TMI Tax Updates - e-Newsletter
September 7, 2020

Case Laws in this Newsletter:

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

Articles

1. GSTR-2B – Relief or Opening of New Pandora Box for Taxpayers

   By: Chitresh Gupta

2. Broader discussion about eligibility and conditions for taking input tax credit

   By: DEVKUMAR KOTHARI

3. GST AS A DRIVER OF ECONOMY GROWTH

   By: jasmeet sehgal

News

1. Shri Piyush Goyal addresses the ACMA annual session;

2. Ranking of states based on implementation of Business Reform Action Plan for the year 2019 declared;

3. Guidelines for Appointment of Insolvency Professionals as Administrators under the Securities and Exchange Board of India (Appointment of Administrator and Procedure for Refunding to the Investors) Regulations, 2018

Notifications

Customs

1. 85/2020 - dated 4-9-2020 - Cus (NT)

Amendment in Notification No. 92/2017-Customs (N.T.), dated the 28th September, 2017

GST - States

2. S.O. 161 - dated 4-9-2020 - Bihar SGST

Appoints the 1st day of September, 2020, as the date on which the provisions of section 10 of the Bihar Goods and Services Tax (Amendment) Act, 2019 shall come into force.

3. 979/XI-2-20-9(47)/17- U.P. Act-1-2017-Order-(141)-2020 - dated 1-9-2020 - Uttar Pradesh SGST

Appoints the 1st day of September, 2020, as the date on which the provisions of section 10 of the Uttar Pradesh Goods and Services Tax (Amendment) Act, 2020, shall come into force

4. 655-F.T. - dated 18-8-2020 - West Bengal SGST

Seeks to amend notification No. 441-F.T. dated 03.04.2020 in order to amend the class of registered persons for the purpose of e-invoice.

5. 654-F.T. - dated 18-8-2020 - West Bengal SGST

West Bengal Goods and Services Tax (Ninth Amendment) Rules, 2020

Circulars / Instructions / Orders

DGFT

1. 15/2015-2020 - dated 4-9-2020

Export of Finished Leather - Revised Leather Norms.

Customs

2. 40/2020 - dated 4-9-2020

All India roll-out of Faceless Assessment

Highlights / Catch Notes

GST

• Court Orders Release of Seized Goods in Tripura After 25% Payment of Disputed Tax and Penalty with Bond Coverage.

  Case-Laws - HC : Seizure/detention of goods/materials - seizure on the ground that e-Way bills tendered for the goods in movement stood expired when the vehicle entered within the territory of the State of Tripura - The respondents are directed to release the detained materials, on deposit of 25% of the disputed tax and penalty - For rest amount bond is to be furnished - HC
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Income Tax

• ITAT rules sum from Development Agreement not taxable as income; Assessing Officer's windfall gain classification rejected.

  Case-Laws - HC : Income from other sources - accrual of income - ITAT held that sum received by the assessee pursuant to a Development Agreement had not accrued as income - on facts, the AO could not have held that this is on account of a windfall gain to be brought to tax under the head 'income from other sources'. - HC
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• Assessee's Section 11 Exemption Denied: Activities Misclassified as Business, Trade, or Commerce u/s 2(15) Interpretation.

  Case-Laws - AT : Exemption u/s 11 - surplus from exhibition activity - Denial of exemption on the ground that, he assessee did not fall within the scope of charitable purposes defined in section 2(15) of the Act because of carrying on or rendering of any services in business, trade and commerce and this in our considered opinion is not a correct interpretation of the provision. - AT
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• Medical College Granted Exemption u/s 11 After Infrastructure Issues Resolved and Approval for 2010-11 Session.

  Case-Laws - AT : Exemption u/s 11 - Providing education through Medical College - inadequate infrastructure - There have been deficiencies in the infrastructure as found by the first report which were found to have been rectified by the second committee comprising of Addl. Secretary, Go I Dean AIIMS, Addl. DG, DGHS, and keeping in view the fact that MCI has granted due permission for the academic session 2010-11, benefit of exemption allowed - AT
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• Car Parking and Location Charges Qualify for Tax Deduction u/s 80IB(10) as Part of Housing Project Profits.

  Case-Laws - AT : Deduction u/s 80lB(10) - Profit attributable to Car parking space and preferential location charges - Since these are integral part of the housing project, the profit derived from sale of car parking space as well as on PLC & HEC is eligible for deduction u/s. 80IB (10) of the Act since deduction u/s 80 IB is available in respect of eligible housing project. - AT
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• Assessment Validity Challenged Over Notice Non-Service u/s 143(2); Assessee's Argument Rejected by Authorities.

  Case-Laws - AT : Validity of assessment - non-service of the notice u/s.143(2) - It is also clear from the record that the assessee has raised this issue first time before us, however, the documents which were produced before us, did not speak that the assessee has raised this issue before the lower authorities. CIT DR has produced sufficient evidences for substantiating the case in favour of Revenue - Argument of assessee rejected - AT
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• Debate Over Depreciation Rate: Furniture and Fixtures at 15% or 10% for Long-Term Building Improvements?

  Case-Laws - AT : Depreciation @ 15% or 10% under the block furniture and fixtures - Considering the nature of expenditure, it can be safely concluded that the entire expenditure has been made for improvement of civil supply altering building by civil work. - Such civil work definitely gives a benefit of enduring nature. - AT
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• Notional Rent Tax on Unsold Property Not Applicable for Assessment Year 2014-15; Effective from 2018-19.

  Case-Laws - AT : Provision in the Act for BRINGING to tax the notional rent on unsold stock of house property was brought into effect from assessment year 2018-19. In the present case, the assessment year is 2014-15 and hence the said provision is not at all applicable for the current assessment year. - AT
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• Determining Annual Letting Value for Property Income: Key Factors u/s 23(1)(a) of Income Tax Act.

  Case-Laws - AT : Income from house property - ALV u/s 23(1)(a) - In determining the reasonable rent, several factors have to be taken into consideration, such as, location of the property, annual ratable value of the property fixed by the municipalities, rents of similar properties in neighborhood, rent which the property is likely to fetch having regard to demand and supply, cost of construction of the property and nature and history of the property. These factors play vital role in determining reasonable expected rent of a house property. - AT
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Customs

• High Court Criticizes Non-Release of Goods Despite Appellate Order; Stresses Judicial Discipline in Tax Enforcement.

  Case-Laws - HC : Release of seized goods - confiscation - First appellate authority set aside the original order - Non-release of goods has been justified and defended by the respondents on the ground that the Department has filed appeal against the order-in-appeal before the CESTAT - Principles of judicial discipline require that orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. If this healthy rule is not followed, the result will be undue harassment to the assessees and chaos in administration of tax laws. - HC
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• Appellant Denied Individual Dumping Margin; Must Pay Anti-Dumping Duty Under 2017 Notification's Residuary Category.

  Case-Laws - AT : Imposition of ADD - determination of individual dumping margin - The Appellant wanted individual dumping margin but that was not accepted and the levy of duty as provided in the Notification dated 18 September, 2017 continues. Thus, it would not be necessary for the Central Government to issue a notification for levy of retrospective duty. Duty was required to be paid by the appellants under the residuary category of the notification dated 18 September, 2017 and the same duty continues. - AT
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Corporate Law

• Company Removed from Register for Non-Filing; Directors Disqualified; New Scheme Offers Fresh Start for Defaulting Entities.

  Case-Laws - HC : Striking off the name of Kushal Power from the Register of the Companies - non-filing of financial statements and annual returns - disqualification of directors - The purpose and intent of the Scheme is to allow a fresh start for companies which have defaulted. In order for the Scheme to be effective, Directors of these companies ought to be given an opportunity to avail of the Scheme. The launch of the Scheme itself constitutes a fresh and a continuing cause of action. Under such circumstances, the question of delay or limitation would not arise. - HC
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• High Court Overturns Trial Court's Decision, Citing Jurisdiction Limits Under Companies Act in Civil Suit Dispute.

  Case-Laws - HC : Validity of proceeding with the civil suit - Jurisdiction of civil court in the matters covered by the Companies Act - the conflict between the parties is found to be the dispute covered under the Companies Act, therefore, applying the above dictum of law, the petition is allowed. The order of the learned Trial Court is set aside. - HC
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IBC

• Supreme Court Overrules NCLAT, Restores NCLT Order on Resolution Plans; Stresses Correct Procedures in Insolvency Cases.

  Case-Laws - SC : Viability and feasibility of Resolution Plan - NCLAT remitted /remanded back the matter to the NCLT with a direction to have the Resolution Plan resubmitted before the Committee of Creditors - the NCLAT was wrong in its approach - The impugned order of NCLAT is flawed and hence, liable to be set aside - Order of NCLT restored - SC
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Case Laws:

• GST

• 2020 (9) TMI 214
  Seizure/detention of goods/materials - seizure on the ground that e-Way bills tendered for the goods in movement stood expired when the vehicle entered within the territory of the State of Tripura and were intercepted in the Churaibari Check Post - Section 129(3) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Learned Advocate General has generously agreed and submitted that the court may pass the similar order directing the petitioner to deposit 25% of the tax and penalty along with the bond pledging payment and securing the rest of the demand, subject to the outcome of the appeal. The respondents are directed to release the detained materials, on deposit of 25% of the disputed tax and penalty, by the petitioner, as demanded under Annexure-9 collectively and also on securing the total demand by a bond whereby the petitioner shall pledge for payment of for the rest of the demand subject to the outcome of the appeal - On deposit of 25% of the tax and penalty as aforementioned, and the bond the authority which detained those goods/materials shall release them within three days from the deposit of the said amount and the bond. Time Limitation - HELD THAT:- If the appeal is filed within 15 days from today, the period of limitation shall stand extended till the expiry of that period of 15 days. Petition disposed off.

