TMI Tax Updates - e-Newsletter
April 12, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax

Highlights / Catch Notes

GST

• Classification of supply of goods/services - rate of GST applicable - Restaurant services - Chocolates - the sale of handmade chocolates which are manufactured in the workshop and brought to the outlets for further processing will be covered under the 'restaurant services'. - AAR
  Visit to Get Source

  ---

• Classification of supply of goods/services - rate of GST applicable - Restaurant services - Supply of items such as birthday stickers, candles, birthday caps, Balloon, Carry Bags, snow sprays etc. - the said related items are being purchased and sold as such without any further processing in the restaurant. These items are not articles of foods and drinks and are covered under goods. Sale of such bought out goods as such, is not a service but sale of goods - AAR
  Visit to Get Source

  ---

Income Tax

• Penalty u/s 271(1)(c) - Bogus purchases - no clinching material had been brought on record by the revenue which could disprove the authenticity of the purchases claimed by the assessee to have been made from the aforementioned parties thus, no penalty under Sec.271(1)(c) could have validly been imposed upon him. - AT
  Visit to Get Source

  ---

• Levy of penalty u/s 271D - cash loan received from mother in violation of provision of Section 269SS - bona fide reason - this advance or loan in cash is between blood relations i.e. mother and son - Following the decision of Madras High Court, penalty deleted - AT
  Visit to Get Source

  ---

• Estimation of income on sub-contract receipts - Revenue fails to dispute clinching fact that the assessee’s books have indicated the impugned receipts from scrap sales than any ‘other’ source inviting application of Section 57 of the Act. We conclude in this factual backdrop that the assessee’s scrap sales income deserves to be treated under the regular business head followed by assessment thereof @8%. - AT
  Visit to Get Source

  ---

• Unexplained cash credits - if the assessee is able to prove the transfer of money from the assessee’s bank a/c to the bank a/c of the customers and if the said gold loan is repaid on the same date, then taking the confirmation from the parties into consideration, the sale consideration of those transactions should be accepted as source for cash deposits. - AT
  Visit to Get Source

  ---

• Deduction of interest on late deposit of TDS under Section 37(1) - payment of interest on late deposit of tax deduction at source by the assessee leviable u/s 201 (1A) of the act is neither an expenditure only and exclusively incurred for the purpose of the business and therefore same is not allowable as deduction u/s 37 (1) - AT
  Visit to Get Source

  ---

• Unexplained cash deposits - once the AO has examined the documents so produced by the assessee and recorded his satisfaction regarding the identity of the donors, the genuineness of the gift and the source of such gift, the assessee has discharged the necessary onus cast on her and no addition can be made in her hands. - AT
  Visit to Get Source

  ---

• Revision u/s 263 - Though the order passed by the Assessing Officer may be prejudicial to the interest of the Revenue, it cannot be termed as erroneous. In such case, the order passed by the Commissioner of Income Tax cannot be sustained. The Tribunal taking into consideration all these aspects, rightly set aside the order passed by the Commissioner of Income Tax and allowed the appeal. - HC
  Visit to Get Source

  ---

• Rectification u/s 254 - non consideration of the Judgment of the Hon'ble Bombay High Court - When the Tribunal has no jurisdiction to review the order passed by them, the remedy open to the assessee is to file an appeal against the order, if they are aggrieved over the same. The order passed by the Tribunal is beyond the scope of section 254(2). In these circumstances, the Tribunal should not have allowed the Miscellaneous Application. - HC
  Visit to Get Source

  ---

• TDS u/s 195 - Royalty - the amounts paid by resident Indian endusers/ distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS - HC
  Visit to Get Source

  ---

Customs

• Warehoused goods - goods were not cleared within the time limit stipulated in Section 48 of the Customs Act, 1962 - The customs authority at no point of time detained the goods. Therefore, this is purely a contractual issue between the petitioner on the one hand and the private respondents on the other. In such a case, it would not be open to the Writ Court to issue any Mandamus compelling the private respondents herein to permit clearance of the goods - Petition dismissed - HC
  Visit to Get Source

  ---

IBC

• Validity of action of the Resolution Professional (RP) - Admittedly, the RP has not provided the copy of Resolution Plans to the Appellant. Thus, he has contravened the mandatory provision provided in Regulation 21(3) (iii) of the IBBI Regulations - the notice of that meeting was sent to the Appellant less than 24 hours’ notice was served, which is against the Regulation 19 of IBBI Regulations - Directions issued to RP - AT
  Visit to Get Source

  ---

Central Excise

• CENVAT Credit - input services - Membership of Club Service - Health Insurance Service - there is no evidence produced by the Department to prove that even these two services were for personal use of the appellant - In absence thereof, there are no logic in confirming the recovery of Cenvat credit availed by the appellant on these two services - AT
  Visit to Get Source

  ---

VAT

• Exemption from turnover - inter-state sale or not - Form-F declaration - false document - consignment sales or not - AO rejected the claim on inter-state movement of goods in the second round of proceedings after remand - the Tribunal did not advert to the findings rendered by the appellate Deputy Commissioner in the earlier round more particularly, with regard to the documentation, the nature of transaction and the role of the broker - what the Assessing Officer was did is to ignore the finding and merely acted based upon the directions of the Enforcement Wing Officials thereby abdicating its power as an Assessing Officer. That apart, as a subordinate statutory authority, the findings rendered by the appellate authority are binding on the Assessing Officer. These aspects have been ignored by the Tribunal while reversing the order passed by the first appellate authority. - HC
  Visit to Get Source

  ---

• Recovery of sales tax dues - liability of third person (spouse) who has giving the property as security - Raising of encumbrance created by way of Intimation - the security bond was not executed in her capacity as wife of the Proprietor and she executed the same in her capacity as an 'individual person' and she has given an undertaking that in the event of non-payment of statutory dues, the immovable property given by way of security can be attached - Petition dismissed - HC
  Visit to Get Source

  ---

Notifications

• GST - States

• G.O.Ms.No.83 - dated 1-4-2021 - Andhra Pradesh SGST
  RETROSPECTIVE EXEMPTION FROM LEVY OR COLLECTION OF STATE TAX ON SUPPLY OF FISHMEAL (FALLING UNDER HEADING 2301) DURING THE PERIOD FROM 01.7.2017 TO 30.9.2019 AND LEVY OF STATE TAX AT THE RATE OF SIX PER CENT, ON SUPPLY OF PULLEY, WHEELS AND OTHER PARTS (FALLING UNDER HEADING 8483) AND USED AS PARTS OF AGRICULTURAL MACHINERY (FALLING UNDER HEADINGS 8432, 8433 AND 8436) DURING THE PERIOD FROM 01.7.2017 TO 31.12.2018.

  ---

• G.O.MS.No. 84 - dated 1-4-2021 - Andhra Pradesh SGST
  Andhra Pradesh Goods and Services Tax (Amendment) Rules, 2021.

  ---

• 95/2020 – State Tax - dated 24-3-2021 - Jharkhand SGST
  Seeks to extend the time limit for furnishing of the annual return specified under section 44 of JGST Act, 2017 for the financial year 2019-20

  ---

• 01/2021 – State Tax - dated 24-3-2021 - Jharkhand SGST
  Jharkhand Goods and Services Tax (Amendment) Rules, 2021.

  ---

• F-A 3-39-2020-1-V(05) - dated 23-2-2021 - Madhya Pradesh SGST
  Amendment in Notification No. FA- 3-32-2020-1-V -(65), Bhopal dated 5th December 2020

  ---

• 10784 - FIN-CT1-TAX-0002/2020 - dated 31-3-2021 - Orissa SGST
  Notification to waive penalty payable for non-compliance of provisions of Notification No. 10654 dated 31.03.2020 bearing S.R.O. No. 91/2020

  ---

• F.17(131-Pt-II)ACCT/GST/2017/6672 - dated 30-3-2021 - Rajasthan SGST
  Amendment in Notification No. F. 17(131) ACCT/GST/2017/3743, dated the 6th August, 2018

  ---

• VI(1)/70(e)/2021. - dated 1-3-2021 - Tamil Nadu SGST
  Amendment in Notification No. 19/2020 dated 31st December 2020

  ---

• II(2)/CTR/132(e)/2021 - dated 25-2-2021 - Tamil Nadu SGST
  Supersession Notification No. II(2)/CTR/232(h-7)/2020, dated 13th April, 2020

  ---

• 365/XI-2-21-9(41)/17- U.P. Act-1 -2017-Order-(175)-2021 - dated 31-3-2021 - Uttar Pradesh SGST
  Seeks to amend Notification No. 428/XI-2-9(47)/17-U.P.Act-1-2017-Order-(106)-2020 Dated 30th April, 2020

  ---

• Insolvency and Bankruptcy

• S.O. 1543 (E) - dated 9-4-2021 - IBC
  Central Government hereby specifies ten lakh rupees as the minimum amount of default for the matters relating to the pre-packaged insolvency resolution process of corporate debtor under Chapter III-A of Insolvency and Bankruptcy Code, 2016

  ---

• G.S.R. 256 (E) - dated 9-4-2021 - IBC
  Insolvency and Bankruptcy (prepackaged insolvency resolution process) Rules, 2021.

