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2021 (9) TMI 1430 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH
Seeking direction to the IRP to accept the claims submitted by the Applicant - Operational Creditor, inadvertently, in Form-C mis-typed as a Financial Creditor - time limitation on filing claims - Section 60(5) of IBC r/w Rule 11 of NCLT Rules, 2016 - HELD THAT:- It is an admitted fact that the last date for submissions of claims was 04.12.2019, however, the Appellant has filed his claim on 12.12.2020 i.e delay of 374 days. The Appellant in any case cannot get the advantage of the Judgment of Hon’ble Supreme Court in IN RE COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (5) TMI 564 - SC ORDER] as prescribed period has already been expired on 04.12.2019 for submitting the claim. In the impugned order, it is mentioned that the CIRP is at the stage of about to end. Ld. Adjudicating Authority has also mentioned that if the Appellant’s claims is directed to consider at belated stage it will not only be unfair to the other creditors who could not file their claim with the RP because of the delay but would also dilute the purpose of publication of Form-A. CIRP is a time bound process and if the Adjudicating Authority sets the clock back, it would certainly go against main objective of the Code.
There are no ground to admit this Appeal. Therefore, the Appeal is dismissed summarily without notice to the other side.
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2021 (9) TMI 1429 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Existence of financial debt or not - internal wrongdoing by constituent shareholders - HELD THAT:- This Petition has been preferred under section 7 for four term loans amounting to total Rs. 159,67,40,173/- along with interest as on 15.03.2019. The date of default as per the Petition is 13th July 2017. The Bench notes that existence of Financial Debt is admitted by the Corporate Debtor and these term loans are adequately reflected in the balance sheet of the Corporate Debtor for the year 2015-2016 and 2016-2017 as has been annexed in the rejoinder submitted by the Petitioner. The Financial Creditor has also produced the Bank statements before the Bench that clearly reflects disbursal of the money.
The bench notes that the Corporate Debtor is a body Corporate and has independent identity distinct from the shareholders. The Bench also notes that the Corporate Debtor had borrowed the money and it must be repaid. Since the Corporate Debtor had borrowed the money, it cannot take a plea of intra shareholders dispute or allegation of internal wrong doings by the constituent shareholders as a reason for not meeting its repayment obligation - In any case, the term loans have been reflected in the balance sheet of the Corporate Debtor and is reflected in the CIBIL Report. The facts of the case clearly and unbiasedly shows that there is a Financial Debt in terms of section 5(8) of IBC, 2016 and there is default in terms of section 3(12) of the IBC, 2016 by the present Corporate Debtor.
Petition admitted - moratorium declared.
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2021 (9) TMI 1428 - ITAT SURAT
Addition u/s. 69A for the alleged unexplained jewellery - HELD THAT:- We note that gold seized was only 636.790 grams embedded with diamonds of 7.95 carats, and in the assessee's family there are three married ladies, three married males and two minors. Three married ladies may hold the gold up to 1500 grams, which need not to be explained by the assessee, as per said CBDT instruction, therefore it seems to us clearly that gold seized was only 636.790 grams embedded with diamonds of 7.95 carats, which is below the limit prescribed by the CBDT, therefore, the Department ought not to have seized such gold. It is a settled law that the Circulars issued by CBDT are binding on the Revenue.
This position was confirmed in the case of Commissioner of Customs v. Indian Oil Corpn. Ltd. [2004 (2) TMI 66 - SUPREME COURT] wherein Their Lordships examined the earlier decisions of the Apex Court with regard to binding nature of the Circular and laid down that when a circular issued by the Board remains in operation then the Revenue is bound by it and cannot be allowed to plead that it is not valid or that it is contrary to the terms of the statute.
At the cost of repetition, we state that in assessee's case, the family contains three married ladies, three married male members and two minors, therefore considering the number of family members as mentioned above, no addition is warranted in the hands of the assessee, therefore, we delete the addition. Appeal of assessee allowed.
