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Showing 201 to 220 of 1125 Records
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2020 (11) TMI 925
Business Auxiliary Services - promotion or marketing of goods produced or provided by or belonging to the client - transfer of right to use - demand of interest and penalties - extended period of limitation - HELD THAT:- The issue has been dealt by this Tribunal in appellant’s own case for the earlier period, wherein this Tribunal observed that The imposition of restrictions or conditions in respect of the usage and consumption of the concentrate, by the seller cannot alter that position. Hence there are no merit in the submission of the Authorized Representative that this transaction was not a truncation of sale but only “transfer to use”.
As issue has already been settled in favour of the appellant, therefore, no demand of service tax is sustainable against the appellant - appeal allowed - decided in favor of appellant.
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2020 (11) TMI 924
Cancellation of Registration Certificate - legal heirs - deemed dealer on the death of dealer - TNVAT Act - CST Act - The petitioner is the wife of deceased. The other legal heirs of the deceased have given no objection for amendment of the registration certificate, in favour of the petitioner and her son - The petitioner has also made a request for amendment of the registration certificate in favour of herself and her son to the respondent. Despite the same, the respondent has passed the impugned orders cancelling the registration certificate on the ground that the petitioner will have to apply for fresh registration under the Tamil Nadu Value Added Tax Act, 2006
Held that:- When it is an admitted fact that the petitioner is a legal heir of the deceased dealer, this Court is of the considered view that the legal heirs are deemed to be dealers on the death of deceased, as per the provisions of Section 26 of the Tamil Nadu Value Added Tax Act, 2006.
The amendment shall take effect retrospectively, from the date of death of deseased i.e., 09.06.2013. This exercise shall be done by the respondent, within a period of eight weeks from the date of receipt of a copy of this order.
Petition disposed off.
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2020 (11) TMI 923
Principles of Natural Justice - Reversal of Input Tax Credit - deemed assessment was made in respect of the Petitioner for the year 2010-2011 - TNVAT Act - HELD THAT:- The receipt of the replies dated 07.09.2013 and 17.09.2013 sent by the Petitioner in response to the notice dated 30.08.2013 issued by the Respondent has not been rebutted. As such, the submissions made by the Petitioner deserve acceptance and the impugned order entailing adverse civil consequences to the Petitioner in violation of the principles of natural justice and the statutory requirements cannot be sustained, and it is quashed and the matter has to be decided afresh by the Respondent.
It is incumbent upon the Respondent, after affording full opportunity of personal hearing to the Petitioner, to deal with each of the contentions raised by the Petitioner and pass reasoned orders on merits and in accordance with law following the prescribed procedure in consonance with the principles of natural justice and communicate the decision taken to the Petitioner under written acknowledgment.
Petition allowed by way of remand.
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2020 (11) TMI 922
Deduction u/s 80IA(4)(iii) - conditions laid down by the Ministry of Commerce for the same have not been fulfilled by the assessee as noted by AO after physical verification of the premises - tribunal allowed deduction - Whether “unit” means separate floor - whether the appellate authorities were correct in holding that one of the lessee occupying more than 50% of the allocable area would not amount to occupation of 50% of the allocable area by an unit, admittedly when more than 50% of the allocable area was occupied by one lessee (unit) and the same was contrary to the conditions contemplated under the Industrial Park Scheme 2002 for claiming deduction under Section 80IA(4)(iii) of the Act under which the assessee has undertaken not to allow single unit to occupy more than 50% of the allocable industrial area and recorded perverse finding?
HELD THAT:- No dispute with the legal proposition that in order to claim the benefit of deduction under Section 80IA(4)(iii) of the Act, the conditions mentioned in the Scheme have to be complied with.
In the present case the order of the Tribunal is cryptic and no finding has been recorded by the Tribunal whether or not the assessee has fulfilled the conditions laid down in the scheme. Tribunal has recorded a finding that an identical issue has been dealt by it in the case of PIRAMAL PROJECTS P. LTD. [2011 (2) TMI 92 - ITAT, BANGALORE] and the case of the assessee is also similar. However, no reasons have been assigned by the Tribunal. The Tribunal is the final fact finding authority and has to record the reasons for its conclusions.
Since the Tribunal has failed to assign any reasons for recording the finding with regard to the fact whether or not the assessee has fulfilled with the terms and conditions laid down in the scheme, we are left with no option but to quash the order passed by the Tribunal. Not necessary to answer the substantial questions of law. The Tribunal shall decide the matter afresh.
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2020 (11) TMI 921
Detention of goods alongwith vehicle - transportation in one segment not being covered by a valid e-way bill - HELD THAT:- If the petitioner furnishes a bank guarantee for the amount demanded in Ext.P9 notice, then the respondents shall permit a clearance, and thereafter proceed to pass the final adjudication order under Section 129(3) of the GST Act.
