt Scheme

4. Economic Advisory Council of the 15th Finance Commission to meet Tomorrow

5. India ranked in the top 50 nations in the Global Innovation Index

6. Income Tax Department carries out searches in Srinagar and Kupwara

7. CBDT provides ITR Filing Compliance Check Functionality for Scheduled Commercial Banks

Notifications

Customs

1. 29/2020 - dated 2-9-2020 - ADD

Seeks to amend notification No. 47/2015-Customs (ADD), dated 8th September 2015 to extend the levy of ADD on imports of "Float Glass" originating in or exported from China PR, for a period of three months i.e. upto 7th December, 2020.

2. 28/2020 - dated 2-9-2020 - ADD

Seeks to impose provisional anti-dumping duty on imports of Ciprofloxacin Hydrochloride originating in or exported from China PR for a period of six months.

GST - States

3. 42/2019 – State Tax - dated 1-9-2020 - Delhi SGST

Seeks to bring rules 10, 11, 12 and 26 of the Delhi Goods and Services Tax (Fourth Amendment) Rules, 2019 in to force

4. 34/2020– State Tax - dated 1-9-2020 - Delhi SGST

Amendment in Notification No. 21/2019- State Tax, dated the 17th October, 2019

5. 09/2020 – State Tax - dated 1-9-2020 - Delhi SGST

Exempt foreign airlines from furnishing reconciliation Statement in FORM GSTR-9C

6. 04/2020 – State Tax - dated 1-9-2020 - Delhi SGST

Amendment in Notification No. 4/2018–State Tax, dated the 23rd February, 2018

7. 03/2020–State Tax (Rate) - dated 1-9-2020 - Delhi SGST

Amendment in Notification No. 1/2017-State Tax (Rate), dated the 30th June, 2017

8. (30/2020)-FD 03 CSL 2020 - dated 31-8-2020 - Karnataka SGST

Seeks to notify the provisions of section 10 of the Karnataka Goods and Services Tax (Amendment) Act, 2019 shall come into force

9. 63/2020-State Tax - dated 2-9-2020 - Maharashtra SGST

Seeks to notify the provisions of section 10 of the Maharashtra Goods and Services Tax (Amendment) Act, 2019 (Mah. XXXI of 2019) to amend section 50 of the MGST Act, 2017 w.e.f. 01.09.2020

10. F.1-11(91)-TAX/GST/2020 - dated 31-8-2020 - Tripura SGST

Seeks to extend the due date for filing FORM GSTR-4 for financial year 2019-2020

Highlights / Catch Notes

Income Tax

• High Court Grants Section 54F Exemption for LTCG on US Residential Investment Made Before April 2015 Amendment.

  Case-Laws - HC : Exemption u/s 54F - LTCG - investment made in the house property in USA - the investment in a residential house was made in USA prior to 01.04.2015, whereas, the requirement of making an investment in a residential house, which was incorporated by way of amendment, came into force w.e.f. 01.04.2015 - Benefit of exemption allowed - HC
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• Tribunal Missteps: Penalty Proceedings u/s 271(1)(c) Must Be Separate from Assessment; No Unaccounted Income Found.

  Case-Laws - HC : Penalty u/s 271(1)(c) - The authorities have failed to appreciate that the penalty proceeding and the assessment proceeding are distinct and since, the assessee had not commenced the business, therefore, it could not have earned income, which had not been accounted for. Tribunal has failed to take into account the well settled legal principles that mere disbelief of an explanation will not be sufficient to impose penalty. - HC
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• Taxpayers Can Claim Indexed Cost for Asset Sale Under MAT, Section 115JB, Reducing Tax Liability.

  Case-Laws - HC : Computation of MAT u/s 115JB - Book Profit - Long term capital gains - There is no provision in the Act to prevent the assessee from claiming indexed cost of acquisition on the sale of asset in case, where the assessee is subjected to Section 115JB - HC
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• Notice u/s 148 Invalid if Issued to Deceased; Reassessment u/s 147 Cannot Proceed.

  Case-Laws - AT : Reassessment u/s 147 - notice issued u/s 148 against the deceased person - It is a settled legal proposition that the notice issued u/s 148 in the name of the deceased assessee is a nullity in the eyes of law. - AT
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• Substantial Justice Over Technicalities: Prioritize Fairness in Delay Condonation Cases, Avoiding Unjust Outcomes from Accidental Delays.

  Case-Laws - AT : Condonation of delay - When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. - AT
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• Taxability of Notional Interest on Security Deposits: Revenue Must Prove Actual Interest Earned for Tax Purposes.