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2021 (9) TMI 1427 - THE NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - threshold limit involved inthe appeal - time limitation - HELD THAT:- It is noted that there is a debt which is more than threshold limit prescribed for initiation of insolvency proceedings under Section 7 of IBC, 2016. This debt has not been repaid, thus, the event of default has occurred. The debt is not barred by limitation.
The application is otherwise complete and defect free. The Financial Creditors have proposed the name of Mr. Devart Rana, to act as IRP which is mandatory for an application filed under Section 7 of CODE and whose consent is on record. It is also noted that no material exists on record as regard to disciplinary proceedings, if any, being pending against such person.
Application admitted - moratorium declared.
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2021 (9) TMI 1426 - BOMBAY HIGH COURT
Offence under SEBI - Appointment of adjudicating officer for holding inquiry - HELD THAT:- It is to be noted that, in the present proceedings, the Respondent issued Show Cause Notice to the Petitioner. Whatever documents can be provided to the Petitioner, the same were provided by the Respondent. Respondent, specifically informed to the Petitioner by their letter dated 24/03/2021 (Exhibit-H) that other documents cannot be provided because those were kept are confidential. Apart from that, the Petitioner already filed applications (Exhibit-P) and another interim application on the same day (Exhibit-Q) for directing the Respondent to provide the documents. These both applications are pending before the Authority.
It is to be noted that the Judgment relied by the Petitioner as stated hereinabove are not applicable in the facts of the present case because in the present case, the Respondent Board specifically informed the Petitioner by letter dated 23/03/2021 that certain documents are confidential and that cannot provided to the Petitioner. The hearing of the show cause notice as well as applications filed by the Petitioner for certain documents (Exhibit-P and Exhibit-Q) are pending before the Whole Time Member of the SEBI.
The letter of the Respondent dated 24/03/2021 and the statement made by the learned senior counsel for the Respondent stating that the they are not relying any other documents except those which are provided to the Petitioner, we do not find any substance in the present writ petition.
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2021 (9) TMI 1425 - CALCUTTA HIGH COURT
Principles of natural justice - full text of the order has not been supplied to the petitioner and only summary of the order has been supplied - requirement of full text of the order, for e-filing of the appeal - HELD THAT:- Division Bench of this Court in M/S. MJUNCTION SERVICES LIMITED AND ANOTHER VERSUS THE ADDITIONAL COMMISSIONER, STATE TAX, LARGE TAXPAYER UNIT, WEST BENGAL AND OTHERS [2021 (9) TMI 1423 - CALCUTTA HIGH COURT] has held that hardcopy of the appeal filed by the appellant shall be considered to have been filed within the limitation and it will be heard and decided on merits.
No relief in these writ petitions against the impugned order of adjudication except giving liberty to the petitioner to file appeal in Hardcopy and manually and if such appeal is filed within four weeks from date, the respondent shall consider the same as to have been filed within the limitation and shall hear and decide the appeal on merits by giving opportunity of hearing to the petitioner.
Petition disposed off.
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2021 (9) TMI 1424 - PUNJAB AND HARYANA HIGH COURT
Dishonor of Cheque - legally enforceable debt or not - legal notice under Section 138 of the Negotiable Instruments Act duly served upon the petitioner or not - issuance of a cheque for repayment of a time barred debt would amount to a written promise to pay the said debt within the meaning of Section 25(3) of the Indian Contract Act, 1872 or not - HELD THAT:- A cheque is a promise within the meaning of Section 25(3) of the Contract Act. Such a promise is an agreement and is an exception to the general rule that an agreement without consideration is void. Thus, although, on the date of making such a promise by issuing a cheque, the debt which is promised to be paid, may already be time barred, but keeping in view the provisions of Section 25(3) of the Contract Act, the promise/agreement will be valid and would be enforceable. It was, thus, held that issuance of a cheque in repayment of time barred debt would amount to a written promise to pay the said debt within the meaning of Section 25(3) of the Contract Act.
Even a perusal of Section 18 of the Limitation Act would show that neither there is a non obstante clause in the same, nor there is any negative terminology used so as to oust the provision of the Section 25(3) of the Contract Act - The provisions of the Negotiable Instruments Act, more so, Sections 118 and 139, raise a presumption, though rebuttable, in favour of the Negotiable Instrument itself, as to several factors, including the factor of consideration etc. and also the fact that the holder of the cheque is a holder in due course and holds the cheque for the discharge of any debt or other liability, in whole or in part.