Petition disposed off.
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2020 (11) TMI 920
Detention of goods along with vehicle - reason for detention is mis-match in the value of the goods transported, as shown in the e-way bill and job work invoice that accompanied the transportation of the goods - HELD THAT:- Inasmuch as the detention of the goods was during the return journey from the job-workers premises to the petitioner's premises, the documents that ought to have accompanied the transportation were the job work invoice, the delivery challan and the e-way bill. In the instant case, it is not in dispute that the consignment was covered by the job-work invoice, an e-way bill as also the delivery challan that originally accompanied the goods on its transportation from Ernakulam to the job worker's premises in Salem. As per the statutory provisions, when goods are sent to other premises for job work, it is the same delivery challan that has to accompany the transportation for the onward and return journey as well. At any rate the objection of the respondents is only with regard to the value shown in the e-way bill that accompanied the goods on its return journey.
In as much as there could be no doubt with regard to the identity of the goods that were being transported, and the difference in the value shown in the e-way bill (from that shown in the original delivery chalan) was only on account of the requirement of maintaining uniformity in the value shown in the tax invoice raised by the job worker and the e-way bill generated by him, the detention in this case was wholly unjustified.
The respondents are directed to release the goods and the vehicle to the petitioner on his producing a copy of this judgment before the respondent - petition allowed.
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2020 (11) TMI 919
Direction to respondents to issue necessary instructions, directions and orders to the jurisdictional officers to give effect to the rectified GSTR-3B returns filed manually by the petitioner for the months of July to September 2017 - HELD THAT:- Issue notice.
List the matter on 13th January, 2021.
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2020 (11) TMI 918
Reimbursement of differential tax amount arising out of change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 01.07.2017 - grievance of the petitioner is that in view of the introduction of the GST, petitioner is required to pay tax which was not envisaged while entering into the agreement - HELD THAT:- The Government has now come out with a revised guidelines in this respect in supersession of the guidelines issued vide Finance Department letter dated 07.12.2017. Additional Counter Affidavit of O.P.-authority has been filed in similar cases annexing the revised guidelines relating to works contract under GST issued by the Government of Odisha, Finance Department vide Office memorandum No. FIN-CTI-TAX- 0045-2017/38535/F Dated 10.12.2018.
Petitioner shall make a comprehensive representation before the appropriate authority within four weeks from today ventilating the grievance. If such a representation is filed, the authority will consider and dispose of the same, in the light of the aforesaid revised guidelines dated 10.12.2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably by 21.01.2021 - If the petitioner(s) will be aggrieved by the decision of the authority, it will be open for the petitioner(s) to challenge the same.
No coercive action shall be taken against the petitioner till 21.01.2021 - Petition disposed off.
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2020 (11) TMI 917
Detention of goods alongwith vehicle - Allegation of attempt to sale goods in between - detention on the ground that prima facie the 'documents tendered were found to be defective' - mismatch between the goods in movement and the documents tendered - remedy of appeal under Section 107 of the TGST Act - HELD THAT:- Without there being any order/decision passed by the 1st respondent and communicated to the petitioner, the petitioner cannot be expected to file appeal invoking Section 107 of the TGST Act, 2017 - the plea of the 1st respondent that the petitioner should avail the remedy of appeal under Sec. 107 of the TGST Act is rejected.
Any defect, if any, in the documentation accompanying the goods for purpose of levy of tax and penalty has to be looked at also in terms of the Circular dt. 13.4.2018 and Circular dt. 14.09.2018 issued by the Central Board of Indirect Taxes and Customs, New Delhi - In the instant case, one of the grounds for detention in Form GST MOV-06 is that 'the documents which were tendered are found to be defective'.
From the very contents of the Form GST MOV-06, wherein it is alleged that the 'documents tendered are found to be defective', it is clear that the documents available with the driver were actually tendered to the 1st respondent. They clearly showed that the goods were to be delivered at Secunderabad. Therefore as mentioned in the Circular dt. 13.4.2018, the vehicle should be allowed to proceed further and the movement of goods cannot be stopped prima-facie - The explanation offered by the petitioner in reply dt. 23-01-2020 to the notice in Form GST MOV-06 dt. 22-01-2020 that generally material from Salem, Tamil Nadu purchased by various dealers at Hyderabad which is to be delivered at Hyderabad at various destinations do come in groups and assemble at IDA Jeedimetla; that the vehicles through Outer Ring Road reach Jeedimetla as there is no entry for heavy vehicle into the city through main roads; and the person in charge from SAIL (TN) reaches IDA Jeedimetla and directs the vehicle drivers to the respective delivery points, cannot be said to be unbelievable. The fact that the said explanations have not even considered by the 1st respondent is also glaring.
