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Showing 221 to 240 of 23051 Records
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2019 (12) TMI 1469
Reopening of assessment u/s 147 - petitioner seeks interim relief - as submitted by assessee initially for the assessment year 2012-2013, the assessment order was passed by the Assessing Authority and on the same material again the Assessing Authority has proceeded to issue a show cause notice under Section 148 - respondent submits that certain materials were not earlier disclosed by the Assessing Authority while passing the first assessment order and the said material came in the light when the fresh notice has been issued by the Assessing Authority by invoking the provisions of Section 148 of the Income Tax Act on the basis of which the order in question has been passed - HELD THAT:- After hearing learned counsel for parties and going through the record, it transpires that the matter needs consideration by this Court, thus, as an interim measure, we provide that the assessment order passed by the Assessing Authority for the assessment year 2012-13 may go on but no final order should be passed till the next date of listing.
Learned counsel for the respondents prays for and is granted four weeks' time to file counter affidavit. Two weeks' time thereafter is granted to file rejoinder affidavit.
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2019 (12) TMI 1468
TP Adjustment - MAM selection - computation of the transfer pricing addition by taking all the direct and indirect costs incurred by the assessee - inclusion of two comparables - HELD THAT:- On a conjoint reading of the relevant parts of above sub-clauses, it is manifested that the RPM compares the transaction at gross profit level, which means considering all the direct costs forming part of the Trading account only. Not only the `gross profit margin’ of the comparables is taken for application to the sale price of the goods purchased from the AE, but also the expenses incurred by the assessee in connection with the purchase of goods are then sought to be reduced. The mandate is for reducing only the expenses incurred by the assessee in connection with the purchase of goods and no other expenses.
On a relative analysis, it emerges that it is only the items of the Trading account of the comparables as well as the assessee which go into determining the ALP of the international transaction of purchase of goods from the AEs under the RPM. If under sub-clause (iii), we proceed to reduce the indirect costs also, meaning thereby, the costs debited to the Profit and loss account of the assessee, the effect would be that we would be comparing the figure of comparables at gross level with the figure of the assessee at net level, distorting the comparability. Sub-clause (iv) talks of even ironing out the differences in the accounting practices of the assessee and comparables. Its rationale is that even after considering all the costs debited to the Trading account of both the assesses and comparables, if still there remains some difference due to following of different accounting practices, then the effect of such difference should also be given to in the determination of the ALP. It may cover a situation in which a comparable may have either debited an item of indirect cost to the Trading account or some direct cost to the Profit and loss account, effect of which is required to be given. There is no prescription what so ever for considering the indirect costs either of the assessee or the comparables in determining the ALP under the RPM.
TPO, in the calculation extracted above, has rightly considered the gross profit margin of the comparables, but stepped out of the method in considering the `Operating cost’ of the assessee and has, in fact, included all the direct and indirect costs of the assessee. The method adopted by the TPO has become a hybrid of the RPM and the TNMM, which has needlessly dragged down the ALP of the international transaction of purchase of goods. As against that, he ought to have considered only the direct costs of the assessee so as to bring parity with the gross margin of the comparables under the RPM. Thus the impugned order cannot be sustained to this extent. We, therefore, set-aside the impugned order pro tanto and hold that only the direct costs incurred by the assessee should be considered.
Inclusion of two companies in the final set of comparables, namely, Larsen and Toubro Ltd. and Siemens Ltd. - As gone through the segmental reporting of L&T Ltd. from which it can be seen that no separate figures for trading segment are available. As the assessee is admittedly only in the trading, the consideration of L&T Ltd.’s figures also including manufacturing and property development activities, do not serve as a good comparable. We, therefore, order to remove L&T Ltd. from the list of comparables.
TPO has computed at page 11 of his order the `Gross margin of trading activity only’ of Siemens Ltd. at 49.20%. We have gone through the Annual report of this company. It can be seen that the year ending of this company is 30-09-2012. As against that, the assessee is maintaining its accounts on financial year ending basis. In CIT Vs. PTC Software [2016 (9) TMI 1282 - BOMBAY HIGH COURT] has held that the companies with different financial year endings cannot be considered as comparable under Rule 10B. Without going into further analysis and following the precedent on this preliminary issue, we order to delete this company from the list of comparables.
