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Showing 241 to 260 of 1346 Records

• 2021 (1) TMI 1108
  

  Deduction u/s 80P - AO treated the assessee as a cooperative bank other than primary agricultural credit society and denied the claim of deduction u/s 80P - HELD THAT:- As relying on decisions in the case of the appellant [2018 (6) TMI 1746 - ITAT MUMBAI] and the decision of the Hon'ble High Court of Karnataka in the case of Tumkur Merchants' case [2015 (2) TMI 995 - KARNATAKA HIGH COURT] it is held that the appellant is eligible for deduction u/s. 80P(2)(a)(i) in respect of the income and it is also eligible for deduction in respect of dividend income of ₹ 1,19,589/- u/s. 80P(2)(d) of the Act. The AO is directed to allow deduction u/s. 80P as claimed by the appellant and assess the total income at Rs. Nil. Ground no. 1 is allowed of assessee.

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• 2021 (1) TMI 1107
  

  Seeking seven days custody of both the accused for their interrogation - money laundering - proceeds of crime - diversion of funds - schedule offence under Section 420 of IPC - HELD THAT:- No doubt udner Section 17(1)(f) of PMLA on 26.01.2021 the statement of accused Babulal Varma came to be recorded by ED and also questions pertaining to ₹ 410 crores obtained from Yes Bank was also put forth including non-constructions of tenements. But the facts remain to be answered that when these two persons are now arrested and produced before this Court, who not only obtained SRA scheme for construction, but mortgaged it and now even without making construction of the Rehab scheme at Wadala and Antop Hill they have diverted ₹ 410 crores, which was obtained as a loan from Yes Bank, after mortgaging FSI and after construction of rehabilitating building.

  The proceeds of crime diverted out of criminal activities in view of schedule offence under Section 420 of IPC has been used and parked by the accused and thus, projected them as untainted. In such circumstances, complaint came to be registered and it needs to be investigated in detail. If it is not investigated definitely diversion of funds, for the purpose of which it was obtained was not carried out and thereafter, obtaining loan of ₹ 3,155/- crores out of said loan ₹ 2,755 crores was disbursed. Out of the same ₹ 1800 crores is outstanding and same has turned NPA.

  Hence entire factual aspects of this money laundering after registration of FIR is within exclusive knowledge of both the accused and all these crucial facts, which are in their domain has to be exploded to being unearth deeply and direct involvement of M/s Omkar Realtors & Developers Pvt. Ltd. It appears active conspiracy in the case. Even both the accused form 25.01.2021 assisting the investigation and came to be arrested on 27.01.2021. Therefore, further investigation by ED has to be carried out for which their presence along with ED officials pertaining to this ECIR is necessary.

  Both the accused i.e Babulal Varma and Kamalkishore Gupta, remanded in the custody of ED for further interrogation till 30.01.2021 - application allowed.

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• 2021 (1) TMI 1106
  

  Foreign tax credit available - Eliminating double taxation of doubly taxable income in the hands of assessee - difference in FTC available to assessee on taxes paid in USA, Japan and Germany vis-s-vis Korea - HELD THAT:- India US DTAA - A perusal of the aforesaid provision makes it clear that, if a resident Indian derives income, which may be taxed in United States, India shall allowed as a deduction from the tax on the income of the resident, an amount equal to the tax paid in United States of America, whether directly or by deduction. The conditions mandated in the treaty is that if any "income derived" and "tax paid in United States of America on such income", then tax relief/credit shall be granted in India on tax paid in United States of America.

  India Japan DTAA - Article 23(2) of India Japan DTAA deals with elimination of double taxation.

  India Germany DTAA - All these clauses are identically worded as Article 25(2)(a) of India US DTAA. Relevant clauses for elimination of double taxation in the treaties under consideration states that, foreign tax credit shall not exceed the part of the income tax as computed before the deduction is given, "which is attributable as the case may be, to the income which may be taxed in that other State". We also note that, these clauses uses the expression 'income', which essentially means 'income' embedded in the gross receipt, and not the 'gross receipt' itself. We therefore do not agree with the computation adopted by Ld.AO.

  For eliminating double taxation of doubly taxable income in the hands of assessee, it would be necessary to establish the taxes paid by assessee in USA, Japan, and Germany. The condition stipulated is very clear that FTC is available on taxes paid in these countries.

  India- Korea DTAA - On perusal of the said Article, we find that, in India FTC is available to the taxes paid in Korea and such credit shall not exceed the taxes payable in India on doubly taxed income. Thus there is a difference in FTC available to assessee on taxes paid in USA, Japan and Germany vis-s-vis Korea.

  In the present facts of the case, respective treaty countries withheld taxes against income from the source state at a particular rate. Article 25 of Indo U.S Treaty, Article 23 (2) of Indo-Japan Treaty and the Indo-Germany Treaty, allows FTC in India to the extent of tax paid in these countries, whereas, Article 23 of Indo-Korea Treaty allows FTC which shall not tax payable on such doubly taxable income in India.

  We note that authorities below failed to understand the treaty provisions applicable in present facts with these countries regarding granting of FTC to assessee. On perusal of treaty provisions, we are of the view, that assessee is eligible for FTC in full, amounting to taxes paid in USA, Japan and Germany. We draw support from decision of Hon’ble Karnataka High Court in case of Wipro [2015 (10) TMI 826 - KARNATAKA HIGH COURT]

  Only in case of Korea, FTC is limited to taxes payable on such doubly taxed income in India, before any deduction. In other words, FTC is limited to or taxes paid in Korea or India, whichever is less. AO is therefore directed to grant FTC in respect of taxes paid in USA, Japan and Germany. In case of taxes paid in Korea, FTC will be tax actually paid in Korea or payable in India on such doubly taxable income, which ever is lower.

