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Showing 381 to 400 of 844 Records
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2020 (7) TMI 465
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- From the details furnished by the assessee we find that it has computed suo-moto disallowance. Further a perusal of the details of the expenses other than interest expenses shows that assessee has incurred expenditure towards administrative expenses.
After deducting expenses incurred by the assessee on account of increase in share capital, stamp duty expenses and gratuity expenses the total administrative expenses comes against which the assessee has made suo-moto disallowance which is approximately 18.61% of the administrative expenses. However, without recording any satisfaction the AO has made the disallowance u/s. 14A read with Rule 8 D of the IT Rules 1962 which in our opinion is not justified.
Hon’ble Supreme Court in the case of Maxopp Investment Limited [2018 (3) TMI 805 - SUPREME COURT] has held that when suomoto disallowance are shown by the assessee, without recording the satisfaction as to why the working shown by the assessee is not acceptable, disallowance cannot be made.
A perusal of the assessment order nowhere shows that the AO has recorded any satisfaction as to why the suo-moto disallowance made by the assessee is not correct.
Therefore, we find merit in the argument of assessee that in absence of recording of any satisfaction by the AO having regard to the accounts of the assesses as to why the claim of disallowance made by the assessee u/s. 14 A is not correct, no disallowance can be made.
The various decisions relied by the Ld. DR are not applicable to the facts of the present case. We find both the decisions relied on by him are prior to the decision of Hon’ble Supreme Court in the case of Maxopp Investment Limited (supra). In view of the above discussion we hold that no further disallowance u/s. 14 A r.w.r 8 D could have been made.
Addition under the head “income from capital gain” - HELD THAT:- We find although the assessee has raised specific ground before the CIT(A), however, the Ld. CIT(A) has not adjudicated the same.
Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the AO with a direction to grant one more opportunity to the assessee to substantiate its case. The AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct according.
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2020 (7) TMI 464
Addition u/s 69A - addition of processing charges bill alleged to be paid outside the books of accounts - HELD THAT:- On receipt of reply alongwith 34 documents from M/s. Utkal Export, neither the AO or the CIT(A) show caused the assessee by way of written notice or note sheet entry and proceeded to make addition u/s.69A by treating the impugned amount of three bills and processing charges paid to the assessee in cash. This act of the revenue authorities is clearly contrary to the principles of natural justice as on receipt of reply from M/s. Utkal Export before making addition, the assessee should have been show caused informing him regarding reply received from M/s. Utkal Export and asking the assessee to reconcile the same.
If the assessee fails to explain and reconcile the differential amount, the revenue authorities were well empowered to make addition in the hands of the assessee u/s.69A - no hesitation to hold that the addition has been made in clear violation of principles of natural justice and the ld CIT(A) was not justified and correct in upholding the same.
Assessee should have been allowed to reconcile and explain the differential amount of all the bills and processing charges paid to the assessee in cash as per reply of M/s. Utkal Exports furnished before the AO.
Issue related to additions made by the AO on both the issues required reverification by the AO after allowing opportunity of being heard to the assessee, thus both the issues are restored to the file of the Assessing Officer for limited purposes with the direction that the AO shall re-examine the bills and reply of M/s. Utkal Exports keeping in view stand and explanation of the assessee and redecide the issue after allowing reasonable opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes.
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2020 (7) TMI 463
TDS u/s 194J - interconnection usages charges (IUC) - HELD THAT:- CIT(A) while allowing the claim of the applicant in deleting the demand raised u/s 194J for A.Y. 2008-09 & 2009-10 respectively with the conclusion that the roaming charges paid by the appellant to other telecom companies are not covered under “fee for technical service” and such payments are out of the purview of TDS provision of 194J.
We find no infirmity in the order passed by the Learned CIT(A). We, therefore, do not hesitate to confirm the same. Therefore, revenue's appeal is devoid of any merit and hence dismissed.