  ---

News

• Insolvency and Bankruptcy Board of India notifies the Insolvency and Bankruptcy Board of India (Pre-packaged Insolvency Resolution Process) Regulations, 2021

  ---

• Finance Minister Smt. Nirmala Sitharaman participated in 103rd meeting Development Committee Meeting of World Bank-IMF

  ---

Case Laws:

• GST

• 2021 (4) TMI 424
  Classification of supply of goods/services - rate of GST applicable - Restaurant services - Cakes, bakery items, ice creams, chocolates, drinks and other eatable products prepared at the premises of the applicant and supplied to the customers - facility to consume the same in the air-conditioned premises itself covered under the restaurant services - composite supply or not - supply of items such as birthday stickers, candles, birthday caps, snow sprays etc. related items - principal supply of goods - sale of handmade chocolates which are manufactured in the workshop of the Applicant - applicability of composition scheme of tax or not. Cake, Ice Cream and other items of food which are made to order along with certain services - HELD THAT:- The transaction of the applicant is examined and it was found that the applicant is supplying Cake, Ice Cream and other items of food which are made to order along with certain services. Hence the applicant is supplying both goods and services - Since the supplies made by the applicant in its outlets involve both supplies of goods and services, with one of them as principal supply i.e. supply of goods which are naturally bundled and supplied in conjunction with each other, therefore, the same has to be considered as a composite supply. Further, Restaurant Services have been defined under the purview of composite supply (in clause (b) of para 6 of Schedule -II) - the composite supply of goods being food or any other article for human consumption or any drink, where supply or service is for a consideration, then such composite supply shall be treated as a supply of services. Since the applicant is supplying ice creams, cakes and other eatables, which are items for human consumption, by way of or as part of any service or in any other manner, the composite supply has to be treated as a supply of services, more specifically the 'Restaurant Service' - the applicant is supplying items of food as a part of service and since the provision of eating in the premises is provided or the customers may take the same away from the applicant's place, the transactions under question are covered under the amended provision of Entry 7(i) of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 as amended by Notification No. 46/2017-Central Tax (Rate), dated 14-11-2017 and attracts a tax of 2.5% without any input tax credit. Supply of items such as birthday stickers, candles, birthday caps, Balloon, Carry Bags, snow sprays etc - HELD THAT:- The said related items are being purchased and sold as such without any further processing in the restaurant. These items are not articles of foods and drinks and are covered under goods. Sale of such bought out goods as such, is not a service but sale of goods - Since this notification is applicable only to supply of services and not supply of goods, only Notification No. 1/2017-Central Tax (Rate) is applicable and hence all the supply of bought out goods as such which are enlisted by the applicant is taxable as 'supply of goods' and at rates applicable as per Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 as amended from time to time - since the goods are supplied and output tax is payable on the same, the applicant is eligible to take applicable input tax credit which is admissible as per the GST laws. Chocolates - HELD THAT:- The raw chocolates are manufactured in the nearby workshop of the applicant which are utilised for the purpose of providing other services such as shakes, brownies and are also retailed by packing in different containers as per the choice of the customer . In no case, chocolates are sold as such from the work shop but are customized and sold from the outlets - the sale of handmade chocolates which are manufactured in the workshop and brought to the outlets for further processing will be covered under the 'restaurant services'.

  ---

• 2021 (4) TMI 419
  Re-credit of I.T.C. in the electronic credit ledger - interest on delayed refund - HELD THAT:- Considerable court's time has been consumed in trying to unravel the purport of the order at Annexure-5 in the light of the equivocal stand of the respondent State and the reply of the GSTN quoted. However, because of the ambivalence on the part of the respondent State no concrete answer is yet discernable. If the refund claim has been purportedly rejected and the order of re-credit has also been passed in Form GST PMT 03 (Annexure-6), why has it not been re-credited to the Electronic Credit Ledger of the petitioner. Matter be listed on 20.04.2021. Affidavit in response, if any about the outcome of the exercise be brought latest by 17.04.2021.

  ---

• 2021 (4) TMI 418
  Availment of ITC - purchase of goods from Non-Existing Dealers - section 79 (1) (C) read with rule 145 (1) of J.G.S.T Act, 2017 - HELD THAT:- Let the matter be listed on 27.04.2021. Meanwhile, this Court is not inclined to grant any interim stay at this stage. However, it is open to the petitioner to make an appropriate request to the competent authority of Steel Authority of India Limited not to take coercive steps against the petitioner.

  ---

• 2021 (4) TMI 415
  E-auction - Levy of CGST and SGST - Advertisement of Tender for allotment of industrial and commercial plots through online auction/e auction on an 'as is where is' basis - HELD THAT:- Issue notice to the respondents returnable on 22.06.2021. If the petitioners deposit bid amount of ₹ 5,15,01,608/ on or before 04.04.2021 and also an amount of CGST and SGST of ₹ 92,70,290/ before the respondent - GIDC within a period of one week from 04.04.2021, the said amount shall be accepted by the respondent GIDC without prejudice to the rights and contentions of the parties and subject to the final outcome of the present petition.

  ---

• Income Tax

• 2021 (4) TMI 420
  TDS u/s 195 - Royalty income as taxable in terms of Section 9(1)(vi) - whether the Tribunal was right in holding that the disallowance made under Section 40(a)(ia) for non deduction of tax at source on payments effected by the assessee is not taxable under Section 9(1)(vi) of the Income Tax Act? - HELD THAT:- The questions of law involved in the above appeals were already decided by the Hon'ble Supreme Court of India against the revenue and in favour of the assessee in the judgment reported in Engineering Analysis Centre of Excellence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT] wherein as held given the definition of royalties contained in Article 12 of the DTAAs it is clear that there is no obligation on the persons mentioned in section 195 of the Income Tax Act to deduct tax at source, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright. The provisions contained in the Income Tax Act (section 9 (1)(vi), along with explanations 2 and 4 thereof), which deal with royalty, not being more beneficial to the assessee, have no application in the facts of these cases. Our answer to the question posed before us, is that the amounts paid by resident Indian endusers/ distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS under section 195 of the Income Tax Act. - Decided in favour of assessee.

  ---

• 2021 (4) TMI 417
  Rectification u/s 254 - non consideration of the Judgment of the Hon'ble Bombay High Court - HELD THAT:- On a reading of section 254(2), it is clear that the Tribunal, with a view to rectify any mistake apparent from the record, may amend the order. In the case on hand, the non consideration of the Judgment of the Hon'ble Bombay High Court cannot be construed as mistake as contemplated under section 254(2) . When the Tribunal has no jurisdiction to review the order passed by them, the remedy open to the assessee is to file an appeal against the order, if they are aggrieved over the same. The order passed by the Tribunal is beyond the scope of section 254(2). In these circumstances, the Tribunal should not have allowed the Miscellaneous Application.The questions of law raised in this appeal are decided in favour of the appellant-Revenue.

  ---

• 2021 (4) TMI 416
  Deduction u/s 10A - Tribunal held that set off of brought forward losses of non eligible unit against the income of the eligible 10A unit is to be allowed - Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that deduction under section 10A should be allowed without reducing the unabsorbed depreciation and brought forward losses of the non 10A unit? - HELD THAT:- As decided in M/S. COMSTAR AUTOMATIVE TECHNOLOGIES PRIVATE LTD., (FORMERLY KNOWN AS VISTEON POWERTRAIN CONTROL SYSTEMS INDIA PRIVATE LIMITED) VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX COMPANY CIRCLE - I (3) , CHENNAI [ 2020 (3) TMI 814 - MADRAS HIGH COURT] the total income was first arrived at by the Revenue through the Assessing Officer in the Assessment Order by computing the total income by way of brought forward or carry forward the depreciation allowance of the earlier Assessment Years and set off the unabsorbed depreciation first and making the return Nil, thereby leaving the Assessee in a position where it could not claim any deduction under Section 10B as there was no income after set off of carry forward depreciation and unabsorbed depreciation from earlier years. This method of computing the income in the present case made by the Revenue is totally against the said law as has been declared by the Hon'ble Apex Court in the aforesaid decision in Commissioner of Income-tax v. Yokogawa India Ltd., [ 2016 (12) TMI 881 - SUPREME COURT] No hesitation to hold that, the decision of the ITAT, which is impugned herein, would not stand in the legal scrutiny, in view of the law having been declared by the Hon'ble Apex Court. Therefore, we are of the view that, the Substantial Question of Law raised in this Appeal is covered by the said decision, therefore it can be answered accordingly. - Decided in favour of assessee

  ---

• 2021 (4) TMI 409
  Revision u/s 263 - Disallowance u/s 14A - HELD THAT:- Since the Tribunal had already decided the issue with regard to Section 14 A in favour of the assessee in respect of the assessment year 2002-03 we direct the Assessing Officer to give effect to the impugned orders passed by the Tribunal taking into consideration the earlier order passed by the Tribunal for the Assessment Year 2002-03, dated 31.01.2008 and decide the matter in accordance with law. So far as the first question of law is concerned, we are leaving it open and the same would be decided in an appropriate case.

  ---

• 2021 (4) TMI 408
  Revision u/s 263 - ITAT set aside revision order passed u/s 263 by the CIT - whether assessee is not required to deduct TDS when the sub-contract amounts were credited into the ledger account of the subcontractor's which is against the provision of Section 194C? - whether Tribunal was right in holding that the Commissioner of Income Tax has not examined whether such payments was less than ₹ 20,000/- and cumulative payment was less than ₹ 50,000/- which is contrary to the material evidence filed by the assessee before the Assessing Officer? - HELD THAT:- What has been credited by the assessee was only a provision towards possible liability and the said liability may be an actual liability or a contingent liability or the provision must have been made as a result of ample precaution by the assessee. The fact that the assessee has made a provision for TDS in its accounts does not in fact decide whether the assessee is bound by the provisions of the TDS or not. As already stated, the Commissioner of Income Tax has not given any finding that the assessee has made payments in excess of the mandatory limit prescribed for TDS or the assessee has credited the accounts of the sub-contractors with commensurate amounts. Though the order passed by the Assessing Officer may be prejudicial to the interest of the Revenue, it cannot be termed as erroneous. In such case, the order passed by the Commissioner of Income Tax cannot be sustained. The Tribunal taking into consideration all these aspects, rightly set aside the order passed by the Commissioner of Income Tax and allowed the appeal. We do not find any ground much less any substantial question of law to interfere with the order passed by the Appellate Tribunal. The appeal is liable to be dismissed.

  ---

• 2021 (4) TMI 406
  Reopening of assessment u/s 147 - change of opinion - HELD THAT:- It is not the case of the respondent that there was any suppression on the part of the assessee. The assessee had chosen to make full disclosure and make a certain claim on that basis. The petitioner's claim was accepted by the then Assessing Officer. The subsequent officer has chosen to take a different view. Change of opinion on the part of the subsequent assessing officer cannot be a ground to reopen a concluded assessment. See M/S. KELVINATOR OF INDIA LIMITED [ 2010 (1) TMI 11 - SUPREME COURT] - Decided in favour of assessee.

  ---

• 2021 (4) TMI 405
  Voluntary admission made by the Assessee during the course of search - Whether in the absence of any material evidence produced by the assessee to the effect of sale of jewelry (difference in jewellery found and jewellery admitted in the W.T return) would the onus shift from the assessee to that of the department for proving that utilization of the sale proceeds for the purpose other than investment into money lending business is sustainable? - HELD THAT:- On a perusal of the order passed by the Tribunal in the earlier round [ 2017 (9) TMI 1925 - ITAT CHENNAI] there was a positive direction to the Assessing Officer to grant certain reliefs to the assessee set aside the order of the CIT(Appeals) and remit the matter to the Assessing Officer with a direction to examine the search document carefully and verify whether cash was available with the assessee and sale proceeds from sale of jewellery etc have been used for acquiring other assets and if not found so, then corresponding credit should be given towards unaccounted money lending business. Assessing Officer is bound to follow the same. Admittedly, the Revenue did not prefer any appeal against the above said order passed by the Tribunal. Therefore, the order and direction binds the Revenue. This fact was noted by the Tribunal in the impugned order and in our opinion, the Tribunal rightly dismissed the appeal filed by the Revenue.

