TMI Tax Updates - e-Newsletter
September 8, 2020

Case Laws in this Newsletter:

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

Articles

1. Order of utilisation of input tax credit - Huge balances in the CGST credit ledger

   By: Shilpi Jain

2. POWER FOR PROVISIONAL ATTACHMENT OF BANK ACCOUNT UNDER GST PROVISIONS IS NOT ABSOLUTE

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Auction for Sale (Re-Issue) of ‘5.09% GS 2022’

2. Government of India, Government of Himachal Pradesh and World Bank sign $82 million loan for implementation of Himachal Pradesh State Roads Transformation Project

3. RBI releases Draft Variation Margin (Reserve Bank) Directions, 2020 under Section 45 W of the RBI Act, 1934

4. Press Note on Global Multidimensional Poverty Index and India

5. Atal Innovation Mission Partners with Freshworks to empower AIM Startup Innovators

6. Atal Innovation Mission and ScooNews Partner to spread awareness of Grassroots Innovations

Notifications

Customs

1. 33/2020 - dated 7-9-2020 - Cus

Seeks to amend notification No. 50/2017-Customs, dated 30.06.2017 so as to exempt BCD on paper based taggants, including M-Feature.

Indian Laws

2. G.S.R. 462(E). - dated 23-7-2020 - Indian Law

Consumer Protection (E- Commerce) Rules, 2020

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/RTAMB/CIR/P/2020/166 - dated 7-9-2020

Re-lodgement of Transfer Requests Shares

Customs

2. 41/2020 - dated 7-9-2020

Auto Let Export Order under Express Cargo Clearance System (ECCS)

Highlights / Catch Notes

GST

• Court Allows Reopening of GSTN Portal for Filing TRAN-1 Form; Screenshots Not Required as Evidence for Filing Attempts.

  Case-Laws - HC : Reopening of GSTN portal to file the TRAN-1 form - transitional input credit - it is not a case where the petitioner has not made any efforts in getting TRAN-1 form uploaded in the GST portal. Efforts were made in December, 2017 and thereafter in the years 2018 and 2019, which is evident from the communications referred to earlier. Therefore, non-filing of screenshots in our view cannot be a ground to reject the request on the ground that no effort was made, since the communication between the petitioner and the respondents is not in dispute - it is a fit case where the request of the petitioner can be considered to accept the GST TRAN-1 form electronically or manually on or before 30.9.2020. - HC
  Visit to Get Source

  ---

Income Tax

• Cost of Improvement for Land Sale: AO to Estimate Boundary Wall Construction in Capital Gain Calculation.

  Case-Laws - AT : Long term capital gain on sale of plot of land - Cost of improvement being the cost of construction of boundary wall - Having regard to the facts and circumstances of the case when the assessee has not produced even the particulars of the boundary wall being height and thickness of the wall we estimate cost of construction of the boundary wall - AO is directed to allow the cost of improvement while computing the capital gain. - AT
  Visit to Get Source

  ---

• Interest Expenditure Allowed: Assessee's Claim Upheld for Loans to Sister Concern, Additions Deleted.

  Case-Laws - AT : Disallowance of interest expenditure - The interest income earned by the assessee is from loans and advances given to sister concern which is shown by the assessee to have been financed by obtaining loan on interest from other parties. Therefore, such interest paid on unsecured loan is laid out and expended wholly and exclusively for the purpose of making an earning such interest income. - Claim of expenditure allowed - additions deleted - AT
  Visit to Get Source

  ---

• Section 68 Challenge: Creditworthiness Previously Accepted for Flagship Company, Lower Authorities' Findings Deemed Unfounded.

  Case-Laws - AT : Addition u/s 68 - allegation that assessee failed to prove the credit worthiness - since the credit worthiness of this company has been accepted in the case of flagship company of the appellant, we do not find any merit in this finding of the lower authorities. - AT
  Visit to Get Source

  ---

• Assessee's Penalty u/s 271B Deleted Due to "Reasonable Cause" for Not Filing Tax Audit Report Timely.

  Case-Laws - AT : Penalty u/s 271B - Assessee may have a view that prior to the date he was not required to file the audit report along with the return of income but obtain tax audit report prior to due date of filing of ROI.Therefore, it cannot be said that assessee did not have a "reasonable cause" for not filing tax audit report along with the return of income. - Penalty deleted - AT
  Visit to Get Source

  ---

• Section 14A Disallowance: Rule 8D(2)(iii) Formula Must Be Followed for Expenses on Exempt Income; No Alterations Allowed.

  Case-Laws - AT : Disallowance u/s 14A r.w.r. 8D - expenditure incurred to earn exempt income - the disallowance u/s 14A on account of such expenses is liable to be worked out by applying the formula given in rule 8D(2)(iii) of the Rules, the basis given therein cannot be altered or changed as sought by assessee, unless and until the basis so given in the formula is found to be patently untenable in the facts and circumstances of a particular case - AT
  Visit to Get Source

  ---

• Land Classified as Agricultural Deemed Capital Asset for Tax Purposes Due to Prevailing Circumstances.

  Case-Laws - AT : Nature of land sold - Agricultural land or capital asset - Though the circumstance that the land is classified as Agricultural in the revenue records is in favour of the assessee, in our view, the other circumstances pointed out above outweighs all of the circumstances in favour of the Assessee and on the basis of those circumstances, we are inclined to conclude that the property was not an agricultural land. - AT
  Visit to Get Source

  ---

• Interest Expense Disallowed by AO Reinstated by CIT(A) as Per ICAI Accounting Standard-2; No Further Adjustments Needed.

  Case-Laws - AT : Disallowance of interest expenditure - As per AO interest attributable to bring the inventory to its present location and condition should be included in the cost of inventory - CIT(A) deleted the disallowance - the method of valuation adopted by the assessee also gets support from Accounting Standard – 2 issued by ICAI - No additions - AT
  Visit to Get Source

  ---

• Foreign Company Fees from Indian Entity Taxed u/s 44BB, Not 44D/115A, Rules High Court.

  Case-Laws - HC : Fees for technical services received by the foreign company from an Indian concern - Amount paid by the respondent to the HUB International Limited would be covered by Section 44BB and not under section 44D r.w.s. 115A - HC
  Visit to Get Source

  ---

• High Court and ITAT Overturn AO's Unsupported 25% Profit Estimate, Citing Lack of Evidence and Credible Material.

  Case-Laws - HC : Estimation of income @ 25% - ITAT deleted the addition - We are at one with the Tribunal in taking the view that the AO wrongly determined the profit at the rate of 25%, without any basis or credible material. - HC
  Visit to Get Source

  ---

• High Court Rules AUDA's Activities as Public Utility Services, Eligible for Tax Exemption u/s 11 of Income Tax Act.

  Case-Laws - HC : Exemption u/s 11 - Activities in the nature of trade, commerce or business or not - the proviso to Section 2(15) of the Act shall not be applicable so far as assessee-AUDA is concerned and as the activities of the assessee can be said to be providing general public utility services, the assessee is entitled to exemption under Section 11 - HC
  Visit to Get Source

  ---

• Capital Profits from Land Sales Excluded from MAT Calculation, High Court Upholds Tribunal's Decision u/s 115JB.

  Case-Laws - HC : MAT Computation u/s 115JB - Tribunal held that the capital profits on sale of land, which are credited to the capital reserves account in the balance sheet, are not to be included under the book profits for the purpose of Section 115J? - Order of tribunal sustained - HC
  Visit to Get Source

  ---

Customs

• Appellant's Failure to Export on Time Under EPCG Scheme Leads to Confiscation and Fine for Breach of Conditions.

  Case-Laws - AT : EPCG Scheme - appellant failed to export containers within the stipulated time period and applied for extension of time - The exemption notifications require strict interpretation and therefore, the Appellant is in gross violation of the conditions of the exemption notification. - Valuation, confiscation and amount of redemption fine upheld - AT
  Visit to Get Source

  ---

• High Court Orders Refund of Special Additional Duty with Interest Due to Lack of Show Cause Notice, Violating Natural Justice.

  Case-Laws - HC : Refund of SAD - admittedly, the impugned order has been made without issuance of a show cause notice, calling for the petitioner’s objections and as such, is in violation of the Principles of Natural Justice. On this ground also, the petitioner may be entitled to invoke the writ jurisdiction without availing the alternate remedy - The impugned Order is set aside and the respondent shall refund the claim made by the petitioner with 6% interest - HC
  Visit to Get Source

  ---

Corporate Law

• Allegations of Oppression and Mismanagement in Company AGM: Illegal Director Appointments Warrant Interim Relief and Inquiry.

  Case-Laws - AT : Oppression and Mismanagement - Grant of interim relief - Illegal appointment of Directors in the AGM - The Appellant has demonstrated all these circumstances to show that it has raised a fair question which requires probe in the Company Petition. The arguments raised on this score cannot be dismissed offhand. - AT
  Visit to Get Source

  ---

Indian Laws

• Cheque Dishonor Evidence Simplified: Bank Memo Suffices, Section 146 Overrides Evidence Act, Section 143 Fast-Tracks Trials.

  Case-Laws - HC : Dishonor of Cheque - Offence u/s 138 of NI Act - Evidence - return memo of the banker with endorsement - In view of insertion of Section 146 in the N.I. Act, Section 67 of the Evidence Act as relied upon by the learned Trial Judge has no manner of application to prove or disprove the document relating to bank note/slip/return memo. Furthermore, Section 143 of the N.I. Act fortifies the complaint under Section 138 of the N.I. Act to be tried in summary manner - HC
  Visit to Get Source

  ---

IBC

• Tribunal Halts Insolvency Case Due to Suspension u/s 10A of Insolvency and Bankruptcy Code for April 2020 Default.

  Case-Laws - Tri : Suspension of initiation of corporate insolvency resolution process - insertion of Section 10A to I&B Code, 2016 - in view of the alleged default if any, had occurred even according to the own admission of the respondent/operational creditor as to be that of 30.04.2020, both in the petition/main application, this Tribunal cannot proceed any further due to the bar created by law - Tri
  Visit to Get Source

  ---

Central Excise

• No Evidence of Separate Duty Collection on Ethanol; Section 11D of Central Excise Act Not Applicable.

