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Showing 21 to 40 of 1081 Records
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2021 (5) TMI 1062 - DELHI HIGH COURT
Assessment order u/s 144C - title of the order reads as “Draft Assessment Order u/s 143(3) r.w.s. 144C - As submitted the impugned assessment order will be treated as a draft assessment order and that the consequential notice of demand and notice for initiation of penalty proceedings shall stand withdrawn - HELD THAT:- Writ petition is disposed of with the following directions:
(i) The assessment order dated 26.03.2021 shall be treated as a draft assessment order.
(ii) The petitioner will have 30 days’ time to file its objections with the DRP. The aforementioned timeframe will commence from the date of the receipt of a copy of this order.
(iii) The notice of demand and the notice for initiation of penalty proceedings shall stand withdrawn.
(iv) In case the order passed by the DRP is adverse to the interest of the petitioner, it will have liberty to assail the same as per law.
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2021 (5) TMI 1061 - ALLAHABAD HIGH COURT
Offence under FEMA - direction to the Respondent Bank to de-freeze the account - HELD THAT:- Evident it is from the communication that it is because of the forgery of passport and initiation of an investigation by the Enforcement Directorate has resulted in freezing of the account. The petitioner for the reason best known to him has not disclosed these facts in the petition rather concealed these facts.
We are not inclined to entertain the petition where the petitioner has not come to the court with clean hands. consequently, petition fails and is dismissed.
In the present case, we refrain from imposing the cost on the petitioner and expect that the petitioner in future while filing a petition under Article 226 of the Constitution shall disclose all the relevant facts.
As we have held that the petition is not entertainable for the reason supra, we decline the prayer of the petitioner for withdrawal of petition and filing of fresh petition.
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2021 (5) TMI 1060 - DELHI HIGH COURT
Black Money - show-cause notice issued u/s 10(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act - as argued since the petitioner has already taken recourse to the statutory remedy, the present writ petition cannot be entertained - HELD THAT:- As we are prima facie of the view that, merely, on the ground, that the petitioner has taken recourse to an alternate remedy, we cannot refuse to entertain the instant writ petition.
The petitioner’s explanation, at this stage, seems to be a plausible one; which is that, since limitation was running against him, he had to file the appeal. That being said, there are issues raised by the petitioner which impinge upon the jurisdiction of the respondents/revenue with regard to the triggering of the provisions of the 2015 Act.
These are aspects that we are considering, as pointed out hereinabove, in other matters as well. Accordingly, issue notice.
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2021 (5) TMI 1059 - ITAT DELHI
Income taxable in India - Income Salary paid to expat employees - disallowance of salaries by the Head Office including Indian taxes thereon to the expatriate employees working in India exclusively for the PE of the taxpayer in India - HELD THAT:- Tribunal in taxpayer’s own case for earlier years from 1998-99 to 2010-11 [2014 (10) TMI 150 - ITAT DELHI], [2017 (9) TMI 1154 - ITAT DELHI], [2020 (5) TMI 665 - ITAT DELHI] respectively and order passed by the Hon’ble Delhi High Court in case of taxpayer for AYs 2007-08 & 2008-09 [2016 (4) TMI 817 - DELHI HIGH COURT] as agreed that the expenses have been incurred wholly and exclusively by the Indian branch and therefore no part of these expenses can be allocated to any other branch of the HO and that there was no dispute with regard to the non-applicability of Section 44C.
DRP has rightly deleted the addition made by the AO by holding that expenses have been incurred wholly and exclusively by the Indian Branch and as no part of these expenses can be allocated to any other Branch of HO section 44C of the Act is not applicable, hence ground no.1 raised by the Revenue is dismissed.
Disallowance of interest paid by the Indian branches to HO/overseas branches and taxing interest received by HO/overseas branches from Indian branches made - Scope of provisions of Circular No.740 dated 17.07.1996 of CBDT and provisions contained u/s 9 of the Act - HELD THAT:- This issue is covered by the order passed by the Hon’ble Delhi High Court in taxpayer’s own case for AYs 2007-08 & 2008-09 [2014 (10) TMI 150 - ITAT DELHI] wherein issue appears to be covered against the Revenue by the decision of the Calcutta High Court in ABN Amro Bank [2010 (12) TMI 340 - CALCUTTA HIGH COURT]
Addition of accrued deferred bank guarantee commission to the taxpayer from its HO/overseas branches - HELD THAT:- Coordinate Bench of the Tribunal in taxpayer’s own case for AY 2007-08 [2014 (10) TMI 150 - ITAT DELHI] decided the issue in favour of the taxpayer by following the decision rendered by Hon’ble Calcutta High Court in taxpayer’s own case for AY 1995-96[1993 (5) TMI 172 - CALCUTTA HIGH COURT] wherein held that full commission though payable at the outset did not crystallize into perfect right to receive so far as unexpired period was concerned because the payability or receivability from the view of the assessee bank was counter-balanced by the refundability diluting the right to receive into a contingent right as regards unexpired period of the guarantee. The assessee clarified that FEDAI Guidelines places an obligation on the assessee to refund the proportionate commission for the unexpired period.
Applicability of provisions of computing of book profit for MAT purpose - whether not applicable to the taxpayer on the ground that the ld. DRP has ignored the provisions contained u/s 2 (17) of the Act? - HELD THAT:- . We have perused the order passed by the Tribunal in taxpayer’s own case for AYs 2007-08 & 2008-09 [2014 (10) TMI 150 - ITAT DELHI] wherein instant issue has been thrashed in detail and decided in favour of the taxpayer stating that section 115JB is not applicable in case of banking companies. Decided against revenue.