  Case-Laws - AT : Taxability of notional interest - Income from House Property - Rental income - The addition was on the sole premise, that the assessee having the security deposit must have earned the interest. In order to tax any amount, the revenue has to prove that the amount as indeed been earned by the assessee. - AT
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• Income Tax Officer's Re-assessment in Dasuya Ruled Void and Jurisdictionally Flawed; Transfer Did Not Validate Actions.

  Case-Laws - AT : Validity of re-assessment proceedings u/s 147 - the re-assessment proceedings initiated by the ITO, Dasuya were without jurisdiction and the same were void abinitio, hence, any transfer of such void proceedings to the Assessing officer of competent jurisdiction did not validate his action and the proceedings. - AT
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Customs

• High Court Blocks Provisional Clearance of Canadian Green Peas, Awaiting Supreme Court Ruling on Import Restrictions Notification.

  Case-Laws - HC : Provisional clearance of the goods imported pending a consideration by the Supreme Court of the main issue with regard to the legality of the notification - Ext.P1 notification - import of restricted item - Canadian Green Peas - The goods, if allowed to be provisionally cleared, would enter the domestic market, thereby frustrating the very objective of the notification issued by the Central Government. - HC
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Corporate Law

• Company Name Change Not a Property Sale; No Stamp Duty Required for Updating Records Per Registrar Approval.

  Case-Laws - HC : Whether on mere change of the name of a Company with the approval of the Registrar of companies, sale/transfer of its immovable property takes place and stamp duty chargeable on its value or not? - Held No - The respondents are under an obligation to update the entries in the revenue record pertaining to the land with the new name of the petitioner Company by addition of word ‘private’ without payment of any stamp duty and registration charges. - HC
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Central Excise

• Exemption Notifications for Bearings in Wind-Operated Electricity Generators Interpreted Broadly to Include All Parts.

  Case-Laws - AT : Admissibility of Benefit of exemption notifications - bearings sold for use in the wind operated electricity generators as parts - The term “wind operated electricity generator” in the notification does not refer to solely to the generator which is just one of the parts of the wind operated electricity generator. - AT
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• Court Examines Related Party Transaction in Bearing Sales; Requires Proof of Mutual Business Interest for Classification.

  Case-Laws - AT : Valuation - ball or roller bearing - related party transaction - rejection of declared value - The mere fact that the entire production of M/S SKFTIL is sold through M/s SKFIL is not sufficient to make them related parties. There has to be positive evidence of them having interest in the business of each other - AT
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Case Laws:

• GST

• 2020 (9) TMI 99
  Profiteering - purchase of flat - allegation that the benefit ITC not passed to be buyers - contravention of section 171 of CGST Act - penalty - HELD THAT:- It has been revealed that the Respondent has not passed on the benefit of ITC to his buyers w.e.f. 01.07.2017 to 31.12.2018 and hence, the Respondent has violated the provisions of Section 171 (1) of the CGST Act, 2017. Penalty - HELD THAT:- Since no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 31.12.2018 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively. Accordingly, the notice dated 17.01.2020 issued to the Respondent for imposition of penalty under Section 171 (3A) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped.

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• 2020 (9) TMI 98
  Profiteering - purchase of flat - allegation that the benefit ITC not passed to be buyers - contravention of section 171 of CGST Act - penalty - HELD THAT:- It has been revealed that the Respondent has not passed on the benefit of ITC to his buyers w.e.f. 01.07.2017 to 30 09.2018 and hence, the Respondent has violated the provisions of Section 171 (1) of the CGST Act, 2017. Penalty - HELD THAT:- Since no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 30.09.2018 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively. Accordingly, the notice dated 26.11.2019 issued to the Respondent for imposition of penalty under Section 171 (3A) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped.

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• Income Tax

• 2020 (9) TMI 97
  Addition u/s 41 - cessation or remission of liability - Written back of excess provision made in earlier years - Disallowance of business expenditure Additional expenditure relating to aircrafts taken on finance lease - HELD THAT:- Non availability of the court fee during the lock down period, the same could not be deposited within the time granted by the court on 06.03.2020 but will be deposited now within two weeks. In the circumstances, the order for depositing cost of Rs. 4,000/- in default of payment within four weeks, should be recalled. Considering the above, the appellant(s) are granted two weeks time to do the needful, in terms of the office report dated 25.8.2020. Having regard to the circumstances for which the amount was not paid, the order for cost of Rs. 4,000/- in default of payment, stands recalled. It is ordered accordingly.