  ---

• 2021 (4) TMI 404
  Deduction u/s 80IB(10) - Mandation of submitting project completion certificate - Whether Tribunal is justified in directing the AO to allow deduction under Section 80IB(10) without observing the violation of Section 310 of the Karnataka Municipal Corporation Act, which directs the assessee to apply for completion certificate only after the project is completed: whereas it is evident from records that the assessee has submitted application for completion certificate on or before 31.03.2009 which is mandatory as per provisions of Section 80IB(10) of the Act.? - HELD THAT:- As the substantial questions of law involved in this appeal stands concluded against the Revenue and in favour of the assessee in view of the following decisions rendered by the Hon'ble Supreme Court, by the Bombay High Court and by this Court in P. SHYAMARAJU VS.KEB, BANGALORE [ 1996 (11) TMI 477 - KARNATAKA HIGH COURT] , HINDUSTAN SAMUH AWAS LIMITED [ 2015 (10) TMI 2306 - BOMBAY HIGH COURT] , MAJESTIC DEVELOPERS [ 2019 (11) TMI 1447 - KARNATAKA HIGH COURT] and NARAYAN BUILDERS [ 2016 (2) TMI 1298 - KARNATAKA HIGH COURT] Thus the substantial questions of law involved in this appeal are answered against the Revenue and in favour of the assessee. In the result, we do not find any merit in the appeal and the same is hereby dismissed.

  ---

• 2021 (4) TMI 399
  Deemed dividend u/s 2 (22) (e) - HELD THAT:- From the perusal of the documents it can be seen that the assessee has received ₹ 2 lacs on 27/1/201 as refund of loan outstanding as on 1/4/2010 at ₹ 8,23,000/-. Balance of ₹ 2 lacs is an excess payment by mistake from Kohli State Pvt. Ltd. as per the submissions of the assessee before the Assessing Officer as well as before the CIT(A). The contention of the Ld. AR that the said amount was recovered on 31/10/2011 by recovering ₹ 5 lacs from the assessee was never examined either by the Assessing Officer as well as by the CIT(A) from the statement of account of the assessee, and there is no clear finding on that account by both the Revenue Authorities. Therefore it will be appropriate to remand back the entire issues to the file of the Assessing Officer for proper verification and after taking cognizance of all the evidences including statement of account, the Assessing Officer may pass appropriate order according to the provisions of law. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Appeal of the assessee is partly allowed for statistical purpose.

  ---

• 2021 (4) TMI 398
  Unexplained cash deposits - addition made as no explanation to source of cash deposit in the bank account maintained by the assessee - explanation of the assessee is that said deposit has been made out of cash gifts received by her on the occasion of her marriage - Admittedly, both the relatives had expired long back and custodian handed over the cash gifts to the assessee on their behalf at the time of marriage - HELD THAT:- AO stated that the original affidavits were produced for verification which appears to be genuine and the source of cash deposit appears to be explained. We therefore find that once the AO has examined the documents so produced by the assessee and recorded his satisfaction regarding the identity of the donors, the genuineness of the gift and the source of such gift, the assessee has discharged the necessary onus cast on her and no addition can be made in her hands. Hence, the addition so made is directed to be deleted. Appeal of the assessee is allowed.

  ---

• 2021 (4) TMI 397
  Interest under section 244A(1)(b) - Disallowance of the claim of interest on Assessment Year paid by the assessee - claim of interest was disallowed purely on the ground that the amendment to section 244A sub-section (a) (aa) of the Act was made w.e.f. 01.06.2016 - HELD THAT:- Since the present appeal pertains to the Assessment Year 2013-14. Therefore, the amended provisions of section 244A of the Act could not be made applicable for the year under appeal. As relying on Punjab Chemical Crop. Protection Ltd. [ 2014 (8) TMI 971 - PUNJAB HARYANA HIGH COURT ] we direct the Assessing Officer to allow the claim of interest on self-assessment tax as made by the assessee in accordance with law. Thus, grounds raised by the assessee are allowed.

  ---

• 2021 (4) TMI 395
  Deduction of interest on late deposit of TDS under Section 37(1) - DR submitted that interest on late deposit of TDS is neither an expenditure wholly and exclusively incurred for the purposes of business and further it is a payment, which is in form of tax it is not an allowable expenditure - even otherwise there is no evidence that it is merely compensatory in nature, thus hit by proviso to section 37 (1) and interest on late payment of TDS has rightly been disallowed - HELD THAT:- The above issue has already been considered in CIT Vs. Chennai Properties Investment Ltd. [ 1998 (4) TMI 89 - MADRAS HIGH COURT] wherein it has been held that interest under Section 201(1A) of the Act paid by the assessee does not assume the character of business expenditure and also cannot be regarded as compensatory payment. The above decision of the Hon ble Madras High Court has also been dealt with exclusively by the various benches of the ITAT , specifically in Velankani Information Systems Ltd. [ 2018 (10) TMI 68 - ITAT BANGALORE] wherein considering various decisions of the Tribunal had followed the decision of the Hon ble Madras High Court in CIT Vs. Chennai Properties Investment Ltd. [ 1998 (4) TMI 89 - MADRAS HIGH COURT] No merit in the appeal of the assessee and hold that interest payment on late payment of tax at source is not eligible business expenditure for deduction and it is not compensatory in nature. None of the decision cited by the assessee in statement of facts supports the view of the assessee that above expenditure is allowable u/s 37 (1) of the act. Even assuming meanwhile denying, that above interest expenditure is compensatory in nature, it should be allowed as allowable expenditure. The conditions of the allowability of expenditure is laid down u/s 37 (1) of the income tax act which speaks that any expenditure which is not a capital expenditure or personal expenses of the assessee which is laid out or expended wholly and exclusively for the purpose of the business shall be allowed in computing the income chargeable Under the head profits and gains of business or profession. Payment of interest on late payment of TDS cannot be considered as an expenditure led out or expended wholly and exclusively for the purpose of the business because late payment of TDS cannot be considered as part of the business of the assessee. Thus we hold that payment of interest on late deposit of tax deduction at source by the assessee leviable u/s 201 (1A) of the act is neither an expenditure only and exclusively incurred for the purpose of the business and therefore same is not allowable as deduction u/s 37 (1) - Decided against assessee.

  ---

• 2021 (4) TMI 394
  Unexplained cash credits - additions made by the Assessing Officer disbelieving the sources of the cash deposits made into the assessee s Bank A/c with Andhra Bank, Main Branch, Tirupati - assessee is a goldsmith and also that he has never filed any return of income in the earlier years - assessee is stated to have procured old gold through auction sales from Andhra Bank and other customers as well - HELD THAT:- The entire procurement of gold ornaments is not only through auction from Bank, but they are from other customers as well. The learned Counsel for the assessee has filed before this Tribunal, the copy of the Bank A/c of the assessee as well as the customers from whom the assessee has allegedly purchased the gold and also the confirmation letters stating that the assessee has paid the loan amount and after release of gold, the said gold was sold and the sale consideration was given to the assessee in cash. None of these letters were considered and verified by the Assessing Officer and he has accordingly disallowed the entire sum . Thus if the assessee is able to prove the transfer of money from the assessee s bank a/c to the bank a/c of the customers and if the said gold loan is repaid on the same date, then taking the confirmation from the parties into consideration, the sale consideration of those transactions should be accepted as source for cash deposits. We deem it fit and proper to remand this issue to the file of the Assessing Officer with a direction to verify the Bank A/c of the assessee and also of the other parties and reconsider the issue in accordance with law. Cash withdrawals and the marriage gifts from others and gift from his brother as sources for the balance of cash deposit - Assessing Officer has held the ATM withdrawals and also 2/3rd of the gifts at the time of marriage as sources for redeposits into the Bank A/c as unbelievable. In my opinion, the entire ATM withdrawals may not have been used for day to day expenses and some of them might have been utilized for making the deposits into his Bank A/c. Therefore, we are inclined to accept 50% of the same as source for cash deposits. The assessee gets relief accordingly. Marriage gifts from others also we are inclined to accept 50% of the same as against 1/3rd of the cash gifts accepted by the Assessing Officer. Therefore, 50% of the total amount is accepted as source for cash deposits. As regards gift on account of marriage from his brother, transaction has been done through banking channel and therefore, it cannot be considered as a source for cash deposits - Ground relating to this addition is rejected.

  ---

• 2021 (4) TMI 393
  Addition on account of late deposit of ESIC PF - assessee company has not deposited the employees contribution within the due date which is prescribed under the said statute i.e. Provident Fund and ESIC - HELD THAT:- This issue is dealt by the Hon ble Delhi High Court in case of CIT vs. M/s Bharat Hotels Ltd. [ 2018 (9) TMI 798 - DELHI HIGH COURT] wherein the issue is decided in favour of the Revenue, without considering the decision of the Hon ble Delhi High Court in case of CIT vs. AIMIL Ltd.[ 2009 (12) TMI 38 - DELHI HIGH COURT] - But the Ld. AR relied upon the decision of the Hon ble Delhi High Court in case of Pr. CIT vs. Pro Interactive Service (India) Pvt. Ltd. [ 2018 (9) TMI 2009 - DELHI HIGH COURT] wherein the Hon ble High Court decided the issue in favour of the assessee relying upon the judgment of AIMIL Ltd. (supra). The Hon ble Delhi High Court held that the legislative intent was/is to ensure that the amount paid is allowed as expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee s Provident Fund (EPD) and Employee s State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act. It is settled law that when two judgments are available giving different views then the judgment which is in favour of the assessee shall apply as held in case of Vegetable Products Ltd[ 1973 (1) TMI 1 - SUPREME COURT] by the Hon ble Supreme Court. Hence, in light of the latest decision in case of Pro Interactive Service (India) Pvt. Ltd., the issue is covered in favour of the assessee. Allowability of sales promotion expenses and Diwali Expenses - allowable business expenses or not? - HELD THAT:- The assessee has given details as to how these expenses are related to the business expenses. The CIT(A) has given a detailed finding to that effect.There is no need to interfere with the findings of the CIT(A). Hence, Ground No. 2 is dismissed. Addition on account of expenditure incurred on Corporate Social Responsibility - HELD THAT:- As in case of National Seeds Corporation Ltd. Vs. Additional CIT[ 2018 (4) TMI 335 - ITAT DELHI] it has been categorically held that the Explanation (2) of Section 37(1) was inserted w.e.f. 1st April 2015 and cannot be construed as to assessee s disadvantage in respect of the period prior to this amendment and thus, supports the case of the assessee. Hence, Ground No. 3 is dismissed. Addition u/s 14A read with rule 8D - HELD THAT:- It is clear finding in assessment order as well as by the CIT(A) that there is no exempt income earned by the assessee during the year. Hence, the decision of the Hon ble Delhi High Court in case of Cheminvest Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] will be applicable. Hence, Ground No. 4 is dismissed. Provision for carbon credit s - As assessee admitted that the provision of carbon credits was inadvertently included in the taxable income of the assessee, though the same is not taxable under the Act - HELD THAT:- Assessee submitted the basis for creation of said provision by submitting the calculation of provision, basis for the same and a certification report and these documents were verified by the Assessing Officer. In remand report dated 11.09.2015, the Assessing Officer observed that the provision of carbon credits has been written off in the subsequent year i.e. A.Y. 2012-13 which was disallowed by the Assessing Officer in the assessment order for the said year. AO has also further observed that no taxable event has occurred or accrued to the assessee in the year under consideration. The assessee has also given a proper reasoning as to why the evidences were not before the Assessing Officer at the time of assessment proceedings. CIT(A) has rightly accepted those evidences and has taken cognizance of the remand report filed by the Assessing Officer wherein it is observed that no taxable amount has incurred in the present Assessment Year and provisions has been written off in subsequent years. Therefore, there is no need to interfere with the finding of the CIT(A). Hence, Ground No. 5 6 are dismissed.