TP Adjustment - selection of MAM - taxpayer in order to benchmark its international transactions of “Counter Guarantee Commission” adopted Comparable Uncontrolled Price (CUP) as Most Appropriate Method (MAM) HELD THAT:- . We have examined the order passed by the coordinate Bench of the Tribunal for AY 2015-16 [2020 (10) TMI 753 - ITAT DELHI] wherein identical issue as to receipt of counter guarantee commission from AE has been decided in favour of the taxpayer by applying TNMM by benchmarking the bundled of international transactions with its AE by applying the combined approach.
Thus since issue is identical international transactions qua rate of bank guarantee commission is to be benchmarked by applying the TNMM as the MAM on combined approach basis. The taxpayer in its TP analysis has duly followed the TP analysis undertaken by the taxpayer in Assessment Years 2009-10 & 2015-16, which was perused by the ld. TPO, but has not disputed the same.
Consequently, benchmarking of bundle of international transactions by the taxpayer with its AE by applying combined approach and TNMM has been used and margin shown by the taxpayer has otherwise been accepted, in these circumstances, the international transactions qua receipt of counter guarantee commission by the AE cannot be segregated from other international transactions undertaken by the taxpayer as has been held by the ld. TPO/DRP, the margin of combined approach has been accepted at arm’s length, hence addition made by the TPO is not sustainable and as such is ordered to be deleted.
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2021 (5) TMI 1058 - SC ORDER
Approval of Resolution Plan - sub-section(1) of Section 31 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The resolution plan was approved by the Committee of Creditors in their commercial wisdom. The resolution plan has been approved by the NCLT in terms of the above directions (save and except for a minor aspect pertaining to the security expenses of West Bengal Industrial Development Corporation, on which there is no cavil or contest on either side). No substantial question of law has been raised by the appellant.
The appeal is accordingly dismissed.
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2021 (5) TMI 1057 - SC ORDER
Grant of ad-interim relief of release on bail - appellant submits that apart from Rs.1 Crore deposited pursuant to the direction issued on the last occasion, the appellant has also deposited a sum of Rs.53 Lakhs. He further submits that his client be given some time to deposit the balance amount so as to make up Rs.3,85,20,886/- - HELD THAT:- The order dated 22.04.2021 absolute. The relief of bail shall be available to the appellant during the pendency of trial of Case No.167 of 2020.
It is made clear that the effect of the Undertaking shall continue to be operative till the proceedings are disposed of by the concerned authorities.
Appeal allowed.
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2021 (5) TMI 1056 - ITAT AGRA
Estimation of NP rate at 5% - HELD THAT:- Undisputedly, the NP rate of assessee from previous years vary 2.49% to 1.86%. Therefore, at the best we take NP rate of 2.49%, which is NP rate for A.Y. 2011-12 or we can take 5% as proposed by the authorities below. To balance the equity, trend of industry, past NP rate of assessee and turnover of the assessee we reduce the NP rate of 5% to 4%. AO is directed to work out the income of the assessee accordingly. In the result the ground no1 of the assessee is partly allowed.
Disallowance u/s. 40(a)(ia) - commission was paid to foreign agent - HELD THAT:- The commission was admittedly paid outside India. There is no situs in India. The modus operandi of assessee is clear that the assessee is recipient of income in India after deduction of commission by the buyer made outside India . Thus, no income has been received or paid inside India , which attract deduction of TDS in India and therefore, the assessee is not liable to deduct TDS in India. The nature of transaction is not disputed. The case of AO was that the assessee has not deducted TDS , as the commission was paid to foreign agent, however he had not denied payment of commission by the assessee for procuring the orders. In view of the above, we allow this ground of the assessee on merit and delete the disallowance made u/s. 40(a)(ia).
Applying the GP rate of 1.86% and to this duty draw back was added by the assessee - While calculating the net profit, the assessee has not taken into account the duty draw back and had separately added to the NP rate calculated by him. In the result the ground of the assessee is dismissed.
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2021 (5) TMI 1055 - SUPREME COURT
Availing of constitutional Remedy - seeking a Writ of Habeas Corpus in the High Court of Delhi - house arrest - whether the period of 34 days spent in house arrest by the appellant is to be counted towards the period of 90 days under Section 167 Cr.P.C.? - HELD THAT:- It will be noted that with the proviso in the Cr.P.C., 1973, in Section 76, in the case of arrest under a warrant, the person is to be produced before the Court within 24 hours with the exclusion of time taken for travelling. Such a proviso was absent in Section (81) of the Cr.P.C., 1898 which was considered by the Court.
Thus ‘house arrests’ have been resorted to in India, in the context of law relating to ‘preventive detention’. What is however relevant is that preventive detention is also a form of forced detention. House arrest is also custody and forced detention - Placing a person in custody depriving him of his rights which would include his fundamental rights as he would stand deprived of on giving effect to the term of house arrest, would amount to a completely illegal exercise, were it not for the fact that the High Court must be treated as having exercised powers available to a Judge under Section 167 of the Cr.P.C.
No doubt, while the remand report is considered by the Magistrate the application for bail may be moved under Section 439 instead of moving under Section 437 in view of the restrictions contained therein. Though an application under Section 397 would not lie against the remand, as already noticed, an application for bail would lie under Section 439. Therefore, ordinarily the accused would seek bail and legality and the need for remand would also be considered by the High Court or court of session in an application under Section 439. No doubt the additional restrictions under section 43 (D) (5) of UAPA are applicable to citizens of India in cases under the said law.