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• 2020 (9) TMI 213
  Reimbursement of differential tax amount arising out of change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 01.07.2017 - grievance of the petitioner is that in view of the introduction of the GST, petitioner is required to pay tax which was not envisaged while entering into the agreement - HELD THAT:- The Government has now come out with a revised guidelines in this respect in supersession of the guidelines issued vide Finance Department letter dated 07.12.2017. He has filed Additional Counter Affidavit of O.P.-authority in similar cases annexing the revised guidelines relating to works contract under GST issued by the Government of Odisha, Finance Department vide Office memorandum No. FIN-CTI-TAX-0045-2017/38535/F Dated 10.12.2018. In that view of the matter, petitioner shall make a comprehensive representation before the appropriate authority within four weeks from today ventilating the grievance. If such a representation is filed, the authority will consider and dispose of the same, in the light of the aforesaid revised guidelines dated 10.12.2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably by 21.10.2020 - No coercive action shall be taken against the petitioner till 21.10.2020. Petition disposed off.

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• 2020 (9) TMI 212
  Jurisdiction - Contention that order has been passed without considering the reply and no notice issued for penalty - submission of petitioner is that the order is beyond jurisdiction, inasmuch as, the proceedings are culminated in the impunged order dated 03.07.2020, arose out of Section 129 of the U.P. Goods and Services Tax Act, 2017 - HELD THAT:- The pith and substance of the order impugned is in the nature of an order assessing the tax liability of the petitioner and determining the consequent penalty. All other arguments are in the nature of grounds, on the foot of which challenge may be laid to the impugned order. We do not propose to go into the merits of the submissions, at this stage, since an alternative and efficacious remedy is available to the petitioner under Section 107 of the G.S.T. Act. The writ petition is dismissed on the ground of alternative remedy.

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• 2020 (9) TMI 211
  Provisional attachment of property - dispute was raised by the department with regard to the registration of the place of business which was changed during the course of time - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Despite revocation of the order of cancellation, the bank account provisionally attached by the order dated 06.09.2019 has not been released. The result is that the petitioner has not been able to operate his business account. It appears that there is a dispute with regard to payment of GST by the petitioner for the period of business prior to 06.09.2019. In view of the provisions in Section 83(2), it is observed that the provisional attachment order dated 06.09.2019 has outlived its life after a period of one year. The competent authority is directed to consider the grievances of the petitioner and pass a fresh order, keeping in mind the provisions of Section 83(2) and as per law - petition disposed off.

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• 2020 (9) TMI 210
  Refund of outstanding IGST - export of goods out of India as is reflected in the export invoice as well as their GST returns - Circular 40/2018-Cus dated 24th October, 2018 issued by CBIC - HELD THAT:- Issue notice. At the request of Ms. Sonu Bhatnagar, the present case is adjourned to 22nd September, 2020.

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• 2020 (9) TMI 209
  Transitional credit - time limitation - case of petitioner is that the Rule 117 of the Central Goods and Service Tax Rules provides the procedure of transaction of credit pertaining to pre-GST period under Section 140 of CGST Act, 2017 - HELD THAT:- Without entering into the merits of the claim of the petitioner, it is directed that the petitioner may approach the respondent No.5-Additional Commissioner, Central Goods and Services Tax (CGST), Nodal Officer IT Grievance Redressal Mechanism by moving a fresh application along with a copy of this order within a period of three weeks from today. The respondent No.5-Additional Commissioner, Central Goods and Services Tax (CGST), Nodal Officer IT Grievance Redressal Mechanism is directed to look into all the grievances of the petitioner, and take necessary steps to redress the same within a period of four weeks thereafter. Petition disposed off.

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• 2020 (9) TMI 208
  Maintainability of petition - Seeking time for filing of the reply to this application - HELD THAT:- What happens in the filing of return is a positive act on the part of assessed and corresponding acceptance of such positive act by the revenue. In the present case, the positive act in the nature of filing of the return did take place, but the effort was negated by the respondents and now blame is being put on the system that respondents have adopted to enable e-filing of tax returns. In such a case the system can always be amended suitably for the system is created by human beings and not the viceversa. Two weeks time granted to the respondents to file reply in the matter. Meanwhile, respondents shall make suitable amends to the system and accept the returns filed by the petitioner on or before the next date. If the petitioners returns are not accepted online, the petitioner shall be allowed to file them manually, which returns shall be taken on record by the respondents - Stand over for two weeks.

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• 2020 (9) TMI 207
  Confiscation of goods and conveyance - Final order of confiscation - Form GST MOV-11 - principles of natural justice - HELD THAT:- It appears that the writ applicant was not given any opportunity of hearing before the final order in Form GST MOV-11 came to be passed. Matter remitted to the respondent No.3 so as to give an opportunity to the writ applicant to make good his case why the goods and conveyance are not liable to be confiscated under Section 130 of the GST Act, 2017.

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• 2020 (9) TMI 206
  Violation of the principles of natural justice - Validity of assessment order - CGST Act - periods 2017-18 to 2019-20 - HELD THAT:- The Assessing Officer, in all fairness, should wait till the end of the working day when personal hearing was fixed, before finalizing the assessment. Finalization of assessment on the same day when the matter was listed for hearing would militate against the requirement of natural justice. Let notice be issued afresh to the petitioner to enable them to appear and make its submissions and let orders be passed within a period of eight (8) weeks from date of first hearing, in accordance with law. Petition disposed off.

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• 2020 (9) TMI 205
  Revenue appeal agaisnt grant of Anticipatory Bail by the session court - Restraint on the petitioner (revenue) from infringing the fundamental right of life and liberty - At the outset, Mr Rohtagi, learned senior counsel appearing for the respondent, fairly stated that the remedy availed by the respondent for filing anticipatory bail in the given circumstances was erroneous. HELD THAT:- Considering the peculiar circumstances of this case and the concession made by Mr Rohtagi, this Court considers it apposite to set aside the impugned order dated 13.08.2020. It is so directed. In addition, it is also directed that in the event, the petitioner or any of its officers propose to take any coercive action against the respondent, the petitioner shall serve a weeks prior notice. Petition allowed.

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• Income Tax

• 2020 (9) TMI 204
  Income from other sources - accrual of income - ITAT held that sum received by the assessee pursuant to a Development Agreement had not accrued as income and was, there fore, not taxable till the Joint Development Agreement took off and sale proceeds were received by the developer? - assessee continued to show the same as a liability - HELD THAT:- There is no finding rendered by the Assessing Officer that the sum of Rs. 9 Crores does not fall under the heads A to E to be brought under head F which deals with Income from other sources . Therefore, the finding of the Assessing Officer is perverse. What weighed in the mind of the Assessing Officer to hold that the amount of Rs. 9 Crores lies in the hands of the assessee was a windfall gain is by referring to an event which took place during the assessment year 2015-16. Obviously, this could not have been done by the Assessing Officer because the assessment which was the subject matter of consideration was of the year 2007-08. The Joint Development Agreement , Power of Attorney, the mortgage were all in force at the relevant time. In fact, even on the date when the Assessing Officer completed the assessment under Section 147 of the Act by order dated 25.03.2015, the Joint Development Agreement was not rescinded and the Power of Attorney was not cancelled. Therefore, on facts, the Assessing Officer could not have held that this is on account of a windfall gain to be brought to tax under the head income from other sources . Thus we hold that the order passed by the Tribunal does not call for any interference and consequently, the Substantial Question of law is required to be answered against the revenue.

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• 2020 (9) TMI 203
  Violation of the principles of natural justice - condonation of delay - delay of three days - HELD THAT:- The reasons for delay are stated to be a miscalculation of the period of limitation. Bearing in mind the period of delay and the reasons expressed, thus the delay is liable to be condoned. W.P is closed and the petitioner is permitted to pursue the statutory appeal filed. No costs. Connected Miscellaneous Petitions are closed. Stay of demand - recovery proceedings - attachment of bank accounts - HELD THAT:- The first respondent is directed to consider and dispose the application for stay dated 18.03.2020 within a period of six (6) weeks from date of uploading of this order after hearing the petitioner, either over video conference or by way of physical hearing as may be mutually convenient to the parties. Let the attachment of the bank accounts of the petitioner continue. However no further recovery proceedings will be initiated till the disposal of the stay application.

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• 2020 (9) TMI 202
  Stay of demand - Direction to pay 20% of the demand - appellant submits that in similar circumstances a Division Bench of this Court issued Annexure A judgment permitting a Co-operative Bank to pay 1% of the demand, for staying the recovery while the first appeal was pending - in second appeal, by Ext.P16 the Tribunal had directed ascertainment of the business income of the assessee and allow deduction under Section 80P - HELD THAT:- Issue dealt with by the statutory authority was not with respect to the details of depositors, but with respect to the transferring of provisions and reserves to the P L account and claiming deduction under Section 80P. These are all adjustments made in the account which were found to be not proper by the Assessing Officer, in addition to which the relief under Section 80P was also declined. Tribunal had merely directed the deduction to be granted under Section 80P after ascertaining the business income. In such circumstances, we do not see any similarity between the issue imugned in the writ petition and and that raised in Annexure A. As left with the order of the learned Single Judge which directed payment of 20% of the demand within one month which is an exercise of discretion, we would not interfere in appeal unless there is shown arbitrariness or illegality. The appellant is granted two months time from today, if he pays 10% of the amounts by 30.09.2020 and another 10% by 30.11.2020.

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• 2020 (9) TMI 201
  Stay of demand - requiring the petitioner to deposit 20% of the demand while disposing of his application filed under Section 220(6) - HELD THAT:- In the present case, upon a perusal of both the orders of demand we find that they are non-speaking - A detailed application was given under section 220(6) of the Act elaborating all the reasons on the basis of which a complete stay order was being sought but the authorities without dealing with any of the grounds has passed a completely non-speaking order in violation of the Instructions and the Guidelines issued by the Department. We allow this petition setting aside both the orders and directing the Assessing Authority (respondent No.1) to pass a fresh order in accordance with law taking into consideration the observations made above and the applicable Guidelines within a period of 15 days from the date of communication of this order.