Whether 'checking of the vehicle at IDA Jeetimetla, Hyderabad' is ground for detention of goods under Section 129 of the Act or Rules made under the Act or as per the Circulars issued by Central Board of Indirect Taxes and Customs, GST Policy Wing? - HELD THAT:- It is not the case of the 1st respondent that mere checking of a vehicle or it being found at a different place without anything more, is by itself a 'taxable event' under the CGST Act/Telangana GST Act, 2017 - under these Acts, it is not permissible to detain a vehicle carrying goods or levy penalty on the sole ground that the vehicle is found at a wrong destination without anything more.
Admittedly, the vehicle was found at weigh bridge, IDA Jeedimetla and it is not the case of the 1st respondent that at the time of it's detention or check at that location, there was sale of goods being done without paying applicable tax. In fact there is no material placed on record by 1st respondent to show that any attempt was being made by petitioner to sell the goods in local market at IDA Jeedimetla on 22.1.2020 evading CGST and SGST - the reasons given for detaining the goods and the vehicle they were being carried in do not indicate any violation of the provisions of the Act by petitioner warranting levy of tax and penalty on the petitioner under the Act.
The detention of the vehicle at IDA Jeedimetla in spite of the vehicle carrying tax invoice and the e-way bill is in violation of the provisions of the Act, in particular Rule 68 of the Rules framed under the Act and the Circulars dt. 13.4.2018 and 14.9.2018 of the Central Board of Indirect Taxes and Customs which are binding on the 1st respondent and that the 1st respondent was not justified in collecting tax and penalty from the petitioner - the 1st respondent cannot rely on the fact that after release of goods on 25-01-2020 at 6.15 p.m., the petitioner generated another e-way bill dt. 26-01-2020 on the same vehicle for the same value of the goods and marked it to be delivered to M/s. Nanabhai Steels in IDA Jeedimetla, Telangana.
The action of the 1st respondent in detaining the vehicle carrying the goods purchased by petitioner on 22-01-2020 and forcing the petitioner to pay on 25-1-2020 a sum of ₹ 9, 40, 618/-towards tax and penalty is declared as illegal, arbitrary and violative of Article 14 and 265 of the Constitution of India apart from Article 301 of the Constitution of India and also the provisions of the Act and Rules made thereunder - Petition allowed.
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2020 (11) TMI 916
Confiscation of goods - solver ornaments - unaccounted stocks - Section 67 of the Central Goods and Service Act, 2017 - Whether the 1st respondent is authorised to pass the impugned proceedings dated 04.02.2020? - HELD THAT:- The argument of the petitioners that the 1st respondent is not legally authorised to issue the impugned proceedings is not correct in view of the Gazette notification No.37 of Revenue Department (CT-II) dated 30.06.2017 filed by the learned Government Pleader. Section 68(3) of the CGST Act confers power on “the Proper Officer” to intercept any conveyance on the way and require the person in-charge of the said conveyance to produce the documents prescribed under sub-section (1) of Section 68 and the devices for verification in which case the said person shall be liable to produce the same and also allow the inspection of goods. While so, in the Gazette notification No.37, the Chief Commissioner of State Tax notified certain officers as “Proper Officer” occurring in different sections of the SGST Act. In Serial No.23, certain officers viz., (i) Goods and Service Tax Officer (ii) Deputy Assistant Commissioner (iii) Assistant Commissioner (iv) Deputy Commissioner and (v) Joint Commissioner having jurisdiction and/or (i) Deputy Assistant Commissioner (ii) Assistant Commissioner and (iii) Deputy Commissioner as authorised by the additional Commissioner/Commissioner in case of State Enforcement Wing are authorised as “Proper Officers” to act under Section 68(3).
While so, by an amendment vide Ref.No.CCW/GST/74/2015 dated 28.03.2018 the Commissioner of Commercial Taxes authorized the officer not below the cadre of ‘Deputy Assistant Commissioner of State Tax’ as ‘Proper Officer’ for the purpose of Section 68(3). In the instant case, the confiscation proceedings are issued by the Deputy Assistant Commissioner (ST)-I, Hindupur, the first respondent herein, who is authorised as per the above Gazette notification.
Whether the 1st respondent is legally justified in proceeding simultaneously under Section 129 & 130 of the CGST Act against the petitioners? - HELD THAT:- We have gone through the case of SYNERGY FERTICHEM PVT. LTD VERSUS STATE OF GUJARAT [2019 (12) TMI 1213 - GUJARAT HIGH COURT] and it was held therein that both the sections, though commenced with a non obstante clause, yet are mutually exclusive and independent. It implies that the confiscation proceedings can be taken up by the authorities after exhausting the measures under Section 129(6) and also simultaneously along with Section 129 and there is no bar. However, since the phrase “with an intent to evade the payment of tax” is employed in Section 130 of the Act, before invoking the confiscation proceedings under Section 130 at the threshold, the concerned authority must form a firm opinion that the assessee has deliberately avoided the payment of tax. Such opinion must be an express one and recorded with the reasons. It must be noted that except arguing that the authorities cannot invoke both the sections simultaneously, the petitioners have not produced any case law which militates against the views expressed in the above judgment.