Whether a writ of habeas corpus lies against an order of remand u/s 167 of Cr.P.C. - HELD THAT:- A Habeas Corpus petition is one seeking redress in the case of illegal detention. It is intended to be a most expeditious remedy as liberty is at stake. Whether a Habeas Corpus petition lies when a person is remanded to judicial custody or police custody is not res integra - In MANUBHAI RATILAL PATEL TR. USHABEN VERSUS STATE OF GUJARAT & ORS. [2012 (9) TMI 1080 - SUPREME COURT] it is noticed that It is within the exclusive domain of the police to investigate and is independent of any control by the Magistrate. The sphere of activity is clear cut and well demarcated. Thus viewed, we do not perceive any error in the order passed by the High Court refusing to grant a writ of habeas corpus as the detention by virtue of the judicial order passed by the Magistrate remanding the accused to custody is valid in law.
Whether superior courts (including a High Court) can exercise power under section 167 of Cr.P.C? - Can broken periods of custody count for the purpose of default bail? - HELD THAT:- The Magistrate is the original Court which would exercise power to remand under Section 167, the exercise of power by the superior Courts which would result in custody being ordered ordinarily (police or judicial custody) by the superior Courts which includes the High Court, would indeed be the custody for the purpose of calculating the period within which the charge sheet must be filed, failing with the accused acquires the statutory right to default bail - broken periods of custody can be counted whether custody is suffered by the order of the Magistrate or superior courts, if investigation remains incomplete after the custody, whether continuous or broken periods pieced together reaches the requisite period; default bail becomes the right of the detained person.
Equally when an order in bail application is put in issue, orders passed resulting in detaining the accused would if passed by a superior court be under Section 167.
Effect of Transit order - Is it a production order though sourced u/s 167 of Cr.P.C.? - HELD THAT:- The remand order be it a transit remand order is one which is passed under Section 167 of the Cr.P.C. and though it may be for the production of the Appellant, it involved authorising continued detention within the meaning of Section 167.
Impact of Section 428 of Cr.P.C - HELD THAT:- There is a scheme which is unravelled by the Code regarding detention of an accused. The starting point appears to be the arrest and detention of the person in connection with the cognizable offence by a police officer without a warrant. He can detain him and question him in the course of the investigation. However, the officer cannot detain the accused beyond 24 hours excluding the time taken for the journey from the place of arrest to the place where the Magistrate who is competent to try the case sits. If he cannot so produce the accused and the investigation is incomplete, the officer is duty bound to produce the arrested person before the nearest Magistrate - The arrested person if detained during the period of investigation can count this period, if he is ultimately charged, tried and convicted by virtue of the provisions of Section 428 of Cr.P.C. We are not concerned with custody of the accused during the period of an inquiry or trial which is a matter governed essentially by Section 309 of the Cr.P.C. In this context, it must be remembered that it is not every detention which can be relied upon to get the benefit of set-off under Section 428. A period spent under an order of preventive detention being not in connection with the investigation into an offence cannot be counted.
The scheme further under Section 167 is that custody (detention/ custody) as authorized under such provisions, if it exceeds the limit as to maximum period without the charge sheet being filed, entitles the person in detention to be released on default bail. In fact, the person may on account of his inability to offer the bail languish in custody but he would undoubtedly be entitled to count the entire period he has spent in detention under orders of the Magistrate/ Superior Court exercising powers under Section 167 for the purpose of set off under Section 428.
Effect of illegality in the order u/s 167 Cr.P.C - HELD THAT:- The power was illegally exercised but is nonetheless purportedly under Section 167. What matters is ‘detention’ suffered. The view taken in the impugned judgment that sans any valid authorisation/ order of the Magistrate detaining the Appellant there cannot be custody for the purpose of Section 167 does not appear to us to be correct. The finding that if any illegality afflicts the authorisation, it will render the ‘detention’ not authorised is inconsistent with our conclusion as aforesaid - Therefore, if the Court purports to invoke and act under Section 167, the detention will qualify even if there is illegality in the passing of the order. What matter in such cases is the actual custody.
However, when the Court does not purport to act under Section 167, then the detention involved pursuant to the order of the Court cannot qualify as detention under Section 167.
Judicial Custody and Police custody - HELD THAT:- When a person is remanded to police custody, he passes into the exclusive custody of the police officers. ‘Custodial Interrogation’ as is indispensable to unearth the truth in a given case is the substantial premise for such custody. The Magistrate must undoubtedly be convinced about the need for remand to such custody. Reasons must be recorded. Judicial custody is ordinarily custody in a jail. It is referred to also as jail custody. Thus, jail custody and judicial custody are the same. The jails come under the Department of Jails and staffed by the employees of the said department. The person in jail custody is therefore indirectly, through the jail authorities, under the custody of the Court - There may be restrictions put in regard to the grant of bail by law which must be observed. But if bail is not granted then a person arrested by the police in connection with the cognizable offence must be remanded to custody. This is inevitable from the reading of Section 167 of the Cr.P.C.
Does the magistrate/court consider the legality of arrest/detention while acting u/s 167? - HELD THAT:- If the arrest does not satisfy the requirements of Section 41, the Magistrate is duty bound not to authorize further detention. The Magistrate is to be satisfied that the condition precedent for arrest under Section 41 of the CrPC has being satisfied. He must also be satisfied that all the constitutional rights of the person arrested are satisfied. Therefore, it is not as if an arrest becomes a fait accompli, however, illegal it may be, and the Magistrate mechanically and routinely orders remand. On the other hand, the Magistrate is to be alive to the need to preserve the liberty of the accused guaranteed under law even in the matter of arrest and detention before he orders remand. This is no doubt apart from being satisfied about the continued need to detain the accused.