  Income earned income from Taiwan - We note that, India has not entered into double taxation avoidance agreement with Taiwan. Therefore, foreign tax credit available to assessee against taxes paid in Taiwan will be computed in accordance with section 91 of the Act.

  The said provision provides for deduction of tax paid in any country from the Indian Income tax payable by assessee of a sum calculated on such doubly taxed income, even though there is no agreement under Section 90 for the relief or avoidance of double taxation. Explanation (iv) defines the expression income tax in relation to any country includes any excess profit tax or business profits tax charged on the profits by the Government of any part of that country or a local authority in that country. Therefore, even in the absence of an agreement under Section 90 of the Act, by virtue of the statutory provision, the benefit conferred under Section 91 of the Act is extended to the income tax paid in foreign jurisdictions.

  We have dealt with FTC available to assessee in respect of foreign taxes paid by assessee in Japan, Korea, Germany and USA. For year under consideration credit has to be computed in similar manner as has been tabulated by assessee for assessment year 2013-14 reproduced hereinabove.

  Our observations for assessment year 2013-14 in allowing tax credit to assessee is applied mutatis mutandis for year under consideration.

  Insofar as Taiwan is concerned, section 91 also interprets computation of foreign tax credit to assessee in the similar manner. Section 91 contemplates the situation where there is no agreement between the Central Government and the other country concerned for the grant of relief in respect of income which has suffered taxation in both the countries or for the avoidance of double taxation of the same income.

  This section lays down its own conditions for and extent of the relief contemplated to be given to an assessee. The first condition is that the assessee should be a resident in India as per term defined in Section 6 of the Act. The second condition is that the income which has accrued or arisen outside India to such resident in India should not be deemed to accrue or arise to him in India. The third condition is that such resident-assessee should have paid income-tax on such income under the law in force in that country. Once these three conditions are fulfilled, such resident-assessee would be entitled to the deduction from the Indian income-tax, as is payable by him, of a sum calculated on the doubly taxed income at the Indian rate of tax or the rate of tax of the other country concerned, whichever is the lower.

  Thus, as per section 91 of the Act, in case of Tiwan, FTC is to be computed based on rate of tax applicable in India or Korea, whichever is less, on such doubly taxable income.

  We are of the view that assessee is eligible for FTC in full, amounting to taxes paid in USA, Japan and Germany. We draw support from decision of Hon’ble Karnataka High Court in case of Wipro( [2015 (10) TMI 826 - KARNATAKA HIGH COURT]

  In case of Korea, FTC is limited to taxes payable on such doubly taxed income in India, before any deduction. In other words, FTC is limited to or taxes paid in Korea or India, whichever is less. In case of Tiwan, FTC is to be computed based on rate of tax applicable in India or Korea, whichever is less, on such doubly taxable income. AO is thus directed to compute FTC accordingly.

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• 2021 (1) TMI 1105
  

  Maintainability of application - initiation of CIRP - Corporate Debtor failed to repay the loan obtained from the Assignor Bank - Non Performing Asset - Financial Debt - time limitation - HELD THAT:- It is well settled by a catena of decisions of this Court, that Article 137 of the Limitation Act gets attracted to applications filed under Sections 7 and 9 of the IBC. The right to sue accrues when a default occurs, and if that default has occurred over three years prior to the date of filing of an application under Section 7 of the IBC, the application would be barred under Article 137 of the Limitation Act. At the highest, limitation started ticking on 27th March 2003, when a Recovery Certificate was issued by the DRT. The appellant has not disclosed any material in its application under Section 7 of the IBC to demonstrate that the application is not barred by limitation.

  In its application under Section 7 of the IBC, the Appellant has not shown that the debt due to the Appellant from the Corporate Debtor is not barred by limitation. The right to sue accrued on 1st April 1993 when the amount of the Corporate Debtor with the Assignor Bank was declared NPA. In Part IV of its application under Section 7 of the IBC, the Appellant declared the date of default as 1st April, 1993. The claim is apparently barred by limitation - Under Section 18 of the Limitation Act, 1963, the acknowledgement of liability in writing, signed by a party in respect of any right or property claimed by such party within the prescribed period of limitation to file a suit and/or application, leads to computation of the period of limitation afresh, from the time when the acknowledgement is so signed.

  It is reiterated that in its application under Section 7 of the IBC, the Appellant declared the date of default as 1st April, 1993. At the highest, limitation started running from 27th March, 2003, when the Recovery Certificate was issued by the DRT in favour of the Assignor. The NCLAT has rightly held that the application of the Appellant under Section 7 of the IBC barred by limitation - In any case, there are pending proceedings in the DRT, in respect of the dues of the Corporate Debtor. The Appellant has been substituted in place of the Assignor Bank in the execution proceedings in the DRT. There is an amended Certificate issued by the DRT. Orders have, from time to time, been passed in the Execution Proceedings. The Appellant is not without remedy against the Corporate Debtor.

  There is no infirmity in the judgment and order of the NCLAT under appeal that calls for interference of this Court - appeal dismissed.