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2020 (7) TMI 462
Bogus purchases - GP estimation - HELD THAT:- It would make it a fit case to make estimated additions to account for profit element embedded in these suspicious / unverified purchases to factorize for profit earned by assessee against possible purchase of material in the grey / unorganized market and undue benefit of VAT against such bogus purchases, which CIT(A) has rightly done so - assessee was dealing in low-margin commodity like iron & steel which attracts lower VAT rate, the estimation of 12.5% with set-off of already declared GP was on higher side.
The coordinate bench in the cited decision of assessee’s son, found merits in the contentions of the assessee and observed that the assessee took all possible steps and produced relevant documents to prove the genuineness of the purchases made from M/s RTIPL. The evidences furnished by AO were not disproved by AO and therefore, the view taken by Ld. AO was not based on any material. In the said background, the bench directed Ld.AO to restrict the estimation to 0.11% on purchases made from M/s RTIPL. This rate was nothing but the GP rate earned by the assessee on other purchases.
Drawing analogy from the same & keeping in view the GP rates reflected by assessee in preceding as well as in succeeding years, we direct Ld. AO to estimate the additions against suspicious / unverified purchases @1% on net basis, without any other benefit. The additions would come to ₹ 3,81,027/-. The balance additions would stand deleted. Accordingly, the revenue’s appeal stands dismissed whereas the assessee’s appeal stands partly allowed.
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2020 (7) TMI 461
Accrual of income - Additions based on TDS statements - Addition on account of sum received which was allegedly not shown as income by Assessee - HELD THAT:- It is apparent that outstanding receivable from the above party debited by admass Builders to the account of the assessee towards various charges. The gross sale price of the above project has already been offered for taxation in the earlier year.
The receipt of consideration of income, which has been already offered for taxation in earlier years, received in this year, naturally cannot suffer tax once again. This amounts to double taxation in the hands of the assessee.
The lower authorities rejected the submissions of the Assessee asking for the confirmation when all the agreement were already available before them and copies of the ledger account depicting the conditions of the agreement before them.There were details of each and every expenditure incurred by Admass Builder pursuant to above agreement. The agreement itself shows various stages of payment and various obligations of the parties. The buyer was to obtain certain approvals at the cost of the appellant on payment as per the agreements. Buyer incurred such cost and debited the account of the appellant as payment of sale consideration.
The appellant also accepted the same and credited the account of the buyer. Just because the payer has deducted tax at source, it cannot become the income of recipient automatically. It is undisputed that total c sales consideration received/ receivable is offered for taxation in immediately preceding year. In view of this, merely because the assessee did not furnish confirmation and more so even when each and every expenditure is part of the agreement, this addition cannot be made so it cannot be sustained. In view of this, we direct the ld AO to delete the addition.
Disallowance of depreciation - HELD THAT:- Assessee has earned gross revenue of ₹ 81,50,271/- such as miscellaneous income and lease rent income etc.
These incomes is offered by the assessee as business income and accepted by the ld AO in the assessment. The assessee has been allowed several business expenditure during the year. Further, the assets on which depreciation is claimed by the assessee are also general asset as per Schedule No. 5 of the balance sheet. They are in the nature of air conditioner, fax machine, Xerox machine, computers, motor cars. These assets were not purchased during the year but was part of the assets i.e. block of assets in earlier. These assets were used for the purposes of the business. Merely because there was no project undertaken by the assesse during the year, and was trying to complete the formalities of sale of the huge project sold last year , which has certain obligations cast on assesse to be fulfilled, it cannot be said that those assets are not used during the year.
The business of the assessee is continuing. In view of this, it cannot be said that the assessee did not carry onany business during the year. Accordingly, ground No. 4 of the appeal of the assessee is allowed and the ld AO is directed to grant depreciation accordingly.