Whether the order dated 04.02.2020 of the 1st respondent is legally sustainable? - HELD THAT:- While interpreting the Tax Statutes and applying to the facts and holding that the provisions thereof are violated, the authorities must give cogent reasons. Unfortunately, in the instant case, the reasons, are a casualty - the impugned order does not stand to legal scrutiny and liable to be set aside.
While the confiscation order dated 04.02.2020 passed by the 1st respondent is set aside, the 1st respondent is directed to conduct an enquiry afresh and afford an opportunity of personal hearing to the petitioners with reference to their explanation and pass an appropriate order by giving cogent reasons in accordance with law - Petition allowed.
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2020 (11) TMI 915
Profiteering - base prices of 1383 goods had been increased by the Respondents after the rate of tax was reduced - allegation that the Respondents had not passed on the benefit of reduction in the rate of GST - contravention of provisions of Section 171(1) of the CGST Act, 2017 - penalty - HELD THAT:- It would be appropriate to state that as has been discussed in paras supra (i) the pre and post reduction base prices have been correctly computed excluding the discounts as per the provisions of Section 15(1) and 15(3)(a) and hence there is no mistake in calculating the same. Therefore, the comparison of prices made by the Respondents as per the Annexure attached with their submissions dated 19.06.2019 is not correct (ii) It is also apparent from the plain reading of Section 171(1) that the benefit of tax reduction has to be passed on by commensurate reduction in price and hence the same cannot be passed by way of discounts. Moreover, the Respondents cannot treat the already existing promotion schemes as passing on of the benefit as such schemes were floated by them to increase their sales in normal course of their business. Hence, the mapping of prices which could have been charged by the Respondents for the SKUs on which promotion schemes were extended and revised profiteering was computed which included the higher benefit passed on, as per the annexure attached with their above submissions is wrong and incorrect and accordingly, an amount of ₹ 61.50 Crore cannot be reduced from the profiteered amount on the above two grounds as has been claimed by the Respondents. (iii) As explained in para supra the Respondents cannot pass more benefit on certain SKUs as per their own convenience and refuse to pass on the same on other SKUs. As per theprovisions of Section 171(1) and Article 14 they are required to pass on the benefit on each SKU to each buyer and therefore, computation of the benefit passed on by way of higher price reduction on certain SKUs as per the annexure attached with the submissions dated 19.06.2019 is incorrect and hence an amount of ₹ 190.36 Crore cannot be reduced from the profiteered amount. (iv) No profiteering has been computed on the SKUs where the Respondents have charged less prices as compared to the average prices. In addition any benefit passed on by claiming higher price reduction on certain SKUs where the actual price charged was less than the average price cannot be set off against the profiteered amount as has been computed by the Respondents vide their above submissions as the benefit has to be passed on each SKU (v) As discussed in para supra the Respondents have not supplied the details to prove that they have passed on the benefit by way of supplying extra quantity, hence, mapping of the normal prices which could have been charged by the Respondents for the products with extra quantity or the higher grammage at the same or lower prices as per the annexure attached with their above submissions is wrong and incorrect and hence the amount so computed cannot be allowed to be deducted from the profiteered amount. As mentioned above no benefit can be passed by introducing new promotion schemes, therefore, the mapping of the benefit as per the annexure attached with the submissions dated 19.06.2019 is wrong and hence, no reduction can be permitted in the profiteered amount. (vi) The Respondents could not have reduced their prices post supply by extending discounts as the benefit was required to be passed on by way of commensurate reduction in the prices upfront. Therefore, computation of benefit on account of post supply rate reductions as per the annexure attached with their submissions dated 19.06.2019 is wrong and incorrect and hence an amount of ₹ 69.55 Crore cannot be reduced from the profiteered amount. Based on the above reasons an amount of ₹ 139.99 Crore in respect of M/s. PGHP Ltd. cannot be reduced.
The Respondents have also claimed that they have passed on an amount of ₹ 7.12 Crore in respect of M/s. GIL on account of correction in the base prices, extension of pre rate reduction promotion schemes and introduction of new promotion schemes as has been computed vide their submissions dated 19.06.2019. However, the claim of the Respondents is wrong. Therefore, the above amount of ₹ 7.12. Crore cannot be deducted from the profiteered amount. Moreover, the Respondents are required to pass on the benefit at the level of each SKU and therefore, any claim of passing on the benefit at the entity level is wrong and against the provisions of Section 171(1) and Article 14. Therefore, all the mappings and computations made by the Respondents through their submissions dated 19.06.2019 are frivolous, incorrect, illogical and against the provisions of Section 171(1) and Article 14 and hence they are liable to be rejected.