Custody undergone under orders of Superior courts in Habeas Corpus - Is the Cr.P.C. applicable to writ petitions? - HELD THAT:- The superior Courts including the High Court can exercise power under Section 167. The finding of the High Court in the impugned judgment appears to proceed on the basis that only a Magistrate can order remand, does not appear to be correct.
The arrest is apparently effected in view of the powers available under Section 48 of the Cr.P.C. Finding that an order under Section 167 was required to produce the appellant before the competent Court in Maharashtra, he produced the appellant-in-person before the nearest Magistrate in Delhi and the Magistrate passed an order which we have found to be an order of remand under Section 167. The High Court came to be concerned with the validity of the remand order and detention of the appellant. A writ of habeas corpus does lie in certain exceptional cases even by way of challenging the orders of remand. If there is non-compliance with Article 22(1) and the person is detained it is an aspect which has to be borne in mind by the Magistrate when ordering remand. Detention is the result of an arrest. Article 22(1) applies at this stage after arrest. If fundamental rights are violated in the matter of continued detention, the Magistrate is not expected to be oblivious to it. It is in this sense that the High Court has found violation of Article 22(1) inter alia and the Magistrate over-looking it as rendering the transit remand illegal. As far as the arrest being made in violation of Section 41(1)(ba), undoubtedly, it is a matter which related to the legality of the arrest itself which is the stage prior to detention. The High Court finds that the Magistrate had not applied his mind to the question as to whether the arrest was in compliance with Section 41 (1) (ba) of Cr.P.C.
The impact of non-accessibility to the appellant for the investigating agency during house arrest and the effect of the appellant being in police custody from 14.4.2020 to 25.4.2020 - HELD THAT:- The scheme of the law (Cr.P.C.) is that when a person is arrested without warrant in connection with a cognizable offence, investigation is expected to be completed within 24 hours from his arrest. If the investigation is not completed, as is ordinarily the case, the accused must be produced before the Magistrate who is nearest from the place of arrest irrespective of whether he is having jurisdiction or not. The Magistrate on the basis of the entries in the case diary maintained by the officer is expected to apply his mind and decide whether the accused is to be remanded or not. If the police makes a request for police custody which is accepted then an order is to be passed and reasons are to be recorded under Section 167(3). Police custody is an important tool in appropriate cases to carry on an effective investigation - The contention of the appellant that it is always open to Magistrate to order only judicial custody and even exclusively with 90 days of judicial custody alone, an application for default bail would lie cannot be disputed. Whatever be the nature of the custody as long as it falls within four walls of Section 167, if the requisite number of days are spent in police/ judicial custody/ police and judicial custody that suffices.
Under Section 43(D)(2)(a), it is clear that the maximum period of police custody which is permissible has been increased from 15 days to 30 days. The further modification is that which is relevant which is incorporated in the second proviso. It contemplates that the investigating officer can seek with reasons and explaining the delay obtain the police custody of a person who is in judicial custody.
The concept of house arrest as part of custody under Section 167 has not engaged the courts including this Court. However, when the issue has come into focus, and noticing its ingredients we have formed the view that it involves custody which falls under Section 167 - under Section 167 in appropriate cases it will be open to courts to order house arrest. As to its employment, without being exhaustive, we may indicate criteria like age, health condition and the antecedents of the accused, the nature of the crime, the need for other forms of custody and the ability to enforce the terms of the house arrest. We would also indicate under Section 309 also that judicial custody being custody ordered, subject to following the criteria, the courts will be free to employ it in deserving and suitable cases.
In view of the fact that the house arrest of the appellant was not purported to be under Section 167 and cannot be treated as passed thereunder, the appeal is dismissed.
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2021 (5) TMI 1054 - ITAT MUMBAI
TP Adjustment - MAM selection - TPO rejected RPM and applied Transactional Net Margin Method (TNMM) as the most appropriate method to determine Arm’s Length Price (ALP) - HELD THAT:- We find no cogent reason to reject assessee’s RPM as the most appropriate method to benchmark ALP in the impugned assessment year, when the same was accepted in the earlier and later assessment years by the TPO. The assessee succeeds on rule of consistency. The ground no.1 of CO is thus, allowed.
Sale price of goods exported by the assessee to AE is more than or equal to the sale price of goods charged by AE from third parties - DRP deleted adjustment - DRP recorded this finding on the basis of documents submitted by the assessee and the report of TPO on same. The assessee could reconcile price of 80% of the goods exported to AE vis-a-vis the price charged by AE from third parties. The Department has not been able to controvert factual findings of the DRP based on the report of TPO. Under such circumstances, no adjustment is warranted. We find no infirmity in the impugned findings of DRP. The appeal of Revenue is devoid of merit, hence, dismissed.
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2021 (5) TMI 1053 - ITAT DELHI
TP adjustment on account of AMP expenses - expenditure incurred by the assessee for promoting brand and creating marketing intangible of Amadeus Global. - HELD THAT:- We find that identical issue arose in assessee’s own case in earlier years and while deciding the issue [2021 (5) TMI 536 - ITAT DELHI] wherein direct the Assessing Officer /TPO to delete the additions made on account of AMP expenditure, substantive and protective.