Disallowance of legal and professional charges - HELD THAT:- As per the agreement, some of the expenses were on account of assessee. Those expenses were incurred during the year as bills of the same were received during the year, they were acknowledged in this year, and consequently obligation to pay by assessee and right to receive by the service providers arose in this year. Therefore, assessee incurred this expenditure during this year. Under section 209(3)(b) of the Companies Act, 1956 [now section 128(1) of the Companies Act, 2013], all companies are required to follow the accrual basis of accounting However the profit on sale of the project Global Technology park was offered for taxation in the immediately previous year. As the allowability of these expenditure , the above bills agreed during the year and itwas paid during the year. we do not find any reason for the disallowance of the same.
Assessee was to record and recognize expenses when they are incurred in case those expenses relate to past performances. The sale took place last year, full sales consideration was offered for taxation by assessee. Some of the expenses of such a large project are bound to spill over to next year. It was a continuous process to incur expenditure when such a large project was soldand to account for in the books of account. Therefore, even though they were treated technically as prior period expenses, it related to a continuous flow of expenditure. Therefore, there was no justification in disallowing the expenditure, otherwise normally eligible for deduction. It is not the case of the revenue that the assessee towards the business of the assessee did not incur these expenses. In view of this, we direct the ld AO to delete the above disallowance.
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2020 (7) TMI 460
Eligibility of exemption u/s 11 & 12 - whether assessee activities are not in charitable nature and activities falls under the last limb of section 2(15) and hit by the proviso to section 2(15) ? - HELD THAT:- As relying on assessee's own case NEW DELHI YOUNG MEN’S CHRISTIAN ASSOCIATION LTD. AND VICE-VERSA [2017 (11) TMI 1370 - ITAT DELHI] we hold that assessee is eligible for exemption under Section 11 and 12 of the Act and the activities of the assessee are not hit by proviso to Section 2(15) of the Act.
The expression would take its colour and had to be considered in the context of Section 10(23C)(iv) of the Act. The court held that if in terms of the dominant and primary objectives of the Institution there was no desire to gain profits and the object was to promote trade and commerce not for itself but for the nation was to be construed as a charitable purpose. Thus, on a careful consideration of the entirety of the facts and the material on record and based on the history of the case and the existing precedents on this point, we have no hesitation in holding that the CIT(A) has rightly decided the issue in favour of the assessee Association by directing relief u/s 11 read with Section 12AA. The assessee trust’s income is also required to be computed on the commercial basis. In view of this all the grounds of appeal filed by the ld. Assessing Officer are dismissed. - Decided in favour of assessee.
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2020 (7) TMI 459
Disallowance of job work expenses - Allowable business expenses or not? - HELD THAT:- Job workers in their statement recorded under section 131(1) have confirmed that they provided services of job work, received charges based on competitive market rate and offered the same for the taxation. CIT (A) further given the finding that the there was no evidence brought by the Revenue suggesting that the amount paid to the job worker returned to the assessee in any manner.
On perusal of the details of the job work expenses incurred by the assessee in the earlier years, we find that the expenses for the year under consideration towards the job charges in relation to the sales has reduced significantly. Thus, in our considered view there is a direct relation between the amount of sales viz a viz the job work charges incurred by the assessee, therefore such turnover cannot be achieved without incurring the job work expenses.
It is also pertinent to note that, at the time of hearing the learned DR has not brought anything on record contrary to the finding of the learned CIT (A). Thus there cannot be any disallowance of the job work expenses as alleged by the AO. In holding so we find support and guidance from the judgment of Hon’ble Gujarat High Court in the case of CIT vs. Avinash M Jhawar [2011 (4) TMI 1514 - GUJARAT HIGH COURT] - Decided against revenue.
Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI]
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2020 (7) TMI 458
Re-opening of assessment u/s 147 - re-opening beyond a period of 4 years from the end of the AY - Addition u/s 68 - HELD THAT:- In this case, the assessee has disclosed during the course of original assessment proceedings details of all the loan creditors. The assessee has filed before us a copy of the notice issued u/s 142(1) of the Act dated 12.11.2013 along with the annexure and replies. He has also filed a copy of the unsecured loan account which contains the account of M/s. Rexnox Trexim Pvt. Ltd. The assessee has paid interest on this loan and deducted tax at source. The loan has been repaid within the same year.