  ---

• 2021 (4) TMI 392
  Reopening of assessment u/s 147 - Disallowance of deduction u/s 80IB - hospital building was completed by March 2012 and hence viewed that the assessee has not satisfied the conditions for grant of deduction u/s 80IB(11C) for the Assessment year(AY) 2012-13 - HELD THAT:- Reopening of assessment was on the basis of information that was already available on record and no fresh information was received by the AO. Revisiting the same issue which was already considered in original assessment and taken the decision amounts to difference of opinion and on difference of opinion the reopening of assessment is not permissible. AO mentioned in the assessment order that the assessee had claimed deduction u/s 80IB and filed Form No.10CCBC instead of 10CCBD. The Ld.AR submitted that there was no material difference in both the forms with regard to information and columns are the same. The AO in the original assessment did not raise any objection for submission of 10CCBC and there was no difference with regard to information to be furnished in Form 10CCBC or 10CCBD, hence it was purely a mistake or misunderstanding. DR also did not controvert the submission of the assessee with regard to difference of information in 10CCBC or 10CCBD. The AO had accepted the 10CCBC and allowed the deduction in original assessment. This Tribunal in assessee s own case [ 2017 (6) TMI 1038 - ITAT VISAKHAPATNAM] following the order of Sri S.Venkatesh [ 2013 (6) TMI 715 - ANDHRA PRADESH HIGH COURT] held that denying deduction u/s 80IB(11C) on technical issue is unjustified. Hence we, hold that the reopening of assessment is bad in law and accordingly, we quash the notice issued u/s 148 and annul the assessment made u/s 147 r.w.s 143(3) dated 26/12/2017 and allow the appeal of the assessee.

  ---

• 2021 (4) TMI 390
  Estimation of income on sub-contract receipts - estimating 8% profit element of its gross contractual receipts - CIT-DR vehemently argued the fact that the Assessing Officer s remand report(s) have declined the assessee s sub-contract receipts plea for want of original documents along with registration thereof - HELD THAT:- We see no reason to accept this mutually contradictory stand on the very books maintained and sub-contract receipts in furtherance to the corresponding contracts entered in the relevant previous year. And more particularly in view of the fact that the Assessing Officer has himself accepted the gross turnover figures in above terms. This tribunal s co-ordinate bench s decision in M/s.Maa highways [ 2013 (7) TMI 1013 - ITAT HYDERABAD] holds that subcontract receipts assessment @5% on lumpsum basis in the very business is just and proper. We thus direct the Assessing Officer to assess the assessee s sub-contract receipts @5% income element only. Treatment on scrap sales income - under the head business OR other sources' - HELD THAT:- There is hardly any dispute that such scrap sales emanates in the ordinary course of civil constructions and contractor business amounts to business income as per DCIT Vs.Harjivandas Juthabhai Zaveri [ 1999 (12) TMI 5 - GUJARAT HIGH COURT] and M/s.J.V.K. Infra Pvt. Ltd. [ 2018 (6) TMI 545 - ITAT HYDERABAD] holding the very view. CIT-DR further fails to dispute clinching fact that the assessee s books have indicated the impugned receipts from scrap sales than any other source inviting application of Section 57 of the Act. We conclude in this factual backdrop that the assessee s scrap sales income deserves to be treated under the regular business head followed by assessment thereof @8%. Un-explained cash credits - HELD THAT:- We come to the first investor party herein, assessee s Managing Director Shri M.Venkatesh, who has duly filed his confirmation and all supportive documents. He continues to be assessed in the same range jurisdiction as well. Hon'ble Gujarat high court decision in PCIT Vs. Gyscoal Alloys Ltd.. [ 2018 (10) TMI 1725 - GUJARAT HIGH COURT] holds that the impugned section 68 addition on explained cash credits involving such related parties does not deserve to be treated as un-explained. We further wish to emphasise here that the assessee s first investor is none other than its Managing Director; taking all key decisions could not be treated as a bogus entity in other words. We thus direct the Assessing Officer to delete the impugned addition. For latter three investor parties who have not filed confirmations all along but they have also been allotted the assessee s shares - The Revenue also fails to dispute that neither the Assessing Officer never found fault with all this evidence of filing of confirmations followed by assessment records and payments made through banking channels but also he has not indicated any cash deposits or withdrawals so as to raise any suspicion qua all of them. We held in this factual backdrop that the assessee has duly discharged his burden of proving identity, genuineness and creditworthiness of the impugned share application money of ₹ 55,36,609/- on facts in other words. We make it clear that although both the parties have sought to rely on a catena of case law, the same does not need a detailed discussion as the assessee has very well proved its genuineness of the investor parties on facts.

  ---

• 2021 (4) TMI 388
  Rectifciation of mistake application u/s 254 - Delay in filing present miscellaneous application by 89 days - HELD THAT:- In the present case, due date for filing the miscellaneous applications u/s 254(2) being 30.06.2020 that is, within six months from the end of the month in which the order was pronounced on 28.09.2020 and the fact that the miscellaneous application has been filed with the Registry on 28.09.2020, respectfully following the decisions of the Hon ble Supreme Court and the Taxation and other Laws (relaxation of certain provisions) Ordinance, 2020 as notified in the Gazette of India dated 31st March, 2020, the same is hereby admitted as filed within the extended due date in terms of section 254(2) of the Act. Non reference to judicial decisions - Basis for estimation of G.P rate after the rejection of the books of accounts - Glaring and patent mistakes apparent from the face of the record which requires appropriate rectification u/s section 254(2) - rejection of books of accounts and GP estimation - HELD THAT:- In the present case, we find that the Coordinate Bench has referred and relied upon the aforesaid two decisions of GUPTA, KN. CONSTRUCTION CO. [ 2015 (5) TMI 315 - RAJASTHAN HIGH COURT] and M/S. CLARITY GOLD PVT. LTD., M/S GEM MART INDIA PVT. LTD. [ 2018 (8) TMI 1318 - RAJASTHAN HIGH COURT] which have not been relied upon or quoted by either of the parties. The ld AR has contended that said decisions doesn t lay a general legal proposition that only past history has to be considered rather it has held that either the past history of the assessee or history of similarly situated other businesses to be considered and we therefore prima facie find that such distinguishing features as pointed out by the ld AR has escaped the attention of the Coordinate Bench and which could have been considered had the said decisions being confronted to both the parties and an opportunity been given to them to file their respective submissions on applicability or distinguishing features of the said decisions. Further, the ld AR has submitted some distinguishing features which has resulted in fall in G.P rate during the year under consideration and non-comparability with the past years which also seems to have escaped the attention of the Coordinate Bench. Thus we deem it appropriate that the order so passed by the Coordinate Bench be recalled and matter be heard afresh for the purposes of adjudication of ground of appeal taken by the Revenue relating to deletion of addition

  ---

• 2021 (4) TMI 385
  Unaccounted income received from undisclosed sources - Parties have not shown that the loan to the assessee out of Reserve/Share capital of these companies or any money borrowed from the outside parties - HELD THAT:- Assessee has discharged the primary onus casted upon him before the Assessing Officer by the way of filing confirmations, bank accounts, audited accounts, certificates from the bank regarding the interest received, copies of the TDS certificates regarding the interest paid, NBFC status of the lender companies. AO conveniently ignored the receipt of the interest by the lender companies. Further, having received all the documents, the Assessing Officer has not brought anything on record or conducted any investigations to prove that the documents filed are not genuine. The revenue has not responded to the reminders issued by the ld. CIT(A) with regard to bringing any evidences or disputing and countering the evidences filed by the assessee. On merits of the case, since the ld. CIT(A) has given relief based on the discharge of onus by the assessee who cogently fulfilled the obligations casted upon by the Act and the revenue has not brought about anything contra, hence, we decline to interfere with the order of the ld. CIT(A). With regard to the non-compliance to the seven reminders issued by the ld. CIT(A) to the field authorities, we decline to comment and leave the matter to the discretion of the administrative authorities at this juncture. Appeal of the revenue is dismissed.

  ---

• 2021 (4) TMI 383
  Reopening of assessment u/s 147 - re-opening of assessment was beyond four years from end of assessment year - HELD THAT:- Admittedly, the re-opening of assessment is after the expiry of four years from the end of assessment year 2008-09 and hence the proviso to Section 147 of the Act comes into play. A reading of the reasons recorded for re-opening of assessment shows that there is no allegation made, that there is failure on the part of the assessee to truly and fully disclose material facts necessary for the assessment. Under these circumstances, we have to hold that the re-opening of assessment is bad in law. Thus we hold that the re-opening is bad in law. In the result, the impugned assessment order is hereby quashed.