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• 2020 (9) TMI 200
  Petitions u/s 154 - petitioner not complied with the requirements of Section 194N - HELD THAT:- Petitioner only asked for a Mandamus for directing the respondent to dispose of this petition. When the petitioner himself has not challenged the orders passed by the respondent, it would not be proper for me to quash the same. However, the respondent is directed to dispose of the petitions filed by the petitioner u/s 154 of the Act in the light of the order [ 2020 (8) TMI 728 - MADRAS HIGH COURT] . Such an order will be passed by the respondent within a period of twelve weeks from the date of receipt of a copy of this order. The respondent is restrained from giving effect to the order that is sought to be rectified by the petitioner herein till the rectification proceedings are concluded.

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• 2020 (9) TMI 199
  Exemption u/s 11 - surplus from exhibition activity - assessee is a registered trust engaged in the activity of promoting and fostering feelings of unity and cooperation and mutual help and to eliminate unhealthy competition and unfair trade practices among the Promoters and Builders Association of Pune - HELD THAT:- Holding of exhibition by the assessee trust is only furtherance of the charitable activity of the trust wherein, the healthy environment is provided for businessmen so that all the stake holders i.e. businessmen and customers are benefited and they also make aware of various activities like pollution control, city development, legal assistance etc which are in the nature of charitable activities and these certainly reached out to the greater number of people of the society. It is not disputed that clause (vii) in the Memorandum of Objects is one of the pertinent object of the assessee trust and fulfillment of such object benefited the public at large by holding the exhibition and therefore, is a part of charitable activity conducted by the assessee trust. Merely having surplus in one year does not change the character of the trust to a business or profit making entity which is otherwise a charitable trust advancing work of general public utility and certainly not hit by the first proviso to Section 2(15) of the Act. Since the Assessing Officer has denied the benefit of sections 11 and 12 which has been upheld by the Ld. CIT(Appeals) also on the ground that the assessee did not fall within the scope of charitable purposes defined in section 2(15) of the Act because of carrying on or rendering of any services in business, trade and commerce and this in our considered opinion is not a correct interpretation of the provision. Set aside the order of the Ld. CIT(Appeal) and direct the Assessing Officer to grant benefit of exemption u/s.11 and 12 of the Act to the assessee. - Decided in favour of assessee.

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• 2020 (9) TMI 198
  Rectification of mistake u/s 154 - unabsorbed depreciation - HELD THAT:- Hon ble Gujarat High Court in General Motors India P.Ltd. Vs. DCIT [2012 (8) TMI 714 - GUJARAT HIGH COURT] has held that any unabsorbed depreciation available to an assessee as on 01-04-2002, namely, A.Y. 2002-03, will be dealt with in accordance with the provisions of section 32(2) as amended by the Finance Act, 2001 and not by the provisions of section 32(2) as stood amended. That is how, the Hon ble Gujarat High Court decided the issue in favour of the assessee. That being the position, no rectification u/s. 154 could have been done qua the unabsorbed depreciation pertaining to the A.Yrs. 1997-98 and 1998-99. Set off of brought forward losses, which was set off by the assessee and rectified by the AO in his order u/s.154 - AO categorically observed that as per records there was no brought forward loss available for set off against the current year s income. Such a finding has not been controverted by the assessee either before the ld. CIT(A) or the Tribunal. In fact, the ld. AR candidly admitted the stand point of the Revenue on this score - amount of set off of brought forward loss claimed by the assessee in its return which was wrongfully allowed in the original assessment, was not admissible and has rightly been rectified u/s.154 of the Act. - Decided partly in favour of assessee.

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• 2020 (9) TMI 197
  Revision u/s 263 - Reopening of assessment - nexus between the particular property acquired and the loan amount obtained for such purpose - HELD THAT:- We do not agree with the contention of the Ld. AR since taking a view should be backed by reasons and that reasons should be demonstrated in the order itself with evidences brought on record and independent enquiry conducted. In this case AO has not at all gone into the area of examination of facts concerning the said nexus which is the subject matter of order u/s.263 by the Ld. Pr. Commissioner of Income Tax and therefore, on this issue, the AO has not formed any view. When no view has been taken, no enquiry has been conducted, when no reasons on facts has been placed on record, the order of assessment is bound to be erroneous in so far as prejudicial to the interest of the revenue. In the case of Rampyari Devi Sarogi vs. CIT [ 1967 (5) TMI 10 - SUPREME COURT] and Tara Devi Aggarwal v. CIT [ 1972 (11) TMI 2 - SUPREME COURT] has held that where Assessing Officer has accepted a particular contention/issue without any enquiry or evidence whatsoever, the order is erroneous and prejudicial to the interest of the Revenue. In the case of Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] while upholding the judgment of the Hon ble High Court observed that Indeed, the High Court recorded the finding that the ITO failed to apply his mind to the case in all perspective and the order passed by him was erroneous. Therefore, the Hon ble High Court has rightly held exercise of the jurisdiction by the Commissioner u/s.263 was justified. Taking the totality of facts and circumstances and judicial pronouncements into consideration, we uphold the order passed u/s.263 of the Act by the Ld. Pr. Commissioner of Income Tax.- Decided against assessee.

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• 2020 (9) TMI 196
  Exemption u/s 11 - Providing education through Medical College - inadequate infrastructure - Pr. CIT has withdrawn the registration granted to the assessee u/s 12AA of the Act by invoking section 12AA(3) with retrospective effect - HELD THAT:- PCIT did not have record of activities which are not in accordance with the objects of the trust. The entire order of the PCIT is based on the appraisal report of DDIT( Inv.) only. We do not find mention of any material being referred by the ld. PCIT and its applicability to any of the provisions of Section 2(15 ) and/or Section 12AA(3 ) while revoking the registration. The Act envisages where a trust or an institution has been granted registration u/ s 12AA(1 )(b) or has been obtained registration at any time u/ s 12A. PCIT can cancel the registration if the conditions mentioned therein are not satisfied or the activities of the trust are not genuine or the activities are not carried out in accordance with the objects of the trust. We do not find that the ld. PCIT has brought out any of the conditions laid down as above. There have been deficiencies in the infrastructure as found by the first report which were found to have been rectified by the second committee comprising of Addl. Secretary, Go I Dean AIIMS, Addl. DG, DGHS, and keeping in view the fact that MCI has granted due permission for the academic session 2010-11, keeping in view the fact of non- sanction of prosecution of Sh. Ketan Desai, keeping in view the order of the Hon ble High Court of Delhi, dropping the proceedings till sanction is received, keeping in view the submission of the revenue that no prosecution is pending against the assessee as on now, keeping in view the aims objects of the trust are in consonance with the provisions of Section 2 (15 ) there has been no violation of clause (ii) para 4 of the trust deed as alleged by the ld. PCIT, we hereby hold that the order of the ld. PCIT dated 27 .10 .2017 cancelling the registration since inception, u/s 12AA(3) of the Act is legally not valid. 1) The order of the ld. PCIT cancelling the registration since inception is hereby revoked. 2) The order has been passed in accordance with the provisions of the Income Tax Act, 1961 and shall not impact the outcome of any proceeding under any other Acts promulgated under Constitution of India. 3) The revenue shall be at liberty to approach the Tribunal for re-institution of the appeal on re-commencement of trial against Sh. Ketan Desai which has been since dropped. - Appeal in favour of assessee.

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• 2020 (9) TMI 195
  Deduction u/s 80IB(10) - revenue contended that, assessee is not eligible for deduction since the matter is sub-judice regarding deduction u/s 80IB before High Court - HELD THAT:- As carefully gone through the orders passed by the Tax Authorities. While allowing the assessee s appeal, Ld. CIT(A) rightly followed the decision of the ITAT Hyderabad Bench [ 2015 (10) TMI 80 - ITAT HYDERABAD] in assessee s own case, wherein an identical issue was decided by the Tribunal in favour of the assessee. Therefore, we are of the view that the order passed by the ld. CIT(A) is fair and reasonable and it does not call for any interference. - Decided against revenue.

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• 2020 (9) TMI 194
  Validity of reopening of assessment u/s 147 - onus on the AO to show that primary disclosure was not sufficient for further investigation by the AO - HELD THAT:- In the reasons recorded, the AO has alleged that which is debited to P L Account is in the nature of future content expenditure and should have been disallowed. In our considered opinion these details were very much available during the course of the original assessment proceedings, therefore, imagine on the part of the AO not to apply the law correctly cannot confer power on the Assessing Officer to reopen the case. Reopening is not based on any fresh new tangible material, evidence brought on record, therefore, the ratio laid down by the Hon ble Supreme Court in the case of Kelvinator of India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT] squarely apply wherein the Hon ble Supreme Court has held that Assessing Officer cannot proceed to reopen the assessment on the basis of mere change of opinion. We are of the considered opinion that exemption of jurisdiction u/s 147 of the Act by issue of notice u/s 148 of the Act is bad in law and deserves to be quashed. - Decided in favour of assessee.