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• 2020 (9) TMI 96
  Exemption u/s 54F - investment made in the house property in USA - scope of amendment incorporated in Section 54F(1) - whether an assessee was required to purchase a residential house within India for the purposes of claiming exemption under Section 54F? - HELD THAT:- Residential property, for which investment is made needs to be situated in India for the purpose of claiming exemption u/s 54F from Assessment year 2015-16 only and not prior to that period. In the instant case, the investment in a residential house was made in USA prior to 01.04.2015, whereas, the requirement of making an investment in a residential house, which was incorporated by way of amendment, came into force w.e.f. 01.04.2015. In the light of aforesaid well settled legal principles as well as the memorandum of objects of Finance Act, 2014, which clearly provide that amendments will take effect from 01.04.2015 and will apply to Assessment year 2015-16 onwards as well as the CBDT s Circular dated 21.01.2015, it is evident that amendment incorporated in Section 54F(1) of the Act is prospective in nature. Substantial question of law framed by this court is answered in the affirmative and against the revenue.

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• 2020 (9) TMI 95
  Penalty u/s 271(1)(c) - defective notice u/s 274 - appellant has not been put to notice of the correct limb u/s 271(1)(c) for which the penalty has been initiated - HELD THAT:- It is pertinent to note that the assesssee since, its inception till the end of previous year i.e., 31.03.1999 did not commence any business. The notice u/s 274 r.w.s 271(1)(c) was issued for Assessment year 2002-03 and not for the Assessment year in question that is 1999-00. Besides this, it is noteworthy that there was no mention in the notice that the assessee has concealed the income or furnished inaccurate particulars of income. The authorities have failed to appreciate that the penalty proceeding and the assessment proceeding are distinct and since, the assessee had not commenced the business, therefore, it could not have earned income, which had not been accounted for. Tribunal has failed to take into account the well settled legal principles that mere disbelief of an explanation will not be sufficient to impose penalty. For the aforementioned reasons and in view of well settled legal principles referred to by learned Senior counsel for the assessee, the first substantial question of law is answered in the negative and in favour of the assessee

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• 2020 (9) TMI 94
  Deduction u/s 57 - disallowance of expenses against interest income being interest paid to the financial institutions - HELD THAT:- Purpose of expenditure is relevant in determining the applicability of Section 57(iii) and the purpose must be making or earning of income. Assessee in order to cover the cost of interest payable to the creditors for the unpaid period, invested the surplus in fixed deposits and earned interest. The amount earned by way of interest was paid to the lenders and creditors. There is a nexus between the interest paid to the creditors on the unpaid balance and interest earned on the deposits. The interest expenditure was incurred wholly and exclusively for the purpose of earning the interest income and therefore, the assessee is entitled to deduction of the interest income under Section 57(iii) of the Act. Computation of MAT u/s 115JB - Book Profit - Long term capital gains - Held that:- The indexed cost of acquisition is a claim allowed by Section 48 to arrive at the income taxable under the income from capital gains. The difference between the sale consideration and indexed cost of acquisition represents the actual cost of the assessee, which is taxable as per Section 45 at the rates provided under Section 112 of the Act. There is no provision in the Act to prevent the assessee from claiming indexed cost of acquisition on the sale of asset in case, where the assessee is subjected to Section 115JB - In any case, since, the indexed cost of acquisition is subjected to tax under a specific provision viz., Section 112 of the Act, therefore, the provisions of Section 115JB of the Act, which is a general provision cannot be made applicable to the case of the assessee. For yet another reason, the assessee has to be given the benefit of indexed cost of acquisition as considering the profits on sale of land without giving the benefit of indexed cost of acquisition results in taxing the income other than actual / real income. In other words, a mere book keeping entry cannot be treated as income. Provisions of Section 115JB of the Act are not applicable as the assessee has not declared any dividend. It is also noteworthy that the Tribunal has failed to appreciate the decision of this court in case of MSR Sons Investment Ltd. [ 2011 (9) TMI 1127 - KARNATAKA HIGH COURT] where the order of the Tribunal was upheld by which the Tribunal has held that if dividends are not paid by the company the provisions of book profit are not attracted. Assessee had not paid the dividends. The profit itself was not attracted and the question of applicability of Section 115JB did not arise. However, the Tribunal failed to consider the decision of this court while passing the impugned order. The submission made by the revenue in the light of decision rendered in the case of Apollo Tyres [ 2002 (5) TMI 5 - SUPREME COURT] does not deserve acceptance as Section 115J with which the aforesaid decision deals does not contain a provision like Sub- Section (4) of Section 115JA or Sub-Section (5) of Section 115JB. Similarly, the submission made on behalf of the revenue that in the absence of the scheme, it cannot be held that the assessee was holding the funds as conduit and therefore, the matter deserves to be remitted to the Income Tax Appellate Tribunal for decision afresh also does not deserve acceptance as in paragraph 10 of this order, this court has noticed that the AO as well as the CIT (Appeals) has taken note of the scheme and has held that assessee was utilized as a special purpose vehicle for purposes of distribution of surplus, if any, after clearance of debts of Kirloskar Electric Company. - Decided in favour of assessee.