  ---

• 2021 (4) TMI 381
  Non-deduction of TDS u/s 194C - transportation expenses incurred by the assessee - HELD THAT:- Admittedly the assessee is buying the pineapples from different states which are brought to the state of Gujarat. Such goods cannot be transported by the assessee without incurring the transportation cost. In the case on hand, on perusal of the truck numbers to whom the assessee has made payment for the transportation expenses, we find that all of those numbers are registered with the state of Kerala from where the assessee is transporting the goods. Thus it can be inferred that all these transporters were engaged by the supplier but the payment was made by the assessee in her books accounts. Thus it can be inferred that there was no contract between the assessee and the transporters and accordingly the provisions of section 194C of the Act cannot be invoked in the case on hand - See M/S. PRAMUKH JUTE TRADERS VERSUS ITO [ 2009 (9) TMI 981 - ITAT AHMEDABAD] . There cannot be any disallowance of the expenses in the given facts and circumstances on account of non-deduction of TDS. Likewise, the judgments referred by the learned DR at the time of hearing are distinguishable from the facts of the present case. Accordingly we are reluctant to rely the same. Hence the ground of appeal of the assessee is allowed.

  ---

• 2021 (4) TMI 380
  Unexplained investment - HELD THAT:- Assessee has duly discharged the obligation by furnishing the necessary evidence about the source of fund used in making the investment in the securities. In this connection, the learned AR has filed the bank statement, copy of the ITR, Identity proof. The assessee was not under the obligation to justify the source of source in the given facts and circumstances. Had the revenue any doubt on the source of funds in the hands of the husband, the revenue could have proceeded against the husband of the assessee. In other words, the assessee was not answerable based on the documentary evidence about the source of money in the hands of the husband. From the above, the assessee was to justify the source of investments made in the securities which has been duly explained. Therefore, the question about the source of fund in the hands of the husband cannot raised from the assessee at the stage. We hold that the assessee has discharged her duty by disclosing the source of fund in the investment of securities. Accordingly, there cannot be any addition to the total income of the assessee. Hence, we set aside the finding of the learned CIT(A) and direct the AO to delete the addition made by him. Thus the ground and additional ground of appeal of the assessee is allowed.

  ---

• 2021 (4) TMI 379
  Ex-parte order u/s. 144 - no proper opportunity to the assessee of being heard and made certain additions - HELD THAT:- AO had posted the case on several occasions. However, none appeared on behalf of the assessee before the Ld. AO on the given dates of hearing and even before the Ld. CIT(A) the assessee could not improve his case. Hence, the Ld. Revenue Authorities were left with no other option except to pass orders based on the material available on record. No much strength in the arguments advanced by the ld. AR. However, considering the prayer and the submissions of the Ld. AR and the nature of issues involved in the appeal, in the interest of justice, hereby remit the matter back to the file of Ld. AO for de-novo consideration thereby providing one more opportunity to the assessee of being heard. At the same breath, hereby caution the assessee to promptly co-operate before the Ld. Revenue Authorities in their proceedings failing which the Ld. Revenue Authorities shall be at liberty to pass appropriate Orders in accordance with law and merits based on the materials on the record. It is ordered accordingly. Appeal filed by the assessee is allowed for statistical purposes

  ---

• 2021 (4) TMI 378
  Levy of penalty u/s 271D - cash loan received from mother in violation of provision of Section 269SS - HELD THAT:- We noted that the assessee has received cash loan from mother of the assessee - It was claimed by the assessee that this is a temporary advances by the mother to her son as per her own finance without there any business necessity for accepting the loans or advances from any one for the business of the assessee. We noted that this advance or loan of ₹ 3 lacs in cash is between blood relations i.e. mother and son. The mother has given this loan of ₹ 3 lacs to her son. As relying on SMT. M. YESODHA [ 2013 (2) TMI 211 - MADRAS HIGH COURT] we delete the penalty and allow the appeal of the assessee.

  ---

• 2021 (4) TMI 377
  Accrual of income - Income from sale of development rights in respect of two Projects - Year of assessment - CIT(Appeals) deleted the addition made by the Assessing Officer by holding that the said amount not received by the assessee during the year under consideration could not brought to tax in the hands of the assessee in the year under consideration - HELD THAT:- Income from Poddar Projects D. R. has not brought anything on record to dispute the finding/ observation arrived at by the ld. CIT(Appeals) while giving relief to the assessee on this issue that the amount in question was not received by the assessee during the year under consideration but the same was actually received in the subsequent years. As a matter of fact, the said amount was assessed by the Assessing Officer in the year under consideration mainly on the basis that the same was actually received by the assessee during the year under consideration and the same representing surplus over the amount paid to the Land Acquisition Officer of Burdwan being retained by the assessee represented the income for the year under consideration. The said basis, as already noted by us, however, turned out to be wrong. Moreover as explained by the ld. Counsel for the assessee, Project Completion Method was being followed by the assessee and the relevant project viz. Poddar Projects having been completed in the previous year relevant to assessment year 2009-10, the entire income from the said project was actually accrued to the assessee in A. Y. 2009-10 and the same was accordingly recognized and offered to tax in that year as is evident from the assessment order dated 20.12.2016 passed by the Assessing Officer under section 143(3)/147 of the Act. We, therefore, find no merit in revenue appeal. Amount received from Dheeraj Promoters - assessee has placed on record a copy of the assessment order dated 20.12. 2016 passed by the Assessing officer under section 143(3)/ 147 of the Act for A.Y. 2009- 10 to show that the amount in question has already been taxed in the hands of the assessee for A.Y. 2009- 10 when the relevant project was completed and the amount in question actually accrued to the assessee as income on the basis of Project Completion Method followed by it. Keeping in view all these facts and circumstances of the case, which have remained undisputed by the ld. D. R., we find no infirmity in the impugned order of the ld. CIT(Appeals) deleting the addition - Revenue appeal dismissed.

  ---

• 2021 (4) TMI 376
  Reopening of assessment u/s 147 - HELD THAT:- In the present case, the Pr. CIT has recorded his satisfaction by writing yes, satisfied, it is a fit case for issue notice u/s 148 on the format. In our considered view, the satisfaction recorded in the present case is similar to the satisfaction recorded in the case discussed above. So far as, the application of mind by AO is concerned, the reasons recorded by AO for reopening of the case prima facie indicate that he has not applied his mind and proceeded on assumption that the bank deposit constitutes unexplained income of the assessee. As pointed out by the Ld. Counsel, the Delhi Bench of the ITAT in the case of Bir Bahadur Singh Sijwali vs. ITA [ 2015 (2) TMI 60 - ITAT DELHI ] has set aside the action of AO in reopening the case of the assessee initiated on fallacious assumption that bank deposits constitute undisclosed income of the assessee, overlooking the fact that source of deposit need not necessarily be income of the assessee. We further notice that in the present case, the Ld. Pr. CIT has accorded sanction for issuing notice u/s 148 of the Act, without ensuring that the AO has recorded the reasons after due application of mind. In our considered view, the Ld. CIT(A) has sustained the addition in question ignoring that the impugned order suffers from the legal infirmities discussed in the forgoing paras. In the light of the facts of the case and the cases relied upon by the Ld. Counsel, we are of the opinion that the impugned order is not sustainable in law as the ld. CIT(A) has passed the impugned order ignoring the ratio laid down by the hon ble High Court of Delhi and Madhya Pradesh and also the decision of the Delhi Bench of the Tribunal discussed above. We accordingly allow the legal grounds raised by the assessee and set aside the impugned order passed by the. ld. CIT(A).

  ---

• 2021 (4) TMI 375
  Penalty levied u/s. 271(1)(c) - disallowance to an extent of 12.5% of the non-genuine purchases - HELD THAT:- It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. In this case Assessing Officer treated purchases of ₹.15,47,764/- as non-genuine. However, the Ld.CIT(A) considering the evidences held that actual purchases made by the assessee from various parties is only ₹.8,44,064/- and directed to apply profit element of 12.5% on the non-genuine purchases. Similar view has been taken by the Hon'ble Delhi High Court in the case of CIT v. Aero Traders Pvt. Ltd.. [ 2010 (1) TMI 32 - DELHI HIGH COURT] wherein the Hon'ble High Court affirmed the order of the Tribunal in holding that estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars. In the case on hand the Assessing Officer treated purchases as non-genuine. Ld.CIT(A) considering the evidences restricted the disallowance to an extent of 12.5% on the non-genuine purchases - CIT(A) following various judicial pronouncements deleted the penalty levied by the Assessing Officer. No infirmity in the order passed by the Ld.CIT(A) in deleting the penalty u/s. 271(1)(c) of the Act levied by the Assessing Officer for the Assessment Year. Grounds raised by the revenue are rejected.

  ---

• 2021 (4) TMI 374
  Penalty levied u/s. 271(1)(c) - method of accounting for recognition of income of the project - method of revenue recognition adopted by assessee - difference between the returned income and assessed income has mainly arisen due to the assessing officer estimating the appellant's profit from building project `Sai Sthaan' on final basis and making an addition - HELD THAT:- On a perusal of the order of the Ld.CIT(A), we find that Ld.CIT(A) considered all the aspects of the matter elaborately with reference to the submissions of the assessee and the averments in the Assessment Order and taking note of the Tribunal order in quantum proceedings, deleted the penalty levied u/s. 271(1)(c). The appellant could have chosen if he had so desired not to offer any income from the project until the project was substantially completed and sold. The AO has not noticed any discrepancy in the accounts as maintained by the appellant. There is no allegation from the AO that any entry made in the books of accounts does not truly or correctly reflect the transactions of the appellant. It is not the case of the Assessing Officer that any receipt of the appellant from any project has been suppressed or deduction of any expenditure not actually incurred by the appellant has been claimed. The entire dispute relates to the method of working of income from the project for assessment during an intermediary year until the first outcome of the project is known in the year of completion. As noted that the main plank of the Assessing Officer in the assessment order that income from project 'Sai Sthaan' should be assessed on final basis for Assessment Year 2009-10 has not been accepted by Hon'ble ITAT. It cannot be said that there is concealment of income or furnishing of inaccurate particulars of income for the reason only that there is difference of opinion in respect of allocation of income of the project amongst different years. Hence, two views are possible in the appellant's case as addition made by the AO is debatable in nature. As long as all primary facts are correctly stated by the appellant the penalty cannot be levied as decided in the judgement of Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts (P) Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] . In view of these facts and circumstances, penalty cannot be sustained. - Decided in favour of assessee.