  Case-Laws - AT : Applicability of Section 11D to the facts of the present case - the Revenue could not show that the appellant after blending ethanol with duty paid motor spirit collected separately, mentioning the duty on ethanol in the invoices, but not paid to the Government. Therefore, Section 11D of CEA, 1944 cannot be said to have been attracted. - AT
  Visit to Get Source

  ---

VAT

• Court Rules Penalties on Charitable Hospital Unreasonable Under Kerala VAT Act for Supplying Medicines to Indoor Patients.

  Case-Laws - HC : Levy of penalty u/s 47(b) of the erstwhile Kerala Value Added Tax Act, 2003 - registration of Charitable Hospitals - indoor patient - medicines supply of surgical items, stents, implants valves with or without medical procedure or medical treatment. - the penalty orders do not stand touchstone of reasonability or any deviation from the provisions of Section 18C of the Kerala Value Added Tax Act 2003, particularly when as per the proviso the petitioner-the charitable hospital is not required to obtain registration. - HC
  Visit to Get Source

  ---

• Assessment Order Validity Challenged: Circular No.3 Empowers Independent Assessments, Overriding Higher Officials' Influence.

  Case-Laws - HC : Validity of assessment order - Circular No.3 has empowered the Assessing Officers to henceforth independently deal with the assessment without being influenced by the proposals of the higher officials - The proceedings which proceeds on the basis of the proposals/reports of the Enforcement Wing/ISIC, are liable to be set aside. - HC
  Visit to Get Source

  ---

Case Laws:

• GST

• 2020 (9) TMI 252
  Permission for withdrawal of Advance Ruling Application - Levy of GST - Reverse Charge Mechanism - salary paid to Directors of the company who is paid salary as per employment contract - entry no. 6 of Notification No. 13/2017- Central Tax (Rate) dated 28th June 2017 86 entry no. 7 of Notification No. 10/2017- Integrated Tax (Rate) dated 28th June 2017. HELD THAT:- Shri Madhu Sudan Sharma, authorized representative of the applicant, submitted a letter dated 29.06.2020 addressed to this authority requesting to withdraw their application. The request to withdraw the application is considered.

  ---

• 2020 (9) TMI 251
  Reopening of GSTN portal to file the TRAN-1 form - transitional input credit - transition to GST regime - case of respondents is that there is no material on record to show that the petitioner herein has made any effort to get his form TRAN-1 uploaded in the GST web portal - HELD THAT:- There were exchange of letters in the year 2018 as well as in the year 2019, between the petitioner and respondents 1 and 2, with regard to the inability of the petitioner to upload form TRAN-1, due to freezing of portal or the portal not getting opened. In fact, the material filed along with the counter itself show that in the month of February, 2019 also the petitioner made a request to the Deputy Commissioner, GST Cell, Commissioner of Central Taxes, Tirupathi GST Commissionerate, Tirupathi, requesting him to take required action to re-open TRAN-1 as per the provisions of the GST law and circular instructions. Similar such letter was addressed to him on 11.2.2019, but there was no response till the order rejecting the request came to be passed. It is very clear that the petitioner did make efforts to get form TRAN-1 uploaded or in the alternative to accept the application manually and do the needful. Identical issue decided in the case of BHARGAVA MOTORS VERSUS UNION OF INDIA ORS. [ 2019 (5) TMI 899 - DELHI HIGH COURT] and KUSUM ENTERPRISES PVT. LTD., SANKO GOSEI TECHNOLOGY INDIA PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (7) TMI 945 - DELHI HIGH COURT] where the High Court disposed of the Writ Petition directing the respondents to either open the portal to enable the petitioner to again file form GST TRAN-1 electronically or in the alternative accept the form GST TRAN-1 presented manually on or before 30.9.2019 - Similar such view came to be taken by a Division Bench of this Court in LANTECH PHARMACEUTICALS LTD, SRIKAKULAM VERSUS THE PRL COMMISSIONER VISAKHAPATNAM [ 2019 (10) TMI 477 - ANDHRA PRADESH HIGH COURT] . Thus, it is not a case where the petitioner has not made any efforts in getting TRAN-1 form uploaded in the GST portal. Efforts were made in December, 2017 and thereafter in the years 2018 and 2019, which is evident from the communications referred to earlier. Therefore, non-filing of screenshots in our view cannot be a ground to reject the request on the ground that no effort was made, since the communication between the petitioner and the respondents is not in dispute - Further, question of preserving screenshots by everyone may not be possible having regard to the conditions prevailing in the country and also the facilities that are available for an uneducated assessee. As observed in UNINAV DEVELOPERS PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (8) TMI 85 - DELHI HIGH COURT] , the GST system is still in a trial and error phase and it will be too much of a burden to place on the Assessee to expect them to comply with the requirement of the law where they are unable to even connect to the system on account of network failures or other failures. As the petitioner could not upload the TRAN-1 form electronically due to technical snags and since Government of India has been extending the time regularly for submitting TRAN-1 forms, we feel that it is a fit case where the request of the petitioner can be considered - the Writ Petition is disposed of directing the respondents herein either to open the portal to enable the petitioner to again file GST TRAN-1 form electronically or in the alternative accept the GST TRAN-1 form manually on or before 30.9.2020. Once it is uploaded or submitted manually, the claim of the petitioner may be processed in accordance with law. Petition disposed off.

  ---

• 2020 (9) TMI 250
  Reopening of portal immediately enabling the Writ Petitioner to submit its GST TRAN-1 Form - time limitation u/r 117 of SGST Rules - Section 140 of the CGST and APSGST Act, 2017 - HELD THAT:- Rule 117 of the SGST Rules prescribed a period of 90 days from the appointed day to file Form GST TRAN-1 mentioning the amount of transitional input tax credit claimed by the registered person. The Form GST TRAN-1 is to be filed electronically on the common portal within the time fixed in the Rule initially or extended by notifications - Though the prescribed time of 90 days from the appointed date expired on 29.09.2017, but the Respondent authorities have been extending time for uploading VAT Credit in Form TRAN-1 from time-to-time. A similar issue came up before the Division Bench of this Court for consideration. Relying upon the judgments in UNINAV DEVELOPERS PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (8) TMI 85 - DELHI HIGH COURT] , BHARGAVA MOTORS VERSUS UNION OF INDIA ORS. [ 2019 (5) TMI 899 - DELHI HIGH COURT] , and KUSUM ENTERPRISES PVT. LTD., SANKO GOSEI TECHNOLOGY INDIA PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (7) TMI 945 - DELHI HIGH COURT] , the Court disposed of the writ petition, on 13.08.2019, directing the respondents to either open the portal so as to enable the petitioner to again file the Form GST TRAN-1 electronically or in the alternative, accept the Form GST TRAN-1 presented manually by fixing a cut of date and process the claim in accordance with law. Having regard to the judgments referred, this Writ Petition is disposed of in terms thereof directing the respondents concerned to permit the Writ Petitioner to submit GST TRAN-1 Form electronically or, in the alternative, manually, by fixing a cut off date, within a period of 30 days from the date of receipt of judgment, in which event, the same may be dealt with, in accordance with law.

  ---

• 2020 (9) TMI 249
  Release of detained goods alongwith vehicle, without insisting security deposit - attempt to evade tax or not - section 129 of CGST Act - HELD THAT:- The goods and vehicle detained pursuant to Ext.P3 detention order shall be released by the 1st respondent to the petitioner on the petitioner furnishing bank guarantee for the value of the amounts shown in Ext.P3 order. Thereafter, the 1st respondent may finalise the adjudication proceedings pursuant to the impugned Ext.P3 detention order, after affording reasonable opportunity of being heard to the petitioner, through the counsel, if any and orders may be passed finalising the said proceedings, without much delay, preferably within a period of 4-6 weeks from the date of production of the certified copy of this judgment. Petition disposed off.

  ---

• Income Tax

• 2020 (9) TMI 254
  Validity of reopening of the assessment - limitation of the notice issued U/s 148 - unexplained source of cash deposit in the bank account - assessee is an individual and has not filed return of income U/s 139 - as per assessee approval by the competent authority u/s 151 without application of mind - HELD THAT:- Notice is dispatched through Speed Post - issuance of notice includes not only the preparation of notice but the notice shall go out of the control of the A.O. and is sent through one of the modes prescribed U/s 282 of the Act. Notice was issued within the period of limitation and was also duly served upon the assessee on the very next day, therefore, the question of limitation does not arise. Further the assessee has complied with the notice by filing the return of income which is only return of income filed by the assessee. Hence, the return of income filed by the assessee in response to notice U/s 148 of the Act is otherwise to be scrutinized by the A.O. Hence, we do not find any substance in the objection raised by the assessee against the limitation of the notice issued U/s 148. Mechanical approval granted by the ld. Pr.CIT - In the case in hand, the assessee has not filed any return of income U/s 139 of the Act and the A.O. received information from the DIT(Inv.), Jaipur regarding the deposit of cash of Rs. 9.19 lacs in the bank account of the assessee that too after an enquiry conducted by the Investigation Wing regarding the source of the said deposit and only when the reply of the assessee was not found to be satisfactory the said information was sent to the A.O. for appropriate steps - when the reasons recorded by the A.O. prima facie lead to the formation of belief that the income assessable to tax has escaped assessment then the ld. Pr.CIT is not required to record separate satisfaction as the reasons itself reveal the satisfaction of the A.O. - Decided against assessee. Unexplained cash deposit u/s 68 - assessee has explained the source of cash deposit in the bank account as the sale proceeds of the land sold by the father of the assessee for consideration - wife of the assessee filed an affidavit claiming that the amount of Rs. 2,72,500/- deposited in the ICICI bank account belongs to her as it is a joint bank account of husband and wife and the said deposit was made by her out of her boutique business receipts - HELD THAT:- When the father of the assessee has sold the property in the year 2007 for a consideration of Rs. 53.00 lacs and the assessee is the only legal heir then the possibility of the source of deposit in the bank account of the assessee from the sale proceeds of the property of the father is not ruled out. However, the assessee has not produced the details of the bank account of father to support the fact that there was a withdrawal of cash from the bank account of the father. Therefore, in these facts and circumstances, we find that this issue requires a detailed and proper verification regarding source of deposit. Further to the extent of income declared by the assessee as well as the claim of wife of the assessee regarding the deposit of Rs. 2,72,500/- cannot be rejected. Therefore, to the extent of income declared by the assessee as well as the wife of the assessee has to be considered as source of deposit. Hence, we set aside this issue to the record of the A.O. for proper verification of the facts regarding the source being the sale proceeds of the property sold by the father of the assessee. The assessee is also directed to furnish details of bank account of father of the assessee for the purpose of conducting the proper enquiry by the A.O. by calling the relevant details from the bank. Hence, this issue is restored back to the file of the A.O. Penalty u/s 271F - default on the part of the assessee for non-filing of the return of income - HELD THAT:- As we have already set aside the issue of addition made by the A.O. to the record of the A.O. Even otherwise when the explanation of the assessee that his income is below the taxable limit except the deposits made in the bank account is factually correct and is a a bonafide explanation, then, in view of the provisions of Section 273B of the Act, the said explanation is a reasonable cause for default on the part of the assessee and accordingly, the penalty U/s 271F of the Act is not leviable, hence deleted.