The profiteered amount in respect of all the 3 Respondents is further determined as (i) ₹ 181, 51, 46, 262/- in respect of the Respondent No. 1 i.e. M/s. Proctor & Gamble Home Products (PGHP) Pvt. Ltd. (ii) ₹ 2, 00, 30, 807/- in respect of the Respondent No. 2 i.e. M/s. Proctor & Gamble Hygiene & Health Care (PGHH) Ltd. and (iii) ₹ 57, 99, 37, 416/- in respect of the Respondent No. 3 i.e. M/S Gillette India Ltd. (GIL), on the sale transactions made by the above Respondents w.e.f. 14.11.2017 to 30.09.2018, which has been individually and collectively computed in respect of all the 33 States and Union Territories as per Annexure-6 attached to the Report of the DGAP dated 31.01.2020. The total profiteered amount of ₹ 2, 41, 51, 14, 485/- is computed - Also, the Respondents are directed to reduce prices of all the SKUs commensurately in respect of which profiteering has been computed as per Annexure-6 forthwith in terms of Rule 133 (3) (a) of the above Rules read with Section 171(1) of the Act.
The Respondents are also directed to deposit 50% of the profited amount of ₹ 2, 41, 51, 14, 485/- (₹ 181, 51, 46, 262/- in respect of Respondent No. 1 + ₹ 2, 00, 30, 807/- in respect of Respondent No. 2 + ₹ 57, 99, 37, 416/- in respect of Respondent No. 3) in the Central Consumer Welfare Fund and the balance 50% in the Consumer Welfare Funds of the 33 States/UTs mentioned supra as per the provisions of Rule 133 (3) (c) of the above Rules read with Section 171(1) as per Annexure-6, since the recipients who are millions of ordinary customers are not identifiable. The above amounts shall be deposited along with 18% interest payable from the dates from which the above amount was realized by the Respondents from their recipients till the date of deposit in the respective Consumer Welfare Funds.
Penalty - HELD THAT:- The Respondents have denied benefit of rate reduction to the buyers of their SKUs in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and they have thus resorted to profiteering. Hence, they have committed an offence for violation of the provisions of Section 171 (1) during the period from 15.11.2017 to 30.09.2018 and therefore, they are apparently liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. However, perusal of the provisions of Section 171 (3A) under which penalty has been prescribed for the above violation shows that it has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, 2019 and it was not in operation during the period from 15.11.2017 to 30.09.2018 when the Respondents had committed the above violation and hence, the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondents retrospectively. Accordingly, notice for imposition of penalty is not required to be issued to the Respondents.
As per the provisions of Rule 133 (1) of the CGST Rules, 2017 this order was required to be passed within a period of 6 months from the date of receipt of the Report from the DGAP under Rule 129 (6) of the above Rules. Since, the present Report has been received by this Authority on 31.01.2020, the order was to be passed on or before 30.07.2020. However, due to prevalent pandemic of COVID-19 in the Country this order could not be passed on or before the above date due to force majeure. Accordingly, this order is being passed today in terms of the Notification No. 65/2020-Central Tax dated 01.09.2020 issued by the Government of India, Ministry of Finance (Department of Revenue Central Board of Indirect Taxes & Customs under Section 168 A of the Central Goods & Services Tax Act, 2017.
Application disposed off.
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2020 (11) TMI 914
Refund of excess tax paid - principles of natural justice - appellant has mainly contested in their appeal memo that the adjudicating authority has passed the impugned orders in original without granting sufficient opportunity of personal hearing in the matter - HELD THAT:- The adjudicating authority while rejecting the refund claims of the appellant neither considered their first request for seeking of some other date as per adjudicating authority's convenience nor discussed any relevant provisions of law/rules for rejection of their refund claims. It is also found that non-passing of speaking order indeed amount to denial of natural justice. Before passing of orders atleast their request for seeking of some other date for personal hearing in the matter should have been considered and at least speaking order should have been passed by giving proper opportunity of personal hearing in the matter to the appellant and detailing factors leading to rejection of refund claims. Such orders are not sustainable in the eyes of law and accordingly set aside.
The appellant is directed to submit all relevant documents to the adjudicating authority and the claims will be processed by the adjudicating authority as per the provisions and procedure as prescribed under CGST Act, 2017 and CGST Rules.
Appeal disposed off.