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• 2021 (1) TMI 1104
  

  Maintainability of petition - no notice of personal hearing provided - HELD THAT:- A reply has been filed to the show cause notice as early as on 23.08.2010 and thereafter, no further proceedings have been initiated by the respondent. The petitioner has also not bothered to appear before the respondents or seek a clarification with regard to what has transpired thereafter. Even without approaching the respondent by way of a representation or a letter seeking clarity in the matter, the petitioner has approached this Court seeking a certiorari of the show cause notice, which is more than a decade old.

  Moreover, there appears to be absolutely no trigger for the present Writ Petition and no notice of personal hearing or any other communication has been received after the show cause notice issued in August, 2010 - there is no cause of action at this juncture to justify this Writ Petition - Petition dismissed.

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• 2021 (1) TMI 1103
  

  Disallowance of the additional depreciation claimed by the Appellant Company u/s. 32(1)(iia) - Manufacture or production - AO has held that the process of delivery of CNG to automobiles at the CNG filling centres does not amount to manufacture or production or an article or thing which is mandatory requirement for claiming additional depredation u/s. 32 (1)(iia) - Whether the compressed natural gas produced by the appellant, having different name, character and use from natural gas can be said to be covered by the phrase manufacture or production? - HELD THAT:- As decided in CENTRAL U.P. GAS LIMITED [2016 (12) TMI 814 - ALLAHABAD HIGH COURT] compressed natural gas in its compressed form has a distinct identity and character and use. It is settled law of the Apex Court in the case of Income Tax Officer Vs.Arihant Tiles and Marbles P. LTD. reported in [2009 (12) TMI 1 - SUPREME COURT] that when a commodity acquires a distinct name, use and commercial identity, it would acquire the trait of 'manufacture'.

  Question is answered in favour of the assessee.

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• 2021 (1) TMI 1102
  

  Refund of amount deposited with the Customs Authorities - time limitation for claiming refund - Section 27 of the Customs Act - HELD THAT:- As short question of law is involved, list this appeal for hearing in the first week of April, 2021.

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• 2021 (1) TMI 1101
  

  Levy of VAT - goods provided by a DTH provider to its customer - petitioner contends that for providing such equipments no charge is collected from the subscriber and petitioner continues to be the owner of the goods and thus the State authorities cannot collect value added tax on such equipments - HELD THAT:- The present petition are squarely covered by the decision of Division Bench of this Court in case of BHARTI TELEMEDIA LTD. VERSUS STATE OF TRIPURA AND OTHERS, TATA SKY LTD. VERSUS STATE OF TRIPURA AND OTHERS [2015 (11) TMI 46 - TRIPURA HIGH COURT]. The question involved in the said petition was with respect to inviting value added tax on the goods provided by a DTH provider to its customer so that the customer could enjoy such service. It is also a case where concededly there was no sale of goods - Nevertheless the High Court referring to the decision of Supreme Court in case of BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [2006 (3) TMI 1 - SUPREME COURT] invoked the principle of transfer of right to use the goods.

  There are no hesitation in confirming the revisional order insofar as it pertains to the liability of the petitioner to pay tax with interest. However, in relation to penalty we find that the authorities have committed a serious error. Firstly, contrary to what the revisional authority has recorded in the impugned order, sufficient opportunity of hearing was not granted to the petitioner before imposing penalty by the Assessing Officer - The Assessing Officer, therefore, issued an oral notice to the accountant who was present, thereafter kept the further hearing of the assessments and penalty proceedings and recently orally instituted penalty proceedings in the afternoon on the same day, heard the accountant on penalty as well and concluded that the assessee was deliberately in default.

  Penalty - HELD THAT:- Such order of penalty cannot be upheld. Firstly, there was gross violation of principles of natural justice. Even if the accountant did not insist on a written notice for penalty, it is questionable whether the Assessing Officer could dispense with the same. More importantly, the penalty proceedings could not have been completed in a summary fashion after giving time from morning to afternoon to the accountant of the company to make his submissions. The penalty proceedings being quasi criminal in nature, strict requirement of procedural adherence is always insisted upon.

  The orders passed by the Assessing Officer and revisional authority confirming penalty against the petitioner are set aside - Petition allowed in part.

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• 2021 (1) TMI 1100
  

  Classification of supply - Works Contract Services or not - activities of supply installation, operation and maintenance of Greenfield Public Street Lighting System (GPSLS) carried out by the Applicant - levy of GST under Entry 3(vi) of Notification No. 11/2017-CT(Rate) dated 28 June 2017 (as amended) - inclusion of capital subsidy received/receivable by the applicant in the Transaction Value for the purpose of calculation of GST payable in terms of Section 15 of the CGST Act, 2017 - HELD THAT:- In the agreement submitted by the applicant the major part of the contract is supply of goods. The price of these goods are supplied to the client by the applicant constitutes 98.58% of total contract price. Further we find that the goods that are supplied are used by the applicant to provide services like installation, commissioning and maintenance etc. Without these goods the services cannot be supplied by the applicant and therefore we find that the goods and services are supplied as a combination and in conjunction and in the course of their business where the principal supply is supply of goods. Therefore, the instant supply squarely falls under the definition of “composite supply”. Thus we find that there is a composite supply in the subject case since in the subject case there is no building, construction, fabrication, completion, erection etc of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of the contract - Besides, as per Para 1(c) of Schedule II of the CGST/OGST Act, any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods and not a service.