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• 2020 (9) TMI 193
  Deduction u/s 80lB(10) - Profit attributable to Car parking space and preferential location charges - Revenue contended that, assessee does not qualify for exemption beyond 1500 sq. ft. if car parking space and PLC are included and thereby violating sec. 80IB(10) - HELD THAT:- Taking note of the decision of the Hon ble Bombay High Court s decision in the case of Purvankara Projects Ltd [ 2011 (7) TMI 1352 - BOMBAY HIGH COURT] and M/s.Vaman Estate [ 2012 (10) TMI 1208 - ITAT MUMBAI] we find that the car parking space sold to the owners of the residential unit of the housing projects are eligible for claiming of deduction u/s. 80IB(10) of the Act and it has been rightly claimed by the assessee because the profits derived from sale of car parking space as well as preferential location charges (PLC) Height Escalation Charges (HEC) are part and parcel of the housing projects. Since these are integral part of the housing project, the profit derived from sale of car parking space as well as on PLC HEC is eligible for deduction u/s. 80IB (10) of the Act since deduction u/s 80 IB is available in respect of eligible housing project. Therefore profits derived by assessee from eligible housing project including the profit from sale of car-parking/PLC HEC as discussed has been rightly allowed by the Ld CIT(A). Therefore, we do not deem it necessary to interfere in the impugned order of the ld. CIT(A) and accordingly, ground No.1 2 raised by the revenue are dismissed. Addition for compensation paid u/s. 37(i) and 40(a)(ia) - CIT- A deleted the addition - HELD THAT:- Payment has been made through banking channel, which fact has not been disputed by the revenue. The assessee has given justification for compensation of payment to the said persons. The AO has alleged that the assessee failed to deduct TDS on such payment. And the AO disallowed the expenditure u/s. 37(1) read with section 40(a)(ia) of the Act. However, we note that there is no specific provision specified in Chapter XVII(B) of the Act by virtue of which assessee is obliged to deduct tax at source. We note that if these two persons were not evicted the assessee could not have completed the housing project and these two would not have vacated unless they were paid compensation as agreed between them. Therefore the compensation paid to these two persons was on account of commercial expediency, so it is an allowable deduction. CIT(A) has rightly deleted the same. Therefore, we do not want to interfere with the impugned order of the Ld. CIT(A) on this issue and so we uphold the same. This ground of revenue is dismissed.

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• 2020 (9) TMI 192
  Validity of assessment - non-service of the notice u/s.143(2) - HELD THAT:- As observed from the order-sheet produced by the CIT DR that the order has been issued on 04.09.2014 for fixing the case for hearing on 13.10.2014 which has been duly dispatched to the assessee on 12.09.2014 as per the Dispatch No.6181, Office of the Additional CIT/JCIT, Range-2, Bhubaneswar and it has not been returned unserved. It is also clear from the assessment order that the assessee has appeared from time to time before the AO, which is clear from the order-sheet produced by the CIT DR and the assessee has never raised any objection regarding service of notice and jurisdiction of the AO before the AO as well as before the CIT(A). It is also clear from the record that the assessee has raised this issue first time before us, however, the documents which were produced before us, did not speak that the assessee has raised this issue before the lower authorities. CIT DR has produced sufficient evidences for substantiating the case in favour of Revenue and we are in agreement with the documents produced by the ld. CIT DR regarding legal issue raised by the assessee. We dismiss the legal grounds raised by the assessee in the form of additional ground challenging the issuance of notice u/s.143(2) of the Act by the AO as well as the ground No.1 raised by the assessee in the grounds of appeal filed in Form 36. Addition to sundry creditors - HELD THAT:- From the order of AO, we find that the AO has accepted the cost of raw material consumed, work-in-progress and finished goods as well as revenue from operations but the AO has not accepted the current liabilities appeared in the books of the assessee. Without the purchases, how the manufacturing process can be done and sales can be made. If there was not genuine or bogus creditors credited by the assessee the effect must be given on the financial statements prepared by the assessee. But the AO has one-sided taken view that the purchase is bogus. This view of the AO is not correct and our view is supported by the decision of the coordinate bench of the Tribunal in the case of Smt. Sudha Loyalka [ 2018 (7) TMI 1892 - ITAT DELHI] - we delete the addition made by the AO and confirmed by the CIT(A) on account of unexplained sundry creditors. Addition for want of non-compliance by the assessee during the course of assessment proceedings - HELD THAT:- After careful consideration of the rival submissions, we noticed from the financial statements for the relevant financial year 2012-2013 after current liabilities there is appearing of advance from parties of Rs. 28,50,000/- and there is also opening balance of Rs. 25,50,000/- for the current financial year i.e. only exceeded Rs. 3 lakhs exceeded. During the course of hearing, ld. AR of the assessee submitted that no any fresh advances have been taken from the parties, therefore, as per our considered opinion, Rs. 25,50,000/- is relating to the financial year ended 31.03.2012, which cannot be added in this current assessment year under the scrutiny proceedings. Therefore, the assessee gets relief of Rs. 25,50,000/- and Rs. 3 lakhs is upheld. This ground No.3 of the appeal of the assessee is partly allowed.

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• 2020 (9) TMI 191
  Validity of reopening of assessment - non recording of reasons before triggering reassessment proceedings - mandatory requirements of recording of reasons - HELD THAT:- Date of issue of notice was 21/08/2013 whereas the reason were recorded on 27/08/2013 which was in violation of express provisions of Sec.148(2). The logic is simple. The recording of reasons would be an essential pre-requisite before triggering reassessment proceedings against the assessee. The case could be re-opened only in case Ld. AO had reasons to believe that certain income escaped assessment in the hands of the assessee. The formation of that belief is sine qua non before reopening the case of the assessee and therefore the same should precede the issue of notice u/s 148. Notice u/s 148 could not predate the reasons recorded by Ld. AO since the same would defeat the jurisdictional requirement of satisfaction on the part of Ld. AO before reopening the case of the assessee. This jurisdictional requirement is mandatory one and the same could not be overcome by mere fact that the assessee did not object to the same or participated in the assessment proceedings. See RAJOO ENGINEERS LTD. [ 2008 (7) TMI 1013 - GUJARAT HIGH COURT] - Decided in favour of assessee.

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• 2020 (9) TMI 190
  Levy of late filing fee u/s 234E - intimation under Section 200A - delayed filing of the TDS statements - HELD THAT:- Where power is being enshrined upon the AO to charge late fees while processing the TDS returns w.e.f. 01.06.2015, such provision cannot have retrospective effect as it would be detrimental to the case of tax payer. The provision under which a new enabling power is being given to charge fees under section 234E of the Act while processing TDS returns / statements and such power is to be applied prospectively. In any case, the Parliament itself has recognized its operation to be prospective in nature while introducing clause (c) to section 200A(1) of the Act and hence, cannot be applied retrospectively. Amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E . Hence, the intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A of the Act and such adjustment could not stand in the eye of law.- Decided in favour of assessee.

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• 2020 (9) TMI 189
  Levy of late filing fee u/s 234E - intimation under Section 200A - contention of the assessee that fee u/s 234E is not leviable before 01.06.2015, i.e., the date when clause (c) was inserted in section 200A(1) for the computation of the said fees at the time of processing - delay in filing of the TDS statements and interest u/s 220(2) - HELD THAT:- Our coordinate Benches have followed one approach in view of conflicting decision of different High Courts in the absence of any decision of the Jurisdictional High Court. So far as the levy of fee u/s. 234E for defaults of period in filing TDS/TCS statements / returns even for the period prior to 1.06.2015 is concerned, as mentioned earlier there are conflicting decisions by different High Courts and there is no decision on this issue by the jurisdictional High Court. While Hon ble Karnataka High Court is in favour of the assessee holding that the amendments brought in statute w.e.f. 01.06.2015 are prospective in nature and hence notices issued u/s. 200 A of the Act for computation and intimation in payment of late filing fee u/s.234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable, the Hon ble Gujarat High Court has decided the issue against the assessee and in favour of the revenue. After considering the above conflicting decisions, the coordinate benches of the Tribunal are taking the view that when there are conflicting decisions, the decision in favour of the assessee should be followed case of Vegetables Products Limited [ 1973 (1) TMI 1 - SUPREME COURT] . We hold that the CIT(A) is not justified in confirming the late fee levied by the AO u/s. 200 A r.w.s. 234 E since the defaults are prior to 1.06.2015. Accordingly we set aside the order of the Ld. CIT(A) and the fee levied u/s. 234 E and interest there on u/s. 220 (2) is directed to be deleted. Appeals filed by the assessee are allowed.

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• 2020 (9) TMI 188
  Rejection of the books of account - HELD THAT:- CIT(A) has observed that the assessee did not filed the books of account whereas the books of account has filed lies at page no. 264-265 of the paper book. Anyhow taking into account all the facts and circumstances, we are of the view that each and every explanation is liable to be considered while accepting or rejecting the books of account, hence, we set aside the finding of the CIT(A) on this issue and restore the issue before the AO to decide the matter of controversy afresh specifically in view of the explanation given by assessee in view of the letter dated 20.02.2015. Accordingly, we decide this issue in favour of the assessee against the revenue. Unexplained investment - addition on the basis of scrips - as per assessee AO nowhere provided company letter of scrips before addition, therefore, in the interest of justice, the company letter/material should be given before raising the addition in accordance with law, hence addition is not liable to be sustainable - HELD THAT:- Addition is liable to be examined once again by the necessary documents/opportunity to the assessee in accordance with law. Addition of unexplained deposits - HELD THAT:- Since this addition are required to be confirmed, therefore, we set aside the finding of the CIT(A) on this issue and restore the issue before the AO to decide the matter of controversy afresh in the light of evidence mentioned above in accordance with law. Accordingly, this issue is decided in favour of the assessee against the revenue. Addition of share of profit from partnership firm - HELD THAT:- As specifically argued that the final figure is not on record, therefore, the issue is liable to be restored to the file of the AO to decide the matter of controversy afresh to adopt the final figure of profit determined in case of M/s. Sunrise Enterprises in the hands of the assessee. Anyhow when the profit figure has been taken from the M/s. Sunrise Enterprises, therefore, it is necessary to determine the matter of controversy on the basis of the final figure of profit determined in the case of M/s. Sunrise Enterprises - direct the AO to decide the matter of controversy afresh, after obtaining the final figure of the profit determining in the case of M/s. Sunrise Enterprises. Disallowance u/s 14A - Disallowance of interest expenditure - HELD THAT:- Since the assessee had not earned any exempt income during the year relevant to the assessment year under consideration, we direct the AO to allow the deduction in respect of interest accrued and calculate @ 12% per annum in terms of the order passed by the coordinate Bench in the case of Sudhir Mehta vs. DCIT [ 2017 (12) TMI 1668 - ITAT MUMBAI ]. Unexplained investment in shares - discrepancies has been explained after due verification of the claim and CIT-A deleted addition - HELD THAT:- Nothing came into noticed that which scrips has not been explained by assessee. The transaction has been explained satisfactorily. Since the CIT(A) has allowed the claim of the assessee on the basis of satisfactorily explanation of the assessee in connection with the transaction in question, therefore, we nowhere found any ground to interfere with the finding of the CIT(A) in question. Accordingly, we decide this issue in favour of the assessee against the revenue.