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• 2020 (9) TMI 93
  Stay petition - no opportunity of being heard offered to petitioner - HELD THAT:- As gone through Ext.P5 issued without proper application of mind, because what is stated therein is that a stay has been granted on condition of payment of disputed demand till the decision of the appeal . Obviously, therefore, this is an eminently fit case where this Court also feels that Ext.P5 order should be vacated and the Authority be directed to reconsider the stay petition in terms of law. Allow this writ petition and set aside Ext.P5, without entering into the merits of the contentions of the parties and leaving all of them open; with a consequential direction to the 2nd respondent to take up the application for stay preferred by the petitioner and issue orders thereon, after affording them an opportunity of being heard, as expeditiously as is possible. Application for stay is considered by the 2nd respondent, all further action to recover amounts as per the demand will stand deferred.

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• 2020 (9) TMI 92
  Recalling of the earlier decision - Same substantial question of law in two appeals of the same assessee - Levy of penalty u/s 271(1)(c) - rejection of claim of sundry creditors which were offered for taxation in the course of the assessment proceedings - concealment of Income or furnishing of inaccurate particulars of Income - HELD THAT:- Substantial question of law, which was entertained in this appeal is the first substantial question of law in [ 2009 (4) TMI 154 - MADRAS HIGH COURT] and it is a verbatim repetition. Since the Hon ble Division Bench considered the entire matter and dismissed the appeal holding that no substantial question of law arose for consideration, we are not inclined to accept the submissions made by the learned counsel for the appellant - assessee. In fact, the learned counsel, who appeared in both the matters, is the same person and it is not clear as to why it was not brought to our notice by the learned counsel, when we heard [ 2019 (7) TMI 606 - MADRAS HIGH COURT] . Be that as it may, in the light of the above discussions, the judgment in [ 2019 (7) TMI 606 - MADRAS HIGH COURT] has to be recalled.

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• 2020 (9) TMI 91
  Disallowance u/s 14A read with Rule 8D - Whether the Tribunal was right and justified in remitting back the issue of disallowance under Section 14A to Assessing Officer by directing him to exclude own funds in the form of reserve and surplus when the assessee was maintaining mixed bag of funds ? - HELD THAT:- As perused the impugned order passed by the Tribunal and more particularly paragraph 11 Tribunal, having chosen to remand the matter to the Assessing Officer for a fresh consideration, could have avoided qualifying the remand especially when the questions of law are being raised by both the Revenue as well as the assessee. We are inclined to interfere with that portion of the order passed by the Tribunal and remand the matter for a fresh consideration to the Assessing Officer to enable him/her to consider the entire matter afresh without, in any manner, curtailing exercise of his/her power as an Assessing Officer. Tribunal did not give independent reasons as to why, in its opinion, the direction issued in the case of Beach Miners Co. Pvt. Ltd. [ 2015 (8) TMI 1031 - ITAT CHENNAI] should also apply to the case of the assessee. Tax case appeal is allowed, the findings/observations made by the Tribunal in paragraph 11 of the impugned order are set aside and the order of remand is confirmed.

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• 2020 (9) TMI 90
  Bogus purchases u/s 37(1) - Reopening of assessment u/s 147 - assessee failed to confirm the purchases - CIT(A) deleted the addition - HELD THAT:- Case of the assessee was reopened on the basis of information received from the DIT (Inv.). The doubtful purchase was found for the F.Y.s 2005-06 to 2012-13. The AO issued the notices u/s 133(6) which were not served. AO raised the addition on the basis of peak purchase - CIT(A) has deleted the same on the basis of this fact that the assessee s unit was 99% exports unit and the sale was supported by documents of export and stock register confirmed sale and purchase. The Tax Audit Report confirmed the same. The stock statement produced to the banks was subjected to verification of the third party and the assessee was having its own vehicle for transporting of goods from one place to another. CIT(A) also observed that the AO nowhere brought any substantial material to raise the addition. AO nowhere brought the material on record to prove the fact that the purchase was bogus. The documents relied upon the CIT(A) was already available with the AO which were not considered and discussed. CIT(A) has considered the all relevant material on record and arrived at this conclusion that the addition is not based upon any material available on record. No distinguishable material has been produced on record which required interfere with the order passed by the CIT(A) in question. CIT(A) has decided the issue judiciously and correctly which is not liable to be interfere with - Decided against revenue.