To hold in favour of a person who has consciously issued a cheque after the debt has become time barred, would amount to doing injustice to the person in whose favour the cheque has been issued and would also defeat/frustrate the intent and object of the provisions of the Negotiable Instruments Act and the Contract Act. After a debt has become time barred, any person issuing a cheque subsequent to that, makes a promise to the person in whose favour the cheque is issued, that the said cheque would be honoured. On dishonor, the person to whom the cheque has been issued, would then have the right to pursue the remedy under Section 138 of the Negotiable Instruments Act - in case the proceedings under Sections 138 of the Negotiable Instruments Act are quashed, then the same would result in undue enrichment of the accused person who has managed to linger on the matter on a false promise by issuing the said cheque.
This Court conclusively holds that the issuance of a cheque in repayment of a time barred debt amounts to a written promise to pay the said debt within the meaning of Section 25(3) of the Contract Act and the said promise by itself would create a legally enforceable debt or liability, as contemplated by Section 138 of the Negotiable Instruments Act. Thus, issue No. (i) and (ii) are hereby answered in favour of the person in whose favour the cheque has been issued.
Whether in the facts and circumstances of the present case, the present petition under Section 482 CrPC would be maintainable? - HELD THAT:- The plea of time barred debt can only be gone into by the trial Court after the parties have led their evidence with regard to their respective pleas. No judgment has been cited by learned counsel for the petitioner in the present case, in which on the basis of said plea of time barred debt, a petition under Section 482 Cr.P.C. has been entertained, much less allowed. Thus, this issue is also decided against the petitioner.
Whether in the present case, the petitioner has been able to prove as to what would be the starting point of the period of limitation, so as to establish that the cheque was issued after the expiry of the period of limitation? - HELD THAT:- In the present case, learned counsel for the petitioner has not been able to state as to what would be the starting point of the period of limitation. No meaningful argument has been raised by the learned counsel for the petitioner and even as per his argument, it is not clear as to what was the last date of repayment.
In the present case, the legal notice and the other relevant documents have not even been produced on record. The Hon'ble Supreme Court as well as Delhi High Court have observed that the presumption of service of notice would arise when address mentioned in the statutory notice is correct. It is not even argued by learned counsel for the petitioner that address on the legal notice was not correct. At any rate, the said issue would be one of a disputed question of fact and on this basis, the present petition under Section 482 Cr.P.C. cannot be allowed and the same point can be agitated before the trial Court after the evidence have been led. Thus, the second argument of learned counsel for the petitioner also stands rejected.
Petition dismissed.
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2021 (9) TMI 1423 - CALCUTTA HIGH COURT
Rejection of refund claim on the ground of being time barred - Rule 108 of the Central Goods and Service Tax Rules, 2017 - HELD THAT:- Hardcopy of the order was supplied to the appellants by the concerned officer on August 3, 2019 and after waiting for some time for the order to be uploaded on the website, the appeal was filed in hard copy, which was dismissed as time barred. As the only mode provided in the Rules is to file the appeal online, the appellants could not avail of that remedy.
On account of technical defect on the website and the order impugned having not been uploaded on the website, as a result of which the appellants were unable to file the appeal online, the hard copy of the appeal filed by the appellants shall be considered to have been filed within limitation and it will be heard and decided on merits.
The present appeal is disposed of with direction to the appellate authority to decide appeal filed by the appellant against the order of rejection of the refund application on merits after affording due opportunity of hearing to the parties.
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2021 (9) TMI 1422 - ITAT DLEHI
TP Adjustment - Enhancement of income of the assessee on account of interest on receivables from the AEs - assessee contending that the authorities below failed to appreciate the fact that the assessee has not been charging any interest from third-party customers as an outstanding receivable and pricing/profitability is more than the working capital adjusted margin HELD THAT:- In Kusum Healthcare Private Limited [2017 (4) TMI 1254 - DELHI HIGH COURT] held that no additional imputation of interest on the outstanding receivables is warranted if the pricing/profitability is more than the working capital adjusted margin of the comparables
Once the working capital adjustment is given, it subsumes the interest on receivables and no separate benchmark for it has to be made. Respectfully following the view taken by the Hon’ble jurisdictional High Court in the case of Kusum Healthcare (supra), we hold that the addition made on account of interest on receivables cannot be sustained. - Decided in favour of assessee.