On these facts, it is wrong on the part of the AO to record at para 7 of his reasons that the assessee has failed to disclose fully and truly all material facts necessary for assessment. Merely alleging that there is failure to disclose, would not serve the purpose. In this case, a factually wrong allegation has been made that the amount of ₹10 lakhs has not been fully and truly disclosed. Re-opening of assessment on such wrong reasons cannot be upheld.
No fresh tangible material has come into the possession of the AO, which could trigger re-opening in this case. The transaction with M/s. Rexnox Trexim Pvt. Ltd. was fully disclosed and it is not fresh material. All the other sentences in the reasons recorded are general and vague and it is not known how these observations are relevant to the assessee company. Re-opening of assessment is bad in law on this ground also.
Coming to the merits of the case, the assessee had received ₹10 lakhs in cash through banking channels and he has repaid the same along with interest after deducting tax at source. The details of the company from which the amount was received were filed. Under these circumstances, the question is whether the addition can be made u/s 68 - Assessee has explained the credit in question and as the amount has also been repaid along with interest, the addition in question made u/s 68 of the Act is bad in law. Hence we delete the same. - Decided in favour of assessee.
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2020 (7) TMI 457
TDS u/s 194C - Payment under the head ‘Distributor Hire Charges” - assessee has failed to deduct the tax at source, the AO held that the expenditure is not allowable as provided u/s 40(a)(ia) - HELD THAT:- In the earlier assessments, on identical facts, CIT(A) deleted the addition and it appeared that the department has not filed the appeal. In the subsequent year, though the assessment was made on identical facts, no such addition was made by the AO.
AO did not dispute that the payment is the sharing of revenue between the theatre owner and the assessee. AO also has not made out a case, to establish that the payment was either in the nature of contract payment or in the nature of rental payment.
In the instant case, the payment was made by the theatre owner who is exhibiting the films, therefore, it cannot be held as rental payment. In the case of rent, the assessee ought to have received the payment, but in the instant case, the assessee is making the payment to film distributor.
Assessee is screening the films being the theatre owner, it cannot be held that the same is contract payment. Therefore, we are of the view that the AO has not made out the case of either contractual payment or rental payment for holding that it attracts the TDS. Department also did not make out a case of assessee in default for non deduction of tax at source u/s 201(1). Hence, the order of the Ld.CIT(A) is unsustainable and accordingly, we set aside the order of the Ld.CIT(A) and delete the addition made by the AO. - Decided in favour of assessee.
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2020 (7) TMI 456
Admissibility of interest paid to KSEB towards delayed payment of pole rental charges - Interest amount for the delayed payment of the pole rent payable by the assessee since 2002-03 - allowable expense - HELD THAT:- KSEB revised the demand which was accepted by the assessee in the year 2016-17. Thus, the entire dispute was finally settled based on mutual verifications conducted by the parties.
This was due the serious anomalies in the apportionment of poles in the urban and in the rural areas. The assessee has placed a copy of the demand raised by KSEB on 28.09.2006 and copy of the order of High Court settling the dispute. In view of the fact that the demand had arisen and liability crystallized during the year, the statutory auditors had disclosed the expenditure under extraordinary item in the financial statements of the company in accordance with the provisions of AS-5 on net profit or loss for the year prior period items and changes in the accounting policies issued by the ICAI considering the largeness of the amount involved.
There is no case for the department that the expenditure is in the nature of prior period expenses. The Chennai Bench of the Tribunal in the case of ITO(OSD) vs. Sicgil India Pvt. Ltd. [2009 (3) TMI 239 - ITAT MADRAS-C] dealt with a case wherein the contractual liability which was disputed arose in the year of settlement of dispute. In the instant case, the dispute involved was finally settled during the F.Y. 2006-07 relevant to the A.Y. 2007-08. - Decided against revenue.