  Whether the supply of the applicant falls under the supply of ‘works contract service’? - HELD THAT:- The salient features of the agreement indicate that the obligation on the applicant is in relation to the effective installation and functioning of the goods supplied by them and thereafter, they would undertake the activities of ‘operation and maintenance’ of the same. The contract governing their supplies does not relate to building, construction, and fabrication etc. of any immovable properties, as envisaged in the definition of ‘works contract’. Their supplies are in the nature of movable property i.e. supply of goods which involves ancillary services such as installation, commissioning etc. All these services which are supplied to the clients are nothing but ancillary activities with the main activities of supply of goods. The primary activity of the applicant is therefore, ‘supply of goods’ and not ‘supply of services’. Further, the said activity performed by the applicant is not related to the immovable property at any point of the time and hence the said activity does not qualify to be a ‘works contract’.

  Whether GST is liable to be paid under Entry 3(vi) of Notification No. 11/2017-CT (Rate) dated 28 June 2017 (as amended) on the supply and installation activities along with operation and maintenance activities to be undertaken by the Applicant? - HELD THAT:- The provisions of Notification No. 11/2017-CT (Rate) dated 28 June 2017 (as amended) are not applicable to the noticee’s case. The principal supply as mentioned above in this case is a ‘supply of goods’ and therefore the GST will have to be paid on the goods at the appropriate rate after classification under the appropriate heading.

  Whether in facts and circumstances of the case, the capital subsidy received/ receivable by the applicant for the subject transaction be liable to be included in the Transaction Value for the purpose of calculation of GST payable in terms of Section 15 of the CGST Act, 2017? - HELD THAT:- In view of Section 15(2)(e) of the CGST Act, the ‘value of supply’ shall include subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments. On perusal of the agreement/contract, we see that the capital subsidy received/ receivable by the applicant in the instant case is the actual cost incurred by the project SPV (the applicant in the instant case) in the project as approved by the Authority & ULBs. It is not a subsidy which generally means grant/grant-in-aid or a benefit given to an individual, business or institution, usually by the government. It is also not a subsidy which typically given to remove some type of burden and to promote a social good or an economic policy for overall interest of the public. The so called ‘capital subsidy’ cannot be a ‘subsidy’ by any stretch of the imagination, rather the same is a consideration as defined in Section 2(31) of the CGST Act in relation to the supply of goods and therefore, the said ‘capital subsidy’ shall certainly be liable to be included in the Transaction Value for the purpose of calculation of GST.

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• 2021 (1) TMI 1099
  

  Classification of supply - Works Contract Services or not - activities of supply installation, operation and maintenance of Greenfield Public Street Lighting System (GPSLS) carried out by the Applicant - levy of GST under Entry 3(vi) of Notification No. 11/2017-CT(Rate) dated 28 June 2017 (as amended) - inclusion of capital subsidy received/receivable by the applicant in the Transaction Value for the purpose of calculation of GST payable in terms of Section 15 of the CGST Act, 2017 - HELD THAT:- In the agreement submitted by the applicant the major part of the contract is supply of goods. The price of these goods are supplied to the client by the applicant constitutes 98.58% of total contract price. Further we find that the goods that are supplied are used by the applicant to provide services like installation, commissioning and maintenance etc. Without these goods the services cannot be supplied by the applicant and therefore we find that the goods and services are supplied as a combination and in conjunction and in the course of their business where the principal supply is supply of goods. Therefore, the instant supply squarely falls under the definition of “composite supply”. Thus we find that there is a composite supply in the subject case since in the subject case there is no building, construction, fabrication, completion, erection etc of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of the contract - Besides, as per Para 1(c) of Schedule II of the CGST/OGST Act, any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods and not a service.

  Whether the supply of the applicant falls under the supply of ‘works contract service’? - HELD THAT:- The salient features of the agreement indicate that the obligation on the applicant is in relation to the effective installation and functioning of the goods supplied by them and thereafter, they would undertake the activities of ‘operation and maintenance’ of the same. The contract governing their supplies does not relate to building, construction, and fabrication etc. of any immovable properties, as envisaged in the definition of ‘works contract’. Their supplies are in the nature of movable property i.e. supply of goods which involves ancillary services such as installation, commissioning etc. All these services which are supplied to the clients are nothing but ancillary activities with the main activities of supply of goods. The primary activity of the applicant is therefore, ‘supply of goods’ and not ‘supply of services’. Further, the said activity performed by the applicant is not related to the immovable property at any point of the time and hence the said activity does not qualify to be a ‘works contract’.

  Whether GST is liable to be paid under Entry 3(vi) of Notification No. 11/2017-CT (Rate) dated 28 June 2017 (as amended) on the supply and installation activities along with operation and maintenance activities to be undertaken by the Applicant? - HELD THAT:- The provisions of Notification No. 11/2017-CT (Rate) dated 28 June 2017 (as amended) are not applicable to the noticee’s case. The principal supply as mentioned above in this case is a ‘supply of goods’ and therefore the GST will have to be paid on the goods at the appropriate rate after classification under the appropriate heading.

  Whether in facts and circumstances of the case, the capital subsidy received/ receivable by the applicant for the subject transaction be liable to be included in the Transaction Value for the purpose of calculation of GST payable in terms of Section 15 of the CGST Act, 2017? - HELD THAT:- In view of Section 15(2)(e) of the CGST Act, the ‘value of supply’ shall include subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments. On perusal of the agreement/contract, we see that the capital subsidy received/ receivable by the applicant in the instant case is the actual cost incurred by the project SPV (the applicant in the instant case) in the project as approved by the Authority & ULBs. It is not a subsidy which generally means grant/grant-in-aid or a benefit given to an individual, business or institution, usually by the government. It is also not a subsidy which typically given to remove some type of burden and to promote a social good or an economic policy for overall interest of the public. The so called ‘capital subsidy’ cannot be a ‘subsidy’ by any stretch of the imagination, rather the same is a consideration as defined in Section 2(31) of the CGST Act in relation to the supply of goods and therefore, the said ‘capital subsidy’ shall certainly be liable to be included in the Transaction Value for the purpose of calculation of GST.