Non-grant of credit of entire TDS - HELD THAT:- Both the counsel agreed on the point that it would be suffice if the learned Assessing Officer is required to verify and grant the credit of TDS as per law. We direct the learned Assessing Officer to verify and grant the TDS under law.
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2021 (9) TMI 1421 - PUNJAB AND HARYANA HIGH COURT
Seeking grant of Regular Bail - case of the prosecution is that the petitioner got his date of birth rectified through a forged judgment and decree sheet of Civil Judge (Junior Division), Panipat - HELD THAT:- Whether the petitioner was unaware that the orders/judgments of the Trial Court submitted by him were forged would be considered during his trial. However, the petitioner is a young man aged 28 years; he has no other criminal case pending against him; investigation in the case is complete and that the petitioner's trial, which is yet to begin, is likely to take a long time to conclude.
The present case is considered to be a fit one in which the petitioner be directed to be released on regular bail. Resultantly, subject to the satisfaction of the CJM/Duty Magistrate, Bhiwani, the petitioner is directed to be released on bail.
Application allowed.
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2021 (9) TMI 1420 - ITAT DELHI
TP Adjustment - MAM - specified domestic transaction has been with regard to sale of electricity units to the other unit for manufacturing process of pharma and phyto-chemical products - whether the sale of electricity unit rate by the eligible unit to its non eligible unit is as per the market rate or not i.e., whether it is an Arms’ Length Price? - HELD THAT:- What is required to be seen here is, whether in the open market what is the rate of power or electricity is available to the consumer. If in open market the power is available to a customer from State Electricity Board at the rate charged by it then it is to be reckoned as market rate.
Once there was a direct internal CUP, i.e., the assessee company had purchased electricity from Punjab State Power Corporation at Rs.7.57, then it represents the market rate on which any industry undertaking or consumer is getting the electricity. Thus, we do not find any reason as to why such market rate or CUP should be rejected. Nowhere, it has been brought by the TPO as to why the average trading rate in Indian Energy Exchange should be applied as external CUP. Accordingly, we hold that the sale of electricity @ 6.72 per unit is at Arms’ Length and no adjustment is required in this segment/unit.
Adjustment in the transfer of steam, it is an undisputed fact that steam has been used for generation of electricity unit and for manufacturing process purely for captive consumption by the assessee, and therefore, it is fully eligible for deduction u/s.80IA. In the transfer pricing study report, the assessee had justified the price of transfer; firstly, by taking CUP in the manner specified hereinabove
The cost plus method was adopted and also the ld. TPO has required the assessee to furnish the cost of the steam produced. In response, the assessee has filed a report from approved senior chartered engineer who has given his report and the details of working. TPO without any cogent material or any expert report has rejected the working. Even if the cost plus method is adopted as held by the TPO, then how can he take the cost of steam at Nil and held that it is biomass which is byproduct therefore there is no cost.
Such an observation of the TPO is de hors any proper reasoning because from a bare perusal of the calculation as given in the report as incorporated we find that formula has been given as to how one ton rice husk has generated 3.96 MT of steam and also the basis for working of steam based on various factors including the steam from boiler sent to turbine at 100%. It has been demonstrated before the authorities below that the total steam generated in turbines was 232,688,432 M Kcal, out of which 46,526,053 M Kcal steam (20%) has been used for generating electricity units and balance (80%) steam was used for generating steam for transferring to manufacturing processes. Thus, there was a clearly cost for steam generation as per the report approved by chartered engineer and the steam unit taken for the purpose of captive power plant in profit ratio has been shown at 22.58%, and therefore, the transfer pricing of Rs. 2,160/- per MT was taken at Arms’ Length Price.