  ---

• 2021 (4) TMI 373
  Penalty u/s 271(1)(c) - Bogus purchases - addition on account of alleged bogus purchases at the rate 12.5% - HELD THAT:- Where a claim of expenditure is neither found inaccurate nor could be viewed as concealment of income on the part of the assessee, then merely because the said claim was not accepted or acceptable to the revenue would not by itself attract penalty under Sec.271(1)(c). Now, in the case before us, as the revenue had failed to disprove to the hilt on the basis of clinching documentary evidence the authenticity of the claim of the assessee of having made purchases from the aforementioned parties, therefore, merely on the basis of the unproved claim of purchases no penalty under Sec. 271(1)(c) could have been validly imposed on the assessee. In fact, the restriction of the disallowance of entire purchases made by the CIT(A) to 12.5% of the aggregate value of such purchases speaks for itself that the disallowance sustained in the hands of the assessee is merely backed by a process of estimation and not based on any concrete evidence. As in the case before us no clinching material had been brought on record by the revenue which could disprove the authenticity of the purchases claimed by the assessee to have been made from the aforementioned parties thus, no penalty under Sec.271(1)(c) could have validly been imposed upon him. We thus not being able to persuade ourselves to subscribe to the observations of the lower authorities therein vacate the penalty imposed by the A.O under Sec. 271(1)(c). Accordingly, the order of the CIT(A) upholding the penalty imposed by the A.O under Sec. 271(1)(c) is vacated. - Decided in favour of assessee.

  ---

• 2021 (4) TMI 372
  Deduction u/s 80P(2)(d) - income from other sources in respect of interest earned on fixed deposit with Co-operative banks - whether or not the interest income earned by a co-operative housing society on its investments lying with a cooperative bank would be eligible for deduction under Sec. 80P(2)(d) ? - HELD THAT:- As pointed out by the ld. A.R, and rightly so, the issue herein involved is squarely covered by the orders of the various benches of the Tribunal. We find, that the ITAT, Mumbai, in the case of Kaliandas Udyog Bhavan Premises Co-operative Society Ltd. Vs. ITO-21(2)(1), Mumbai, [ 2018 (4) TMI 1678 - ITAT MUMBAI] had concluded that a co-operative society would duly be entitled for claim of deduction under Sec. 80P(2)(d) in respect of its interest income on the investments held with a co-operative bank. Thus order passed by the CIT(A) declining the assessee s claim for deduction under Sec. 80P(2)(d) as regards the interest income earned on its investments held with the co-operative bank is herein vacated - Decided in favour of assessee.

  ---

• 2021 (4) TMI 371
  Disallowance u/s 14A r.w.r. 8D - CIT (A) directing to exclude investment which was not yielded exempt income - HELD THAT:- As decided in own case [ 2018 (5) TMI 1942 - ITAT MUMBAI] issue decided in favour of assessee adopting same methodology for computing the disallowance. The Ld.DR could not controvert the findings of the Ld.CIT(A) with new cogent evidence or information. Accordingly, we find that Ld.CIT (A) has relied on the judicial decisions and took a reasoned view. Accordingly, we do not find any infirmity in the order of the Ld.CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue.

  ---

• 2021 (4) TMI 370
  TDS u/s 194H - payment on principal to principal basis and was not a payment of a principal to the agent - HELD THAT:- As decided in s relying on M /S. RELIANCE COMMUNICATIONS INFRASTRUCTURE LTD. [ 2019 (7) TMI 1371 - BOMBAY HIGH COURT] as independently examined the nature of the transaction and come to the conclusion that when the transaction was between two persons on principal to principal basis, deduction of tax at source as per section 194H, would not be made since the payment was not for commission or brokerage. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- The undisputed facts are that the assessee did not have any exempt income during the year. Thus as relying on M /S. RELIANCE COMMUNICATIONS INFRASTRUCTURE LTD. [ 2019 (7) TMI 1371 - BOMBAY HIGH COURT] the assessee had not earned any exempt income and there is, therefore, no question of disallowance under section 14A that would arise.- Decided in favour of assessee. Disallowance u/s 14A while computing the book profits under Section 115JB - HELD THAT:- Since we have dismissed ground no. 1 of Revenue s appeal by confirming the order of learned CIT(A) wherein the learned CIT(A) has deleted the disallowance made under Section 14A of the Act on the ground that assessee is not having any exempt income during the year, therefore, this ground is consequential and required to be dismissed

  ---

• Customs

• 2021 (4) TMI 423
  Release of imported goods from Pakistan - rate of duty - Vires of N/N. 5/2019-Customs dated 16.02.2019 - consignments of goods from Pakistan had entered the territory of India and the bill of entry with the prescribed rate of duty was electronically generated on 16.02.2019 before impugned notification enhancing the duty @ 200% was issued in late evening on the same date - prayer for release of the imported goods upon payment of the rate of duty assigned in the bill of entry instead of the subsequently enhanced duty @ 200%. HELD THAT:- In view of the decision of the three-Judge Bench of this Court in UNION OF INDIA OTHERS VERSUS M/S GS CHATHA RICE MILLS ANOTHER [ 2020 (9) TMI 903 - SUPREME COURT] , the SLP are dismissed.

  ---

• 2021 (4) TMI 422
  Warehoused goods - goods were not cleared within the time limit stipulated in Section 48 of the Customs Act, 1962, the customs authority proposed to auction the goods - contractual relationship and contractual liability - requirement to issue waiver certificate or not - HELD THAT:- It is well settled that no Court can issue 'Mandamus' contrary to law. The statutory authority cannot be restrained from discharging its statutory functions. In the case on hand, the customs authority had issued notice on 15.09.2020 calling upon the petitioner to clear the goods. In the counter affidavit, the customs authority has pointed out that though the customs authority could have issued first notice on the expiry of the 30th day, they chose to wait for about three months before issuing the notice. Since proper response was not forthcoming from the petitioner, they decided to e-auction the imported goods. The goods had arrived on 09.05.2020 - The bill of entry was filed on 21.05.2020. Warehousing was ordered on 21.05.2020. The Customs Authority has pointed out that if the goods had been seized or detained or confiscated by them, the Customs Cargo Services Provider cannot charge any rent or demurrage on the goods. In the case on hand, there has been no seizure or detention or confiscation - If there was detention of goods and the customs authority had issued waiver certificate and still the warehousing entity refuses to release the goods, the importer can certainly move the Writ Court for relief. But the case on hand is not one such. The customs authority at no point of time detained the goods. Therefore, this is purely a contractual issue between the petitioner on the one hand and the private respondents on the other. In such a case, it would not be open to the Writ Court to issue any Mandamus compelling the private respondents herein to permit clearance of the goods, even though the petitioner has not satisfied the contractual demand raised by the shipping liner/warehousing entity - The goods are not prohibited goods. Unfortunately, though the amount was debited from his account, it did not get credited in the account of the fourth respondent. While the petitioner is willing to pay a sum of ₹ 2,00,000/- to the warehousing entity, the demand of the third respondent is ₹ 35,00,000/-. Since there are no meeting point, no purpose will be in keeping the issue alive. No grant of any relief in these writ petitions. These Writ Petitions stand dismissed.

  ---

• 2021 (4) TMI 410
  Seeking re-export of imported goods - petitioner was carrying with him four mobile phones, which was considered to be in excess of permissible limit - failure to make a declaration under Section 77 of the Customs Act, 1962 - HELD THAT:- Whether a specific averment has been taken either in the representation or in the affidavit filed in support of the writ petition that immediately on landing, the petitioner did make a declaration under Section 77 of the Act. The learned counsel for the petitioner is unable to draw my attention to any such averment either in the representation or in the affidavit filed in support of the writ petition. Unless the person has legal right to seek consideration of one's representation, he cannot maintain a writ of mandamus - there are no ground to grant relief - petition dismissed.

  ---

• 2021 (4) TMI 401
  Imposition of penalty on Customs Broker - customs broker had not verified KYC and has violated Regulation 10(n) of Customs Brokers Licensing Regulations (CBLR), 2018 - HELD THAT:- A show cause notice has to be issued within 90 days from the date of receipt of the offence report. In the present case, the copy of the order passed by the adjudicating authority at Mumbai Customs is dated 29.05.2019. The same was communicated to Chennai Customs. If the said order is considered as offence report, show cause notice ought to have been issued on or before 28.08.2019. In the present case the show cause notice is dated 26.11.2019. Thus there is delay in issuing the show cause notice which is clear violation of Regulation 17(1) of CBLR 2018. The jurisdictional High Court in the case of M/S. BHUVAN SHIPPING SERVICES VERSUS THE COMMISSIONER OF CUSTOMS, THE INQUIRY OFFICER AND ASSISTANT COMMISSIONER OF CUSTOMS [ 2021 (4) TMI 24 - MADRAS HIGH COURT] has held that when the SCN is issued beyond 90 days of the offence report, the consequential order passed cannot sustain. The second violation argued by Ld. Counsel is with regard to Regulation 17 (5) of CBLR 2018. It is submitted by the Ld. Counsel that the inquiry report has been submitted with delay of 12 days. In page 31 covering letter for forwarding the inquiry report has been furnished. On perusal, it can be seen that though inquiry report is dt. 23.02.2020, the appellant has received it only on 09.03.2020 - From the records, it is seen that the appellant has received necessary documents from the importer for filing the Bill of Entry. The IEC of the importer is correct. As per the Regulation 10 (n), the customs broker has to verify correctness of IEC code of the importer, GSTIN, identity of his client using reliable information. Thus when the appellant has collected necessary documents, it cannot be said that they have violated Regulation 10 (n) of CBLR 2018 - On merits also, there are no allegation proved against the appellant - appeal allowed - decided in favor of appellant.

  ---

• 2021 (4) TMI 386
  Interest on delayed Refund of SAD - case of Revenue is that the necessary documents were filed only on 16.02.2019 and from such date the refund has been granted within 3 months and therefore no interest is liable to be paid to the appellant - HELD THAT:- It is seen that refund claims were filed by the appellant in March 2014 and April 2014. The same has been sanctioned only on 10.06.2019. The department was always a party to the litigation before Commissioner (Appeals) as well as the Tribunal. When the matter was agitated by the appellant for denial of refund alleging that appellant has not complied with condition 2(b) of the notification, the Department had sufficient knowledge about the proceedings as well as the order passed by the Tribunal. Even after the order passed by the Tribunal, the department has waited for 2 years to sanction the refund. Further, as correctly pointed out by Ld. Counsel that refund has not been rejected for not furnishing necessary documents. When the department was a party to the proceedings before Commissioner (Appeals) as well as the Tribunal, the department ought to have taken steps to refund the amount when the litigation has been finalized at the Tribunal level - in the OIO as well as the order impugned herein the date of refund claim is noted as 3/2014 and 4/2014. The appellant is eligible for interest on the refund amount after 3 months from the date of filing of refund claim - appeal allowed - decided in favor of appellant.