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• 2020 (9) TMI 187
  Estimation of sales - Seizure activities - difference between the weight and the value was determined depending upon the purity of the gold as reflected in the working giving in the seized documents - addition by taking 5% net profit on such alleged sales - HELD THAT:- We find that the assessee right from the stage of the assessment proceedings has been clarifying that the quantity of purchase and sale mentioned in the seized documents has duly been disclosed in the working of purchase and sale of jewellery and the figures are not in terms of value. Prima facie the figures of weight/quantity has been wrongly inferred by the AO. This explanation was also given before the CIT (A) also as incorporated above. From the perusal of the seized documents reflects that there was a closing balance of gold jewellery 2763.010 gms which are in terms of quantities and the AO has interpreted the same as alleged sales of Rs. 27,63,010. It was specific clarified before the authorities below that the difference between the weight and the value was determined depending upon the purity of the gold as reflected in the working giving in the seized documents. A bare perusal of these documents read with explanation it is quite clear that the value of the quantity of the gold jewellery has been inferred as in terms of value and the sales has been estimated on the basis of values instead of working given by the assessee in terms of quantity of purchase and sale. The sales declared by the assessee entire quantity recorded in the seized documents and the difference is only on account of inference drawn by the AO that these quantities are in fact in rupees. Otherwise there is no difference in quantities mentioned in the seized records. - Appeal of the assessee is allowed.

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• 2020 (9) TMI 186
  Levy of late filing fee u/s 234E - intimation under Section 200A - contention of the assessee that fee u/s 234E is not leviable before 01.06.2015, i.e., the date when clause (c) was inserted in section 200A(1) for the computation of the said fees at the time of processing - delay in filing of the TDS statements and interest u/s 220(2) - HELD THAT:- Our coordinate Benches have followed one approach in view of conflicting decision of different High Courts in the absence of any decision of the Jurisdictional High Court. So far as the levy of fee u/s. 234E for defaults of period in filing TDS/TCS statements / returns even for the period prior to 1.06.2015 is concerned, as mentioned earlier there are conflicting decisions by different High Courts and there is no decision on this issue by the jurisdictional High Court. While Hon ble Karnataka High Court is in favour of the assessee holding that the amendments brought in statute w.e.f. 01.06.2015 are prospective in nature and hence notices issued u/s. 200 A of the Act for computation and intimation in payment of late filing fee u/s.234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable, the Hon ble Gujarat High Court has decided the issue against the assessee and in favour of the revenue. After considering the above conflicting decisions, the coordinate benches of the Tribunal are taking the view that when there are conflicting decisions, the decision in favour of the assessee should be followed case of Vegetables Products Limited [ 1973 (1) TMI 1 - SUPREME COURT] . We hold that the CIT(A) is not justified in confirming the late fee levied by the AO u/s. 200 A r.w.s. 234 E since the defaults are prior to 1.06.2015. Accordingly we set aside the order of the Ld. CIT(A) and the fee levied u/s. 234 E and interest there on u/s. 220 (2) is directed to be deleted. Appeals filed by the assessee are allowed.

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• 2020 (9) TMI 185
  TP Adjustment - comparable selection - HELD THAT:- Tribunal in Assessment Year 2003- 04 has directed for exclusion of six comparable companies. Therefore, respectfully following the same, we direct the Assessing Officer/TPO to exclude the six comparable companies mentioned hereinabove. Depreciation @ 15% under the block furniture and fixtures - addition in the nature of lease hold improvement - HELD THAT:- Undisputedly, expenditure on account of civil and interior works and payment has been made only to one M/s Decorator Pvt Ltd. Considering the nature of expenditure, it can be safely concluded that the entire expenditure has been made for improvement of civil supply altering building by civil work. In our considered opinion, such civil work definitely gives a benefit of enduring nature. No error or infirmity in the findings of the ld. CIT(A). This grievance is accordingly dismissed.

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• 2020 (9) TMI 184
  Opening work-in-progress - business loss on demolished project - AO was of the opinion that the opening work-in-progress was a capital loss as the assessee has demolished the constructed property - HELD THAT:- Assessee s case is that there has been court cases and amendments in the rules and plans which have led to the change in plan and consequent amendment and demolition of certain aspects of the project. But the assessee s contention is that assessee is still continuing with the project and the expenditure in this regard has to be treated as work-in-progress in as much as assessee is following project completion method Matter needs to be remitted to the file of AO as directed to consider the veracity of assessee s submission with reference to the relevant evidences. If the assessee s submissions regarding the change in rules and other aspects are found to be cogent, then the assessee s claim of work-in-progress and the assessee s following of project completion method have to be examined on the touchstone of Hon ble Delhi High Court decision in the case of Lunar Electrical [ 2012 (4) TMI 51 - DELHI HIGH COURT] - Remit the issue to the file of Assessing Officer - Assessee appeal allowed for statistical purposes

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• 2020 (9) TMI 183
  Revision u/s 263 - assessee has not offered notional rent on its unsold flats, which are assessee s stock in trade - assessee submitted that the flats are unsold stock in trade of the assessee - HELD THAT:- We find that the unsold flats are stock in trade of the assessee. The relevant provision for bringing the same under the ambit of income from house property has been introduced by Finance Act by introduction of Section 23(5). Provision in the Act for BRINGING to tax the notional rent on unsold stock of house property was brought into effect from assessment year 2018-19. In the present case, the assessment year is 2014-15 and hence the said provision is not at all applicable for the current assessment year. As referred by the learned counsel of the assessee in the decision of Hon ble Gujrat High Court in the case of Neha Builders (P.) Ltd. [ 2006 (8) TMI 105 - GUJARAT HIGH COURT] it was held that notional house rent cannot be computed for stock in trade. The Hon ble Supreme Court in the case of CIT vs Vegetable Products Ltd., [ 1973 (1) TMI 1 - SUPREME COURT] has expounded that if two constructions are possible, one in favour of assessee has to be adopted. Even from this point of view on the touchstone of Hon ble Gujrat High Court decision, as referred above, notional house rental income cannot be computed for the unsold flats of the assessee. Admittedly, when an issue is before the Hon ble Supreme Court and has not yet been decided, the issue can be considered to be a debatable issue and in such circumstances as long as there is existence of debate about both point of view, the learned CIT is not empowered to exercise jurisdiction under Section 263 of the Act in support of one point of view to which he subscribes. This view is duly supported by the decision of Hon ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs CIT [ 2000 (2) TMI 10 - SUPREME COURT] . Thus exercise of jurisdiction under Section 263 of the Act by the learned CIT is not sustainable - Decided in favour of assessee.

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• 2020 (9) TMI 182
  Assessment u/s 153 A - Validity of search - denial of exemption under section 11 - Issue of Capitation Fees - Donation from the students - Presumption u/s 292C - HELD THAT:- Carrying out search against the person i.e issuance of warrant of authorization against the person for raising presumption is not necessary. There should be a search and the person is whose control and possession assets/books/ documents are found may be some person or may be other. If these items are found in control and possession of the person searched then presumption would be raised against the person searched in respect of these items. But if these items are found in control and possession of some other person during the course of search then presumption would be raised against that other person. In the absence of working out of the basic parameters regarding the ownership of transactions as to how they culminate into the determination of concealed income, the presumptive clauses provided u/s 132(4A) cannot be invoked in the instant case. As considered the fact of seizure of cash and its relation to the collection of capitation fees. The cash balance as per the books of account as on 18.09.2014 was Rs. 8.5 crores. The cash seized was Rs. 6.6 crores. Hence, the revenue s endeavor to relate the presence of cash to collection of capitation fee false flat. The issue of cash seizure is dealt further in this order about its source, accountability, reconciliation and taxation thereof. There has been a sequence of admission of Shobhit Pal and Anuj Agarwal to the medical courses which has been narrated above. No examination of the students from whom the amounts purportedly have been received has been undertaken by the revenue to prove receipt of donation. The writings on the empty envelops have not been examined. Other than the loose papers, there has been no evidence corroborating receipt of the amounts from these two persons to the tune of Rs. 73 lacs. We also find that no primary evidence has been available with the Revenue authorities extrapolating the amount and work out the donation purportedly received. The addition of Rs. 29.30 crores has been made on the strength of two papers wherein the amount of Rs. 65 lakhs has been purportedly written cannot be held to be valid. The reliance on the case of M/s Rohilkhand Educational Charitable Trust is found to be misplaced. Having given due consideration to of the seized material, having mulled over the arguments of ld. AR and the ld. DR, after going through the presumption as to assets, books of accounts u/s 292C and after examining the process of admission as per UPUMCWA, we hereby direct that the addition made by the Assessing Officer cannot be held to be legally valid and so as the extrapolation made by the AO for the other years. - Decided in favour of assessee. Seizure of cash - Addition on account of unexplained cash in the hands of main Trustee and Chairman of the Trust and on protective basis in the hands of the assessee trust - HELD THAT:- Cash has to be assessed in the hands of the trust SRMST, Bareilly. The reconciliation statement has been rejected en-bloc by the revenue. The facts or the explanation given by the assessee has not been examined by the Revenue in a right perspective so as to determine the accountability of these amounts in the regular books or not. Keeping in view the cash deposited in the bank, expenses, cash balance as per the books and cash found at the premises, the reconciliation filed by the assessee, we here by remand the matter to the file of the assessing officer for the limited purpose of verifying the cash balances with the regular books of accounts filed by the assessee as well as with the balance sheets and income and expenditure accounts available with the revenue along with the returns and the books of accounts available in the seized material. In order to arrive at a coherent decision, this exercise of verification shall be carried out under the effective supervision of the officer who authorizes the officers to file appeals before the tribunal so as to avoid duplication. Addition of cash seized during the search conducted in the premises - Addition in the hands of trustee - HELD THAT:- The cash seized has been treated as income of the assessee whereas it has been explained undisputedly that the cash belongs to the trust in which the assessee is a trustee. The material found during the course of search, books of account and the cash found have to be examined together rather than in isolation and it should reflect the true state of affairs of the assessee. The taxation has to be done as per law in the correct hands. Since we have already adjudicated on the issue of cash seizure in the case of the trust, we hereby delete the addition made in the hands of the trustee. Valuation of properties/Unexplained investment in the building - CIT(A) deleted the addition as the difference between the actual investment, shown by the assessee and the estimated by the D.V.O., is only 9.86%, which is less than 15% - HELD THAT:- During the arguments before us, the Revenue could not controvert the factual findings. Hence, the addition made on account of the difference of the investment and as estimated by the D.V.O., being less than 15%, the same is hereby ordered to be deleted.