Transfer pricing addition on the entity level figures of the assessee company rather than the international transactions - Hon'ble jurisdictional High Court in CIT vs. Thyssen Krupp Industries India Private Ltd. [2015 (12) TMI 1076 - BOMBAY HIGH COURT] has held that the transfer pricing addition can be made only with reference to the international transactions and not the transactions with the non-associated enterprises. Similar view has been espoused by the Hon’ble Delhi High Court in CIT VS. Keihin Panalfa Ltd. [2016 (5) TMI 203 - DELHI HIGH COURT]. Respectfully following the precedents, we hold that the transfer pricing addition should be restricted only to the international transactions.
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2019 (12) TMI 1467
Exclusion of service tax portion in computing income u/s 44BB - CIT(A) has allowed the claim of the assessee on the basis of his earlier decision for the A.Y. 2016-17 dated 25.01.2018 - HELD THAT:- No doubt, the law relied by the Ld. Representative of the revenue speaks that the service tax is the part and parcel of the profit, therefore, the same was subject to presumptive profit and gain u/s 44BB of the Act. The issue has been considered by Hon’ble Delhi High Court in the case of Mitchell Drilling International [2015 (10) TMI 259 - DELHI HIGH COURT].
Subsequently, by ITAT Mumbai Bench in the case of M/s. Weatherford Drilling [2018 (6) TMI 1526 - ITAT MUMBAI] in which it has been clearly held that the service tax is not liable to be include in gross receipt in terms of Section 44BB(1) r.w. Section 44BB(2) of the Act because the same is not part of the gross receipt for the purpose of depositing the presumptive tax. Taking into account all the facts and circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, we decide all the issues in favour of the assessee against the revenue.
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2019 (12) TMI 1466
Seeking appropriate directions to the National Stock Exchange of India Limited (NSEIL) for release of 1,00,000 shares of Reliance Industries Limited including all corporate benefits thereon on account of Fixed Deposit standing with NSEIL - HELD THAT:- Clearly, given the manner in which fraudulent acts are undertaken under deceit and camouflage, if done with the affairs of a company/trust etc., the standard of proof required to prove such fraudulent conduct would necessarily be less stringent - it is manifest that Rommel has failed to place on record material facts without any plausible explanation.
Rommel has failed to show that pursuant to sale of shares of Reliance Industries Limited which belonged to CRB Trustee Limited A/c CRB Mutual Fund the consideration was paid to CRB Trustee Limited. - Rommel has also failed to give details, namely, folio no./share Nos. of the shares of Reliance Industries Limited allegedly belonging to CRB Capital Markets Limited that were allegedly pledged to Rommel as claimed by Rommel. Hence, the defence sought to be given by Rommel about alleged execution of agreements dated 22.11.1995 and 24.4.1996 with CRB Capital Markets Limited cannot be accepted and appears to be make belief.
NSEIL is directed to transfer 1,02,000 shares of Reliance Industries Limited with accumulated benefits including dividend, bonus shares etc. in favour of the applicant Committee formed by the court - Application allowed.
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2019 (12) TMI 1465
Seeking permission to participate for submitting the proposal of scheme of compromise and arrangement - HELD THAT:- Similar issue fell for consideration before this Appellate Tribunal in Jindal Steel and Power Limited vs. Arun Kumar Jagatramka and Anr. [2020 (2) TMI 1130 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI]. In the said case, the question fell for consideration as to whether in the liquidation proceeding under Insolvency and Bankruptcy Code, 2016 in terms of Section 230-232 of the Companies Act, 2013 a promoter is eligible to file application for compromise and arrangement, while he is ineligible under Section 29A of the I&B Code.
The Appellant in view of Section 29A of the I&B Code, cannot file any application for compromise and arrangement in terms of Section 230-232 of the Companies Act, 2013 to take over the Company - there is no delay in preferring the Appeal - Appeal dismissed.
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2019 (12) TMI 1464
Classification of goods - rate of tax - Air Conditioner Hose Assembly (suction discharge) used as part of Air Conditioner Compressor - taxable under Chapter heading 4009 of Custom Tariff Act, 1975 or otherwise? - HELD THAT:- The hoses are made up of vulcanised Rubber other than hard rubber, as communicated by the applicant. Further as per the facts mentioned in the application for advance ruling the product under question is a part of gas compressor and not of air conditioners. Further prior to GST regime the applicant was also classifying the said product under the Chapter Heading 4009. Thus, the impugned product shall be aptly classifiable under Chapter Heading 4009 and accordingly liable to such GST rate as prescribed under Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 (as amended).