  ---

• 2020 (9) TMI 253
  Income from House property - Annual Lettable Value (ALV) determination - CIT(A) held that Annual Lettable Value (ALV) should be based on Municipal Rateable Value - whether ALV has to be taken as per the deeming provision of section 23(1) - HELD THAT:- As decided in own case [ 2018 (3) TMI 1876 - ITAT MUMBAI] relying on case of Tip top typography [ 2014 (8) TMI 356 - BOMBAY HIGH COURT] municipal valuation rate for determining the ALV is also an accepted method of valuation. Hence, AO was directed to compute ALV based on municipal rateable value. - Decided in favour of assessee. Disallowance u/s 40(a)(ia) - non-deduction of TDS at source - assessee had no deducted requisite TDS on the amount credited to the respective expenses account - HELD THAT:- Assessee as well as the learned Sr. Departmental Representative agreed that this issue is squarely covered in favour of the assessee, as the assessee has already deducted TDS and paid to the Government exchequer before filing of return of income and this finding of CIT(A) is not contested before us. This issue has been considered by Tribunal in Assessment Year 2008-09 in assessee s own case - the issue is covered and it is not in disputed that the assessee has not deducted TDS or paid to the government exchequer before the due date of filing of return of income. In view of this fact, we are of the view that the CIT(A) has rightly deleted he disallowance and we confirm the same. Appeal of Revenue is dismissed.

  ---

• 2020 (9) TMI 248
  MAT Computation u/s 115JB - Tribunal held that the capital profits on sale of land, which are credited to the capital reserves account in the balance sheet, are not to be included under the book profits for the purpose of Section 115J? - whether Tribunal is justified in law by holding that the Assessing Officer has no power and jurisdiction to bring to tax the income which is includible under the book profit but not included under the book profit in the audited statement of accounts? - HELD THAT:- As revenue fairly submitted that the substantial questions of law which arise for consideration in this appeal have already been answered against the revenue by a Bench of this Court in SRI HARIRAM HOTELS (P) LTD. Vs. COMMISSIONER OF INCOME- TAX AND ANOTHER [ 2015 (12) TMI 1419 - KARNATAKA HIGH COURT] In view of the aforesaid enunciation of law, the substantial questions of law framed by this Court in this appeal are also answered against the revenue and in favour of the assessee.

  ---

• 2020 (9) TMI 247
  Exemption u/s 11 - Whether the activities of the appellant AUDA can be said to be in the nature of trade, commerce or business as occurring in the first proviso to Section 2(15) ? - HELD THAT:- The object and purpose for which the assessee is established/constituted under the provisions of the Gujarat Town Planning Act and collection of fees and cess is incidental to the object and purpose of the Act, even the case would not fall under second part of proviso to Section 2(15). We are of opinion that the Tribunal has committed a grave error in holding the activities of the assessee in the nature of trade, commerce or business and consequently holding that the proviso to Section 2(15) of the Act shall be applicable and therefore, the assessee is not entitled to exemption under Section 11. For the reasons stated above, it is held that the proviso to Section 2(15) of the Act shall not be applicable so far as assessee-AUDA is concerned and as the activities of the assessee can be said to be providing general public utility services, the assessee is entitled to exemption under Section 11 of the Act. Both the questions are therefore, answered in favour of the assessee and against the revenue.

  ---

• 2020 (9) TMI 246
  Maintainability of appeal - low tax effect - monetary limits prescribed under Act - Revision u/s 263 - HELD THAT:- Referring to Circulars issued by the Central Board of Direct Taxes from time-to-time, the underlying policy of the Department is to reduce the litigation. So far as the matters arising out of the order under Section 263 is concerned, the same pertain to invocation of the revisional powers of the Commissioner of Income-tax for revising the assessment orders, which are erroneous or prejudicial to the interest of the Revenue. Therefore, when any order is passed under Section263 of the Act, the same would also be the order under the Income Tax Act, 1961. The Circular referred to above do not distinguish the order passed under Section263 or any other Section of the Act,1961, but it refers the monetary limits prescribed in the circulars itself and if any appeal is filed, which is not a writ-matter, then the monetary limits prescribed under the circular would apply and the Department is bound by such monetary limits and accordingly, the Department cannot pursue the matter, if the monetary limit prescribed in the circular is adhered-to. If, we take consolidated tax effect in all these appeals, it would not exceed the monetary limits prescribed in the Circular No.17 of 2019, dated 8th August, 2019. Therefore, these appeals are dismissed due to low tax effect.

  ---

• 2020 (9) TMI 245
  Revision u/s 263 - difference between the amount of service income on which tax is deducted by the service provider and income which is shown in the Profit and Loss account by the respondent assessee - as submitted that the Assessing Officer while framing the assessment under section 143(3) of the Act did not verify this aspect - ITAT quashed the order passed u/s 263 - HELD THAT:- PCIT has not considered the submissions made by the respondent assessee and has arrived at conclusion with regard to the issue of less income as stated by him in the show-cause notice. However, the Tribunal after considering the submissions made by the respondent assessee and on the basis of material on record has arrived at finding that because there was some difference in the service income as per the Profit Loss account and as worked out based on TDS, the assessment order cannot be said to be erroneous and prejudicial to the interest of the Revenue. No substantial questions of law.

  ---

• 2020 (9) TMI 244
  Estimation of income @ 25% - advances received from its customers - Reopening of assessment u/s 147 - ITAT deleted the addition - whether assessee has worked as a contractor only and therefore revised provisions of AS-7 would apply for estimation of matching income on proportionate completion method? - HELD THAT:- We take notice of the fact that the AO in the assessment order has not discussed anything or rather has not been able to justify in any manner the addition of Rs. 3,38,44,000/- to the total income being 25% of the total receipts of Rs. 13,53,76,000/- as the business profit of the assessee for the year. No reason worth the name has been assigned by the AO in this regard. This exactly weighed with the CIT (A) while partly allowing the appeal of the assessee. The Tribunal ultimately concurred with the findings recorded by the CIT(A) and dismissed the appeal preferred by the Revenue. We are at one with the Tribunal in taking the view that the AO wrongly determined the profit at the rate of 25%, without any basis or credible material. No questions of law as proposed by the Revenue

  ---

• 2020 (9) TMI 243
  Advance receipts - deduction under Section 80IAB - substantial question of law - HELD THAT:- We admit this appeal on the following two substantial questions of law:- 2 (B) Whether Appellate Tribunal ought to have appreciated that the alternate plea of assessee treating the impugned receipt as Advance Receipt was never made before the Assessing Officer and this plea was made for the first time before CIT (A)? (C) Whether the Appellate Tribunal ought to have appreciated that the claim of deduction under Section 80IAB rejected by the Assessing Officer as well as CIT(A) was not contested by the Assessee subsequently and the assessee by advancing such alternate plea tried to neutralize the revenue effect consequent to reject of its claim of deduction under Section 80IAB? Deduction u/s 80IB(10) - disallowance of claim with proper evidence Assessing Officer had established the assessee does not fulfill the conditions for claiming deduction u/s 80IB(10) - HELD THAT:- CIT(A) has taken into account the detailed submissions made on behalf of the assessee while adjudicatin the issue in favour of the assessee applying the judicial interpretations available built up area has also been addressed by the CIT(A) based on documentary evidences. Documentary evidences revealed that built up area was within the permissible limit. The Revenue before us could not point out any deficiency in the order of the CIT(A). We also take note of the significant plea on behalf of the assessee that the claim of deduction under Section 80IB(10) of the Act was duly allowed by the AO in subsequent year 2010-11 and 2011-12 in the assessment framed under Section 143(3) of the Act. Also, in the absence of rebuttal of observations made by the CIT(A), we do not see any justification to interfere with the order of the CIT(A). We thus express our concurrence with the conclusion drawn by the CIT(A) and hence, decline to interfere Disallowance of proportionate interest expense - assessee company has incurred substantial interest expense while giving interest free loans - HELD THAT:- Revenue could not support the case of the AO for disallownce. The issue in the context of the facts is no longer res integra and covered in favour of the assessee by several judicial precedents as rightly recorded by the CIT(A). Question Nos.2(D)and 2(E) cannot be termed as substantial questions of law

  ---

• 2020 (9) TMI 242
  Fees for technical services received by the foreign company from an Indian concern - Chargeable to tax under Section 44BB v/s 44D - Indian permanent establishment of company - whether assessee s case is covered u/s 44BB and not u/s 44D r.w.s.115A ? - whether classified as Indian Concern in context of sec.44D r.w.s.115A of I.T. Act, 1961 as the company is incorporated Canada ? - Special provision for computing profits and gains in connection with the business of exploration, etc. of mineral oils - HELD THAT:- As relying on OIL NATURAL GAS CORPORATION LIMITED VERSUS COMMISSIONER OF INCOME TAX ANOTHE [ 2015 (7) TMI 91 - SUPREME COURT] payment made by respondent to HUB International for providing supervising drilling operations in oil fields, may be Fees for technical services but the dominant purpose of payment of fees for technical services was for exploration and development of Oil and Gas in India. There is no infirmity in the impugned order of the Tribunal, holding that the provisions of Section 44D of the Act is not applicable in the facts of the present case and from the payment made to HUB International Limited, respondent would be liable to deduct TDS at the rate of 4.2%, under the provisions of Section 44BB of the Act. Amount paid by the respondent to the HUB International Limited would be covered by Section 44BB and not under section 44D r.w.s. 115A of the Act, Question (A) is answered in favour of assessee.