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• 2020 (9) TMI 181
  Income from house property - ALV u/s 23(1)(a) - Municipal value of property or actual rent received - determining ALV to undertake and apply known method of working out the Annual Value - CIT-A adopting the rent paid by the earlier licensee for the earlier period as Annual value (ALV) for the present year for the purpose of section 23(1)(a) - determining reasonable expected rent of a house property - HELD THAT:- As per section 23(1)(a), the annual value of any property shall be the sum for which the property might reasonably be expected to be let from year to year. It may neither be the actual rent derived nor the municipal valuation of the property. It is something like notional rent which could have been derived, had the property been let. In determining the reasonable rent, several factors have to be taken into consideration, such as, location of the property, annual ratable value of the property fixed by the municipalities, rents of similar properties in neighborhood, rent which the property is likely to fetch having regard to demand and supply, cost of construction of the property and nature and history of the property. These factors play vital role in determining reasonable expected rent of a house property. In the instant case, as mentioned earlier, the leave and license agreement dated 01.01.2010 for a period of 36 months i.e. from 01.01.2010 to 31.12.2013 and subsequent leave and license agreement dated 01.01.2014 for a further period of 36 months i.e. from 01.04.2013 to 31.03.2016 are exactly the same. In the instant case, as stated by the AO as per the website of MCA the assessee was a major shareholder and Director in the company to whom property has been rented i.e. Joseph Leslie Dynamiks Mfg. Ltd. We are of the considered view that the above principles in Tip Top Typography [ 2014 (8) TMI 356 - BOMBAY HIGH COURT] are applicable to this case. Considering the facts and circumstances of this case, we admit the additional evidence filed by the assessee. Accordingly, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to make an order afresh by examining the Leave and License Agreement dated 7.7.2012 between Shri Ganesh Vishwas and one Joshi and Sameer Thakoor - Assessee appeal is allowed for statistical purposes.

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• Customs

• 2020 (9) TMI 180
  Release of seized goods - confiscation - First appellate authority set aside the original order - Non-release of goods has been justified and defended by the respondents on the ground that the Department has filed appeal against the order-in-appeal before the CESTAT - HELD THAT:- The original authority took the view that importation of caustic soda by the petitioner was without compliance to BIS standard IS 252:2013 made mandatory vide Government of India order dated 03.04.2018. Therefore, the said importation being in contravention of BIS requirements, was liable to confiscation under section 111(d) of the Customs Act. While further holding that penal action under section 112(a) of the Customs Act was invocable in the case of the petitioner, it was however observed that petitioner had acted bona fidely without any mala fide intention. Coming to the appeal preferred by the petitioner, appellate authority vide the order-in-appeal dated 20.12.2019 noted that the appellant i.e., the petitioner had made the requisite pre-deposit of Rs. 7,50,000.00 on 27.11.2019 which is 7.5% of the penalty imposed in the order-in-original. Therefore, the appellate authority declared that appellant had made the mandatory pre-deposit and thus this requirement was satisfied - Appellate authority further noted that the appeal was heard on 09.12.2019. While counsel for the appellant attended the hearing and made submissions on behalf of the appellant, there was no representation on behalf of the Department. Department neither filed any crossobjection on the appeal memo nor submitted any written argument. Thus, it is quite evident that the Department did not contest the appeal filed by the petitioner under section 128 of the Customs Act. Significantly, neither in the affidavit-in-reply nor in the written submissions filed by the respondents there is any explanation for such default by the Department. This conduct of the Department is inexplicable and quite baffling to say the least. The foreign manufacturer obtained licence on 30.09.2019 from BIS for the standard specification IS 252:2013 for its manufactured goods i.e., caustic soda which was imported into India by the petitioner on 01.11.2018. Post the order-inappeal, test report of the sample of the goods of BIS accredited laboratory showed that the goods conform to BIS standard IS 252:2013 specification. Objection of the respondents is that at the time of arrival on import on 01.11.2018 the goods did not have the BIS standard specification IS 252:2013 marking. Therefore, seizure and subsequent confiscation is justified. What is crucial from the above is that an appeal to CESTAT has to be filed within three months from the date of communication of the order sought to be appealed against with the period of limitation extendable on sufficient cause being shown. Therefore what is of relevance is that the limitation of three months commences from the date on which the order sought to be appealed against is communicated and not from the date of decision or opinion rendered by the Committee of Commissioners under sub-section (2) - though respondents have not mentioned the date on which the order in appeal was communicated to the Chief Commissioner or Commissioner of Customs, it is however stated in paragraph 8 of the written submissions that in terms of the order-inappeal dated 20.12.2019, samples were drawn on 08.01.2020. This goes to show that the order-in-appeal was communicated to the respondents prior to 08.01.2020. However as the respondents have not mentioned the date of communication of the order-in-appeal, we take 08.01.2020 as the date of communication. The three months limitation period would therefore be upto 07.04.2020. In the present case there is no dispute that by the order-in-appeal dated 20.12.2019, the order-in-original dated 22.11.2019 was set aside. By the order-in-original the goods in question were confiscated. After the order-in-original is set aide, the order of confiscation no longer survives. When an order is set aside by a superior authority or appellate authority, the consequence thereof is that such an order loses its effectiveness and becomes inoperative - it is evident that after the order-in-original has been set aside there is now no order of confiscation of the goods. While power of seizure is provided in section 110 of the Customs Act, section 111 thereof deals with confiscation of improperly imported goods. As per sub-section (1) of section 110, if the proper officer has reason to believe that any goods are liable to confiscation under the Customs Act, he may seize such goods. Therefore, seizure is made if the proper officer has reason to believe that any goods is liable to confiscation. Thus seizure may be said to be the first step to confiscation - So when the order of confiscation is set aside, the order of seizure cannot survive. Principles of judicial discipline require that orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. If this healthy rule is not followed, the result will be undue harassment to the assessees and chaos in administration of tax laws. The non-release of the goods of the petitioner by the respondents is without any justification and liable to be interfered with - on thorough consideration of the matter we direct the respondents to release the goods i.e., caustic soda of the petitioner imported vide bill of entry dated 01.11.2018 forthwith without any delay. Writ petition is allowed but without any order as to cost.

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• 2020 (9) TMI 179
  Release of petitioner - mis-declaration of imported goods - used and second hand goods - allegation against the petitioner is that he had imported hard disks from overseas declaring them to be new but the test reports indicate that the said goods are used goods - HELD THAT:- Considering that the custom authorities have commenced proceedings against the petitioner in Mumbai and an order remanding the petitioner to custody has been passed by the learned CMM, Mumbai, this Court is of the view that even assuming that this court has jurisdction to entertain the present petition, it would not be apposite to do so. The petiton is, accordingly, disposed of leaving it open for the petitioner to avail of remedies before the concerned courts at Mumbai.

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• 2020 (9) TMI 178
  Non-service of order - auction of goods - Mr. Dayan Krishnan assures this Court that the ground rent/demurrage shall be paid to respondent no.2 after the said amount is determined and benefit is given of the letter dated 23rd April, 2020 issued by the Central Board of Indirect Taxes and Customs. HELD THAT:- Issue Notice. Till further orders, there shall be stay of auction scheduled on 31st August, 2020 of the subject consignment of goods imported by the petitioner.