Revenue could not point out any distinguishing feature in the facts of the case in the year under consideration and that of the earlier year. We therefore following the order of Co-ordinate Bench in assessee’s own case for earlier years and for similar reasons, direct the AO to delete the addition made on account of AMP expenditure on Substantive protective basis. Thus the ground of the assessee are allowed.
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2021 (5) TMI 1052 - AUTHORITY FOR ADVANCE RULING, CHHATTISGARH
Levy of Compensation Cess - total quantity of raw coal or washed coal - coal rejects supplied by Coal Washery are exempt from levy of Compensation Cess once Compensation Cess on raw coal or, washed coal and coal rejects, as the case may be, is discharged, or not - whether subsequent supply (or sale) of coal rejects attracts Compensation Cess?
HELD THAT:- It is of paramount importance to analyze the relationship between the two parties involved under CMDA and the contractual arrangement between them. PKCL, the Applicant has entered into a contract for rendering mining services to RVUNL including washing of coal and the Applicant has, in turn, contracted the work of actual mining to AEL, who is the Mining Contractor. The mining contractor raises an invoice for mining services and discharges GST at the rate applicable to services, which is 18%. Thereafter, the Applicant, on a back to back basis, as per the CMDA with RVUNL, raises an invoice on RVUNL. The Applicant levies and collects 18% GST on the mining fee charged by it under the contract - As per the conditions envisaged under the contractual CMDA, between the Applicant and RVUNL, the Mining Contractor AEL not only undertakes mining, but has also been entrusted upon with the work of washing of the coal. Accordingly, once the mined raw coal is subjected to the process of washing, emergence of rejects is inevitable in the course of washing of raw coal.
There is no ambiguity as regards the fact that washed coal and coal rejects are two separate commercial products arising consequent to the process of washing of raw mined coal. It is also seen from the CMDA that both the parties involved viz.. Applicant and RVUNL Chhattisgarh have also separately recognized and dealt with washed coal and rejects in the said CMDA. RVUNL Chhattisgarh transfers washed coal to RVUNL Rajasthan. This is a supply under Section 7 of the CGST Act, 2017. RVUNL Chhattisgarh and RVUNL Rajasthan are distinct persons having separate GST registrations. Consequently, RVUNL Chhattisgarh, as required under law issues a taxable invoice in the name of RVUNL Rajasthan for the quantity of the washed coal supplied - it follows that the Applicant has a right to receive the coal rejects from RVUNL. It also follows from the said CMDA that RVUNL raises a tax invoice in favour of the Applicant for the rejects, to give effect to the above clause in the CMDA. Such tax invoice is evidence of transfer of property in the coal rejects from RVUNL to the Applicant, as contemplated in Clause 3.4.1 of the CMDA. The same constitutes a supply within the meaning of Section 7 of the CGST Act, 2017 on which GST as well as Compensation Cess has to be discharged by the supplier.
What is important is that the supplier of coal, which is RVUNL in the present case, has declared that they are paying the appropriate tax and cess on the total quantity of the coal raised / mined, through the mining services received by it from the said mining contractor - Sr. No. 41A of Notification no. 01/2017- Compensation Cess dated the 28th June, 2017 as amended vide Notification no. 02/2018-Compensation Cess (Rate) dated 26/07/2018, read with corrigendum issued under F.No.354/255/2018-TRU (Pt-11) dated 2/8/2018, effective from 27th July, 2018, in very unambiguous terms provides that NIL rate of Compensation Cess would apply only in the case of coal rejects supplied by a coal washery, arising out of coal on which Compensation Cess has been paid and no input tax credit of the Compensation Cess paid on coal is availed by any person. The expression 'arising out of would mean 'to originate from' or 'come into being' and the expression 'arise' has been defined in the Concise Oxford Dictionary to mean 'to occur as a result of'. In the facts and circumstances of the present case, the raw coal is the genus of which washed coal and reject coal are subsets. The reject coal arises on account of washing of the raw coal.
The coal rejects supplied by the Applicant should arise out of the raw coal mined and Compensation Cess on the entire quantity of raw coal mined as applicable has been paid and further that it would not be sufficient compliance of the conditions of Sr. No. 41A of Notification No. 1/2017-CC, if Compensation Cess has been paid only on the washed coal and not on the entire quantity of row coal raised /mined. Besides this for availing the said exemption, input tax credit on the compensation cess so paid on the said raw coal raised should also not be availed by any person.
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2021 (5) TMI 1051 - ITAT MUMBAI
Write off of bad debts - loss suffered during trading at National Spot Exchange - alternate claim of allowing irrecoverable bad debts as ‘business loss’ u/s 28(1)/37(1) - Whether the assessee is entitled for the benefit of write off of bad debts on amounts irrecoverable from transactions at NSEL? - CIT(A) has rejected the claim of assessee inter alia on the ground that the loss from transactions at NSEL is speculative - HELD THAT:- We find that in the case of M/s. Megh Sakariya International P. Ltd. [2018 (9) TMI 1961 - ITAT CHENNAI] under somewhat similar set of facts where the assessee therein had claimed write off of bad debts in respect of transactions at NSEL, the Assessing Officer rejected assesses claim being premature, the Tribunal allowed the claim of assessee. Similar view was taken by Indore Bench of the Tribunal in identical set of facts in the case of Mohan Jain [2019 (2) TMI 367 - ITAT INDORE]
There is discrepancy in quantum of claim of write off of debts before the Assessing Officer and the CIT(A). Taking into consideration entire facts, we deem it appropriate to restore this issue back to the file of Assessing Officer for examining assessee’s return of income/assessment order in the preceding assessment years wherein the income from transactions at NSEL were allegedly offered and accepted as ‘Business Income’, contract notes etc. to ascertain the transactions being actual delivery based and to iron out inconsistencies in the amount of claim. AO shall allow reasonable opportunity of hearing to the assessee, in accordance with law. In view of our above findings, ground no. 1 to 4 of the appeal are allowed for statistical purpose, in the terms aforesaid.