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2019 (12) TMI 1463
Input Tax Credit - original invoices issued by service provider from old GST Number - invoices issued from the new GST Number under section 31 (3) (a) of the CGST Act, 2017 read with rule 53 (1) of the CGST rules, 2017 - invoices issued from new GST No., then from which date does the input is admissible i.e. original date or the revised date.
Whether the input tax credit is admissible on the basis of original invoices issued by service provider from old GST Number? - HELD THAT:- An Input Service Distributor could pass only the Input Tax Credit accumulated to him and in accordance with Rule 54 of the CGST Rules, 2017. Moreover, in the instant case the service provider has already claimed refund of the tax deposited under the old registration number (Input Tax Distributor category) - we are in unison with the jurisdictional authority that the input- tax credit, on the basis of invoices issued by the service provider from old GST No. 09AVKPS 1666H2Z1 (Input Service Distributor), could not be admissible to the applicant.
Whether under the CGST Act 2017, two registration certificate issued under the same PAN number, are to be treated as different legal entity or not? - If they are to be treated as different legal entity, whether the invoices issued by one business entity can be revised by the other legal entity? - HELD THAT:- Even if a person obtains two separate registrations, on the same PAN number, they are to be treated as distinct person under the CGST Act, 2017 - any person registered under the CGST Act, 2017, can only revise those invoices which were issued by him previously. However, in the instant case, we observe that one legal entity/ person (GST No. 09AVKPS1666H2Z1) has provided service and issued original invoices in lieu of providing such service. Whereas, these invoices were revised by another legal entity/ person (GST No. 09AVKPS 1666H3Z0). This fact has also been confirmed by the Additional Commissioner, CGST (Appeals), Noida.
In the light of Section 31 (3) (a) of the CGST Act, 2017 read with Rule 53 of the CGST Rules, 2017, it is not permissible to revise the invoices issued by one person/ legal entity by another person/ legal entity - the Input Tax Credit is not admissible to the applicant on the revised invoices issued by the service provider from the new GST No.09AVKPS1666H1Z0 under Section 31 (3) (a) of the CGST Act, 2017 read with Rule 53 (1) of the CGST Rules, 2017.
If the input is admissible on the basis of invoices issued from new GST No., then from which date does the input is admissible i.e. original date or the revised date? - HELD THAT:- As the Input Tax Credit is not admissible to the applicant on the basis of revised invoices issued from new GST No of the service provided, accordingly in this situation this question raised by the applicant become redundant and needs no reply.
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2019 (12) TMI 1462
Determination of Time of Supply - 'Deposit Works' being executed by the applicant - time of receipt of funds from the client government department or the time when expenditure incurred towards execution of the work is debited to 'Deposit Works account'? - value of such supply.
HELD THAT:- The amount received by the applicant is for certain supply of service, to be carried out by them. Further, as and when some part of the work gets completed, the proportionate amount gets debited from advance amount. Accordingly, it is observed that the contention of the applicant that the amount received by them as “Deposit Work” is a deposit and not advance, is not tenable. The amount received by them is rightly classifiable under advance received for supply of service.
As regard to the proviso to sub section 31 of Section 2 of CGST Act 2017 i.e. “Provided that a deposit given in respect of supply of goods or service or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply”, it is observed that the above said provision envisages a situation wherein the amount is received by the service provider as “Security deposit” for any particular work and the same get refunded after the completion of said work. Whereas, in the instant case, the amount received by the applicant is in the nature of “Advance payment” and not “Security deposit”. Thus the proviso in question does not apply in the instant case.
Time of supply of service - Section 13 of the CGST Act, 2017 - HELD THAT:- The time of supply is determined with reference to the time when the supplier receives payment with respect to the supply as well as a few other references like issue of invoice, receipt of goods etc. In general, the time of supply is earliest of issuance of invoice or receipt of payment. Therefore, in case of advance received for any supply, time of supply is fixed at the point when advance is received, irrespective of the fact whether the supply is made or not. Accordingly, GST needs to be paid with reference to the time at which advance is received. In view of this we observe that the time of supply in case of 'Deposit Works' being executed by the applicant would be the time of receipt of funds from the client (Government department).
Value of supply - Section 15 of the CGST Act 2017 - HELD THAT:- The value of the supply, on the advance payment received by the applicant, will be the amount of advance received by the applicant towards that particular work/ supply.