TPO has erroneously treated the assessee’s power plant as Biomass Gasifier Power Plant in which no steam is generated, instead of Biomass Steam Power Plants has wrongly came to conclusion that the cost of Steam generation is “Nil” as against Rs. 2160/ MT. Ld. TPO has failed to understand the operational working of Husk based power plants in which total expenditure is incurred first on generation of steam and thereafter part of steam is used for generation of electricity units and majority of steam is transferred to manufacturing processes of Pharma units of the assessee.
Steam is a form of power eligible for deduction u/s.80IA and same cannot be denied by taking its steam cost at Nil. Further. He has grossly erred in ignoring the audited certificate by Senior Chartered Engineer who is an approved valuer by Income Tax Department and the Cost Accountant appointed by the Central Government without any accounts report, without any agency or expert. Accordingly, for this unit also, we hold that no transfer pricing adjustment is required. Appeal of assessee allowed.
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2021 (9) TMI 1419 - ITAT MUMBAI
TP Adjustment - Disallowance of availing of intra-group services, i.e. Administrative and Managerial Services by the Appellant from its Associated Enterprises (AE) - application of benefit test - AO made addition of management support services u/s. 37(1) and /or/u/s. 40A(2)(b) - HELD THAT:- As decided in assessee's own case [2020 (2) TMI 1608 - ITAT MUMBAI] ITAT has inter alia held that TPO has erred in applying the benefit test. That the AO has contradicted himself that he is not applying the benefit test. We find that the proposition of ITAT in the above order are applicable to the facts in the present case to the extent ITAT has inter alia set aside the order, DRP observation that the agreement should have been entered into by the parties in a particular manner by incorporating several other clauses. This observation is duly applicable to this year also. However, since the AO has noted that assessee has not supplied the relevant documentary evidence and Ld. Counsel of the assessee has agreed that documents may be examined by the AO, we remit the issue to the file of AO only to examine the documents in this regard. Thereafter, AO shall decide as per law keeping in mind ITAT order in assessee’s own case as above and our observations hereinabove.
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2021 (9) TMI 1418 - ITAT BANGALORE
TP Adjustment - Comparable selection - turnover limits - HELD THAT:- Persistent Systems Ltd., Larsen and Toubro Infotech Ltd., Infosys Ltd., Thirdware Solutions Ltd. - There is nothing on record brought by the Ld. CIT. DR in order to establish that these are comparable with assessee that is a captive service provider which functions at the strict supervision and instructions by the AE's - we note that turnover criteria has to be applied with an upper limit which is not been considered by the Ld. TPO. The TPO has applied less than 1 crore turnover limit to eliminate the comparables however it failed to apply upper limit considering the functions performed assets owned and risk assumed by assessee under this segment for the year under consideration.
Respectfully following the view taken by coordinate benches in respect of the turnover limits that needs to be applied, we direct Ld. AO/TPO to reject the comparable accordingly from the finalist.
Insofar as Aspire systems (India) Ltd., Nihileant Technologies Ltd. And Cybage Software Pvt. Ltd. is concerned, it is also been submitted by Ld. AR that direction may be given to the Ld. AO to consider correct margins of the comparables that is finally retained in the final list. Accordingly we direct the Ld. AO/TPO to adopt correct margins of the comparables in accordance with law.
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2021 (9) TMI 1417 - ITAT DELHI
Reopening of assessment u/s 147 - service of notice issued u/s 148 - assessee has submitted that the approval granted by the Pr. CIT as well as ACIT is not valid as only the Competent Authority can grant an approval after recording the satisfaction on the reasons recorded by the AO before issuing the notice u/s 148 - HELD THAT:- The assessee did not raise any objection before the Assessing Officer and particularly before the assessment order was passed regarding non receipt of notice or disputing the service of notice issued u/s 148 - Once the assessee has not raised any objection against the service of notice issued u/s 148 and participated in the proceedings then after the completion of the assessment order the assessee is not allowed to dispute the service when the issuance of notice u/s 148 is not in dispute. Accordingly, in the absence of any argument on this issue as well as the facts as discussed above, we do not find any substance or merits in ground no. 1.1 on the assessee’s appeal. The same is dismissed.