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• 2020 (9) TMI 89
  Reassessment u/s 147 - notice issued u/s 148 against the deceased person - whether notice under 148 has been issued and served in the name of legal heirs of the assessee? - HELD THAT:- There is no subsequent notice u/s 148 which was issued by the Assessing Officer on the legal heirs of the deceased assessee and therefore, the provisions of section 159 cannot be invoked in the instant case. In any case, the limitation for issue of notice u/s 148 had expired on 31.03.2017 and beyond such limitation period, no notice can be issued in the name of the legal Heirs. It is a settled legal proposition that the notice issued u/s 148 in the name of the deceased assessee is a nullity in the eyes of law. Consequently, the present reassessment proceedings initiated by issuance of notice in the name of the deceased assessee and consequent reassessment proceedings is hereby quashed for want of jurisdiction. - Decided in favour of assessee.

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• 2020 (9) TMI 88
  Expenditure u/s 37(1) - expenditure claimed on account of Interest on delayed payment of entry tax and secondly on account of Charges on delayed supply of books to M.P. Text Book Corporation Ltd - AO has disallowed expenditure by relying on the judgment in the case of Bharat Commerce and Industries Ltd. [ 1998 (3) TMI 2 - SUPREME COURT ] - HELD THAT:- The issue before Hon ble Supreme Court was regarding interest paid for delayed payment for advance tax. However, the issue in present case is related to payment made by the assessee on account of delay in supply of books. Therefore, disallowing the entire amount by the Assessing Officer was not justified. Hence, the Assessing Officer is directed to delete the addition made on account of disallowance of expenditure related to delay in supply of the books. Regarding interest on entry tax and TDS division bench of this Tribunal in the case of M/s Naarayani Sons Pvt. Ltd. in 2018 (8) TMI 1362 - ITAT KOLKATA] after considering the judgment of Hon ble Supreme Court in the case of Bharat Commerce and Industries Ltd. vs. CIT (Supra) decided the issue in favour of the assessee

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• 2020 (9) TMI 87
  Condonation of delay - sufficient cause of late filing of appeal in terms of Section 249(3) - non-receipt of statements u/s 200A - HELD THAT:- Keeping in view the adverse business / financial as well as medical conditions being faced by the director of the assessee entity, we are of the considered opinion that the delay was to be condoned. The factual matrix placed before us could explain the non-receipt of statements u/s 200A by the assessee. While doing so, we are guided by the following principles laid down regarding condonation of delay in the case of Collector, Land Acquisition Vs. Katiji [ 1987 (2) TMI 61 - SUPREME COURT] We are unable to find any deliberate negligence or malicious intent on the part of the assessee in filing of the appeal. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. Keeping in mind the aforesaid principles, the bench formed an opinion that the delay was to be condoned and the appeal was to be restored back to the file of learned CIT(A) for disposal on merits.

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• 2020 (9) TMI 86
  Taxability of notional interest - Income from House Property - Rental income - Taxability under Income tax Act - HELD THAT:- The issue of as to how to treat the security deposit after the completion of the lock-in-period is not the issue before us. AO has not brought anything about earning of the interest by the assessee which has not been offered to tax. The addition was on the sole premise, that the assessee having the security deposit must have earned the interest. In order to tax any amount, the revenue has to prove that the amount as indeed been earned by the assessee. Only the incomes fall under the deemed provisions which have been explicitly mentioned in the Income Tax Act can only be brought to tax under the deeming provision but not any other notional or hypothetical income not envisaged by the Act. Hence, we hereby direct that the addition made by the Assessing Officer on account of notional income on the security deposit cannot be held to be legally valid. Appeal of the assessee is allowed.

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• 2020 (9) TMI 85
  Disallowance u/s 36(1)(iii) on account of diversion of interest-bearing fund - HELD THAT:- Assessee has agreed for the disallowance of the amount of interest on the amount diverted as interest-free loans and advances. As such the issue is limited to the extent of the rate of interest which needs to be applied on such interest-free loans and advances. As per the revenue the average rate of interest is 11.45% whereas the assessee claims the same to be at 8.73%. From the order of the AO we find that the assessee in most of the cases has borrowed money on interest at the rate of 12% and in very few cases at the rate of 15% and 10.5 %. Admittedly the assessee has borrowed more amount on interest at the rate of 10.50%. AO has worked out average cost of the borrowed funds at the rate of 11.45% which appears very reasonable and logical in the given facts and circumstances. As such the assessee in none of the case has borrowed fund at the rate of 8.73% as claimed by him as the cost of borrowed fund. Accordingly, we do not find any merit in the argument of the assessee. Thus, we confirm the order of the authorities below. Hence the ground of appeal of the assessee is dismissed.