Difference between liability of interest due and penal interest which arose out of the demand by a competent authority - HELD THAT:- Supreme Court in the case of Mahalakshmi Sugar Mills Co. vs. CIT [1980 (4) TMI 1 - SUPREME COURT] where it was held that the interest for delayed payment of statutory dues is an allowable deduction u/s. 37(1). The same view was taken by Supreme Court in the case of Lachmandas Mathurdas vs. CIT [1997 (12) TMI 16 - SUPREME COURT]. Similarly, in the recent decision of the Cochin Bench of the Tribunal in the case of Lakshdweep Development Corporation Limited [2018 (10) TMI 283 - ITAT COCHIN]the Tribunal has held that interest on delayed payment of VAT and TDS is only compensatory and is not penal in nature. Therefore, the CIT(A) has correctly deleted the disallowance made for the interest expenditure claimed on delay payment of VAT and TDS. Thus, this ground of appeal of the Revenue is dismissed.
Depreciation on Modem - @ 15% OR 60% - HELD THAT:- Special Bench of the ITAT, Mumbai has held in the case of Dy.CIT vs. Data Craft ndia Ltd. [2010 (7) TMI 642 - ITAT, MUMBAI] that definition of computer should not be restricted to Central Processing Unit of the computer but should also extend to all input and output devices which support computer in the receipt of input on outflow and output to and from the computer. Further, in the following decision of High Courts and Tribunals, it has been held that modem is an integral part of a computer eligible for high rate of depreciation of 60% - Decided against revenue.
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2020 (7) TMI 455
Refund of IGST - Non compliance with the Directions - action against the respondent authority (Pr. Commissioner of Customs) - HELD THAT:- Noticing the contents of reply, time of one week is permitted to the respondent to approach the Apex Court. We are conscious of the fact that the judgment which is sought to be implemented by the applicant – original petitioner is dated 27.06.2019. One year has already gone. In one week’s time, if the respondent does not move the Apex Court, the matter shall be proceeded on merits.
Matter to appear on 20.07.2020.
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2020 (7) TMI 454
Holding of Video Conferencing - Commencement of physical hearing in the first week of July, 2020 - HELD THAT:- From the report it is evident that though the CESTAT was willing to hold the video conferencing but the members of the Bar were not in favour. On a representation of Bar Association President, CESTAT, New Delhi was requested to commence physical hearing on first week of July, 2020. petitioner has already filed the appeal. But, the only apprehension is that there is no hearing either physical or through video. In view of the report of the Registrar General, no further course of action in the review petition seeking the clarification of the order whereby petitioner was given liberty to avail the remedy of appeal is required.
Petition disposed off.
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2020 (7) TMI 453
Imposition of penalty u/s 112(a) of Customs Act, 1962 - import of LED battern fixture, LED panel light, LED flood light etc. - prohibited goods or not - the BIS number embossed on the driver did not tally with the registration number given in the BIS certificate - Absolute Confiscation - HELD THAT:- The registration number has two parts. One, the 8-digit number and also I.S. no.R-41036226 is 8-digit number, with regard to the driver imported by the appellant which is under dispute. The second part, which is the I.S. no. gives the description of the product type number. In case of driver, the product type number i.e., IS No.15885 is “PART 2/SEC 13” – 2012. On the drivers instead of embossing the said Indian Standard number, the Indian Standard number of LED lights happened to be embossed. The Indian Standard number of LED lights is IS 10322 “PART 5/SEC 2” – 2012. The Commissioner (Appeals) in para 5 has noted that the second part of the BIS number embossed on the driver does not tally.
On perusal of the facts as brought out from the records, it is seen that the Indian Standard number only has been embossed erroneously on the driver. The I.S. no. of the LED panel has been embossed on the driver. It is not the case that the I.S. no. of entirely different product is endorsed. Driver is part of the LED panel lights and the lights cannot be used without the corresponding driver - there are no merit in the clarification given by the manufacturers stating that it was an error while embossing I.S. no. on the drivers. For this reason, the confiscation of the driver alone cannot sustain. The order passed by the authority below is therefore set aside. There is no requirement to state specifically that the appellant has to pay duty when these goods are cleared for home consumption.