  ---

• 2020 (9) TMI 241
  Recognition u/s.80G denied - Registration u/s.12AA of the Act was granted - exemption u/s 11 - assessee e-filed application in Form No.10G for grant of recognition u/s.80G - HELD THAT:- Only after the institution or fund has been registered u/s 12AA etc. that, on an application made by it, the exercise of examination of the satisfaction of conditions of section 80G read with rule 11AA gets triggered. From the Profit and loss account of the assessee for the year ending 31-03-2018, the ld. CIT(E) found that no activities were carried out. We gave also gone through such P L account and find that there is Nil expenditure on its Expenditure side. The assessee, in fact, filed application for recognition u/s.80G on 20-02-2019 and the impugned order came to be passed on 31-08-2019. It is the case of the assessee that when the ld. CIT(E) rejected the assessee s application u/s.80G, the accounts for the year ending 31-03-2019 were under preparation, which could not be filed and such accounts actually got finalized a little later. AR made a statement at the Bar that for the year ending 31-03-2019, the assessee received a sum of Rs. 3.53 lakh as donation and incurred expenditure of Rs. 4.04 lakh on the activities of the trust. Since such Profit and loss account showing expenditure on activities of the assessee was not available before the ld. CIT(E), without commenting on the merits of the matter, we set-aside the impugned order and remit the matter to the file of ld. CIT(E) for deciding the case afresh after considering the relevant evidence including Profit and loss account for the year ending 31-03-2019. Needless to say, the assessee will be allowed sufficient hearing opportunity before reaching any decision. - Appeal is allowed for statistical purposes.

  ---

• 2020 (9) TMI 240
  Validity of reopening of the assessment - Notice beyond four years from the end of the relevant A.Y - capital gains invoking the provisions of section 50C - HELD THAT:- CIT (A) has summarily rejected the contentions of the assessee without considering the detailed written submission and the facts placed before her. It is the obligation of the Learned CIT(A) to consider all the facts and decide the issue in speaking order. In the instant order the Ld.CIT(A) has not discussed the facts placed before her and the reasoning for rejection of assessee s contention regarding the validity of reopening the assessment. Issue with regard to the validity of the reopening of the assessment needs to be addressed by the learned CIT (A) in the light of the facts placed by the assessee in it s written submissions - we set aside the matter to the file of the CIT (A) with a direction to consider all the facts and submissions made by the assessee and the evidence placed before the CIT (A) and decide the issue afresh on merits after giving opportunity to the assessee. - Decided in favour of assessee for statistical purposes.

  ---

• 2020 (9) TMI 239
  Addition u/s 68 r.w.s. 115BBE - unsecured loans received by the assessee from various companies/persons - HELD THAT:- Some of the subscribes to the share capital as well as unsecured creditors are genuine creditors and their credit worthiness can be established, provided the opportunity is given to the assessee. As submitted by the assessee that some of the creditors are assessed in Hyderabad and filing the returns regularly. Though the entire facts were placed before the CIT (A), it seems that the learned CIT (A) did not consider the evidences placed before him - issues needs to be verified by the AO with regard to the genuineness and the creditworthiness of the creditors as well as the share applicants/share applications money received by the assessee. We remit back the matter to the file of the AO to redo the assessment de nova taking into consideration of all the evidences placed before him by the assessee - direct the AO to consider the issue of addition with regard to the opening balance and set off of losses u/s 115BBE as per the law and in the light of the board Circular issued by the CBDT in circular No.11 of 2009. - Appeals are allowed for statistical purposes.

  ---

• 2020 (9) TMI 238
  Exemption u/s.54F - Assessee purchased property was remodified and all the assessee have invested the balance of the capital gain in the re-modification of the house and have thus, claimed the said amounts as exempt u/s.54F - HELD THAT:- Amount spent on renovation of such residential house by an assessee according to his requirements is also allowable as exempt u/s. 54F as it would amount to construction of a residential house. The only other requirement is that the construction should be completed within three years from the date of transfer of the original asset. CIT(A) also agrees that the issue is covered in favour of the assessee by the decisions of the Hon ble Karnataka and Calcutta High Courts but chooses to follow the decisions against the assessee. In the case of CIT Vs. Godavari Devi Saraf [ 1977 (9) TMI 24 - BOMBAY HIGH COURT] has held that - in the absence of a decision from the jurisdictional High Court, the decision of another High Court which is in favour of the assessee has to be followed. Hence, the order of the CIT(A) is not sustainable and the assessee s claim of exemption u/s.54F has to be examined in the light of the details submitted by the assessee and the report of the valuer submitted by the assessee in the absence of sufficient details as the construction was allegedly done in the year 2006. Therefore, we deem it fit and proper to remit the issue back to the file of AO with a direction to allow the exemption u/s.54F of the Act in respect of the cost of the house, which is already purchased by the assessee on 29-03-2006 and also the amount spent on renovation/re-modification of the house. - Grounds raised by the assessee are treated as allowed for statistical purposes.

  ---

• 2020 (9) TMI 237
  Disallowance of interest expenditure - As per AO interest attributable to bring the inventory to its present location and condition should be included in the cost of inventory - AO computed interest attributable to the inventory by adopting prime lending rate of 12.75% determined by the State Bank of India - CIT(A) deleted the disallowance - HELD THAT:- There is no dispute with regard to the fact that the inventories held by the assessee are current assets and hence the requirement of capitalising the interest does not arise, as per the proviso to section 36(1)(iii) of the Act mandates capitalization of interest only in respect of capital assets purchased out of borrowed funds. We also notice that the method of valuation adopted by the assessee also gets support from Accounting Standard 2 issued by ICAI. A.R. also submitted that the newly introduced ICDS though applicable in the subsequent year also supports the methodology adopted by the assessee. Decision rendered by the Ld. CIT(A) is in consonance with the decision rendered by the coordinate bench in the case of JSR Constructions [ 2016 (7) TMI 943 - ITAT BANGALORE] we do not find any infirmity in the decision rendered by Ld. CIT(A) on this issue. - Decided against revenue.

  ---

• 2020 (9) TMI 236
  Nature of land sold - Agricultural land or capital asset - Evidence of Agricultural operations carried out or not - claim of the Assessee that agricultural operations were carried out over the property and the property was actually used for agricultural purpose was sought to be established by relying on the classification of the property in revenue record - question of law or fact - HELD THAT:- There is no evidence of availability of Agricultural produce and how they were dealt utilized. The Revenue also contends that the burden of proof that the property was agricultural land at the time of transfer to claim exemption was on the Assessee. As already observed, the question whether the land was Agricultural land has to be decided on facts of each case and decided cases are only guidelines to be kept in mind. Facts and all the circumstances are to be considered as a whole and an overall view is to be taken in deciding whether the land was an agricultural land. In a given case, large number of circumstances may be indicative of agricultural character, but one circumstance may outweigh all of them and on its basis the land would be held to be a non-agricultural land. Question whether land was used for agricultural purpose or not to be considered as Agricultural land is a question of fact to be decided on the basis of facts and circumstances of a given case. The decisions cited by the learned counsel for Assessee in the case of Venkateswara Hospital is a case where the Hon ble High Court of Madras refused to entertain an appeal on the ground that the question whether a property is Agricultural land or not is essentially a question of fact which action was confirmed by the Hon ble Supreme Court. [ 2018 (9) TMI 1101 - SC ORDER]. If one considers the facts and circumstances of the present case as a whole and an overall view is to be taken in deciding whether the land was an agricultural land, one would come to a conclusion that the property cannot be considered as Agricultural land. Though the circumstance that the land is classified as Agricultural in the revenue records is in favour of the assessee, in our view, the other circumstances pointed out above outweighs all of the circumstances in favour of the Assessee and on the basis of those circumstances, we are inclined to conclude that the property was not an agricultural land. We therefore find no merits in this appeal and hence dismiss the same.

  ---

• 2020 (9) TMI 235
  Penalty levied u/s 271(1)(c) - Defective notice - non specification of charge - whether the penalty is levied for concealment of income or furnishing of inaccurate particulars of income ? - HELD THAT:- No penalty is leviable in accordance with law. We find that the penalty was initiated on account of furnishing the inaccurate particulars of income. Subsequently while initiating the penalty proceeding, the notice dated 24.03.2015 was issued wherein both the limbs have been tick off. Subsequently, while passing the order penalty order dated 29.09.2015. The penalty was levied on both the limbs which is not justifiable. See MEHERJEE CASSINATH HOLDINGS PRIVATE LIMITED VERSUS ACIT, CIRCLE-4 (2) , MUMBAI [ 2017 (5) TMI 904 - ITAT MUMBAI] - We nowhere found any justifiable ground to uphold the order passed by the CIT(A) in question, therefore, we set aside the finding of the CIT(A) and delete the penalty. - Decided in favour of assessee.