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• 2020 (9) TMI 84
  Validity of re-assessment proceedings u/s 147 - non-issuance of notice u/s 148 by DCIT(International Taxation) - AO Dasuya had no jurisdiction to issue the notice u/s 148 when it was duly intimated to the AO, Dasuya and Hoshiarpur that the Assessee is NRE - Transfer of jurisdiction of AO - as submitted that the assessment has been framed by the DCIT (International Taxation) on the basis of the borrowed satisfaction of the ITO, Dasuya instead of himself forming the belief regarding the escapement of income of the assessee - HELD THAT:- ITO Dasuya did not have any jurisdiction over the assessee and, as such, the notice u/s 148 of the Act by the ITO, Dasuya being without jurisdiction was not valid. Though, the fact, that the assessee was a non-resident Indian, was duly mentioned to the ITO, Hoshiarpur and the entire record along with reply of the assessee was transferred to ITO, Dasuya, apart from that the ITO Dasuya also was informed vide separate replies, as mentioned above, that the assessee was a permanent resident of USA, ITO Dasuya, continued to proceed with the re-assessment and issued notices u/s 148 of the Act. The fact that the assessee was an NRI was very much on the record. ITO Dasuya had no jurisdiction to initiate reopening of the assessment by way of issuance of notice u/s 148 of the Act. However, thereafter he transferred the case to ADIT (International Taxation) fully convinced that he himself had no jurisdiction to make assessment in the case of the assessee. Admittedly, no notice u/s 148 of the Act by the DCIT (International Taxation), Chandigarh to the assessee was issued. Since the ITO, Dasuya had no jurisdiction to reopen the assessment, hence, any notice issued by him has no legal validity. So far as the DCIT (International Taxation), Chandigarh is concerned, he admittedly did not issue any notice u/s 148 to the assessee, therefore, the very reopening of the assessment without issuance of notice u/s 148 of the Act by the Assessing officer of the competent jurisdiction, is bad in law. Argument of the Ld. DR that the ITO, Dasuya had transferred the case to DCIT (International Taxation ), Chandigarh and, hence, there was no requirement of issuing of fresh notice u/s 148 of the Act as per the provisions of section 127 (4) - No force in the above contention of the Ld. DR. Firstly, the re-assessment proceedings initiated by the ITO, Dasuya were without jurisdiction and the same were void abinitio, hence, any transfer of such void proceedings to the Assessing officer of competent jurisdiction did not validate his action and the proceedings. Even otherwise, as per the provisions of section 127, ITO, Dasuya himself had no jurisdiction to suo motu transfer the case to the DCIT (International Taxation). Rather, the transfer of the case as per the provisions of section 127 (1) of the Act, can be ordered by the competent authority prescribed in the said provisions - Decided in favour of assessee.

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• Customs

• 2020 (9) TMI 83
  Seizure of goods along with vehicle - 304 bags, containing 20,520.00 kgs . of betel nuts - It is submitted that the goods and the truck are lying under the open sky, hence are likely to decay and perish, hence it would be appropriate that the same are released for which the petitioners are ready to approach the respondent Custom authorities and furnish cash and bank guarantee - Case of Revenue is that present writ petition is also not maintainable at the instance of the petitioner no. 2, who has claimed for release of the seized goods, since the said Biren Sah has never filed any application before the respondent authorities claiming ownership or seeking release of the seized betel nuts. HELD THAT:- This Court finds that since there is no disagreement amongst the parties regarding release of the goods/truck in question, it is deemed fit and proper to grant liberty to the owners of the goods/truck in question to approach the respondent Custom authorities by filing appropriate application for provisional release whereupon the respondent Custom authorities shall release the same in accordance with their scheme/circular and upon the owners of the goods/truck furnishing adequate security, cash and bank guarantee. Whether the initiation of the seizure/ confiscation proceedings is or is not ultra vires the provisions contained in the Custom Act, 1962? - HELD THAT:- This Court finds that allegations and counter allegations have been levelled from both the sides and in fact the respondent Custom authorities, in their counter affidavit filed before this Court, have raised the issue regarding the very maintainability of the writ petition in its present form and have alleged non-cooperation by the petitioners during the course of investigation as also have placed materials on record to show that the petitioners have not approached this Court with clean hands, thus disentitling them from any relief under the equitable and discretionary jurisdiction of this Court under Article 226 of the Constitution of India, however, this Court is not going into the merit of the imputations since the same would prejudice the case of the petitioners herein and it would suffice to state that since the investigation is going on and is in a nascent stage, any interference in the seizure proceedings would have the effect of hampering and stifling proper investigation and adjudication. Thus, this Court is of the view that since the material on record prima facie indicates suspicious and dubious transaction as also a serious challenge has been made by the respondents with regard to the maintainability of the present writ petition, it would be proper not to delve on the merits of the case since the same may cause prejudice to the owners of the goods/vehicle, hence it is deemed fit and proper to grant liberty to the petitioners to raise all the issues raised herein, in the present writ petition, before the respondent Custom authorities at an appropriate stage. Petition disposed off.