Validity of notice issued u/s 148 due to invalid approval granted u/s 151 -satisfaction recorded by the Pr. CIT is separate and independent not having any influence. Hence, even if there is a satisfaction recorded by the Addl. CIT who is not a Competent Authority for granting sanction for issuing notice u/s 148 in this case the said satisfaction of Addl. CIT would not vitiate the satisfaction recorded by the Pr. CIT. Therefore, the satisfaction as recorded by the Pr. CIT at the time of granting the approval/sanction u/s 151 of the Income Tax Act manifests that it was an independent satisfaction based on the reasons recorded by the Assessing Officer. Even otherwise, the reasons recorded by the Assessing Officer prima facie makes out the case to form a belief that income assessable to tax as reflected in Form 26AS has escaped assessment because the assessee did not file any return of income u/s 139 of the Income Tax Act. From the Paper Book of the assessee, we further note that the sanction accorded by the Pr. CIT was communicated to the Assessing Officer through Addl. CIT vide letter dated 31.03.2017. Thus, it appears that the movement of the file from the ITO to Pr. CIT is rooted through Addl. CIT. Hence, we do not find any error or illegality in the sanction granted u/s 151 by the Pr. CIT.
Validity of the reassessment order for want of valid notice u/s 143(2) - Where the assessment was reopened due to the reasons that the assessee has not filed any returned income u/s 139 and Form No. 26AS shows the receipt of Rs. 65,02,171/- as contract receipt subjected to TDS u/s 194C of the Act from M/s E-X Seed Technologies & Device P. Ltd. which is a party to a contract dated 6th August, 2009 entered into for having business/contract transactions then the details available in Form 26AS would constitute an incriminating material disclosing an income escaped assessment. Therefore, the notice issued by the Assessing Officer u/s 143(2) cannot be said to be without verification of the return of income filed by the assessee because the AO had to examine the issue which is subject matter of the reasons recorded for reopening of the assessment. Hence, we do not find any merit or substance in the additional ground no. 3 & 4 raised by the assessee. The same are dismissed.
Addition based on the details of payment reflected in the Form 26AS - assessee has contended before the AO as well as CIT(A) that the payment shown in Form 26AS was not received by the assessee from M/s E-X Seed Technologies & Device P. .Ltd. as the cheque issued by the said company got dishonored and assessee has filed a police complaint - Complete facts reflecting the true state-of-affairs between the parties have not come on record. AO has not conducted a proper enquiry during the assessment proceedings to ascertain the correct facts regarding the amount reflected in Form 26AS even, during the remand proceedings as directed by the CIT(A) nothing has come out conclusively. Therefore, it is apparent that the addition made by the AO is solely based on the details of Form 26AS and not on the basis of any facts detected as a result of an enquiry conducted by the AO. Hence, in the facts and circumstances of the case and in the interest of justice, we are of the considered view that this matter requires a proper verification and enquiry to ascertain the correct facts regarding the actual amount received by the assessee from the other contracting party namely E-X Seed Technologies & Device P. Ltd. Accordingly, in the interest of justice, we set aside this issue to the record of the Assessing Officer for deciding the same afresh after conducting a proper enquiry on this point. Needless to say the assessee be granted and appropriate opportunity of hearing before passing the fresh order.
Appeal is partly allowed for statistical purposes.
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2021 (9) TMI 1416 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, MUMBAI
Levy of IGST - import of footwear having a sale value not exceeding Rs. 1000 per pair - Eligibility for concessional IGST rate at 5% - HELD THAT:- It is relevant to note that the GST rate on apparel and hotels was also based on price-based classification similar to footwear. However, the basis of taxation was sale value as compared to retail sale price for footwear. In the above-mentioned clarification, the transaction value is used as the basis for levying GST in both the cases, i.e., for retail sale price as well as for sale value. The transaction value in the context of sale value is the value of supply, whereas, it is the declared sale price in the context of the retail sale price. However, the differential GST rate on the basis of retail price failed to account for any discount offered by the supplier.