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2020 (11) TMI 913
Revision u/s 263 - out of provision made for depreciation on investment by the assessee AO has added only investments in India and excluded a sum pertaining to investments outside India - Also audit report in Form 3D sated that expenditure of capital nature were charged to profit and loss account and Assessing Officer did not take into account the aforesaid aspect of the matter - HELD THAT:- Tribunal by placing reliance on the order passed by it in the case of assessee for Assessment Year 1996-97 and 1997-98 inter alia held that the revenue as well as assessee are bound by the decision rendered by the tribunal and therefore, in the light of decision rendered by tribunal, CIT committed an error in holding that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the revenue. Accordingly, the order passed by the Commissioner of Income Tax was set aside.
The Supreme Court in G.M.Mittal Stainless Steel (P.) Ltd. [2002 (12) TMI 13 - SUPREME COURT] has held that power u/s 263 has to be exercised on the basis of the material, which was available at the time when CIT passed an order, the order passed by the tribunal was operative and therefore, the AO's order could not have been termed as erroneous. Merely because the order of the AO was passed relying which was subsequently reversed by this court cannot justify the order passed by the Commissioner of Income Tax under Section 263 of the Act. - Decided against revenue.
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2020 (11) TMI 912
Cash sales unaccounted - Peak negative cash balance -Interest income addition as it cannot adjusted and set off against other cost/business expenditure after setting up of business - turnover reflected as per cash book does not reflect the sales as per bill book and the assessee has not been able to reconcile the same with evidences during the course of assessment proceedings and appellate proceedings - Tribunal deleted the additions - HELD THAT:- From a perusal of paragraph No.10 of the Order passed by the Tribunal, it is evident that the Tribunal has not assigned any reasons worth naming for confirming the finding recorded by the Commissioner of Income-Tax (Appeals). From a perusal of paragraph No.6 of the Order passed by the Tribunal, it is evident that the Tribunal has remitted the matter to the Assessing Officer with regard to the substantial question of law No.3 involved in this appeal. We find that substantial questions of law No.1 and 2 are inextricably involved with substantial question of law No.3. Since the Order of the Tribunal, which is a final fact finding authority is cryptic and suffers from the vice of non-application of mind, the same is hereby quashed. The matter is remitted to the Tribunal to consider the substantial questions of law No.1 and 2 afresh by assigning reasons.
Since the matter has been remitted to the Tribunal for decision afresh, it is not necessary for us to answer the substantial questions of law framed in this appeal.
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2020 (11) TMI 911
Fringe benefit tax in respect of reimbursement of medical expenses to the employees - revenue submitted that the tribunal has set aside the disallowance in respect of reimbursement of medical expenses granted by the assessee to its employees by ignoring the fact that the same is excluded as per proviso to viii of Section 17(2) of the Act read with Rule 3 - HELD THAT:- Effect of Proviso (v) to Section 17(2) is that reimbursement of the amount in excess of ₹ 15,000/- would be taxable as part of the salary in the hands of the employee, whereas, amount less than ₹ 15,000/- would not be taxable in the hands of the employee. However, such reimbursement nevertheless would perquisite as defined under the Act but would remain untaxed in the hands of the employees and therefore, untaxed amount is taxed as fringed benefits in the hands of the employer. Thus, if the medical reimbursement exceeds ₹ 15,000/- relating to unapproved hospital, then under Section 17(1) of the Act the employees are taxed beyond ₹ 15,000/- and if ₹ 15,000/- which is exempt in the hands of the employees is not liable for fringe benefit tax but over and above the aforesaid amount is liable for fringe benefit tax.
Expenses incurred by the assessee on bundling of product - HELD THAT:- Effectively the bundling is not done free of cost as customer pays for the bundled project indirectly. The Delhi High court while considering the aforesaid issue in the case of T & T Motors Ltd. [2012 (1) TMI 96 - DELHI HIGH COURT] has held that expenses incurred in bundling of products are not exigible to levy of fringe benefit tax. Expenditure for the purpose of business not connected to employees cannot be brought to tax under the fringe benefit tax. Therefore, we hold that the expenses incurred by the assessee on bundling of the product is not exigible to fringe benefit tax.
Assessee has also incurred expenses for sponsoring Science Graduates to Post Graduate courses. From perusal of the document placed on record, it is evident that the assessee has enrolled the student in computer applications in the academy of the assessee viz., Wipro Academy of Software Excellence. The student is not an employee of the company and the payment was made to the Birla Institute of Technology for expenses, thus, the expenses incurred by the assessee in respect of payment made to Birla Institute of Technology for imparting training to the students cannot be subjected to fringe benefit tax.