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• 2020 (9) TMI 82
  Provisional clearance of the goods imported pending a consideration by the Supreme Court of the main issue with regard to the legality of the notification - Ext.P1 notification - import of restricted item - Canadian Green Peas - HELD THAT:- The prayer for provisional release of the goods sought for by the petitioner cannot be granted. It cannot be ignored that what the petitioner has chosen to import is a commodity in respect of which the Central Government, through the Directorate General of Foreign Trade (DGFT), has issued Ext.P1 notification restricting imports with a view to safeguard the domestic industry. The minimum import price for the product imported is fixed as 200/- per kilo gram CIF and it is not in dispute that the price at which the petitioner imported the commodity is significantly lower than the minimum import price stipulated. The goods, if allowed to be provisionally cleared, would enter the domestic market, thereby frustrating the very objective of the notification issued by the Central Government. That apart, the challenge to the notification itself is pending consideration before the Supreme Court in a batch of transferred writ Petitions from various High Courts. In those writ petitions, the Supreme Court has interdicted the High Courts from deciding the issue with regard to the legality of the notification and has also indicated that, in the event of any importer seeking interim directions, they would have to approach the Supreme Court for the same. Petition dismissed.

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• Corporate Laws

• 2020 (9) TMI 81
  Review petition - error apparent on the face of record or not - Interpretation of statute - Section 529A read with Section 529 of the Companies Act, 1956 - mortgage property - preferential claims have not been appreciated by this Court. HELD THAT:- It is evident from the grounds raised for reviewing the judgment that petitioners are trying to re-argue the points, which have already been decided by this Court, after considering facts and circumstances placed before it as well as provisions of Section 529 read with Section 529A of the Act - The petitioners cannot be allowed to re-agitate points in review petition, which have already been decided by this Court. A decision not accepting the plea of a party, but passed after taking into consideration entire facts and circumstances brought on record and considering pronouncements of the Apex Court as well as provisions of law applicable to the case, cannot be termed having apparent error on the face of record. Thus, there is no error in interpreting the relevant provisions of law and appreciating pronouncements of the Apex Court, however, even if, plea of petitioners is accepted that there is incorrect interpretation of law, then also, for the detailed discussion in the impugned judgment, with respect to provisions of the Act and ratio of law laid down by the Supreme Court, such error cannot be said to be self evident, but the same is to be detected by a process of reasoning and such error, if any, cannot be said to be an error apparent on the face of record, so as to attract the jurisdiction under Order 47 of Civil Procedure Code. Review petition dismissed.

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• 2020 (9) TMI 80
  Whether on mere change of the name of a Company with the approval of the Registrar, in terms of Section 21 and 23 of the Companies Act 1956 {Section 13(2) of the Companies Act 2013}, sale/transfer of its immovable property takes place and stamp duty chargeable on its value or not? HELD THAT:- The stand of the respondents that the present is not a case of mere change of name and rather a case of conversion of public limited company to private limited company, hence stamp duty is chargeable under Section 3 of the Indian Stamp Act, 1899 though has been taken by the respondents-State to make an attempt just to mislead this Court and confuse the whole issue, however, unsuccessfully. Section 3 of the Stamp Act speaks about the instruments, which are chargeable with duties, subject to the exemptions contained in Schedule-I. The instrument referred to herein and also Schedule-I, nowhere show that on mere addition of word private in the name of a company without transfer of its assets and liability, is an instrument, which is chargeable thereunder. So far as the Registration Act is concerned, only that instrument is chargeable, which needs registration. In the case in hand, land and building remained with the petitioner-company, even after addition of word private to its name. Therefore, there is no question of existence of an instrument of transfer of its assets and property and the compulsorily registration thereof. The respondents though have made an attempt to draw the distinction between a public limited and private limited company from its definition finds mentioned in Section 2 of the Companies Act, 2013 and has canvased that two companies are quite different and distinct. It is worth mentioning that the circular dated 16.2.2012 Annexure P-2 clearly distinguishes between cases pertaining to change of name simplicitor under the provisions of Companies Act 1956 and for that matter Companies Act 2013 and those with transfer of assets. The second category of cases cover transaction like merger, demerger and amalgamation etc., which involve two separate entities and transfer of assets from one entity to another. Annexure P-2 clearly postulates that no stamp duty or registration fee is payable in a case of change of name of the Company - In the case in hand since no transfer of assets occurred on account of change of the name of the petitioner Company, hence neither stamp duty nor registration charges is payable on such change of name of the petitioner and its name is required to be entered in the revenue record pertaining to the land and building in question. The respondents, therefore, are under an obligation to update the entries in the revenue record pertaining to the land with the new name of the petitioner Company by addition of word private without payment of any stamp duty and registration charges. Grant of permission to transfer of the land and building in existence thereon in the name of Harbinder Singh Purewal, under Section 118 of the HP Tenancy and Land Reforms Act - HELD THAT:- The writ petition is neither maintainable nor can be entertained for grant of such relief because it is for the appropriate authority under the Act to examine this aspect of the matter and pass appropriate orders, in accordance with law. Petition allowed in part.