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• 2021 (1) TMI 1098
  

  Levy of GST - Capital Subsidy (90 per cent of Project Capital Expenditure) received by the Applicant as per SIOM Agreement and Escrow Agreement from Odisha Government /ULBs for the Green Field Public Street Lighting System in the State of Odisha - composite supply or not - balance 10% of the Project Capital Expenditure and O&M Fees received as Annuity Fee over the period of 7 years by the Applicant as per SIOM Agreement considering the Si. No. 3(vi) of the notification No. 11/2017 Central Tax (Rate), dt. 28-06-2017 as amended by Notification No. 31/2017 Central Tax (Rate), dt. 13-10-2017 and corresponding notifications of Odisha State Tax Rate as amended - time for raising GST Invoices for Capital Subsidy and Annuity Fee (consisting of 10% of Project Capital Expenditure and O&M Fee) payable in 7 years - rate of tax on the supplies by the sub-contractor to the Applicant shall be 12 % GST in terms of serial no. 3 (ix) of Notification No.11/2017-Central Tax(Rate) dated 28.6.2017 as amended by Notification No.1/2018-Central Tax (Rate) dated 25.01.2018/ Odisha State Tax (Rate) dated 28.06.2017 as amended.

  Whether in the present case, the supply being undertaken or proposed to be undertaken by the applicant would qualify to be a supply of ‘composite supply ‘or ‘works contract’? - HELD THAT:- On perusal of the SIOM agreement (supply, installation, operation and maintenance) & Equipment Price Schedule for Cluster C, we see that the contract value for cluster C (urban Local Bodies in Balasore, Bhadrak, Jajpur, Baripada) is ₹ 42.35cr and the contract pricing is different for Equipment of Materials and O&M Fee (operation and maintenance fee). Out of ₹ 42.35 cr, the price of Equipments is ₹ 38.23 Cr and the price for O&M Fee is ₹ 4.12Cr only. Thus the contract price has clearly bifurcated the contract into a supply of goods and supply of services. Further clause No. 13 of the agreement deals with TERMS OF PAYMENTS. The said clause of the agreement envisages that separate payment for capital subsidy & O&M Fee. There appears to be a clear bifurcation in the agreement with respect to price of Equipments and O&M Fees - the agreement that the contract is considering a clear demarcation of goods and services to be provided by the applicant but the supplies are naturally bundled and in conjunction with each other.

  It is found that in the agreement submitted by the applicant, the major part of the contract is supply of goods. The price of these goods supplied to the client by the applicant constitutes 90.23% of total contract price. Further we find that the goods that are supplied are used by the applicant to provide services like installation, commissioning and maintenance etc. Without these goods the services cannot be supplied by the applicant and therefore we find that the goods and services are supplied as a combination and in conjunction and in the course of their business where the principal supply is supply of goods. Therefore, the instant supply squarely falls under the definition of “composite supply” where the principal supply is supply of goods’ - here is a composite supply in the subject case since in the subject case there is no building, construction, fabrication, completion, erection etc of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of the contract - Besides, as per para 1(c) of Schedule II of the CGST/OGST Act, any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods and not a service.

  Whether the supply of the applicant falls under the supply of ‘works contract service’? - HELD THAT:- The salient features of the agreement indicate that the obligation on the applicant is in relation to the effective installation and functioning of the goods supplied by them and thereafter, they would undertake the activities of ‘operation and maintenance’ of the same. The contract governing their supplies does not relate to building, construction, and fabrication etc. of any immovable properties, as envisaged in the definition of ‘works contract’. Their supplies are in the nature of movable property i.e. supply of goods which involves ancillary services such as installation, commissioning etc. All these services which are supplied to the clients are nothing but ancillary activities with the main activities of supply of goods. The primary activity of the applicant is therefore, ‘supply of goods’ and not ‘supply of services’. Further, the activity performed by the applicant is not related to the immovable property at any point of the time and hence the said activity does not qualify to be a ‘works contract’.

  Whether Capital Subsidy (90 per cent of Project Capital Expenditure) received by the Applicant as per SIOM Agreement and Escrow Agreement from Odisha Government / ULBs for the Green Field Public Street Lighting System in the State of Odisha is not liable to GST and if liable to GST, then at what rate of GST? - HELD THAT:- In view of Section 15 (2)(e) of the CGST Act, the ‘value of supply’ shall include subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments. On perusal of the agreement/contract, we see that the capital subsidy received/ receivable by the applicant in the instant case is the actual cost incurred by the project SPV (the applicant in the instant case) in the project as approved by the Authority & ULBs. It is not a subsidy which generally means grant/grant-in-aid or a benefit given to an individual, business or institution, usually by the government. It is also not a subsidy which typically given to remove some type of burden and to promote a social good or an economic policy for overall interest of the public. The so called ‘capital subsidy’ cannot be a ‘subsidy’ by any stretch of the imagination, rather the same is a consideration as defined in Section 2(31) of the CGST Act in relation to the supply of goods and therefore, the said ‘capital subsidy’ shall certainly be liable to be included in the Transaction Value for the purpose of calculation of GST. We are of the considered view that the applicant is liable to pay GST on ‘Capital Subsidy’ ( 90% of the total capital expenditure).