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2020 (11) TMI 910
Benefit of Vivad Se Vishwas Scheme ('VVS Scheme') - assessee has already filed the declaration under Section 4 of the Act on 14.10.2020 - HELD THAT:- The assessee has already availed the benefit under the Act, no useful purpose would be served in keeping this appeal pending. At the same time, safeguarding the interest of the assessee in the event the order to be passed by the Department under the Act is not in favour of the assessee. Accordingly, the Tax Case Appeal stands disposed of on the ground that the assessee has already filed a declaration and the Department shall process the application at the earliest in accordance with the said Act and communicate the decision to the assessee at the earliest. As observed, the assessee is given liberty to restore this appeal in the event the ultimate decision to be taken on the declaration filed by the assessee under Section 4 of the said Act is not in favour of the assessee. If such a prayer is made, the Registry shall entertain the prayer without insisting upon any application to be filed for condonation of delay in restoration of the appeal and on such request made by the assessee by filing a Miscellaneous Petition for Restoration, the Registry shall place such petition before the Division Bench for orders.
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2020 (11) TMI 909
Addition u/s 69A - unexplained money - HELD THAT:- AO has accepted the return of the assessee thereby accepting the turn over from the sales of papad and snacks. It is the say that counsel for the assessee has been doing this business since past many years and therefore had sufficient funds to explain the source of cash deposit. Per contra the DR strongly supported the findings of the lower authorities - once the business of the assessee has been accepted by the AO by accepting her return of income there should not be any doubt in accepting the source of cash deposit.
Assessee has successfully explained the source of cash deposit of ₹ 10 lacs. We accordingly direct the AO to delete the impugned addition. The appeal filed by the assessee is allowed.
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2020 (11) TMI 908
Disallowance u/s 80IC - whether “assessee is entitled for deduction under 80IC @ 100% after substantial expansion carried out during financial year 2011-12? - HELD THAT:- When assessee has carried out substantial expansion in the existing unit immediately on the completion of first five years i.e. in FY 2011-12 and duly complied with the conditions laid down in clause (ix) sub section 8 of Section 80-IC it is entitled for deduction for the year under assessment @ 100%. Ld. CIT(A) by threshing the facts of this case relied upon order passed by coordinate bench of Tribunal in Tirupati LPG Industries Ltd. [2014 (1) TMI 1689 - ITAT DELHI] has rightly deleted the addition made by the AO on account of disallowance u/s 80-IC. So we find no scope to interfere into the findings returned by Ld. CIT(A). - Decided against revenue.
Addition on account of personal use of car, on account of tour and travelling expenses and on account of telephone expenses respectively made by the AO on ad hoc basis @ 10% - HELD THAT:- AO has proceeded to make ad hoc disallowance without assigning any reasons but on the basis of surmises the disallowance is not sustainable in the eyes of law. When undisputedly assessee has claimed the expenses on the basis of its audited financials which have not been disputed by the AO, the ad hoc addition on the basis of surmises is bad in law. Moreover, when it is not case of the AO that these expenses have not been made wholly and exclusively for the purpose of business by the assessee there is no ground to disallow the same. Ld. CIT(A) has rightly deleted the addition - Decided against revenue.
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2020 (11) TMI 907
Undisclosed Receipts from ECIL & BEL - undisclosed turnover - Accrual of income - HELD THAT:- We are satisfied that the assessee has correctly shown the amounts certified by the respective authorised supervisors and as we have noted above that ld CIT(A) after considering the entire facts and circumstances and relevant books of account and financial statements of the assessee for A.Y. 2012-13 has rightly concluded that the expenditure booked by him for assessment year 2012-13 was against the income received only and no expenses has been booked against much higher contract receipts as picked up and assessed by the AO.
Inflated amounts are not the actual amount accrued to the assessee by ECIL and BEL, respectively and are not the amount of actual turnover which has accrued to the assessee for assessment year 2012-13.
Since the assessee has satisfactorily established that the amount of work certified by the respective supervisors has been claimed and shown as turnover and the expenditure booked by the assessee for assessment year 2012-13 was against the income received and shown in the profit and loss account, no expenditure has been booked against impugned higher contract amount as assessed by the AO, therefore, we decline to accept the contention of ld CIT DR that the ld CIT(A) in the last sentence at top para 6 has considered and appreciated wrong fact that the assessee has not shown these receipts as income and not claimed expenses linked with them.
CIT(A) after observing that the assessee has claimed higher TDS in the compelling circumstances under the given totality of the facts and circumstances of the case, it would be appropriate to levy an appropriate rate of net profit on the differential amount between the bill raised by the assessee and the amount claimed by it and compute the profit element embedded in these gross receipts.
Estimation of profit - percentage of net profit - CIT(A) should have directed the AO to adopt the gross profit rate (before salary & interest to partners) of 39.87% instead of net profit rate of 16.22% (after salary & interest to partners) on the undisclosed turnover - HELD THAT:- In the facts and circumstances of the present case, the total impugned amount from the respective service receivers and the amount of work which was not certified by the authorized officers of ECIL and BEL cannot be treated as income of the assessee, only an element of income calculated on the logical percentage of net profit can be taxed in the case of unaccounted sales/turnover pertaining to which expenditure has not been claimed by the assessee in calculating the net profit of a particular assessment year. Therefore, in our humble opinion, the ld CIT(A) was right in directing the AO to calculate and tax only profit element embedded in the impugned amount of turnover.