  ---

• Insolvency & Bankruptcy

• 2021 (4) TMI 402
  Maintainability of Application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - amounts advanced towards purchase of shares of the Appellant / Company - case of appellant is that Respondent / Petitioner is neither an Operational Creditor nor a Financial Creditor and further that there is no debt and that the Respondent is not in Default under the Code - time limitation - HELD THAT:- Keeping in mind that the Appellant / Corporate Debtor acknowledged the debt of Respondent / Financial Creditor on 28.11.2018, it is held by this Tribunal that the application filed by the Respondent / Applicant / Financial Creditor is within the limitation period. The Adjudicating Authority (National Company Law Tribunal, Kochi Bench, Kerala) on 25.8.2020 came to the conclusion that the present debt arose out of the Share Purchase Agreement dated 21.11.2012 and that the said amount was a debt disbursed against the consideration for advance payment as per the agreement and hence was covered within the definition of financial Debt and that the Respondent / Applicant would be treated as Financial Creditors and resultantly admitted the Section 7 Application of the Respondent / Financial Creditor / Applicant for initiation of CIRP - It is to be mentioned that an inherent power of the Tribunal has its gross root in necessity and the said power can be exercised by a Tribunal based on the rudimentary principle that an act of Court shall prejudice no person . Further, to meet the ends of justice an inherent power of a Tribunal being Co-extensive with need can be exercised to render justice to the litigants. Undoubtedly, the Adjudicating Authority (National Company Law Tribunal, Kochi Bench, Kerala) had rightly allowed application on 28.01.2021 (filed under Rule 11 of National Company Law Tribunal Rules, 2016 by the Respondent / Financial Creditor ) of course, based on proper material before it and the same requires no interference in the hands of this Appellate Tribunal sitting in Appeal . Looking at from any angle, the Appeal sans merits. Appeal dismissed.

  ---

• 2021 (4) TMI 396
  Validity of action of the Resolution Professional (RP) - Section 24 and 25 (2) of the Insolvency and Bankruptcy Code - direction to Resolution Professional to call the Suspended Management in Committee of Creditors (CoC) meeting after giving the Agenda and to supply/provide the copy of Resolution Plan issued by the RP before taking any decisions of the Resolution Plan whether being accepted or not - restraint on RP from acting on the Resolution Plans - without affording opportunity to the ex-directors of the Corporate Debtor, 9th 10th and 11thCoC meetings were convened and Resolution of Liquidation of Corporate Debtor has been passed - principles of natural justice. HELD THAT:- In the present case, there were two directors of the Corporate Debtor, Appellant Amit Suresh Bhatnagar and Sumit Suresh Bhatnagar. The RP was required to give notice of each and every meeting of CoC to both the exdirectors. There is nothing on record to show that RP has served notice of any meetings of CoC on ex-director Sumit Suresh Bhatnagar. The RP has not offered any explanation as to why the notice has not been served on Sumit Suresh Bhatnagar ex-director of Corporate Debtor - it is clear that on false ground RP has declined to share video conference link to the Appellant. Admittedly, the RP has not provided the copy of Resolution Plans to the Appellant. Thus, he has contravened the mandatory provision provided in Regulation 21(3) (iii) of the IBBI Regulations - It is pertinent to note that the 11th CoC meeting convened on 08.11.2019 at 03:00 PM and notice of that meeting was sent to the Appellant on 07.11.2019 at 08:15 PM i.e. less than 24 hours notice was served, which is against the Regulation 19 of IBBI Regulations. Without affording opportunity to the ex-directors of the Corporate Debtor, 9th 10th and 11thCoC meetings were convened and Resolution of Liquidation of Corporate Debtor has been passed. Which is in contravention to Section 24 (3) (b) of I B Code and Regulations 19(1), 21 (3) (iii) and 23 of the IBBI Regulations. Thus, the RP has failed to perform the duties of Resolution Professional as provided under Section 25 of the I B Code - it is apparent that there has been material irregularity in exercising of powers by the RP during the Corporate Insolvency Resolution Period. Therefore, the Impugned order as well as the Resolution Passed in 9th 10th and 11thCoC meetings are not sustainable in law. Hence, they are hereby set aside. The Respondent (RP) is directed to provide all the documents relevant to the matters including Resolution Plans to suspended directors (Appellant and Sumit Suresh Bhatnagar) of the Corporate Debtor and the meetings of CoC called by giving not less than five days notice in writing to every participants and they shall provide an option to attend the meetings even through video conferencing - Appeal allowed.

  ---

• Service Tax

• 2021 (4) TMI 389
  Levy of penalty - extended period of limitation - non/short payment of service tax or not - Revenue has submitted that the non payment of service tax in is instalments/ parts and also conduct of the appellant during the investigation proceedings is impressed upon to be highly non co-operative - HELD THAT:- It is observed that the demand as raised by the Department against the appellant amounting to ₹ 40,79,178/-, the entire amount alongwith the interest of ₹ 3,08,328/- stands paid by the appellant over a period of four months starting from 21.01.2015 i.e. from the date even prior to the search was conducted in the appellant s premises and the entire aforesaid amount stand paid till May, 2015 i.e. much prior before the issuance of the impugned show cause notice dated 27.09.2016 as stands clear from the table in the show cause notice as well as reproduced in the order-in-original. Even an amount of ₹ 59,900/- for delayed filing of return has been made. It is apparent that the show cause notice has been issued after a period of almost 1 years from the date of the payment of entire demand. In the present case, where the entire payment has been paid even prior the order of assessment is being communicated to the appellant, the decision of Hon ble Apex Court in M/s Lark Chemicals Pvt. Limited [ 2016 (5) TMI 190 - SC ORDER ] is not applicable to the present case. Penalty - suppression of facts or not - intent to evade or not - HELD THAT:- Reliance placed on the decision in M/S RADHE RESIDENCY VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, SURAT [ 2015 (7) TMI 716 - CESTAT AHMEDABAD ], wherein it has been held that when the service tax stands paid alongwith interest after being pointed out but before the issuance of the show cause notice, the penalty under Section 78 of Finance Act, 1994 is not imposable - the appellant did not discharge his liability at the appropriate time as was otherwise required by the law and also fail to inform the issue of financial crunch as mentioned in the impugned appeal to the notice of the Department. The possibility of intentional suppression as is alleged against him cannot be ruled out. There are no infirmity in the order where the demand of service tax, though it stands already paid, is hereby confirmed - However, the order with respect to imposition of penalty is hereby set aside - appeal allowed in part.

  ---

• 2021 (4) TMI 387
  Refund of CENVAT Credit amount to Consumer Welfare Fund - unjust enrichment - HELD THAT:- The appellant have not led evidence that there was no passing of the service tax burden to the end users of the canteen. In view of the contention of the learned Counsel at the bar that food has rather been given at subsidised rate, this appeal is allowed by way of remand to the Adjudicating Authority with the direction to examine the agreement between the appellant and M/s Caparo Engineering India Limited, as well as other relevant documents like costing of food, price charged from the end users. If it is found that the company M/s Caparo Engineering India Limited have not passed on the burden of the service tax to their employees/ workers, the amount of refund shall be paid to the appellant. The appeal is allowed by way of remand.

  ---

• Central Excise

• 2021 (4) TMI 400
  CENVAT Credit - input services - Membership of Club Service - Health Insurance Service - credit denied holding that both the services are specifically excluded from the definition of input service, as stands amended, w.e.f. 1 July 2012 - extended period of limitation - HELD THAT:- Both these services are neither for the personal use of the appellant nor for consumption of any one employee, but for the welfare of the employee at large. Tribunal Hyderabad in the case of M/S HYDUS TECHNOLOGIES INDIA PVT LTD. VERSUS CCE, C ST, HYDERABAD-II [ 2017 (2) TMI 538 - CESTAT HYDERABAD] has held that the group gratuity scheme for employees is a service for the welfare of the employees at large services stated in clause (c) in the input service definition are held to be excluded only when such services are used primarily for personal use or consumed by any employee Hyderabad Tribunal has denied the insurance service of all the employees if taken by the manufacturer to fall under exclusion clause of the input definition - Hon ble Madras High Court also in the case of M/S. GANESAN BUILDERS LTD. VERSUS THE COMMISSIONER OF SERVICE TAX [ 2018 (10) TMI 269 - MADRAS HIGH COURT] has held that insurance also was insured specific and not employee specific. It cannot be for personal use or for consumption of an employee manufacturer held entitled to take credit of service tax paid. Above all, there is no evidence produced by the Department to prove that even these two services were for personal use of the appellant. In absence thereof, there are no logic in the findings of Commissioner (Appeals) while confirming the recovery of Cenvat credit availed by the appellant on these two services as well. Extended period of limitation - HELD THAT:- There is no other evidence with respect to the alleged suppression of facts or willful mis-statement on the part of the appellant. Law has been settled that the allegations as that of fraud, collusion or willful mis-statement are grave allegations, mere recital thereof cannot be suffice - Apparently, there is no such evidence on record. The Department was not entitled to invoke the extended period for issue show cause notice. Credit allowed - appeal allowed - decided in favor of appellant.

  ---

• 2021 (4) TMI 391
  CENVAT Credit - GTA Services - Freight charges - goods cleared from the factory gate to the place of buyer - place of removal - HELD THAT:- On an identical issue, this Tribunal in the case of BHARAT FRITZ WERNER LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BANGALORE NORTH WEST COMMISSIONERATE [ 2019 (11) TMI 1050 - CESTAT BANGALORE] has remanded the case back to the original authority to pass a fresh order after examining various documents for the disputed period. The case remanded back to the original authority to pass a fresh order after examining the various documents for the disputed period in the light of the Circular issued by the Board dated 08/06/2018 - appeal allowed by way of remand.

  ---

• 2021 (4) TMI 384
  CENVAT Credit - inputs/capital goods - corrugated profile sheets - prefabricated modular - cealing panel/wall panel/PVC conduits/wall to ceiling coving/wall to wall coving/single doors/double doors/locks etc., - these were used for creating Clean Room and Clean room is required for maintaining temperature control and RH control - HELD THAT:- Admittedly, the appellant have used the disputed inputs for fabrication of clean room, which is essential for manufacture of their dutiable goods, as such clean room is necessary for maintaining proper temperature and hygiene as well as keeping the RH factor in control, and without it manufacture of dutiable medicines is not possible - Further, under Rule 2(k) of CCR, inputs means, all goods used in the factory of the manufacturer of final products . The appellant is entitled to cenvat credit on the items in dispute as inputs - Appeal allowed - decided in favor of appellant.