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• 2020 (9) TMI 177
  Smuggling - Gold - Silver - silver coins - currencies - foreign origin - party receipts and invoices submitted belatedly were fabricated - Confiscation - redemption fine - penalty - HELD THAT:- On 04-08-2015, the Officers of the Department searched the premises of Sri Ratan Kumar Shah (Appellant No.1) and recovered three cut pieces of gold and some quantity of silver and silver coins along with Indian Currency and Nepali Currency, which has been reflected in the Seizure List prepared in the Customs Office at Forbeshganj. The Seizure List shows the total value of the gold, silver and currencies, which comes to Rs. 40,80,158/-. The Officers did not take the jewellery from the shop premises of the Appellant No.1. Also, the Appellant No.1 was kept in the custody of the Customs Authority in the Customs Office for the period from 04-08- 2015 to 07-08-2015 and he was allowed to leave the Customs House on 07-08-2015 on furnishing Bail Bond. This is a case of seizure from the shop premises/a case of town seizure by Customs Officials and not from any Port or Airport while being smuggled. Since the appellant was ill, he could not take steps for release of the seized goods. There is no evidence also to show that the goods were actually having any foreign markings. The Essay Certificate dated 07-10-2015 do not also suggest the gold were of foreign origin since the purity was in the range of 992.8 to 993.6. The imported gold generally is having purity of 999 per mille. It is very difficult to hold that the gold were smuggled one. The documents submitted by the Appellant No.1 appear to be genuine and on submission of the documents he has discharged the burden under Section 123 of the Customs Act, 1962. There is no evidence on record to show that the seller Shri Ratan Lal Soni of Shri Balaji Impex was an active collaborator in this transaction, rather Department did not proceed to investigate in respect of the purchase documents submitted by Shri Ratan Lal Soni during investigation showing purchase of imported gold from different importers. Since the Appellant No.1 had discharged the burden, the confiscation cannot be held to be legal and proper. Redemption fine and penalty - HELD THAT:- Without going into the proper determination of redemption fine, I am inclined to hold that redemption fine is not required to be paid since the confiscation under Section 111(a) and (b) of the Customs Act, 1962 in respect of gold and silver has been held to be not maintainable as also confiscation of Indian Currency and Nepali Currency are held to be not maintainable under Section 121 of the Customs Act, 1962, in the absence of evidence that the said currencies are the sale proceeds of the smuggled goods - Since, I find confiscation is not maintainable, the imposition of penalty is also not maintainable apart from being not maintainable for imposing composite penalty. Appeal allowed - decided in favor of appellant.

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• 2020 (9) TMI 176
  Imposition of ADD - determination of individual dumping margin for the appellants (exporters) in relation to anti-dumping duty imposed on new/unused Pneumatic Radial tyres [subject goods] originating in or exported from Peoples Republic of China [China PR] - Section 9C(1) of the Tariff Act - HELD THAT:- Though, under the main part of sub-rule (2) of Rule 22, it is provided that the Central Government shall not levy anti-dumping duties during the period of review, but the proviso permits the Central Government to resort to provisional assessment and if the review results in determination of dumping in respect of the subject goods, it may levy duty in such cases retrospectively from the date of initiation of the review. What is, therefore, important to notice is that the review should result in a determination of dumping in respect of such products or exporters . It is only in such a case that the Central Government may levy duty retrospectively from the date of initiation of the review, for which purpose a notification has to be issued by the Central Government. In the present case, the Designated Authority did not make a recommendation for imposition of any definitive individual dumping margin. The Appellant wanted individual dumping margin but that was not accepted and the levy of duty as provided in the Notification dated 18 September, 2017 continues. Thus, it would not be necessary for the Central Government to issue a notification for levy of retrospective duty. Duty was required to be paid by the appellants under the residuary category of the notification dated 18 September, 2017 and the same duty continues. The preliminary objection raised by the Domestic Industry on the maintainability of the appeals is rejected - The appeals shall now be heard on merits on 12 March, 2020.

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• Corporate Laws

• 2020 (9) TMI 175
  Striking off the name of Kushal Power from the Register of the Companies - non-filing of financial statements and annual returns - disqualification of directors - Section 164(2)(a) of the Companies Act, 2013 - HELD THAT:- The judgment in MUKUT PATHAK ORS., YOGESH KHANTWAL, AARTI KHANTWAL, AND VINEET WADHWA VERSUS UNION OF INDIA AND ANR. [ 2019 (11) TMI 319 - DELHI HIGH COURT] , insofar as the merits of the case is concerned, is squarely applicable in the present case. The said judgment clearly holds that the proviso to Section 167(1)(a) of the Act cannot be read to operate retrospectively. It was further held that the said proviso, being a punitive measure with respect to the rights and obligations of directors, cannot be applied retrospectively unless the statutory amendment expressly provides so. In the present case, the facts and circumstances show that the Companies Fresh Start Scheme (CFSS) is a new scheme, which has been notified on 30th March, 2020. This Scheme was not invoked before the Ld. Division Bench. The scheme is obviously launched by the Government in order to give a reprieve to such companies who have defaulted in filing documents and they have been allowed to file their requisite documents and to regularize their operations, so as to not face disqualification. The Scheme also envisages non-imposition of penalty or any other charges for belated filing of the documents - The purpose and intent of the Scheme is to allow a fresh start for companies which have defaulted. In order for the Scheme to be effective, Directors of these companies ought to be given an opportunity to avail of the Scheme. The launch of the Scheme itself constitutes a fresh and a continuing cause of action. Under such circumstances, the question of delay or limitation would not arise. Considering the COVID-19 pandemic, the MCA has launched the Fresh Start Scheme-2020, which ought to be given full effect. It is not uncommon to see directors of one company being directors in another company. Under such circumstances, to disqualify directors permanently and not allowing them to avail of their DINs and DSCs could render the Scheme itself nugatory. Petition allowed.

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• 2020 (9) TMI 174
  Specific performance of agreements for sale - Principles of Indoor Management - respondent contended that the appellants had not made out any prima facie case to obtain any order of temporary injunction in their favour; that balance of convenience is in fact in favour of the 1st respondent because it was a real estate Company and doing business successfully - HELD THAT:- It is a settled principle in Company Law that if a person deals with a Company or any other representative of a Company who is exercising the powers of Management and directing its business and affairs, that person is not affected by the lacuna of procedure within the Company or by its failure to fulfill conditions which are required by the Company s Memorandum or Articles to be fulfilled before the transaction. Such outsider is not bound to enquire whether acts of internal management have been regular. This doctrine of indoor management protects the persons dealing with the Company. Prima facie the appellants, while dealing with the 2nd respondent in good faith, are entitled to assume that the 2nd respondent, who was the Managing Director of the 1st respondent, while executing Ex. P1 agreements of sale was acting within the scope of his powers by the Articles of Association and they were not bound to enquire whether his actions had been properly and regularly performed - The very admission by respondents 1, 3 and 4 of execution of Ex. R9 resolution by the 2nd respondent implies that in the normal course of business of the Company, he did have the authority to enter into agreements of sale of plots and only after Ex. R9 dt. 14.07.2016 this practice changed. In our opinion, the appellants were entitled to assume prima facie that he continued to have such powers and were not bound to enquire into such issues of internal management. The view of the court below that a doubt arises as to whether the 2nd respondent could have executed the respective agreements of sale on 21.11.2016 in favour of the appellants, and they should have filed prima facie some material to show that the 2nd respondent had all the powers to execute the respective agreements of sale in favour of the appellants, or that they ought to have questioned the 2nd respondent for signing Ex. P1 independently without the signature of the 3rd respondent because the rubber stamp used mentioned both Chairman and Managing Director, and therefore the balance of convenience tilts in favour of respondents 1, 3 and 4, is in our opinion, prima facie erroneous. Use of 2014 stamp papers purchased by the 1st respondent in the State of Andhra Pradesh for the suit agreements of sale Ex. P1 dt. 21.11.2016 - HELD THAT:- In regard to this aspect, it was held by the Court below that the appellants should have given an explanation and that they did not do so - There is no dispute that the stamp papers on which the Ex. P1 agreements of sale were drafted had been purchased by the 1st respondent. The fact that the respondents 1, 3 and 4 now allege that they were stolen by the 2nd respondent from the office of the 1st respondent proves this fact. The Court below cannot doubt the authenticity of Ex. P1 agreements of sale, particularly when the 2nd respondent, who was then Managing Director of 1st respondent, admits to their execution, merely on the ground that they were drafted on stamp papers purchased by the 1st respondent in 2014. Stamp papers on which Ex. P1 agreements of sale were executed, having been purchased in the State of Andhra Pradesh in 2014 and not in the State of Telangana, which was created with effect from 02.06.2014 - HELD THAT:- This plea is also not tenable prima facie. There was no necessity for the appellants prima facie to again prove payment of advance amounts to the 2nd respondent on account of the 1st respondent, when the 2nd respondent admits to have received it and there are clear recitals in Ex. P1 agreements of sale also to that effect - Even if the rubber stamp affixed on Ex. P1 agreements of sale mentions that the 2nd respondent is both the Managing Director and also the Chairman, that will not invalidate the documents if, as Managing Director, the 2nd respondent had authority to execute the said agreements of sale. The very admission by respondents 1, 3 and 4 of execution of Ex. R9 resolution by the 2nd respondent implies that in the normal course of business of the Company, he did have the authority to enter into agreements of sale of plots and only after Ex. R9 dt. 14.07.2016 this practice changed. The appellants were entitled to assume prima facie that he continued to have such powers and were not bound to enquire into such issues of internal management. Appeal allowed with costs.

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• 2020 (9) TMI 173
  Validity of proceeding with the civil suit - dispute between the parties is covered under the provisions of the Companies Act or not - whether after incorporation of Section 430 of The Companies Act, 2013 w.e.f. 1.6.2016, the civil Court is barred to proceed with the civil suit already pending before it? HELD THAT:- In the present case, the parties are at variance with regard to the issue of duplicate share certificate. In the backdrop of the law laid down by Hon ble the Apex Court in SHRIPAL JAIN VERSUS TORRENT PHARMACEUTICALS LTD. AND ORS. [ 1995 (3) TMI 494 - SC ORDER] and followed by the Bombay High Court in NINE MEDIA INFORMATION SERVICES LTD. VERSUS HERO HONDA MOTORS LTD. OTHERS [ 2016 (10) TMI 370 - BOMBAY HIGH COURT] and the aforestated provisions of the Companies Act, in the facts and circumstances of the present case, it is manifest that the dispute between the parties is a company matter and not a civil dispute as held by the learned trial Court. After incorporation of new Companies Act, 2013 such matters has to be heard and decided by the Company Law Tribunal constituted under the new company law and is the only competent authority and has jurisdiction under the law to decide the conflict between the parties in respect of any company matter. It can hold enquiry into the matter under Section 84 of the Act, 1956 or 46 of the Companies Act, 2013 read with the Companies (Issue of Share Certificates) Rules, 1960 or The Companies (Share Capital and Debentures) Rules, 2014 and take a decision in the matter. In all the judgments cited by the petitioner, the disputes between the parties were found to be related to the company matters as enshrined in the Companies Act; like increase of authorized capital, allotment of shares or bonus shares, appointment of directors etc., therefore, they were relegated to the competent authorities constituted under the Companies Act. In this case also the conflict between the parties is found to be the dispute covered under the Companies Act, therefore, applying the above dictum of law, the petition is allowed. The order of the learned Trial Court dated 22.11.2019 delivered by XVth Civil Judge Class-I, Indore is set aside. The matter is pending since last 10 years, therefore, the Tribunal is directed to decide the matter within 6 (six) months from the date of receipt of the matter following the due process of law. No adjournment shall be given to the parties except in unavoidable circumstances. Petition allowed.