  ---

• 2020 (9) TMI 234
  Disallowance u/s 14A r.w.r. 8D - claim made by the assessee company of having not incurred any expenditure to earn exempt income - HELD THAT:- As rightly contended by assessee, there was a presumption that the investment capable of yielding exempt income was made by the assessee company out of its own interest free funds and there was no utilization of interest bearing borrowed funds for making such investment so as to warrant any disallowance of interest u/s 14A. This contention for the assessee is duly supported by the decision of Hon ble Jurisdictional High Court in the case of CIT Vs. Reliance Utilities Power Ltd [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] wherein it was held that if the assessee had interest free funds of its own which were more than the investment capable of earning exempt income, it could be presumed that the said investments were made from interest free funds available with the assessee and not from the interest bearing borrowed funds so as to warrant the disallowance u/s 14A . Since the interest free funds of its own funds available with the assessee company in the form of share capital and free reserves were substantially more than the corresponding investments made as noted by us, we are of the view that the disallowance made by the AO and confirmed by the Ld. CIT(A) on account of interest u/s 14A of the Act read with rule 8D(2)(ii) of the Rules is not sustainable and the same is directed to be deleted. Disallowance made u/s 14A of the Act on account of common administrative expenses by applying rule 8D(2)(iii) - Once the claim of assessee of having not incurred any common expenses in relation to the earning of exempt income is found to be not correct and the disallowance u/s 14A on account of such expenses is liable to be worked out by applying the formula given in rule 8D(2)(iii) of the Rules, the basis given therein cannot be altered or changed as sought by assessee, unless and until the basis so given in the formula is found to be patently untenable in the facts and circumstances of a particular case - No merit in this contention of the assessee and reject the same. The issue raised by the assessee relating to the disallowance u/s 14A of the Act read with rule 8D of the Rules as raised partly allowed. Education cess and secondary and high education cess - allowed as a deduction while computing the total income of the assessee - Admission of additional ground - HELD THAT:- Respectfully following the decision of the Hon ble Jurisdictional High Court in the case of Sesa Goa Ltd. [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] we admit the additional ground raised by the assessee and allow the same on merit by directing the Assessing Officer to allow the deduction to the assessee company while computing its total income on account of education cess and secondary and high education cess.

  ---

• 2020 (9) TMI 233
  Penalty u/s 271 (1) (c) - Defective notice - non recording of proper satisfaction in terms of provisions of Section 271 (1) ( C ) - assessee submitted none of the twin charges has been struck off - filing revised computation of income - HELD THAT:- Such penalty cannot be sustained in view of the decision of Sahara India Life Insurance Co Ltd . [ 2019 (8) TMI 409 - DELHI HIGH COURT] wherein cancelled the penalty as none of twin charges were struck off in notice u/s 274 of the Act. Therefore respectfully following the decision of the honourable jurisdictional High Court, we do not find any reason to sustain the penalty. Accordingly, reversing the order of the lower authorities, we delete the penalty imposed u/s 271 (1) ( c) - Additional grounds raised by the assessee are allowed. Penalty u/s 271B - Failure to get the books of accounts audited as required u/s 44AB - appellant is carrying on two different businesses in his individual capacity, one is trading in footwear and other is trading of clothes and in the return of income assessee did not disclose, profit of cloth business - HELD THAT:- There is no dispute with respect to disclosure of profit of footwear business and audit of books of accounts of that business. Assessee when confronted was found to have not disclosed profit from cloth business. In assessment proceedings assessee submitted computation of profit of cloth business, paid tax thereon and it appears submitted tax audit report of that business also. The tax audit report is dated prior to the due date of filing of the return for assessment year 2012 13. The notification issued by the Central Board Of Direct Taxes dated first may 2013 clearly states that the assessee was required to file audit report along with the income tax return form assessment year 2013 14 onwards. Assessee may have a view that prior to the date he was not required to file the audit report along with the return of income but obtain tax audit report prior to due date of filing of ROI.Therefore, it cannot be said that assessee did not have a reasonable cause for not filing tax audit report along with the return of income. Lower authorities are not justified in confirming the penalty u/s 271B - Decided in favour of assessee.

  ---

• 2020 (9) TMI 232
  Addition u/s 68 - allegation that assessee failed to prove the credit worthiness - HELD THAT:- For the impugned A.Ys under appeal, transactions with Pabla Leasing and Finance Pvt. Ltd have been questioned by the AO on the ground that the assessee has failed to establish the credit worthiness. We are of the opinion that since the credit worthiness of this company has been accepted in the case of flagship company of the appellant, we do not find any merit in this finding of the lower authorities. On perusal of the confirmation of ledger account of Pabla Leasing and Finance Pvt. Ltd., we find that the loan has been repaid on 19.01.2013, which is much earlier than the date of search, which is 26.08.2015. Statement of Shri Virender Triparti, Managing Director of Pabla Leasing and Finance Pvt. Ltd was recorded under section 131 of the Act on 22.12.2017 and the same is exhibited at pages 109 to 111 of the paper book. There remains no doubt that the assessee has successfully discharged its onus cast upon it by the provisions of section 68 - No merit in the allegation of the lower authorities that Pabla Leasing and Finance Pvt. Ltd is only a paper company providing accommodation entries to the Nimbus India Ltd group of companies. Tribunal in the case of flagship company Nimbus India Limited, and further drawing support from the statement of the Managing Director of Pabla Leasing and Finance Pvt., Ltd, we are of the considered view that the assessee has successfully discharged the onus and, therefore, the additions made u/s 68 deserve to be deleted. - Decided in favour of assessee.

  ---

• 2020 (9) TMI 231
  Disallowance of interest expenditure - Difference of unsecured loan on which interest is paid is not commensurate in with interest received on loans and advances - advances given to the sister concern or associated concerns at interest are sourced from interest-bearing loans obtained - assessee has incurred interest cost of Rs. 376,982,874/ on unsecured loans amounting to Rs. 512 crores and assessee has earned interest of Rs. 376,951,117/ on loans and advances of Rs. 344 crores - HELD THAT:- Assessee has submitted a chart of interest charged which also supports the view that advances given to the sister concern or associated concerns at interest are sourced from interest-bearing loans obtained by the assessee. It is also undisputed fact that the total interest received by the assessee of Rs. 376,982,874/ is taxed under the head income from other sources by revenue. As assessee has utilised interest-bearing funds for the purpose of making investment/giving advances to the sister concern on interest, which is charged to taxed Under the head income from other sources, assessee is entitled to deduction u/s 57 (iii) of the act of any expenditure which is not in the nature of capital expenditure, if it is laid out and expended wholly and exclusively for the purpose of making or earning such income. Undisputedly there is no claim by the revenue that above expenditure is in the nature of capital expenditure. The interest income earned by the assessee is from loans and advances given to sister concern which is shown by the assessee to have been financed by obtaining loan on interest from other parties. Therefore, such interest paid on unsecured loan is laid out and expended wholly and exclusively for the purpose of making an earning such interest income. Relevant judicial pronouncements placed before us by both the parties also canvass a view that any expenditure incurred by the assessee which is not in the nature of capital expenditure, if laid out and expended wholly and exclusively for the purpose of making or earning any income which is chargeable to tax under head income from other sources is allowable as deduction to the assessee u/s 57 (iii) of the act. Allow appeal of the assessee and direct the lower authorities to delete the disallowance of interest expenditure .

  ---

• 2020 (9) TMI 230
  Revision u/s 263 - disallowance under section 14A r.w. rule 8D - HELD THAT:- In the instant case, the order u/s 263 passed by the Pr. CIT has been set aside/quashed by the ITAT F Bench, Mumbai [ 2017 (4) TMI 812 - ITAT MUMBAI] for the impugned assessment year. As the Tribunal has set aside/quashed the order u/s 263 passed by the Pr. CIT-9, Mumbai , we agree with the order of the Ld. CIT(A) that the consequential assessment order u/s 143(3) r.w.s. 263 dated 24.09.2016 does not survive. - Decided against revenue.

  ---

• 2020 (9) TMI 229
  Long term capital gain on sale of plot of land - Disallowance cost of improvement being the cost of construction of boundary wall - HELD THAT:- We note that at the time of purchase the description of the property clearly stated that there was no construction of any kind on the plot bearing no. 86/149 Pratap Nagar, Scheme of Rajasthan Housing Board, Sanaganer, Jaipur whereas at the time of sale deed dated 05.11.2008 the description of the property includes plot of land in question and the boundary wall around the said plot with length of 57 meters. Thus, the length of the boundary wall is correctly mentioned based on the dimension of the plot as 18*10.50 meters. Once the boundary wall was in existence at the time of sale though the correct description of the boundary wall is not available being the height of the boundary wall and thickness of the boundary wall, then, the claim made by the assessee is without any supporting evidence as well as necessary particulars. Having regard to the facts and circumstances of the case when the assessee has not produced even the particulars of the boundary wall being height and thickness of the wall we estimate cost of construction of the boundary wall - AO is directed to allow the cost of improvement while computing the capital gain. Disallowance of deduction u/s 54 - new property purchase by the assessee in the name of wife AND not in assesse own name - HELD THAT:- Since the assessee has sold only plot of land and not a residential house, therefore, the deduction U/s 54 of the Act is not admissible but the deduction U/s 54F is allowable. Hence, in the facts and circumstances of the case when the assessee purchased the said new residential house property in the name of wife but the investment was made by the assessee from his bank account as it is evident from the bank account statement then the claim of deduction U/s 54F of the Act cannot be denied on the ground of investment made in the name of wife. We direct the AO to compute allowable deduction U/s 54F after considering the sale proceeds and the total amount of investment for purchase of new house property. As regards the claim of expenditure incurred by the assessee on the renovation of the new asset purchased by the assessee we note that neither the AO nor the ld. CIT(A) has considered this issue despite the fact that the assessee has produced documentary evidence in support of the claim - Set aside this issue of claim of expenditure claimed on the renovation of the house property for the purpose of deduction U/s 54F to the record of the AO to decide the same after considering the evidence filed by the assessee and after giving appropriate opportunity of hearing to the assessee. Disallowance of the expenses incurred by the assessee being stamp duty and transfer charges - HELD THAT:- The assessee has claimed the stamp duty and registry expenses of Rs. 51,900/- as cost of new asset purchased by the assessee. This issue was not considered by the AO as the deduction U/s 54 of the act was disallowed at threshold on the ground that the assessee has purchased new asset in the name of the wife. CIT(A) though confirmed the disallowance but on the ground that the new house purchased by the assessee is not fit of habitation and also rejected this claim of transfer expenses in the absence of supporting evidence. It is pertinent to note that this expenditure is evident from sale deed itself whereby the assessee has purchased a new property in the name of wife. The stamp duty is part and parcel of the sale deed/purchase document and therefore, the total expenditure as evident from the registered documents itself. Hence, in the facts and circumstances of the case we allow this claim being part of cost of new property. Appeal of the assessee is partly allowed.