  What shall be the GST rate for the balance 10% of the Project Capital Expenditure and O&M Fees received as Annuity Fee over the period of 7 years by the Applicant as per SIOM Agreement considering the Sl. No. 3 (vi) of the notification No. 11/2017 Central Tax (Rate), dt. 28-06-2017 as amended by Notification No. 31/2017 Central Tax (Rate), dt. 13-10-2017 and corresponding notifications of Odisha State Tax Rate as amended’? - HELD THAT:- The supply being undertaken or proposed to be undertaken by the applicant would qualify to be a supply of ‘composite supply’ in terms of definition under Section 2(119) of the Central Goods and Services Tax Act, 2017, where the principal supply is ‘supply of goods’ not ‘supply of service’. Therefore, question of the applicability of concessional rate of tax in terms of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 and as amended does not arise. The GST will have to be paid on the goods at the appropriate rate after classification under the appropriate heading.

  What shall be the time for raising GST Invoices for Capital Subsidy and Annuity Fee (consisting of 10% of Project Capital Expenditure and O&M Fee) payable in 7 years? - HELD THAT:- Since in the subject case there is a ‘composite supply’ where the predominant supply/principal supply is ‘supply of goods’, we are of the opinion that the applicant should raise invoice as per the provisions of Section 31 of the CGST Act, 2017.

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• 2021 (1) TMI 1097
  

  Classification of supply of service - activity of bullet proof body building (in addition to fixing bullet proof windshield glass, bullet proofing of engine and fuel tank on the motor vehicles (2.5 Ton capacity) having Tarpaulin cover in the cargo compartment - whether classified under head 9988 (ic) or 9988 (id) of the GST tariff or not? - Since the applicant has already charged IGST @ 28% by classifying the supply as supply of goods under GST tariff for goods heading 8707, whether the customer should claim the refund from the department or the applicant should lodge the claim the refund, in the event of the above classification being upheld by the AAR? - HELD THAT:- The applicant is engaged in the manufacture of Bullet proof glass, bullet proof Vehicles, Lectern etc. in their factory. Besides, applicant is also undertaking armouring by body building on the chassis of vehicles supplied by the customers mainly the army/ police etc. using bullet proof steel and glass. Vehicles of 2.5 Ton or higher capacity owned by the customer (army/police) are supplied to the applicant and these vehicles have either metal (partial or full) or partially metal and partially Tarpaulin covered cargo compartments.

  The applicant for the purpose of bullet proofing of these vehicles, first of all removes the existing metal/ tarpaulin cover on the rear cargo compartment making the cargo compartment completely naked so to say except the flooring part. At this stage the vehicle resembles a chassis virtually and for all practical purposes so that the body can be built on the cargo portion as per the specific requirement of the customer with bullet proof steel, glass, and other fixtures to stack the weapons, seating for the personnel to be carried, providing firing ports, turrets etc. On the driver cabin, bullet proof windshield with bullet proof steel frame is fixed, driver cabin doors are fixed with bullet proof glass and bullet proof steel sheets on existing front body. In addition, bullet proofing of the engine compartment and fuel tank are also to be done.

  In view of Circular bearing No. 52/26/2018-GST, dated 09.08.2018, it is concluded and clear that the activity of job work consisting of fabrication including of bullet proof work done on chassis provided by the Principal (ownership of which always remains with Principal) is a supply of Service attracting GST @ 18%.

  Refund claim - HELD THAT:- Further it is observed that as per Section 97 (2) of CGST Act, 2017, Advance Ruling can be obtained only regarding taxability, classification, rate of tax, exemption notification, determination of time and value of supply, ITC and Registration etc. under GST for supply of goods and Services. Since, the applicant has sought ruling on issue of refund of tax which is outside the purview/scope of this Authority as defined under Section 97(2) of the act ibid.

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• 2021 (1) TMI 1096
  

  Constitutional validity of Section 16(4) of the GST Act, 2017 - Vires of Articles 14, 19(1)(g) and 300A respectively of the Constitution - HELD THAT:- Let Notice be issued to the respondents, returnable on 25th March 2021. The respondents shall be served directly through E­mail. In the meantime, one set of the entire paper book be furnished to Mr. Devang Vyas, the learned Additional Solicitor General of India, who would be appearing for the respondents.

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• 2021 (1) TMI 1095
  

  Valuation - Independent transaction of purchase of land and construction contract for construction of bungalow on such land - Validity of Entry No.3(if) of the Notification No.11/217 -Central Tax (Rate) dated 28th June, 217 read with Para-2 of the said notification - HELD THAT:- The writ applicant has been able to make out a strong prima facie case to have an interim order in his favour in terms of para-27(F) of the writ application. We, accordingly, grant such relief. We permit the writ applicant to deposit the amount of tax as raised under the invoice without prejudice to his rights and contentions as raised in this writ application.

  Mr. Sheth, the advocate on record, shall furnish one set of the entire paper-book to Mr. Devang Vyas, the learned Addl. Solicitor General of India at the earliest so that he can obtain necessary instructions in the matter by the next date of hearing.