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• 2020 (9) TMI 167
  Disqualification of Directors - defaulting directors - Automatic vacancy of officer of director - Deactivation of the DIN of the defaulting directors - HELD THAT:- Issue covered in the decision of MUKUT PATHAK ORS., YOGESH KHANTWAL, AARTI KHANTWAL, AND VINEET WADHWA VERSUS UNION OF INDIA AND ANR. [ 2019 (11) TMI 319 - DELHI HIGH COURT] where it was held that the office of a director shall become vacant by virtue of Section 167(1)(a) of the Act on such director incurring the disqualifications specified under Section 164(1) of the Act. It shall also become vacant on the directors incurring the disqualification under Section 164(2) of the Act after 07.05.2018. However, the office of the director shall not become vacant in the company which is in default under sub-section 164(2) of the Act. Petition disposed off.

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• 2020 (9) TMI 166
  Maintainability of petition - condoantion of delay in filing petition - Disqualification of Directors - Section 164 of Companies Act - publication of their names in the List of disqualified Directors - unfreeze their Director Identification Number (DIN) and Digital signatures certificates - only explanation sought to be offered by Mr. Verma, learned counsel appearing for the petitioners is that they were unaware of the publication of the aforesaid List till recently. He however concedes that there is no explanation offered in the petition for the delay. HELD THAT:- The aforesaid submission is not acceptable. Ignorance cannot bestow any benefit on a litigant and nor can it be a ground to condone a delay of almost three years in approaching the court for relief. The petitioners had been disqualified for a period of five years commencing from 01.11.2016 and continuing to remain in force till 31.10.2021. By now, a little over one yeare of the period of disqualification is left to expire. But no steps have been taken by the petitioners to seek legal recourse in all this duration. Powers of judicial review vested in the court are discretionary in nature and in particular facts and circumstances, the court can decline to exercise the said power more so, when a party approaches the court for relief with a delay of almost three years, without an explanation worth the name for the said delay. The present petitions dismissed on the ground of delay.

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• Insolvency & Bankruptcy

• 2020 (9) TMI 172
  Viability and feasibility of Resolution Plan - NCLAT remitted /remanded back the matter to the NCLT with a direction to have the Resolution Plan resubmitted before the Committee of Creditors - HELD THAT:- The law is now well settled - reliance can be placed in the case of K. Sashidhar vs. Indian Overseas Bank [2019 (2) TMI 1043 - SUPREME COURT]. The principles laid down in the aforesaid decision, make one thing very clear. If all the factors that need to be taken into account for determining whether or not the corporate debtor can be kept running as a going concern have been placed before the Committee of Creditors and the CoC has taken a conscious decision to approve the resolution plan, then the adjudicating authority will have to switch over to the hands off mode. It is not the case of the corporate debtor or its promoter/Director or anyone else that some of the factors which are crucial for taking a decision regarding the viability and feasibility, were not placed before the CoC or the Resolution Professional. The only basis for the corporate debtor to raise the issue of viability and feasibility is that the ownership and possession of the ethanol plant and machinery is the subject matter of another dispute and that the resolution plan does not take care of the contingency where the said plant and machinery may not eventually be available to the Successful Resolution Applicant. Therefore, the fact that there was an issue with regard to the ethanol plant and machinery, had been taken note of by the Resolution Professional, the Committee of Creditors and the Successful Resolution Applicant. Once all these three parties have taken note of the said fact and taken a conscious decision to go ahead with the Resolution Plan, it cannot be stated that the question of viability and feasibility was not examined in the proper perspective - the first ground and actually the main ground on which NCLAT interfered with the decision of the NCLT to approve the Resolution Plan, is wholly untenable, misconceived and unjustified. Alleged breach of confidentiality - contention of the Promoter/Director of the corporate debtor is that the liquidation value mentioned in the Resolution Plan submitted by the SRA exactly tallied with the liquidation value obtained by the Resolution Professional and that the whole sequence of events would show clearly that there was an attempt to cover up - HELD THAT:- It appears from the impugned order of NCLAT that only in the course of hearing of the appeal, the date 09th February 2019 typewritten at the bottom of the selfdeclaration (page 29 of the Resolution Plan) was sought to be taken advantage of. Since this was not raised as one of the grounds in the Memorandum of Appeal but raised in the course of arguments, the Resolution Professional could do no more than to file the printout of the email correspondence between him and the SRA dated 07.02.2019. In the first email dated 07.02.2019, the Resolution Professional had sought a clarification from the SRA as to how they discovered the liquidation value and the source for the same. In response to this mail, the SRA sent a reply email contending that they undertook a due diligence to know the current market value and liquidation value and that what was quoted by them in the Resolution Plan, was something that an independent agency provided to them. It is obvious from the material on record that the Promoter/Director of the Corporate Debtor has tried to take advantage of two small mistakes on the part of the SRA, one of which was a typographical error mentioning the date 09th February 2019 at the bottom of the selfdeclaration and the other, which happened as a matter of coincidence. The NCLAT appears to have made a mountain out of a molehill and has recorded a finding even beyond the pleadings in the Memorandum of Appeal. Hence, the second ground on which the NCLAT was convinced to pass the impugned order, is legally and factually untenable. Ethanol plant and machinery - HELD THAT:- The SRA admittedly did not make his Resolution Plan on the strength of the ethanol plant and machinery in question. The threat looming large over the availability of the ethanol plant and machinery has admittedly been taken note of by the SRA and the CoC. The Resolution Plan does not give an indication anywhere that without this plant and machinery the whole resolution plan will fail. In paragraph 8.04 of the Resolution Plan, the SRA has undertaken to continue the operations in the normal course of business. It is a commercial decision that they have taken. The corporate debtor cannot cry wolf over the said decision. Therefore, the third ground on which NCLAT chose to interfere, is also bound to be rejected. Advertisement issued by the Resolution Professional on 30.03.2018 - NCLAT holds that the advertisement was not in conformity with Regulation 36A of The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and as per Form G of the Schedule - HELD THAT:- But the conclusions reached by NCLAT in this regard cannot hold water for two reasons. If NCLAT was convinced that the very process of inviting Expression of Interest was vitiated, NCLAT should have issued a direction to start the process afresh all over again by issuing a fresh advertisement. NCLAT did not do this and the person who raised this point is not on appeal - The second meeting of the Committee of Creditors was held on 27.03.2018. The advertisement was approved in the said meeting. It was the unamended Regulation 36A that was in force at that time. This has not been appreciated by NCLAT. Therefore, the NCLAT was wrong in its approach even in this regard. The impugned order of NCLAT is flawed and hence, liable to be set aside - Order of NCLT restored - Appeal allowed.

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• Service Tax

• 2020 (9) TMI 171
  Classification of services - Dredging Services - Penalty - HELD THAT:- Mr. Yashraj Singh Bundela, learned counsel appearing for Commissioner Of Customs Central Excise And Service Tax (appellant) submits that the Ad-volarm court fee will be deposited by the appellant, within four weeks from today. Registry to verify and proceed accordingly.

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• CST, VAT & Sales Tax

• 2020 (9) TMI 170
  Permission for withdrawal of petition - Grant and continuation with the exemption from payment of Sales-tax - purchase of Raw Materials on sale of Finished Products to the extent in respect of quantum/amount made in the Industrial Policy - withdrawal of exemption before completion of the period for availing the amount of exemption - petitioner seeks permission to withdraw the present petition as the same has become infructuous. HELD THAT:- Petition disposed of as withdrawn.

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• 2020 (9) TMI 169
  Best Judgement Assessment - Reassessment of turnover - denial of input credit already allowed for the VAT collected by Southern Railway for the sale effected by the petitioner - Section 25(1) read with Section 25AA of the KVAT Act, 2003 - HELD THAT:- Ext.P2 is only a show cause notice and it is not necessary for this Court to interfere in the assessment proceedings at this stage. However taking into consideration the difficulties faced by the petitioner, it is necessary that the petitioner should be given time to get necessary documents to produce before the first respondent. The writ petition is disposed of permitting the petitioner to submit a reply to show cause with supporting documents within a period of three months from today. If the petitioner submits reply to Ext.P2 within the said period of three months, the first respondent shall consider the contentions of the petitioner and decide the matter after giving an opportunity of personal hearing to the petitioner.

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• Indian Laws

• 2020 (9) TMI 168
  Grant of Bail - Smuggling - Charas - acquittal of the accused - offence punishable under Sections 8(c), 20 and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 - HELD THAT:- This Court is of the view that there are reasonable grounds to believe that the petitioner may be acquitted. Admittedly, the petitioner is not involved in any other criminal case and there is no reason to believe that he would commit a similar offence, if released. It appears to be the prosecution s case that the petitioner had begun dealing in drugs to feed his addiction. But, as noticed earlier, there is nothing on record to establish that the petitioner is a drug addict. The present petition is allowed and the petitioner is directed to be released on bail on his furnishing a personal bond in the sum of Rs. 25,000/- with one surety of an equivalent amount to the satisfaction of the concerned Jail Superintendent/Trial Court/Duty Magistrate, subject to conditions imposed.

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