  ---

• 2020 (9) TMI 228
  Addition on account of cash deposit in the bank account - Expalination to source of cash as sale proceeds of the lands sold by the assessee along with other co-owners - HELD THAT:- Assessee is one of the joint owners of the land which was sold vide sale deed 08.04.2009. We further note that the cash was deposited in the bank account of the assessee with Oriental Bank of Commerce, Kishangarh on 09.04.2009. The date of cash deposit is subsequent to the date of sale deed dated 08.04.2009 which prima facie shows that the source of cash deposit has a direct nexus with the sale transaction of the land sold by the assessee jointly with other coowners vide sale deed dated 08.04.2009. Though the sale deed shows the sale consideration which is also the Stamp Duty Valuation however, once the assessee has brought on record the relevant facts as well as nexus between transaction of sale and deposit in bank account then only inference can be drawn from these facts and circumstances of the case is that the source of deposit of Rs. 27,50,000/- is the sale consideration of the land. AO has not brought anything contrary on the record during the remand proceedings such as examination of the purchaser. Therefore, in the absence of any contrary material the explanation of the assessee regarding source of cash deposit in the bank account cannot be disputed When the deposit of cash in the bank account is contemporaneous to the transaction of sale of land then in the absence of any contrary material the source explained by the assessee cannot be rejected. Hence, the addition sustained by the Ld. CIT(A) is deleted. - Decided in favour of assessee.

  ---

• 2020 (9) TMI 227
  Reopening of assessment u/s 147 - Addition u/s 69A - cash deposits made by the assessee in his Bank account - addition of only the peak deposits of cash - HELD THAT:- We find that in the assessment order passed for A.Y. 2012-13 u/s 147 r.w. 143(3), the income declared by the assessee has been accepted and no addition on account of undisclosed source u/s 69A of the Act has been made. In such a situation following the principle of consistency, we are of the view that the addition of the entire cash deposits in the assessee s Bank account is uncalled for and find force in the submission of the AR that only the peak cash deposits be considered as income of the Assessee. Before us, assessee has filed the working of the peak credit of deposits. We find that there is no finding of the lower authorities on that aspect. Considering in earlier years the addition has been made only on the peak deposits, we direct the AO to make the addition of only the peak cash deposits during the year. We accordingly direct the AO to examine the working of peak cash deposits furnished by the assessee and thereafter make the addition of the peak amount. Thus the ground of the Assessee is partly allowed.

  ---

• Customs

• 2020 (9) TMI 226
  Refund of SAD - N/N. 102/2007 dated 14.09.2007 - sale of imported goods in India - Escalator in SKD condition - availability of alternate remedy - HELD THAT:- Notification No.102/2007 dated 14.09.2007 (as amended), provides for refund of Additional Duty of Customs paid under Section 3(5) of the Customs Tariff Act, 1975 upon sale of imported goods in India, subject to certain conditions. Among the conditions prescribed, the importer was required to pay the appropriate Sales Tax or Value Added Tax and should also produce documents evidencing payment of appropriate Sales Tax or Value Added Tax, as the case may be, on sale of such imported goods - By Circular No.6/2008 dated 28.04.2008, the Central Board of Excise and Customs had prescribed the procedures to be adopted for refund of the 4% Additional Duty of Customs, in pursuance of Notification No.102/2007 dated 14.09.2007. As per Clause 5.1 of this Circular, the importer was required to furnish a certificate from the Statutory Auditor, certifying that the imported goods and the local goods are one and the same. This Court is of the view that though there is an alternate remedy of appeal as against the impugned order in the present case, the same shall not be a bar to maintain this Writ Petition under Article 226 of the Constitution of India, since there is a violation of the procedure prescribed under the statute and thereby, the order itself is wholly without jurisdiction - Apart from this aspect, admittedly, the impugned order has been made without issuance of a show cause notice, calling for the petitioner s objections and as such, is in violation of the Principles of Natural Justice. On this ground also, the petitioner may be entitled to invoke the writ jurisdiction without availing the alternate remedy, as held in a catena of decisions of the Hon ble Apex Court and various High Courts. The impugned Order is set aside and the respondent shall refund the claim made by the petitioner, which is the subject matter of the Order-in-Original, together with interest at the rate of 6% p.a. from the date of the refund application - Petition allowed.

  ---

• 2020 (9) TMI 225
  EPCG Scheme - Exemption N/N. 104/94 dated 16th March 1994 - import of containers, free of duty on execution of Bond/Undertaking, on the condition that such containers will be exported within a period of six months from the date of import - Allegation that appellant failed to export containers within the stipulated time period and applied for extension of time - Confiscation alongwith Redemption Fine and Penalty. HELD THAT:- It is undisputed that the Appellant had imported 75 containers and had availed the benefit of exemption N/N. 104/94 dated 16th March 1994. Under the said notification, the Appellant was required to re-export the containers within six months. The Appellant, admittedly, failed to re-export the containers within the stipulated time period and also failed to exercise the liberty to file for extension of time, granted to him under the said notification. The exemption notifications require strict interpretation and therefore, the Appellant is in gross violation of the conditions of the exemption notification. On perusal of the Survey Report, it is found that the containers have been declared unfit for export and the depreciated value has been calculated at Rs. 11.70 lakhs. The first adjudicating authority had valued the containers at Rs. 28,24,034/- (36 containers) and Rs. 30,79,820/- (39 containers) and accordingly, duties of Rs. 9,50,316/- and Rs. 10,36,390/- respectively had been demanded. Much time has elapsed since this valuation was confirmed by the first adjudicating authority. Confiscation of the said containers - HELD THAT:- The valuation of the 39 containers at Rs. 30,79,820/-, as arrived at by the First Adjudicating Authority is upheld and accordingly, the demand of duty of Rs. 10,36,390/- along with interest is upheld. The Appellant has already paid the duty amount of Rs. 10,36,390/- vide challan No. 245 dated 22 nd January 2008, which has been appropriated in the impugned order. The order of confiscation of the 39 containers is upheld and the redemption fine reduced to Rs. 2,20,000/-. The Appellant had already paid redemption fine of Rs. 2,20,000/- vide challan No. 1119 dated 22nd January 2008, which has been appropriated in the impugned order. Appeal disposed off.

  ---

• Corporate Laws

• 2020 (9) TMI 224
  Oppression and Mismanagement - Grant of interim relief - Illegal appointment of Directors in the AGM - Section 241 of Companies Act - HELD THAT:- Section 241 provides for grant of relief by the Tribunal in cases of oppression etc. while Section 244 regulates the right of members to apply under Section 241. Powers of Tribunal to deal with an application under Section 241 are embodied in Section 242, Sub-section 4 whereof provides for passing of such interim directions by the Tribunal on the application of any party to proceedings which it thinks fit for regulating the conduct of the Company s affairs. This appeal has a limited scope as it has been preferred against an order passed under Section 242(4) of the Act declining to grant interim relief. Considerations for grant of interim relief are well settled. Existence of a prima facie case besides balance of convenience and irreparable injury being suffered by a Member of Company alleging acts of oppression and mismanagement prejudicial to its interest and those of the Company, if there is no judicial intervention to protect the interests of such Member or the Company from alleged acts of oppression and mismanagement pending probe into allegations of oppression and mismanagement in the affairs of the Company, are the relevant considerations at the stage of grant of interim relief and Section 242(4) of the Act vests ample powers in the Tribunal to pass such interim directions as may be necessary for regulating the affairs of the Company. In the instant case, it can be seen that the Appellant has made specific allegations of oppression and mismanagement against Respondents and made strenuous efforts to demonstrate that the affairs of the Company have been conducted in a manner which seriously jeopardize his interests. While it is not permissible to return findings of fact qua such allegations of oppression and mismanagement across the ambit of interlocutory application under Section 242(4) of the Act as also within the limited scope of instant appeal, the Appellant is required to make out a prima facie case warranting grant of interim relief. To demonstrate that the affairs of the Company were not being conducted in accordance with the provisions of law and the Articles of Association, the Appellant has raised the issue of not being served with notice of AGM dated 24th September, 2019 and EoGM dated 4th January, 2020 which were crucial in so far as his interests as a stakeholder in the Company were concerned. It is not in dispute that such meetings were purportedly held to induct Respondents No. 4 to 6 as Directors and remove the Appellant from the Directorship of the Company - The approach adopted by the Tribunal is fundamentally flawed as it could not solely rely upon documents Notices herein, service whereof to Appellant was seriously disputed. The Tribunal ought to have been more careful in drawing conclusion as regards existence of prima facie case from such questioned notices, as the consequences flowing from such notices had the deleterious effect of diluting the status and forcing ouster of Appellant from Directorship of the Company. Whether there was a fair question raised by Appellant in the Company Petition alleging oppression and mismanagement at the hands of Respondents be it seen that the Appellant is admittedly a minority shareholder whilst Respondent No. 2 and its associates are the majority shareholders? - HELD THAT:- It is submitted on behalf of Appellant that since the Appellant did not attend any purported meeting on 24th September, 2019, the minimum required quorum of General Meeting not being present any resolutions said to have been passed on such date are required to be stayed. As regards the EoGM dated 4th January, 2020, it is pointed out on behalf of Appellant that the only ground for removal of Appellant as a Director from the Board of the Respondent No. 1 Company was in relation to the affairs of M/s Indocean Developers Pvt. Ltd. Incorporated in Sri Lanka which is a foreign company and the Act does not permit affairs of a foreign company to be taken into consideration for any such decision to be taken by the shareholders of the Company. Reference in this regard is made to Section 102 of the Act which does not envisage affairs of a foreign company to be taken into consideration for taking a decision in a General Meeting of the Shareholders - On the strength of these relevant facts, it is contended on behalf of Appellant that the ouster of Appellant as Director is entirely illegal. Since the foundation is bad, it is contended, the entire superstructure is bound to collapse. The Appellant has demonstrated all these circumstances to show that it has raised a fair question which requires probe in the Company Petition. The arguments raised on this score cannot be dismissed offhand. Given the status of Appellant, it can be safely stated that with existence of prima facie case in his favour, balance of convenience lies to the side of Appellant who is faced with the prospect of his interests and legal rights being seriously jeopardized in the wake of impugned order. The impugned order suffers from grave legal infirmity besides factual frailty. Same cannot be supported - Appointment of Respondents No. 4 to 6 as Directors of the Company and removal of Appellant as the Director of the Company is stayed till the decision of Company Petition by the Tribunal - Appeal allowed.