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• Central Excise

• 2020 (9) TMI 79
  Jurisdiction - appropriate forum - Striking down of Rule 96 ZQ of the Central Excise Rules - applicability if same in the facts of present case - HELD THAT:- We are not inclined to entertain these submissions unless such submissions have been first raised before the learned Tribunal and the same have been dealt with by the Tribunal in appropriate manner by reasoned order thereon. Though the learned counsel for the respondent Assessee also raised a plea before us that the Revenue stakes involved in the present case are below the prescribed monetary limit as per the latest litigation policy of Revenue Department, we are not inclined to consider the same at this stage. Appeal dismissed - decided against Revenue.

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• 2020 (9) TMI 78
  Valuation - ball or roller bearing - related party transaction - rejection of declared value - value is sought to be determined on the basis of price at which M/s. SKF India Ltd. has sold the product - benefit of N/N. 6/2006-CE. - HELD THAT:- So far as loan granted by M/S SKFIL to M/s SKFTIL is concerned interest at the rate of 9% has been fixed. It has also been specified that the rate of interest would be revised regularly at half yearly basis and shall not be less than the prevailing bank rate under section 49 of RBI Act, 1934. In view of above, it is apparent that this a purely business transaction and not a transaction creating interest in the business of each other. It is seen that M/s SKFIL and M/s SKFTIL are sharing some staff cost. It is seen that M/s SKFIL has factories located in Bangalore, Haridwar, Pune, Manesar and Jamshedpur, also for 5 branches located all over the country. There are also two associate companies namely M/s SKF Technologies Ltd. and M/s Lincoln Helios India Ltd. Among these organisations, M/s SKFIL has identified the departments where they share the cost incurred on staff. It is found that these are purely business transaction and cost sharing cannot be treated as transaction creating interest in business of each other. Had it been the case that M/s SKFIL were providing such services free of cost or at subsidised rates to the other, then one could have asserted that there was an interest in business of each other. In this case, the costs of staff are charged to each other. Therefore, it can only be treated as business transaction. The mere fact that the entire production of M/S SKFTIL is sold through M/s SKFIL is not sufficient to make them related parties. There has to be positive evidence of them having interest in the business of each other - Since the two cannot be treated as related parties, the transaction value between SKFIL and SKFTIL has to be accepted for the purpose of assessment. The appeal on this count is allowed. Admissibility of notifications of 06/2006 to the bearings manufactured by the M/s SKFTL and ultimately sold for use in the wind operated electricity generators as parts - HELD THAT:- The term wind operated electricity generator appeared in notification 06/2006-CE dated 01.03.2006 includes the entire setup i.e. the tower, the generator, the blades which are used to generate electricity from wind. The term wind operated electricity generator in the notification does not refer to solely to the generator which is just one of the parts of the wind operated electricity generator. Appeal allowed - decided in favor of appellant.

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• Indian Laws

• 2020 (9) TMI 77
  Grant of anticipatory bail - investment in the company by way of fraud - Dishonor of Cheque - Non-disclosure agreement or not - HELD THAT:- The Company has spent majorly on traveling and food expenses as also on liaisoning expenses but it gives no indication regarding the investment in the business and other details of business including the manner in which the amount given by complainant was used. It is an admitted fact that the amount spent by the complainant was sought to be returned by giving two cheques which have stood dishonoured - For further purpose of appropriate investigation, custodial interrogation of the applicant is necessary. There are no valid grounds in this application for giving the benefit of anticipatory bail to the applicant. Application dismissed.

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