CIT(A) directing the AO to estimate only 16.22% on the undisclosed receipts based on the net profit rate disclosed by the assessee - HELD THAT:- In F.Y. 2010-11 to 2017-18 pertaining to assessment year 2011-12 to 2018-19, respectively, that the assessee provided service to private customers including ECIL and BEL and in the case of ECIL and BEL, some mismatch is there which has been observed by the authorities below but in the last, the total amount of turnover as per assessed income and as per balance sheet submitted by the assessee is almost similar. Therefore, if the figures of turnover is disturbed in one year then that would have consequent effect on the subsequent year and since the assessee is in the highest tax slab rate, therefore, such an exercise would be revenue neutral and there is no loss of revenue to the exchequer in this regard. Therefore, the ld CIT(A) was right in directing the AO to estimate and calculate the net profit embedded in the undisclosed turnover/receipts.
Unexplained expenditure u/s 69C - HELD THAT:- Merely mismatch between the amount of TDS claimed by the assessee and amount of turnover shown by the assessee does not raise a question about the expenditure incurred by the assessee against the part receipts/turnover which was not shown in the P&L account and balance sheet due to non-certification by the Supervisors of the service recipients and non receipt of payment during the relevant financial period. Therefore, the contention of the AO in the grounds that the amount of expenditure should be included and taxed in the hands of the assessee u/s.69C of the Act being “unexplained expenditure” has no legs to stand in the totality of the facts and circumstances of the case as noted above and hence, we dismiss the same.
Estimation of percentage of net profit in the hands of the assessee - HELD THAT:- Percentage picked up by the AO, ld CIT(A) and percentage of calculation submitted by the assessee is not similar and there is vast difference between them, therefore, this requires examination and verification at the end of the AO. Ld Representatives of both the parties have agreed that the percentage of net profit of undisclosed receipts/turnover has to be estimated before payment of salary and interest on capital to partners. Therefore, we direct the AO to estimate the net profit before payment of salary and interest on capital to partners on the amount of undisclosed turnover/receipts. Accordingly, Ground Nos.1 to 5 of appeal of revenue are dismissed.
Unexplained unsecured loan - FAA right or indeed the duty to admit additional evidence which is wilfully withheld from the Assessing Officer - HELD THAT:- As alleged by ld CIT DR, has been considered by the ld CIT(A) at appellate stage without confronting the same with the Assessing officer, we deem it fit and proper to remit the issue back to the file of the Assessing officer with the direction to the assessee to furnish the contracts/agreements alongwith confirmations with the three service providers and all other relevant documents before the Assessing officer.
AO is directed to consider the said contracts/agreements duly entered into by the assessee with the service providers and all other relevant documents without being prejudiced from earlier assessment order.
AO is also directed to examine and verify the relevant contracts and all other relevant documents entered into by the assessee with service providers and also verify that as to whether these service providers were hired to assist the assessee in carrying out the biometric enrolment programme in the State of West Bengal and often times, expenditure incurred by these service providers on behalf of the assessee were subsequently reimbursed by the assessee and in fact, these are “business/ sundry creditors” and no ‘loans’ were taken and repaid by any one of the three parties. AO is also directed to verify the explanation of the assessee submitted during first appellate proceedings and after verification of the correctness of the same pass an appropriate and justified order considering the entire facts and circumstances related to this issue.
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2020 (11) TMI 906
TDS u/s 194H - expenses incurred under the head Sales Promotion, Marketing development, promotional expenses and MR expenses - HELD THAT:- Under Explanation (iv) to Section 194H requires that where any income is credited to any account, whether called 'suspense account' or by any other name, in the books of account of the payer, such crediting shall be deemed to be credit of such income to the account of the payee for purposes of deduction of tax at source.
The controversy arises in the given facts and circumstances whether the stakeholders are the payees as contemplated under Explanation (iv) to Section 194H - The answer stands in negative. Undisputedly, the payees in the present facts and circumstances are not the stakeholders but the other parties.
There cannot be any question of deducting the TDS under the provisions of Section 194H Act in the present facts and circumstances. In holding so we draw support and guidance from the order of Mumbai tribunal in the case of Industrial Development Bank of India [2006 (7) TMI 248 - ITAT BOMBAY-H] which has been reproduced somewhere in the preceding paragraph.
Thus, in view of the above detailed discussion and after considering the facts in totality, the grounds of appeal of the assessee are allowed whereas the grounds of appeal of the revenue are dismissed.
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