Disallowance of TDS credit - AOhas allowed credit only to the extent in part - HELD THAT:- We deem it appropriate to restore this issue back to the file of Assessing Officer for re-verification/reconciliation of TDS credit claimed by the assessee with the documents/statements furnished by the assessee. The assessee is directed to furnish relevant documents before the Assessing Officer for reconciliation of tax credit. The Assessing Officer shall grant the benefit of tax credit after examining the statements and reconciliation, in accordance with law. The ground No.6 is allowed for statistical purpose.
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2021 (5) TMI 1050 - ITAT MUMBAI
Tax implications of foreign exchange fluctuation gains arising upon receiving the repayment of a personal loan, extended by the assessee, denominated in US Dollars - As explained that the loan transaction was in terms of the Liberalized Remittance Scheme of the Reserve Bank of India inasmuch as it was a permitted transaction, and specifically on capital account and that the transaction was in capital field and that, therefore, “the gain is in the nature of capital receipt and hence not offered for taxation” - HELD THAT:- It is not even in dispute, and rightly so, that the receipt is in question is in the capital field but the AO has taxed it on the basis that “the gain on realization of loan would partake character of an income under the head income from other sources”, and the CIT(A) has justified such a taxation on the basis, which was altogether different vis-à-vis the reasoning adopted by the AO, that the accretion in rupee terms is to be considered as interest, and is to be taxed as such by observing that “as per provision of the Income-tax Act if giving and taking loan is not the business of the assessee then income arising out of the loan is treated as interest of the income or income from other sources”. None of these reasonings meet our approval.
Interest is the amount “payable” in any manner in respect of “moneys borrowed or debts incurred” but in the present case nothing more than principal debt has been paid by the borrower, and unless borrower pays an amount in respect of moneys borrowed or debts incurred, the definition of interest does not come into play. Yes, there was a benefit or a gain to the assessee; that is not even in dispute. The benefit or the gain was not on account of interest payment; that benefit or gain was on account of foreign exchange fluctuation but since the foreign exchange fluctuation with respect to a transaction in capital field, on the facts of this case foreign exchange fluctuation receipt itself turned out to be a capital receipt.
CIT(A) was, therefore, in error in holding the foreign exchange fluctuation income to be in the nature of ‘interest’. As for his holding that the income was taxable as income from other sources, that is exactly what the Assessing Officer had also done, and, for the detailed reasons set out above, that approach does not meet my judicial approval either.
In any case, merely because the rupee loans are specifically permitted to the NRI/PIO close relatives, this fact per se cannot lead to the conclusion that foreign exchange denominated loans being extended to the NRI/PIO close relatives was prohibited. Be that as it may, we are not inclined to, nor do I see any reasons to, deal with the broader question as to whether or not such a transaction of foreign exchange denominated loan, as the assessee has indeed entered into, was permissible or not. That is neither my domain nor my concern. If this transaction was impermissible under the Foreign Exchange Management Act, 1999, the consequences must flow under that legislation itself. The Income Tax Act, 1961 has nothing to do with the consequences, even if that be so, of impermissibility of such transactions under the FEMA or Liberalized Remittance Scheme framed thereunder- at least in the context of dealing with an income.
The impugned addition is not sustainable in law. AO is, accordingly, directed to delete the same. Decided in favour of assessee.
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2021 (5) TMI 1049 - ITAT MUMBAI
TP Adjustment - comparable selection - TPO rejected / excluded the comparables selected by the assessee (being non KPO) and further selected / included KPO companies as comparable to the assessee - HELD THAT:-assessee is a captive service provider providing Information Technology Enabled Service (ITES) to its Associated Enterprises (A.E) globally and the assessee’s margin from the said international transaction for the assessment year 2009–10 is 23.07%. The assessee is providing only ITES services to its A.Es and is not a KPO consequent to which classified as KPO companies cannot be considered as comparable to the assessee, which is evident from the order passed by the Tribunal in assessee’s own case in assessment year 2007–08 [2019 (9) TMI 972 - ITAT MUMBAI] and 2008–09 respectively [2020 (8) TMI 170 - ITAT MUMBAI]
Thus Companies functionally dissimilar with that of assessee need not to be selected as a comparable.
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2021 (5) TMI 1048 - DELHI HIGH COURT
CIRP proceedings - Petitioner is a Doctor by profession and was a Director in the Company - Counsel for the Petitioner submits that independent of the NCLT proceedings, the petitioner is offering the hospital facility to Respondent No.1 and is ready and willing to deposit Rs.15 Lakhs as an initial contribution as also Rs.4 Lakhs p.m. for running the hospital.
HELD THAT:- we hereby direct Respondent No.1 to take a decision with respect to the aforesaid offer of the Petitioner, subject to the undertaking given by him with regard to the contribution of funds and the control over the running of the hospital and also looking to the reply affidavit of Respondent No. 3 file in this petition.