Even if the goods were sold at the price below the threshold due to a discount offered, the seller was not able to avail concessional rate of tax as the rate was linked to the retail sale price. Therefore, there was a demand to levy tax on transaction value and not on retail sale price so that when footwear was sold at a discount on the printed price, the tax would be charged on the transaction value.
IGST is imposed on the imported goods to neutralise the impact of GST being levied on domestic goods. GST is a supply-based, value-added taxation system. The levy is triggered when the goods are supplied and is charged on the basis of transaction value i.e., the value of supply. As the goods move across the supply chain, taxes are levied on the basis of the actual value of the supply. The amendment made to Sr. No. 225 of Schedule-I brought price-based differential taxation on footwear in line with the principle of GST. Therefore, if the supply value is below Rs. 1000 per pair, IGST at 5% would be applicable and if supply value is above Rs. 1000, it would attract IGST at 12%.
Thus, the imported footwear of sale value of Rs. 1000 per pair are liable to Integrated Goods and Services Tax at the rate of 5%.
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2021 (9) TMI 1415 - ITAT AHMEDABAD
Nature of expenditure - Trademark License Utilization fees - AO has not agreed with the submission of the assessee and treated the trademark license utilization fees as payment made for acquisition of trademark and licneses within the meaning of capital asset as defined in section 32(1)(ii) and allowed 25% of depreciation - HELD THAT:- As decided in M/s. Vishnu Pouch Packaging Pvt. Ltd . [2019 (12) TMI 1613 - ITAT AHMEDABAD] contractual obligations are ordinary in commercial parlance and does not grant any valuable right to the licensee. The advantage earned by the assessee by use of the license is neither permanent nor ephemeral but is linked to the use of the trademark owned by the licensor. The expense towards use of trademark was clearly laid out for the purpose of ongoing business carried on by the assessee and fee paid for use of such trademark is clearly deductible as revenue expenditure. The assessee herein has been merely granted a license to use trademark on payment of license fee determined on the basis of a formula laid down in the agreement. The right to use can neither be assigned at the wishes of licensee nor is the licensor prohibited to terminate the user license agreement executed with licensee. Thus, licensor retains the inherent control over the manner of use of trademark. Thus license fee paid for mere use of capital asset which continues to belong to someone else thus cannot be regarded to be in the capital field in the hands of licensee. - Decided against revenue.
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2021 (9) TMI 1414 - SC ORDER
Detention of vehicle alongwith goods - mistake in E-way bill - E-way bill in which by mistake erroneously entered its own name in the column of consignee - levy of tax and penalty - It was held by the High Court that The respondents are not justified in rejecting the appeal of the petitioner on the ground that the mistake committed while generating the E-way bill, was not a clerical error or a small mistake and the impugned orders passed by the respondents, confirming the tax and penalty to the tune of ₹ 2224268/-, are hereby quashed.
There are no reason to entertain the Special Leave Petition under Article 136 of the Constitution - SLP dismissed.
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2021 (9) TMI 1413 - ITAT ALLAHABAD
Multiple appeals against one CIT order - duplicate appeals - 12 appeals by the assessee all directed against the order of Pr. CIT (Central), Allahabad passed under section 12AA(3) and 80G (5) of the Income Tax Act - HELD THAT:- It seems that the assessee has filed total 13 appeals purportedly each for assessment years 2007-08 to 2019-20 without having any order relating to these assessment years to be challenged. Therefore, the assessee has mis-represented the basic information and facts required in Form No. 36 as well as abused the process of law by filing 13 appeals instead of one appeal against one impugned order. Accordingly, one appeal was taken as a lead case for the purpose of hearing and disposal which we are deciding vide separate order and the remaining 12 appeals are nothing but invalid duplicate appeals and are nonest. Accordingly, in view of the fact that these 12 appeals are duplicate and therefore, these are liable to be dismissed as invalid appeals being nonest. We order accordingly.