  ---

• 2021 (4) TMI 382
  Clandestine procurement and removal - MS ingots - TMT Bars, flats, challans etc. - shoratge of goods - M.T. M.S. Ingots - MT TMT Bar - MT Sponge Iron - challenge mainly based on reliance upon third party evidence - evidentiary value of the third party evidence - HELD THAT:- There is no other evidence or document in the form of stock verification of the raw-material of the appellant and the material supplied to M/s. PIL nor any evidence about usage of any transportation by the appellants for transporting the alleged quantity of raw-material to M/s.PIL. In absence thereof the documents recovered from M/s.PIL cannot be held against the appellant. It is well settled law that there has to be some concrete evidence which would show clandestine manufacture of goods, as was reiterated by Tribunal, Delhi in the case of C.C.E. S.T. -RAIPUR VERSUS P.D. INDUSTRIES PVT. LTD. [ 2015 (11) TMI 455 - CESTAT NEW DELHI] . The order confirming the recovery has no legal basis to sustain - Appeal allowed - decided in favor of appellant.

  ---

• CST, VAT & Sales Tax

• 2021 (4) TMI 421
  Recovery of sales tax dues - liability of third person (spouse) who has giving the property as security - Raising of encumbrance created by way of Intimation - contract of guarantee - whether the security given can be subjected to revenue recovery under the provisions of the Revenue Recovery Act? - HELD THAT:- the security bond was not executed in her capacity as wife of the Proprietor and she executed the same in her capacity as an 'individual person' and she has given an undertaking that in the event of non-payment of statutory dues, the immovable property given by way of security can be attached. Where the security bond is executed as an individual person and further as per Section 21(2-B) of the TNGST Act, where it appears necessary to the authority granting a certificate of registration under this Section, so to do for the proper realisation of the tax payable under this Act, it may, at any time, while such certificate is in force, by an order in writing and for reasons to be recorded therein, require the dealer to whom the certificate has been granted, to furnish within such time as may be specified in the order and in the prescribed manner such security or, if the dealer has already furnished any security in pursuance of an order under this sub-section or sub-section (1-A) such additional security, as may be specified in the order for the aforesaid purpose. The statutory dues are recoverable and no one should be allowed to escape from the payment of statutory dues, this Court is of an opinion that the provisions are to be interpreted pragmatically and constructively, so as to ensure that the purpose and object of the Statute are meted out and the public interest is protected. Thus certain Rules or guidelines formulated for the purpose of implementing the provisions of the Act and time limits or certain procedures, guidelines contemplated are to be construed as directory and cannot be held as mandatory. This Court is of the considered opinion that the petitioner is not entitled for the relief, as such, sought for in the present writ petition - Petition dismissed.

  ---

• 2021 (4) TMI 414
  Levy of tax on the turnover pertaining to design engineering charges - interstate purchase or not - Revenue would contend that the Tribunal ought to have noted that the Form C declaration filed by the respondent dealer included tax portion also for the turnovers on which they had claimed exemption and hence it is conclusively established that the turnover is taxable in the State - HELD THAT:- The Tribunal held that the conditions specified in Section 6(2) of the CST Act have been satisfied by the dealer and faulted the Assessing Officer for disallowing the claim for exemption only on the ground that the dealer had collected tax whereas he had not rejected the declaration Form filed in support of the claim for exemption made on transit sales under Section 6(2) of the CST Act. Thus, the Tribunal rightly appreciated the factual position while upholding the order passed by the Appellate Authority and we find that the revenue has not made out any ground to interfere with the order passed by the Tribunal. There are no ground to interfere with the order passed by the Tribunal - the tax case is dismissed and the questions of law are answered against the revenue.

  ---

• 2021 (4) TMI 413
  Exemption from turnover - inter-state sale or not - Form-F declaration - false document - consignment sales or not - AO rejected the claim on inter-state movement of goods in the second round of proceedings after remand - HELD THAT:- The Tribunal placed heavy reliance on the conclusion arrived at by the Enforcement Wing Officials, who had caused an inspection of the petitioner's place of business, the statements, which were recorded from the dealer, the inspection conducted in the place of business of the broker, the statements recorded from him, to conclude that the entire dispatches made by the petitioner has to be treated as outright inter-State sales and liable to be taxed accordingly. The appellate Deputy Commissioner noted that the petitioner is in a position to show the closing stock balance available with the various agents in their accounts and if that is so, if there is transfer of goods with the agents, then the petitioner need not even show the value of stocks held with the agents in their accounts. The first appellate authority noted that though these were the observations and directions given by the appellate Deputy Commissioner, while remanding the matter to the Assessing Officer with direction to verify the Form-F declaration, the Assessing Officer failed to carry out the directions issued. After making such an observation, the first appellate authority proceeds to examine the transaction. The first appellate authority concluded that the finding of the Assessing Officer that the goods moved pursuant to an order passed by the broker has not been factually established, the first appellate authority relied on the decision in the case of STATE OF ORISSA VERSUS ROLTA MOTORS LTD. [ 1992 (1) TMI 319 - ORISSA HIGH COURT] - the first appellate authority once again took note of the finding recorded by the appellate Deputy commissioner in the earlier round, where a specific finding has been given regarding the role of the broker and such finding was endorsed by the first appellate authority in its order dated 15.10.1999. Furthermore, we find that the State did not challenge the order passed by the appellate Deputy commissioner in the earlier round and the State cannot be heard to say that it was only an order of remand. The order of remand was after making pointed observations and rendering factual finding and directing the Assessing Officer to verify the Form F declaration. Considering the fact situation, which prompted the first appellate authority to allow the appeal, we find that the Tribunal erroneously reversed such order by glossing over the nature of the documents, which were placed by the petitioner before the first appellate authority not only in the present round of litigation, but in the earlier round as well. That apart, the Tribunal did not advert to the findings rendered by the appellate Deputy Commissioner in the earlier round more particularly, with regard to the documentation, the nature of transaction and the role of the broker - what the Assessing Officer was did is to ignore the finding and merely acted based upon the directions of the Enforcement Wing Officials thereby abdicating its power as an Assessing Officer. That apart, as a subordinate statutory authority, the findings rendered by the appellate authority are binding on the Assessing Officer. These aspects have been ignored by the Tribunal while reversing the order passed by the first appellate authority. The order passed by the Tribunal calls for interference - Petition allowed.

  ---

• 2021 (4) TMI 412
  Validity of assessment order - validity of estimation done by the Assessing Officer based upon records, which were recovered during the inspection - HELD THAT:- The Tribunal found that the petitioner had paid wages during the relevant year to the tune of ₹ 4,12,515/- as per book marked B and based upon the payment of wages, the Assessing Officer estimated the value of the electrical goods manufactured and sold outside the accounts at ₹ 22,27,551/- and the purchase of raw materials outside the accounts at ₹ 16,50,060/- under Section 7A of the TNGST Act. The Tribunal noted that there was no proof by way of delivery note for the supply of raw materials for manufacture of finished goods for labour charges. Further, it noted that there was no proof for the supply of finished goods to the customers with the labour bills raised by the petitioner in the name of the customers whereas, there was receipt of raw materials by the petitioner in the name of some other party. The extract of the bank account showed that a sum of ₹ 9,07,529/- was credited for the year 1997- 98 and though the petitioner contended that the amount related to labour charges, no proof was produced by the petitioner and in the absence of evidence to prove that the receipt of money was for labour charges, the Tribunal concluded that the Assessing Authority was justified in drawing an inference of sales suppression. Levy of penalty - Section 12(3)(b) of the TNGST Act - HELD THAT:- The turnover has been estimated based upon the bank statement, the entries in the books, which were recovered during inspection and there is no allegation of concealment. Further, we find that there is no specific allegation made against the petitioner as to on what basis, the Assessing Officer was of the view that penalty has to be imposed on that petitioner, that too, at 150% - in the absence of proper proposal, the levy of penalty cannot be sustained. The writ petition is partly allowed.

  ---

• 2021 (4) TMI 411
  Violation of principles of natural justice - validity of assessment order - Assessing Officer did not look into the accounts, which were produced by the appellant - HELD THAT:- The refusal to exercise extraordinary jurisdiction under Article 226 of the Constitution of India when a statutory alternate remedy is available under the Act is a selfimposed restriction and there are exceptions carved out from this selfimposed rule. One such exception, which has been held by the Court to be a justifiable reason to exercise writ jurisdiction, is when the writ petition is pending for a considerable length of time before a Court and it would be too harsh on the party to be driven to avail the alternate remedy after few years. The Assessing Officer cannot state that he need not call for other bills and even it is called for, except for the 7 bills, which were purchased by the appellant, all other bills will reflect lower sale price than the purchase price. This may not be a right approach while completing the assessment for the purpose of levying tax. The Assessing Officer has to come to a definite conclusion, especially, when it is a scrutiny assessment and the dealer has cooperated in the scrutiny by filing their reply and submitting the documents available with them. Had it be a case of best judgment assessment, the situation would have been different, which is not so in the case on hand. The matter has to be sent back to the Assessing Officer to redo the assessment after affording an opportunity to the appellant/dealer - the matter is remanded to the respondent-Assessing Officer for a fresh consideration - Appeal allowed by way of remand.

  ---

• 2021 (4) TMI 407
  Validity of assessment order - Condonation of delay in filing appeal - recovery of the amount as determined by the assessment year - HELD THAT:- The statutory appeals along with the stay petitions and applications for condonation of delay are pending adjudication before the 2nd respondent and therefore, the petition is disposed of with the directions that the 2nd respondent shall decide the applications for condonation of delay, and then if necessary, the applications for stay, Exts.P5 to P5(b), within a period of three months from the date of communication of this judgment. Writ petition disposed off.

  ---

• 2021 (4) TMI 403
  Seeking to be impleaded as one of the party-respondents - SCN issued for the period of assessment between 01.04.2015 and 31.08.2015 - HELD THAT:- We would not have entertained this writ application as the subject matter of challenge is a show-cause notice. However, there are few jurisdictional issues raised and argued by the learned counsel appearing for the writ applicant going to the root of the matter. Prima facie, it appears that the authority seeks to invoke Section 34 (8A) and Section 50 respectively of the Gujarat Value Added Tax Act, 2003. One of the jurisdictional issues involved in the present litigation is that Section 50 could not have been invoked for assessing a commission agent as liability has to be first determined by framing an assessment. Section 50 can be invoked to recover the tax due either from the commission agent or the principal. Section 50 is not a substantive provision, but is an enabling provision to recover the tax due once the assessment is framed. The matter deserves consideration. Rule returnable on 6th May, 2021.

  ---