  ---

• Insolvency & Bankruptcy

• 2020 (9) TMI 223
  Suspension of initiation of corporate insolvency resolution process - insertion of Section 10A to I B Code, 2016 - applicability of said section to the present case - the date of alleged default of the claim amount is stated to be 30th April 2020 and it is claimed that the stated case of the Respondent/Operational Creditor itself being a date subsequent to that dealt with by Section 10A of the I B Code, 2016 - Retrospective application of the statute. HELD THAT:- While the main provision of Section 10A taken together with the Explanation makes it clear that a Lakshman Rekha , so to say, has been demarcated by providing the relevant date of 25.03.2020 in relation to a default and for filing an application for the initiation of CIRP against the corporate persons for the defaults occurring on or thereafter, however it must be noted that the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 (No. 9 of 2020) inserting Section 10A was in itself notified only on 05.06.2020 in the Gazette of India, even though, pegging the disability to file an application for initiation of CIRP to the defaults arising on or after 25th March 2020. At this juncture, it will be essential to understand as to why the relevant date has been fixed as 25th March 2020 and not some other date in between 25th March 2020 and the date of notification or for that matter the date of notification itself, namely 05.06.2020. This can be best explained again by looking into the objects and reasons for promulgation of the Ordinance (No. 9 of 2020) wherein it seen that the relevant date, namely 25.03.2020 happens to be the date when the nation-wide lockdown came into force to combat the spread of COVID-19. Thus, while the prevalence of the global pandemic caused uncertainty and stress for business for reasons beyond their control, the lockdown which came into force additionally caused a disruption to the normal business operations. Retrospective application of the statute - HELD THAT:- The main provision of Section 10A taken together with objects reasons resulting in the promulgation of Ordinance (No. 9 of 2020) demonstrates that it is to be made applicable retrospectively to the defaults arising on or after 25th March 2020. Whether Section 10A, newly inserted in I B Code by the promulgation of the Ordinance (No.9 of 2020) has a retrospective applicability and retroactive effect? - HELD THAT:- From a plain reading of the main provision of Section 10A of I B Code it is clear that in relation to defaults arising on or after 25th March 2020, no application for initiation of CIRP shall be filed for a period of six months or such further period not exceeding one year as may be notified in this behalf. The duration of suspension in relation to filing of application initially is pegged at six months extendable to a further period not exceeding one year. It is to be noted that in relation to Sections 7, 9 and 10 it is the default on the part of the Corporate Debtor to pay the debt due which can trigger the filing of a petition and not otherwise. Where there is no debt as defined in Section 3(11) of the Code which is due and payable and no default as defined under Section 3(12) of the Code which had occasioned in it is payment, there is no question of any cause for a creditor to invoke the provisions of I B Code seeking for the initiation of CIRP. Thus, in the normal run of Section 7, 9 and 10 it is a sine qua non for the existence of a debt and its default and if both stand established this Tribunal is required to initiate the CIRP of the corporate debtor. The proviso to main provision of Section 10A makes it abundantly clear that the hands of the clock were not required to be temporarily frozen for a period of six months or such further period not exceeding one year but are required to be permanently interdicted in relation to defaults occurring on or after 25.03.2020 by the use of the term no application shall ever be filed for initiation of CIRP of a corporate debtor for the said default arising during the said period - endeavoring to define the relevant period in the main proviso initially for a minimum fixed period of six months commencing from 25.03.2020, the main provision leaves it open to the Executive to either limit it to the six months period ending on 25.09.2020 or cause it to be extended for a further period not exceeding one year i.e. till 25.03.2021. Having dealt with the power of the Executive to promulgate laws having retrospective effect based on decided case laws and also answering the question posed in relation to the retrospectivity of the applicability of Section 10A by relating it back to 25.03.2020 being the relevant date to be reckoned in relation to suspension of filing of application seeking for initiation of CIRP in the affirmative, it is only required of this Tribunal to ascertain as to whether the date of default falls within or outside the Lakshman Rekha , namely 25.03.2020 drawn by the legislation by way of the Ordinance (No. 9 of 2020) promulgated on 05.06.2020 in the present case. Whether the date of default falls prior to or on or after 25.03.2020 to determine whether the application is to be proceeded any further or alternatively this Tribunal is to restrain itself from the exercise of its Jurisdiction available to it under section 9 due to the applicability of Section 10A? - HELD THAT:- Though rejection of the plaint under Order VII Rule 11 does not preclude the plaintiffs from presenting a fresh plaint in terms of Rule 13 thereof, in the case of I B Code, 2016 in view of the express terms of proviso to Section 10A of the Code the same may not be possible. Be that as it may, what is material to be noted is that in relation to the rejection of a plaint the focus of the Civil Court is required to be in relation to the plaint and its averments and the written statement, if any filed by the defendant is relegated to irrelevancy. Correlating with the date on which the operational debt fell due and the date of default, both being disclosed as 30.04.2020, the details of transactions on account of which the debt fell due, for sake of brevity not repeated, consistently asserts the said date to be the date of default even according to the averments made by the respondent/operational creditor germane for the consideration of the present application filed by the applicant/corporate debtor. Hence the endeavour on the part of the Operational Creditor/respondent, after the promulgation of the Ordinance fixing the cut off or relevant date as 25.03.2020 and to portray as if the default had occurred even prior to the relevant date of 25.03.2020 and in the circumstances the petition in IBA/215/2020 should be proceeded with, cannot be accepted as the petitioner who approaches this Tribunal should be consistent in his pleadings and cannot be allowed to resile from it in order to suit his convenience. The Executive in the Promulgation of the Ordinance to meet an extra-ordinary situation and to avoid causing further stress to the already beleaguered businesses due to the prevalence of COVID pandemics throughout the world, including India and also in addition affected by the lock down enforced by the Union as well as the States of the Union, all beyond their control have chosen to suspend filing of any application in relation to defaults arising on or after 25.03.2020 under Section 7, 9 and 10 of I B Code for a period of six months extendable by a further period not exceeding one year as per the main provision of Section 10A newly inserted and further by virtue of proviso thereunder to the main provision of Section 10A has further qualified the main proviso that in relation to default arising on or after 25.03.2020 (incidentally the date on which the lock down came into force) and during the said period to be correlated with the main provision of Section 10A which for the time being is specified as six months extendable up to a year, no application shall ever be filed thereby both the main provision as well as the proviso making it amply clear that the suspension in filing the application in relation to defaults arising on or after 25.03.2020 is to be made applicable retrospectively from the said date. The Explanation given under Section 10A only reinforces the retrospectivity in the applicability of Section 10A in as much as providing that the defaults which had occurred prior to the date of 25.03.2020, Section 10A will not apply thereby clearly demarcating defaults arising on or after 25.03.2020 and till such period as may be extended as given in the main provision of Section 10A not exceeding a year, as a class in itself due to the prevalence of the extraordinary situation as stated in the objects and reasons leading to the promulgation of the Ordinance. Thus, as a consequence of the applicability of the newly inserted Section 10A of the I B Code to the instant case, in view of the alleged default if any, had occurred even according to the own admission of the respondent/operational creditor as to be that of 30.04.2020, both in the petition/main application filed in Form 5 in IBA/215/2020 as well as the demand notice issued prior to it in Form 3, both forms statutorily prescribed under the AAA Rules and as required to be completed and filed by an Operational Creditor while approaching this Tribunal, this Tribunal cannot proceed any further in relation to the petition in IBA/215/2020 due to the bar created by law, namely the newly inserted Section 10A of I B Code by virtue of The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 promulgated by the Executive and published in the Gazette of India on 05.06.2020, coming into force at once and in the circumstances this Tribunal is constrained to allow the instant application. Application allowed.

  ---

• Central Excise

• 2020 (9) TMI 222
  Benefit of exemption under N/N. 28/2002-CE - Ethanol Blended Petrol (EBP) (Gasohol) - Allegation that the appellant had not complied with the condition of said notifications inasmuch as the EBP did not satisfy the Bureau of Indian Standard s (BIS) specification 2796:2000 - requirement of deposit of duty under Section 11D of the Central Excise Act, 1944. Revenue s main contention is that to be eligible for exemption under aforesaid Notifications, inter alia, it is required to show that EBP conforms the BIS 2796:2000 standards. It is their allegation that the Appellant failed to establish that the EBP cleared by them from their Vashi Terminal conforms the BIS specification - appellants, on the other hand, claimed that the tests carried out on the samples of EBP at their Vashi Terminal even though limited to nine out of fifteen tests, but indicate that the EBP confirms to the BIS 2796:2000 specification. They submitted the sample Test Reports conducted at Vashi Terminal to the department. HELD THAT:- There are no merit in the reasoning advanced by the learned Commissioner in rejecting the test reports. The appellant while clearing the EBP from their Vashi Terminal invariably conducted tests on the EBP samples to ascertain its quality and the specification of the product before clearance. Needless to mention the said product is subjected to strict control and orders issued by Central and State Government from time to time viz. Motor Spirit and High Speed Diesel(Regulation of Supply Distribution and Prevention of Malpractices) Order,1998, where under the quality and specification of the MS to be strictly complied. It is found that at the Vashi Terminal where the duty paid MS and Ethanol were received, and after blending the same, EBP emerges, the Appellant carry out tests, albeit nine out of fifteen tests, which indicated that it conforms the BIS 2796:2000 specification and the control Order, 1998; and accordingly cleared/sold to their customers like other Refineries /terminals did. Later on being disputed by the department about the correctness of the test reports of EBP at Vashi Terminal as all the tests were not carried out on the samples, they subjected the samples tested at their Refinery and produced test certificates dated 1.6.2004 and 5.6.2004, which conform BIS specification 2796:2000 - the test reports on EBP at Vashi Terminal cannot be brushed aside unless contrary test result is produced by the Revenue. The said test results further confirmed when got tested at their equipped to test all parameters. Applicability of Section 11D to the facts of the present case - HELD THAT:- The Vashi terminal receives duty paid Motor spirit from their Refinery and also duty paid ethanol, which was blended in the ratio of 95:5 at the time of clearance from the Vashi unit to the customers in tankers. The price per KL of EBP was similar to the price charged by the appellant for unblended motor spirit to the customers - In the present case, the Revenue could not show that the appellant after blending ethanol with duty paid motor spirit collected separately, mentioning the duty on ethanol in the invoices, but not paid to the Government. Therefore, Section 11D of CEA, 1944 cannot be said to have been attracted. The Revenue has vehemently argued that the issue is covered by the judgment of this Tribunal in the appellant s own case reported as IOCL Vs. Commissioner of Customs, Vadodara [ 2010 (10) TMI 399 - CESTAT, AHMEDABAD ] - Analyzing the facts and the question of law involved in the said case, we find that there is no similarity between the said case and the appeal before us. Appeal allowed - decided in favor of appellant.