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2021 (9) TMI 1412 - CESTAT ALLAHABAD
Classification of goods - Nimbooz by 7 up - Nimbooz Masala Soda by 7 up - whether merits classification under CETH 2202 10 20 of the First Schedule to the Central Excise Tariff Act, 1985 as “Lemonade” or not - HELD THAT:- The products involved in the present appeal are Nimbooz by 7 up, Tropicana Twister Nimbooz and Nimbooz Masala Soda by 7 up. The products, therefore, deserve classification under Tariff Item No. 2202 90 20.
Appeal allowed - decided in favor of appellant.
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2021 (9) TMI 1411 - ITAT MUMBAI
TP Adjustment - corporate guarantee to its overseas Associate Enterprise - Commissioner (Appeals) reducing the corporate guarantee fee to 0.5% as against 1.5% determined by the Transfer Pricing Officer - HELD THAT:- No infirmity in the aforesaid decision of learned Commissioner (Appeals). The Hon’ble jurisdictional High Court in case of CIT vs Everest Kento Cylinders Ltd. [2015 (5) TMI 395 - BOMBAY HIGH COURT] has upheld the decision of the Tribunal in charging guarantee commission on corporate guarantee at 0.5%. The same view was expressed by the Hon’ble jurisdictional High Court in case of CIT vs M/s GlennmarkPharmceuticals Ltd [2017 (2) TMI 1305 - BOMBAY HIGH COURT] The aforesaid decision of the jurisdictional High Court was upheld by the Hon’ble Supreme Court while deciding the appeal of the revenue [2018 (12) TMI 608 - SUPREME COURT]. In view of the aforesaid, we uphold the decision of learned Commissioner (Appeals) on this issue. Grounds are dismissed.
Disallowance of deduction claimed on employee stock option (ESOP) expenditure - whether ESOP expenditure is allowable u/s 37(1) ? - HELD THAT:- We find, while deciding identical issue in assessee’s own case in Assessment Year 2012-13 learned Commissioner (Appeals), following the decision of ITAT, Bengaluru Special Bench in case of M/s Biocon Ltd [2013 (8) TMI 629 - ITAT BANGALORE] allowed assessee’s claim of deduction by holding that ESOP expenditure is not a contingent liability; hence, is an allowable deduction under section 37(1) of the Act. We have also noted, identical issue has been decided in favour of the assessee in Assessment Year 2008-09 - Thus we uphold the decision of learned Commissioner (Appeals) while dismissing the ground raised.
Disallowance u/s 14A r.w.r. 8D - suo motu disallowance made by assessee - HELD THAT:- As could be seen from the summary of average value of exempt income yielding investments, interest free fund available and disallowance computed under section 14A filed before us by the learned Counsel for the assessee, the assessee had sufficient interest free fund available with it. Therefore, no disallowance of interest expenditure can be made. Further, we also agree with assessee that disallowance under rule 8D(2)(iii) can only be made on the average value of assets yielding exempt income during the year. It is the case of the assessee that if disallowance under rule 8D(2)(iii) is computed on the average value of exempt income yielding investments, it will work out to Rs.64,24,889/– only. Whereas, assessee, suo motu, has disallowed Rs.11,68,95,186. We find substantial force in the aforesaid submissions of the assessee. Further, the contention of the assessee that the shares of DEN Network has no cost to the assessee as it was received by gift/voluntary contribution is acceptable. In view of the aforesaid, we uphold the decision of learned Commissioner (Appeals). This ground is dismissed.
Disallowance u/s 14A r.w.s. rule 8D while computing book profit u/s 115JB - HELD THAT:- We are in agreement with learned Commissioner (Appeals) that while computing books profit under section 115JB of the Act, the assessing officer cannot invoke the provisions of section 14A r.w.r. 8D for making adjustment to the book profit. This legal proposition has been laid down in case of ACIT vs Vireet Investments (P) Ltd [2017 (6) TMI 1124 - ITAT DELHI].Though, the assessing officer is empowered to disallow expenditure incurred for earning exempt income in terms of Explanation 1(f) of section 115JB; however, such expenditure must have a direct nexus with the earning of exempt income and not something which is computed under rule 8D r.w.s. 14A of the Act. Therefore, we do not see any reason to interfere with the decision of learned Commissioner (Appeals) on the issue. Ground is dismissed.
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