The misdescription of the BIS number is an error committed by the manufacturer - Penalty set aside - appeal allowed.
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2020 (7) TMI 452
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - time limitation - HELD THAT:- Admittedly, even as per learned counsel for the petitioner, the date of default for the alleged claim was July 8, 2013. The petitioner also failed to show any subsequent acknowledgment of debt by the respondent-corporate debtor, therefore, the starting point for the period of limitation is the date of default, i. e., July 8, 2013.
Since, admittedly, the date of default of the debt due to the petitioner was July 8, 2013 and that no acknowledgment of debt or any other circumstances are shown to extend the period of limitation beyond the period of 3 years expiring on July 8, 2016 and the CP having been filed on July 16, 2018 is clearly barred by the period of limitation - the instant CP is barred by the period of limitation and accordingly, the same is dismissed.
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2020 (7) TMI 451
Maintainability of petition - alternative remedy of appeal - Levy of Service Tax - construction undertaken in TNCSC Thanjavur Division - time limitation - HELD THAT:- There is nothing on record to indicate that the appellant himself was very much vigilant in getting his writ petition disposed of. Merely delay in taking up of the writ petition does not impell to entertain the aforesaid arguments for the reason that even if the contention is that the appellant was not liable to service tax, it was a question of fact, which had to be determined on the strength of the contract agreement and the documents which have been relied on by the parties - there are no error in the approach of the learned Single Judge in allowing the appellant to seek the remedy of appeal, which has been extended to the appellant even after a lapse of such a long time by giving the benefit of limitation.
The Tamil Nadu Civil Supplies Corporation, admittedly, is a Corporation registered under the Companies Act and is basically a Corporation for transacting food and civil supplies through various projects, where certain subsidies are also extended. Merely because the Corporation is working on the principle of No profit No loss basis, the same cannot enure to the benefit of the appellant, who is a Contractor, extending his service as Contractor for the purpose of raising construction for the Corporation. The activity of the Corporation will have no impact on the claim of any such benefit under the provision aforesaid that has been pressed into service by the learned counsel for the appellant. The service rendered by the appellant and the activity of construction by the appellant is not an activity of charity and is rather a contract for profit. The appellant is doing construction work not for any loss by raising constructions for the Corporation.
There are no merit in the appeal - appeal dismissed.
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2020 (7) TMI 450
Principles of Natural Justice - Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 - request for an opportunity of personal hearing rejected - rectification of mistake - whether aggrieved person of an order like Ext.P1 having availed the remedy of rectification, be permitted to take the benefit of Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 or not? - HELD THAT:- It is deciphered that the amount estimated by the designated committee must exceed the amount declared by the declarant. However on comparison of Exts.P1 and P3 the amount confirmed in the order in original Ext.P1, is ₹ 5,88,76,999/- whereas in the scheme the petitioner had claimed the liability of ₹ 4,60,68,715/-. Thus it was less than the amount as estimated by the designated committee. It is also a matter of record that though the petitioner could have availed the scheme, the rectification petition, against Ext.P1, pending consideration could not have arrived at a figure other than reflected in Ext.P1 - Revenue clearly complied with the provisions of Section 127, as there was no such occasion to afford opportunity of hearing being a farcical exercise.
The 1st respondent is directed to dispose of the rectification application Ext.P2, as expeditiously as possible, in accordance with law, by affording an opportunity of hearing - application disposed off.
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2020 (7) TMI 449
The Gujarat High Court issued an oral order in response to a complaint of non-compliance of directions in a previous case. The court invoked jurisdiction under the Contempt of Courts Act, 1971. Notice was issued to the respondents, returnable on 8.7.2020. Direct service through E-mode is permitted in addition to normal service.
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2020 (7) TMI 448
Classification of services - segregation, treatment, recycling of Municipal Solid Waste (MSW) and thus clearing MSW landfills - exemption under SI.No.3 of Notification 12/2017 dated 28.07.2017 as amended - service recipient i.e., M/s. Tirupati Smart City Corporation - Governmental Authority or not - liability of Governmental Authority to deduct TDS as per the provisions of section for the services rendered.