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• 2021 (1) TMI 1094
  

  Profiteering - benefit of input tax credit to its customers/homebuyers not passed on - Section 171 of the CGST Act and Chapter XV of the CGST Rules (more particularly, Rules 126, 127 & 133 of the CGST Rules) - HELD THAT:- Issue notice. Mr. Farman Ali, learned counsel for the respondent No.1 and Mr. Ravi Prakash, learned counsel for respondents No. 2 and 3 accept notice. Counter affidavits be filed within a period of two weeks. Rejoinder, if any, be filed before the next date of hearing.

  List along with other batch petitions on 15th February, 2021.

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• 2021 (1) TMI 1093
  

  Vires of Section 171 of the CGST Act, 2017 and other provisions under Chapter XV of the Act - composition of the Respondent No. 2/National Anti-Profiteering Authority under Rule 122 of the CGST Rules, 2017 - HELD THAT:- Although in the order passed in NESTLE INDIA LTD. & ANR. VERSUS UNION OF INDIA & ORS. [2020 (2) TMI 671 - DELHI HIGH COURT] the court has apparently not interdicted the suo moto investigation, but at the same time we notice that this Court has given protection to nearly all the Petitioners, faced with similar circumstances, i.e., wherever the authority has directed investigation in relation to products/services which were beyond the scope of original investigation. Therefore, we see no reason to deny the same relief to the Petitioner herein.

  Petitioner is therefore entitled to the interim protection, pending disposal of the present petition. Accordingly, it is directed that the directions given in the impugned order to Respondent No. 3 to investigate 14 projects of the Petitioner in the State of Haryana, shall remain stayed. It is however clarified that the investigation with respect to the ‘Discovery Project’ at Faridabad shall continue in terms of the directions given in the impugned order.

  Issue Notice.

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• 2021 (1) TMI 1092
  

  Vires of Sections 69 and 132 of the Central Goods and Services Tax Act, 2017 and U.P. Goods and Services Tax Act, 2017, Section 135 of the Central Goods and Services Tax Act, 2017 and U.P. Goods and Services Tax Act, 2017 and Sections 16 (2) (c) of the Central Goods and Services Tax Act, 2017 and U.P. Goods and Services Ta Act, 2017 - HELD THAT:- Since, vires of provision of the Central Goods and Services Tax Act, 2017 and U.P. Goods and Services Tax Act, 2017 have been challenged, let issue notices be issued to Attorney General of India and the Advocate General of State of U.P. Sri Manish Kumar Niranjan, learned counsel for respondent no.1 and learned Standing Counsel for respondent no.2 pray for and are granted four weeks' time to file their respective counter affidavits. Learned counsel for the petitioner shall have one week thereafter to file rejoinder affidavit.

  Let this matter be listed along with Writ Tax No.688 of 2020, showing name of Sri Manish Kumar Niranjan, Advocate as counsel for the respondent no.1.

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• 2021 (1) TMI 1091
  

  Seizure of Goods - allegation of reuse of E-way bills - Since the e-way bills were not cancelled and the transportation of the goods commenced four days thereafter, it has been inferred that the said e-way bills had been reused - HELD THAT:- Rule 138(9) of the Rules does not prescribe that the dealer must necessarily cancel the e-way bill if no transportation of the goods is made within 24 hours of its generation. It certainly does not provide any consequence that may follow if such cancellation does not take place. On the contrary, the Rule permits a dealer to cancel the e-way bill only if the transportation does not take place and the dealer choses to cancel such e-way bill within 24 hours of its generation.

  Even if the dealer does not cancel the e-way bill within 24 hours of its generation, it would remain a matter of inquiry to determine on evidence whether an actual transaction had taken place or not. That would be subject to evidence received by the authority. As such it was open to the seizing authority to make all fact inquiries and ascertain on that basis whether the goods had or had not been transported pursuant to the e-way bills generated on 24.11.2019. Since the petitioner-assessee had pleaded a negative fact, the initial onus was on the assessing authority to lead positive evidence to establish that the goods had been transported on an earlier occasion. Neither any inquiry appears to have been made at that stage from the purchasing dealer or any toll plaza or other source, nor the petitioner was confronted with any adverse material as may have shifted the onus on the assessee to establish non-transportation of goods on an earlier occasion - the presumption could not be drawn on the basis of the existence of the e-way bills though there did not exist evidence of actual transaction performed and though there is no statutory presumption available. Also, there is no finding of the assessing authority to that effect only. Mere assertion made at the end of the seizure order that it was clearly established that the assessee had made double use of the e-way bills is merely a conclusion drawn bereft of material on record. It is the reason based on facts and evidence found by the assessing authority that has to be examined to test the correctness of the order and not the conclusions, recorded without any material on record.

  Though the petitioner-assessee has also disputed the correctness of the additional evidence, that issue is not required to be gone into in the present case - the order passed by the appeal authority is erroneous, being contrary to the provisions of law.

  The appeal authority had no jurisdiction to examine fresh evidence at the behest of the revenue or record fresh reasons to support original order. The proper authority, had not recorded any reason to establish evasion of tax or attempt to evade tax or even reuse of the documents by the petitioner. Though he raised that issue in the seizure proceedings, he did not record any finding that effect in the final order dated 3.12.2019 passed under Section 129(3) of the Act. He simply rejected the explanation furnished by the assessee without recording any reason and consequently imposed tax and penalty.

  No useful purpose would be served to remand the proceeding now as that would amount to giving the revenue a second inning to built a fresh case that too after being aware of the defense set out by the assessee in the first leg of the proceedings. The order dated 3.12.2019 passed by the proper authority under Section 129(3) of the Act is found to be perverse and is set aside - Petition allowed.