  ---

• CST, VAT & Sales Tax

• 2020 (9) TMI 221
  Validity of assessment order - proceedings on the basis of the proposals/reports of the Enforcement Wing/ISIC - defects with regard to mismatch in their returns vis-a-vis the other dealers - independent application of mind on the part of Assessing Officer - HELD THAT:- In the case of M/S. JKM GRAPHICS SOLUTIONS PRIVATE LIMITED VERSUS THE COMMERCIAL TAX OFFICER [ 2017 (3) TMI 536 - MADRAS HIGH COURT] , this Court had considered the claim of the dealers in connection with Input Tax Credit reversal on an alleged mismatch between their returns and the returns filed by the sellers - impugned order on this issue set aside. Independent application of mind on the part of Assessing Officer - HELD THAT:- This Court, in a batch of Writ Petitions in the case of TVL. TARUN CREATION VERSUS THE COMMERCIAL TAX OFFICER, TIRUPUR. [ 2020 (8) TMI 689 - MADRAS HGIH COURT] had held that the Assessing Officer cannot be solely guided by the proposal given by the Enforcement Wing Officers and that the Assessing Officer has to independently consider the same, without being influenced by such proposals of the higher officials - Some of the decisions in which similar views have been taken are in the cases of MADRAS GRANITES (P) LTD. VERSUS COMMERCIAL TAX OFFICER, ARISIPALAYAM CIRCLE, SALAM AND ANOTHER [ 2002 (10) TMI 767 - MADRAS HIGH COURT] and NARASUS ROLLER FLOUR MILLS VERSUS THE COMMERCIAL TAX OFFICER [ 2015 (4) TMI 361 - MADRAS HIGH COURT] . Also, Circular No.3 dated 18.01.2019 has empowered the Assessing Officers to henceforth independently deal with the assessment without being influenced by the proposals of the higher officials - In view of Circular No.3 dated 18.01.2019 issued by the Commissioner of State Tax, Chennai, the impugned proceedings in all these Writ Petitions, which proceeds on the basis of the proposals/reports of the Enforcement Wing/ISIC, are liable to be set aside. The impugned assessment proceedings, which culminated on the basis of the inspection conducted by the Enforcement Officers, as well as the VAT Audit and the alleged mismatch between the returns of the petitioner with the corresponding dealers, cannot be sustained - the matters are remanded back to the respondent herein for reconsideration - petition allowed by way of remand.

  ---

• 2020 (9) TMI 220
  Maintainability of petition - availability of alternative remedy of appeal - income from undisclosed sale transactions - HELD THAT:- The respondent after finding the petitioner s explanation to be unsatisfactory had straight away assumed that the said sum represents income from undisclosed sale transactions. I am afraid that this approach is clearly not sustainable in law - In fact when the matter was taken up for hearing, the petitioner s counsel produced a copy of the certificate issued by the Indian Bank as well as the City Union Bank to show that the transactions in question are between the Directors of the Company and the assessee themselves. The second aspect of the matter pertains to reliance on the stock details report dated 13.02.2020. In this case, personal hearing was held on 31.01.2020. It is quite possible that the petitioner themselves requested the Assessing Authority to conduct an inspection. In fact, on the last occasion when the Assessing Officer was also heard through the Video Conference, she strongly submitted that the report dated 13.02.2020 was obtained based on the inspection that was undertaken at the instance of the petitioner themselves. It may be so - It is obvious that the Assessing Officer had relied on a report dated 13.02.2020 before passing the impugned order. But the said report was not made available to the petitioner herein. The matter is remitted to the file of the second respondent and after the petitioner remits the sum of Rs. 5,00,000/- as undertaken before this Court, the second respondent will issue a hearing notice to the petitioner - Petition allowed by way of remand.

  ---

• 2020 (9) TMI 219
  Maintainability of petition - petition was dismissed on the ground of availability of alternative appellate remedy - requirement of pre-deposit being the pre-condition to entertain the appeal - HELD THAT:- During the hearing, it was pointed out that, before the Division Bench, where the writ appeals were originally heard, at the time of admission on 28.11.2019, the learned counsel for the assessee had offered to deposit 10% of the demand made in the impugned assessment for invocation of the statutory remedy before the appellate authority - The said offer was made voluntarily on the side of the assessee, of course, in the context of conditions imposed under the relevant provisions of the TNVAT Act to deposit 25% of the demand/tax due, as pre-deposit being the pre-condition to entertain the appeal. Only in order to get instructions to that offer made by the assessee side, the counsel appeared on behalf of the revenue seems to have taken time and only at that stage those writ appeals came to be disposed by our Division Bench in the common order dated 05.12.2019. The impugned assessment order and the impugned demand dated 12.07.2019 made by the assessing authority for the assessment years 2013- 14, 2014-15 and 2015-16 respectively, which are impugned in the respective writ petitions, which are the subject matter in the appeal are hereby set aside - Consequently, the matters are remitted back to the assessing authority for reassessment. Petition allowed by way of remand.

  ---

• 2020 (9) TMI 218
  Validity of Bihar Value Added Tax Ordinance, 2005 - vested rights accrued to the Petitioners with retrospective effect [before expiry of the period] for exemption from payment of Sales-tax on sale of Finished Products under the Notification- S 0 No.:96 dt. 04.04.1994 and Notification-S 0 No.: 479 dt.22.12.1995 issued under the Industrial Policy, 1993 1995. HELD THAT:- This issue can be agitated by the petitioner first with the appropriate authority and thereafter before the appropriate forum in accordance with law. Petition disposed off.

  ---

• 2020 (9) TMI 217
  Levy of penalty u/s 47(b) of the erstwhile Kerala Value Added Tax Act, 2003 - registration of Charitable Hospitals - Deferment of assessment proceedings under Section 25 of the 2003 Act, before finalisation of the proceedings under Section 47(b) of the Act - HELD THAT:- It is a fit case where the penalty order Ext.P6 to P16 are not sustainable. In M/s Fortis Healthcare Limited [2015 (2) TMI 1014 - PUNJAB HARYANA HIGH COURT], the Division Bench of Punjab and Hariyana High Courts after noticing the provisions of Punjab Value Added Tax Act and as well as Power to Impose Sales Tax and VAT clause flowing from entry 54 of list to schedule 7 and Article 366 (29-A) of the Constitution of India did not accept the contention of the state for the applicability of doctrine of severance with regard to the services provided to the indoor patients involving medicines supply of surgical items, stents, implants valves with or without medical procedure or medical treatment. During all the aforementioned procedure supply of oxygen is also a sine qua non. All these services are in a packaged form and have to be consumed and cannot be segregated during the course of the treatment - Thus for all intends and purpose is rightly so held to be not exegible to tax. The cumulative reading of the reasoning assigned herein above would leave a irresistible conclusion that the penalty orders do not stand touchstone of reasonability or any deviation from the provisions of Section 18C of the Kerala Value Added Tax Act 2003, particularly when as per the proviso the petitioner-the charitable hospital is not required to obtain registration. Penalty Order quashed - petition allowed.

  ---

• Indian Laws

• 2020 (9) TMI 216
  Dishonor of Cheque - insufficiency of funds - presence of legal liability or not - Section 138/142 of Negotiable Instruments Act - petitioner submits that he would be satisfied if the petitioner is granted liberty to approach the Magistrate concerned and move an appropriate application by raising all the pleas, as raised in the present petition. HELD THAT:- This petition is disposed of with a liberty to the petitioner to approach the Magistrate concerned and move an application by raising all the pleas, as raised in the present petition. On his doing so, the Magistrate concerned will decide such application after taking into consideration the pleas raised therein by the petitioner, in accordance with law, within a stipulated period.

  ---

• 2020 (9) TMI 215
  Dishonor of Cheque - Offence u/s 138 of NI Act - complaint was dismissed on the ground that the return memo of the banker with endorsement has not been proved in accordance with Section 67 of the Evidence Act - HELD THAT:- It is no more res integra that the provisions of Section 146 of the N.I. Act unambiguously and expressly override the principles of the Indian Evidence Act and making such a major departure from the application of the Evidence Act provides that the bank slip or memo with the official mark showing that the cheque was dishonoured would by itself give rise to the presumption of the dishonour of the cheque, unless and until the contrary to the said fact was disproved. In view of insertion of Section 146 in the N.I. Act, Section 67 of the Evidence Act as relied upon by the learned Trial Judge has no manner of application to prove or disprove the document relating to bank note/slip/return memo. Furthermore, Section 143 of the N.I. Act fortifies the complaint under Section 138 of the N.I. Act to be tried in summary manner - Having held so, the findings that the contents of the bank notes were not proved in accordance with Section 67 of the Evidence Act and thus bad in law, has no force in the eye of law and contrary to Section 146 of the N.I. Act. The accused- respondent has not preferred any appeal in regard to the findings of the learned Trial Court while deciding the point No.1 as quoted herein-above that the cheque was issued by the accused-respondent in favour of the complainant-appellant in discharge of his liability and debt to pay the sum of Rs. 7,95,000/- - the instant appeal merits consideration, the complainant-appellant has been able to prove the fact of the accused s liability to pay the entire amount of Rs. 7,95,000/- as fine. The same should be paid to the complainant within a period of three months from the date of receipt of this order, otherwise, in default, the accused-respondent shall be sent to jail to suffer simple imprisonment for six month. Appeal disposed off.

  ---