Classification of services - whether the nature of the activities of the applicant falls under SAC Code No 9994? - HELD THAT:- We concur with the opinion of the applicant after a thorough examination of the nature of the services of the applicant by classifying them under Sl.No.32 of Heading 9994 of Notification No: 11/2017 Central Tax (Rate) dt. 28.06.2017.
Whether services provided by the applicant is exempted under SI.No.3 of Notification 12/2017 dated 28.07.2017 as amended? - HELD THAT:- Sl. No. 3 of the above notification describes pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by way of any activity in relation to any function entrusted to a panchayat under article 243G of the constitution or in relation to any function entrusted to a Municipality under article 243W of the constitution.
Whether the services rendered by the applicant are pure services? - HELD THAT:- The Services rendered by the applicant as seen from the record, are devoid of any incorporation of goods in the process of supply and the agreement copy between the applicant and Tirupati Smart City Corporation Limited reveals the same citing the approximate value of the work to be done under the agreement for a sum of ₹ 18,64,00,000/- (Rupees Eighteen Crore Sixty Four lakh only) for 2,00,000 MT (Contract Price). Hence, they are classifiable as pure services, excluding works contract service and other composite supplies involving supply of any goods.
Whether the service recipient i.e., M/s. Tirupati Smart City Corporation is a “Governmental Authority” as per the definition of Notification No: 12/2017 Central Tax (Rate) dt:28.06.2017 as amended? - HELD THAT:- The applicant satisfies all the conditionalities as described under Section 2(16) of the IGST Act, or as defined vide Notification No. 31/2017 - Central Tax (Rate), dated: 13.10.2017 - the service recipient is a Governmental Authority.
Thus, services provided by the Applicant are exempted under SI.No.3 of Notification No. 12/2017 dated 28.07.2017 as amended further by Notification No. 32/2017 - Central Tax (Rate), dated: 13.10.2017.
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2020 (7) TMI 447
Supply or not - interest/penalty collected for delay in payment of monthly subscription by the members - classification and rate of duty applicable - whether there is any Tax Liability on such additional amount (termed as Interest) charged on delayed payment? - HELD THAT:- The applicant is chit company engaged in the activity of distribution of prize money to its members and the additional amount is being collected in the form of interest for delay payment from the members as consideration as a fixed percentage of transaction value. Having regard to the trade parlance it is also clear that chit company gives a reasonable time to its customer to make the payment however if the customer do not make the payment within the stipulated time then an additional amount is being charged and it may be termed as different names i.e. Interest, Late fee or Penalty - The additional amount being charged on delayed payment termed as Interest, late fee or penalty on the amount delayed in specified time cannot be bifurcated as such additional payment do not have its own classification. It is taking colour from original supply i.e., supply of financial and related services.
The entry No 27 of Notification no 12 / 2017 of CGST dated 28th June 2017 exempt the services by the way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services). Further, interest is also defined vide Section No.2 z(k) as means ‘interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) but does not include any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised’.
It is further clarified in circular No.102/21/2019-GST dated 28th June, 2019 that “any service fee/charge or any other charges that are levied by M/s. ABC Ltd in respect of the transaction relating to extending deposits, loans or advances does not qualify to be interest as defined in notification 12/2017-Central Tax (Rate) dated 28th June, 2017, and accordingly will not be exempt”.
The additional amount being charged in delay of payment by whatever name called should be classified as principal supply and the classification of the same cannot differ from the original supply. Hence the additional amount charged on delayed payment shall be taxed as per original supply i.e. supply of financial and related services.
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2020 (7) TMI 446
Direction to disburse the refund amount - HELD THAT:- Keeping in view the strict timelines stipulated in Rules 90 and 91 of the Central Goods and Services Tax Rules, 2017 this Court directs the respondent to process the petitioner’s aforesaid manual application within three working days.
List on 23rd July, 2020.
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9911796707