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2021 (5) TMI 1047 - NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Maintainability of petition - initiation of CIRP - Corporate Debtor defaulted in repaying the Arbitral Award and due license fee - Financial Creditors - existence of debt and dispute or not - HELD THAT:- In the present case, the Applicant has submitted that the award was passed on 10.07.2019 and the same becoming enforceable on expiry of a period of 90 days thereafter and since the Corporate Debtor has failed to make the payment in terms of award, has committed default in terms of Section 7 of Insolvency and Bankruptcy Code, 2016. Further, it must be noted that the arbitral award was passed on the basis of rental agreement dated 17.08.2005 and subsequently on 03.07.2006 in pursuance of which a Plot No. B-481 situated at Industrial Area, Bhiwadi, Rajasthan admeasuring 8444 sq. mts consisting of building and vacant land was given to Corporate Debtor for its business purpose. The basic nature of transaction is not covered under financial debt. Rental lease agreement can be operational debt but not financial debt. In any case, the transactions which transpired between the parties does not partake the character of a ‘Financial debt’ and as such the Applicant does not qualify to be a Financial Creditor in relation to the Corporate Debtor.
The instant Application is liable to be dismissed and accordingly stands Dismissed.
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2021 (5) TMI 1046 - RAJASTHAN HIGH COURT
Validity of condition imposed by the respondents private medical institutions that the students seeking admission to MBBS Course to submit bank guarantee against the annual fees for next 3½ years of course duration in addition to deposit of annual fee for the first year of the course, at the time of admission - petitioner is an advocate by profession - interest of petitioner in the present case - HELD THAT:- The education is essentially a charitable activity, which cannot be regarded as profession, trade or business rather, it will fall within the meaning of expression "occupation" under Article 19(1)(g) of the Constitution of India. The right to establish an educational institution can be regulated; but such regulatory measures must, in general, be to ensure the maintenance of proper academic standards, atmosphere and infrastructure (including qualified staff) and the prevention of maladministration by those in charge of management. In establishment of the education institutions, there cannot be a profiteering motive but it is permissible for such institution to generate a reasonable revenue surplus for the purpose of development of education and expansion of the institution - There is autonomy with the institution in fixing the fee structure but it has to be rational and there cannot be any profiteering motive and no capitation fee could be charged. Until the suitable legislation or regulation framed by the State, the fee structure in various institutions shall be determined by the Committee separately having regard to relevant factor and the management is not entitled to charge anything more. It is permissible for the institutions to charge fee only for one year in accordance with the rules and not the fee for the entire course.
As laid down in Islamic Academy [2003 (8) TMI 469 - SUPREME COURT], if an educational institution feels that any particular student may leave in midstream then at the highest it may require that student to give bond/bank guarantee that the balance fee for the whole course would be received by the institution if the student left in midstream, however, in such situation, ordinarily, the management should insist a bond from the concerned student and thus, the management of the educational institution cannot insist upon each and every student to furnish a bank guarantee as a matter of course and the advance fee cannot be charged in addition to annual fee for more than one year.
It is pertinent to note that the factum of the respondent private medical institutions insisting upon each and every student admitted to the professional course to deposit the fee for one year and to furnish bank guarantee towards the fee for remaining duration of the course, is not even disputed before this Court. Rather, some of the institutions have even admitted that in addition to the fee for one year, the advance fee is being accepted generally for one more year, which is not kept in separate account and the interest accrued thereon is also not credited to the fee account of the concerned student or refunded to him at the time of completion of the course - the respondent private educational institutions imparting medical education, inherently with a charitable purpose, must always take care of the students belonging to lower echelons of the society or to a middle income group admitted to the medical courses on being found meritorious and must ensure that they are not deprived from pursuing the medical course merely on account of their inability to deposit advance fee in addition to the annual fee for one year or the bank guarantee for remaining 3½ years duration of the medical course.
Insisting upon the students who are otherwise eligible to be admitted to the course being meritorious but are not in position to arrange the requisite funds to procure a bank guarantee towards the fees for entire course duration would be absolutely unjustified - the directions issued by the Hon'ble Supreme Court in Islamic Academy are quite unequivocal that if an institution feels that any particular student may leave in midstream then, at the highest, it may require that student to give a bond/bank guarantee that the balance fees for the whole course would be received by the institute even if the student left in midstream.
The fee structure determined by the 'Fee Fixation Committee' constituted by the respondent University in supersession of fee structure already proposed by the 'Fee Regulatory Committee' constituted by the State of Rajasthan pursuant to the directions of the Supreme Court was held not sustainable in the eyes of law.
Petition allowed.
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2021 (5) TMI 1045 - NATIONAL COMPANY LAW TRIBUNAL BENGALURU
Approval of Resolution Plan - HELD THAT:- In view of these multiple IAs emanating from the RP's actions while conducting the CIRP, seeking inclusion of their claims or consideration of their Resolution Plan by the CoC, and thus seeking to reject the Resolution Plan submitted in IA 161 of 2020, we have prima facie reason to believe that the process followed by the RP during the CIRP neither takes into account the interest of all the creditors / stake holders, nor seeks to maximise value of the assets of the CD by considering all possible Resolutions Plans, even though these are the twin objects of the CIRP - the manner in which the CIRP has been conducted is not satisfying.
Whether under the facts and circumstances of the case, the liability of the Corporate Debtor to the Applicant State Govt. would amount to a Financial Debt? - HELD THAT:- The Respondent's argument that no actual money was disbursed for the time value of money and that there was no financial debt has to be rejected and the said transaction has to be considered as 'Financial Debt' under Section 5(8) of the Code.