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• 2021 (1) TMI 1090
  

  Condone delay in fling the application for exemption u/s 10(23C)(vi) - extension of the limitation period - HELD THAT:- Neither of the two i.e. the order dated 27.09.2019 and the Circular dated 03.11.2020 deal with an application for exemption under section 10(23C)(vi) of the act in Form No.56D which has a definite time line i.e., upto 30th September of the relevant assessment year, in the instant case 30th September 2019. We do not find any provision for extending the time limit beyond 30.09.2019 though such a power is available with the CBDT.

  There is no provision for extension of the limitation period or for condonation of delay in fling the application for grant of exemption under section 10(23C)(vi) of the act by the CIT (Exemption) To that extent respondent No.1 was justified in rejecting the application for the assessment year 2019-20. As per the version of the respondents themselves the application for exemption of the petitioner was not confined to assessment year 2019-20 only. An application for grant of exemption from the assessment year 2019-20 onwards. While respondent No.1 was correct in rejecting the application for the assessment year 2019-20 as being time-barred, it certainly fell in error in not considering the said application for subsequent assessment years i.e. for assessment year 2020-2021 and onwards. Because even if the application was fled on 31.10.2019 which was belated for the assessment year 2019-20, it was before the prescribed date for the subsequent assessment year i.e. assessment year 2020-2021 and thereafter as it had been fled much before the cut of date of 30.09.2020.

  We feel that even at this stage petitioner may approach CBDT under section 119(2)(b) seeking a special order to respondent No.1 to condone the delay in fling the application for exemption under section 10(23C)(vi) of the Act for the assessment year 2019-20, there being admitted delay of 31 days in fling the application for the said assessment year, and thereafter to deal with the said application/ claim on merit in accordance with law.

  Since we have taken the above view, it may not be necessary to deal with the contention relating to alternative remedy.

  Having regard to the above and upon thorough consideration of the matter, we deem it appropriate to issue the following directions :-

  I) Petitioner shall file an application before the CBDT under section 119(2)(b) to authorize respondent No.1 to condone the delay in fling its application dated 31.10.2019 for exemption under section 10(23C)(vi) of the act, for the assessment year 2019-20 and to deal with the same on merit in accordance with law ;

  II) If such application is fled by the petitioner within a period of three weeks from today, CBDT shall pass an appropriate order in accordance with law within a period of four weeks thereafter with due intimation to the petitioner;

  III) Respondent No.1 shall consider the application of the petitioner dated 31.10.2019 for grant of exemption under section 10(23C)(vi) of the act for the assessment year 2020-21 onwards in accordance with law within a period of eight weeks from the date of receipt of a copy of this order;

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• 2021 (1) TMI 1089
  

  RTI Application seeking information against Private Parties - Allegation of tax evasion - Public interest - Single Judge held that Petitioner is not entitled to get the information in the form of his Income Tax Returns, Status of Agriculturists, disclosure as Business Income or not etc. and from the concerned Authorities of the Income Tax Department under provisions of the RTI Act with respect to private Respondent with whom the present Petitioner has some litigation with regard to the land in question, which the Petitioner claims to have purchased and was again sold by the same Seller in favour of private Respondents also who claimed to be the Agriculturists under a Will - HELD THAT:- We are satisfied that the order of the learned Single Judge does not require any interference in the present intra­Court appeal and the same being without merit deserves to be dismissed.

  The Applicant - Petitioner in the present case firstly sought to emphasise that Section 6(2) of the RTI Act does not require any reasons to be given in the Application requesting for the information except those that may be available with him and necessary for contacting him. This, in the submission of the learned counsel for the Applicant - Petitioner, gives a larger latitude and platform to the Applicant under the said Act. The procedure for disposal of such request and application provided in Section 7 of the RTI Act, while the other provisions of remedial nature for further appeal, etc. are contained in Chapter 5 containing Sections 18 to 20 of the RTI Act.

  The overriding factor which enables such information to be disclosed notwithstanding the exemption under Section 8 of the RTI Act appears to be larger public interest in such disclosure of information.

  The tenor of the application filed by the Applicant shows it is in the nature of a complaint against the private Respondents to the Income Tax Department, rather than any bona fide public interest sought to be served by the disclosure of such information about the status of the private Respondents as agriculturists or not, whether their right to get such status by way of a Will executed by a Testator is sustainable in law or not, etc. Such personal or private information about the Assessees under the Income Tax Act are only meant to be dealt with, investigated, inquired or contested by the Assessees concerned before the Income Tax Authorities and they are not the 'information' in public domain to be made available to any third party

  The only interest of the Petitioner who has been fighting against these private Respondents at all possible forums including the RTI Act and criminal complaints appears to be the only private interest and the name of a public interest is just a ruse or excuse given to the public authorities calling upon them to disclose such 'information' to the Petitioner - Applicant. The provisions of the RTI Act are not meant to allow the parties to collect evidence from such Departments or Public Authorities to sub­serve their private interest

  The sanctity of the Income Tax Assessment, filing of Returns, investigation and inquiry under the Act would be thrown open to third parties, if such 'information' was to be disclosed to third parties casually or carelessly. On the other hand, the Act provides for keeping such information guarded in confidence with the Authorities. Therefore, the bar under Section 138 of the RTI Act as well as the exemption against such disclosure contained in Section 8 of the RTI Act, more particularly under Section 8(1)(j) of the RTI Act, completely seals the fate of the Applicant - Petitioner in the present case.

  The learned Single Judge, in our opinion, was absolutely correct and justified in dismissing the writ petition at the threshold.

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