When the audited books of accounts of the Corporate Debtor were available for the concerned years and reflected the financial debt under consideration, and in view of the clear provisions of the Code and the Regulations, the RP was duty bound to determine the financial position of the CD, verify the credits in the name of the Creditor from the books of accounts and put up the same before the CoC, with the complete factual and legal position, rather than reject it behind its back.
Whether the financial creditor is eligible to have its claim considered, if not presented or submitted within the period stipulated under Regulation 12(2) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016? - HELD THAT:- In accordance with the provisions of section 60(5)(c) of I&B code read with Rule 11 of NCLT Rules 2016 this Adjudicating Authority passes the following orders and directs the Resolution Professional as under:
(1) IA 85 of 2021 C.P. (IB) No. 51/BB/2018 is disposed of with the directions that the claim filed by the Applicant, the State of Karnataka, Department of Industries & Commerce as a Financial Creditor, in Form C, shall be put up by the RP to the CoC for its consideration/acceptance, in the light of our findings and decision in the foregoing paragraphs. Reconstitution of the CoC will also be considered by the RP.
(2) IA227 of 2020 C.P. (IB) No. 51/BB/2018 is disposed of with the directions that the Resolution Plan submitted by Swamitva Landmark, Shankeshwar Landmarks LLP and Shankeshwar Landmarks, shall be placed before the CoC along with the Resolution Plan filed by METL and submitted for our approval in IA 161, for the CoC's evaluation and approval, strictly keeping in mind the objects of the Code, and superior commercial viability. The Resolution Plan approved out of the two by the CoC shall be submitted to us for our consideration and approval.
(3) IA 248 r/w IA 225 C.P. (IB) No. 51/BB/2018 is disposed as infructuous as IA 225 has already been disposed of. However, the issues raised by the erstwhile Promoters shall be kept in view by the RP so as to attain the objects of the Code.
(4) IA 134 of 2020 is disposed with directions to the Commercial Taxes Dept. to place before the RP only ascertained, crystallised demand that may have arisen from a regular assessment for the period under consideration. The RP shall place the same before the CoC/reconstituted CoC, for its consideration.
(5) IA 161 of 2020 is deemed to be disposed of and restored to the RP, for being re-considered by the CoC along with the Resolution Plan submitted by Swamitva Landmark, Shankeshwar Landmarks LLP and Shankeshwar Landmarks.
(6) The directions at sl. nos. 1), 2) and 4) shall be carried out within a period of 12 weeks from the receipt/uploading of this order. This period is considered appropriate considering the present Covid 19 pandemic situation and the ensuing lockdown in several states. The RP is granted liberty to bring an Application before this Adjudicating Authority for any further exclusion of time, if the same is for exceptional and justifiable reasons, and in the interest of completing the process and achieving the objects of the Code.
Application disposed off.
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2021 (5) TMI 1044 - AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND
Valuation of supply - water and electricity charges as well as the notional rent of the land, provided free of charge by BHEL CFFP to the applicant - to be included in the value of supply of oxygen gas by the applicant or not? - HELD THAT:- This authority has no doubt that Oxygen gas is emerged out as a new product by extracting it from the atmospheric air with the help of refrigerator, compressors, separators etc. and during this process electricity and water is constantly used.
It is categorically stated that value of supply is the transaction value i.e. the price actually paid or payable for the said supply of goods and the price is the sole consideration for the supply. Further, value of supply shall also include any amount that the supplier Is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both - consideration includes any payment whether in money or otherwise made or to be made or monetary value of any act or forbearance for the inducement of the supply of goods.
The value of supply is the price actually paid/payable and price is the sole consideration and consideration includes monetary value of any act or forbearance. In the instant case BHEL CFFP are providing rent free land and free electricity & water to the applicant and thus tolerating all the expenditure incurred on these free of cost items. Therefore, inputs provided free of cost by the recipient of resultant goods shall also form part of value of supply in view of Section 15(1) and Section 15(2)(b) of the Act as the cost of these inputs has to be paid by the supplier of goods but actually incurred by the recipient and this cost is also not include in the price actually paid/payable by the recipient - In the instant case also, BHEL CFFP are also providing rent free space alongwith free water & free electricity to the applicant for manufacturing & supply of Oxygen gas to them. The applicant has contended that the ownership of land, water and electricity remains with BHEL CFFP during all stages of the process till receipt of manufactured oxygen by it. In no circumstances, would the ownership of the said rent free space or water or electricity would pass on to the applicant. In such a case, all the said facilities provided by BHEL CFFP cannot be said to be a consideration for the applicant and thus, would not form part of the value of manufactured oxygen within the boundaries of Section 15(1) of the CGST Act.
The value of rent free space alongwith free water & free electricity will form part of value of oxygen supply.
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2021 (5) TMI 1043 - ITAT DELHI
Assessment u/s 144C - Period of limitation - assessee vehemently stated that the assessment order is barred by limitation in as much as there was no need to frame a draft assessment order as per provisions of section 144C(13) - AO proposed that the interest income is to be taxed @ 20% u/s 115A(1)(a)(ii) - HELD THAT:- AO shall forward the draft of the proposed order if he proposes to make any variation in the income or loss returned. The aforestated proposal in the draft assessment order clearly show that the AO did not intend to make any variation in the income of the assessee, therefore, the assessment order should have been framed as per the provisions of section 153 r.w.s. 143(3) of the Act meaning thereby that the assessment order dated 07.09.2018 is barred by limitation.
In the light of the facts mentioned elsewhere when considered within the provisions of section 144C(1) we have no hesitation to hold that the assessment order is barred by limitation.
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