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2019 (12) TMI 1461
Seeking grant of Bail - Murder - It was alleged that the Accused used rods to beat the deceased with an intention to kill him and that after beating the deceased, the Accused fled from the scene of the incident - HELD THAT:- Essentially, this Court is required to analyse whether there was a valid exercise of the power conferred by Section 439 of the Code of Criminal Procedure to grant bail. The power to grant bail Under Section 439 is of a wide amplitude. But it is well settled that though the grant of bail involves the exercise of the discretionary power of the court, it has to be exercised in a judicious manner and not as a matter of course.
The determination of whether a case is fit for the grant of bail involves the balancing of numerous factors, among which the nature of the offence, the severity of the punishment and a prima facie view of the involvement of the Accused are important. No straight jacket formula exists for courts to assess an application for the grant or rejection of bail. At the stage of assessing whether a case is fit for the grant of bail, the court is not required to enter into a detailed analysis of the evidence on record to establish beyond reasonable doubt the commission of the crime by the Accused. That is a matter for trial. However, the Court is required to examine whether there is a prima facie or reasonable ground to believe that the Accused had committed the offence and on a balance of the considerations involved, the continued custody of the Accused sub-serves the purpose of the criminal justice system.
Where a court considering an application for bail fails to consider relevant factors, an appellate court may justifiably set aside the order granting bail. An appellate court is thus required to consider whether the order granting bail suffers from a non-application of mind or is not borne out from a prima facie view of the evidence on record. It is thus necessary for this Court to assess whether, on the basis of the evidentiary record, there existed a prima facie or reasonable ground to believe that the Accused had committed the crime, also taking into account the seriousness of the crime and the severity of the punishment.
Without expressing any finding or opinion on the merits of the case, a case has been made out for setting aside the bail granted by the High Court. The High Court has manifestly erred in not taking note of the material which has been adverted here. The order passed by the High Court fails to notice material facts and shows a non-application of mind to the seriousness of the crime and the circumstances referred to earlier which ought to have been taken into consideration - The High Court has erred in not considering material relevant to the determination of whether the Accused were to be enlarged on bail. The order of the High Court enlarging the Accused on bail is erroneous and liable to be set aside.
Where an order refusing or granting bail does not furnish the reasons that inform the decision, there is a presumption of the non-application of mind which may require the intervention of this Court. Where an earlier application for bail has been rejected, there is a higher burden on the appellate court to furnish specific reasons as to why bail should be granted - The perfunctory analysis by the High Court in the present case cannot be sustained.
Appeal allowed.
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2019 (12) TMI 1460
Classification of goods - Trapezoidal shaped pre-painted GI roof profiles - to classified under CTH 73089090 or under CTH 7216 - HELD THAT:- The dispute with regard to classification of the subject goods was under challenged before the Tribunal in the case of PRABHAT STEEL TRADERS PVT LTD, KAVI COMMERCIAL LTD VERSUS COMMISSIONER OF CUSTOMS (IMPORT-I) MUMBAI [2019 (2) TMI 506 - CESTAT MUMBAI] where it was held that the product in question should appropriately be classifiable under CTH 72169100. Since, the operation of the said order of the Tribunal has not been stayed or over ruled by the higher judicial forum, as per the principles of judicial discipline, the findings/observations recorded by the Tribunal in classifying the product under CTH 7216 cannot be disturbed at this juncture.
There are no substance in the impugned order passed by the learned Commissioner of Customs (Appeals) - appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1459
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditor - NBFC - financial creditor proves the financial debt against the corporate debtor on the basis of transaction as disclosed or not - Commitment of default or not - HELD THAT:- Admittedly the financial creditor is a non-banking financial company. Hence, the transaction in dispute cannot be a transaction of simple corporate deposit in between two companies. Here in this case, the financial creditor alleges to have given the loan to the corporate debtor. Obviously, when any NBFC gives loan to an individual or for that matter any corporate person, it may require to follow certain rules of business.
In this case, the financial creditor did not disclose in its application, more particular in Part V of the application, by giving details as to when the corporate debtor made application for loan, when it was granted. The financial creditor did not produce on record the document to show that loan was really granted as per the request of the corporate debtor. In Form V of the application, he did not state all relevant facts - the financial creditor did not disclose the document to establish its claim of loan disbursement. It has relied on only one document that is xerox copy of the statement of account issued by HDFC Bank (annexure 6) to show that amount of ₹ 25 lakhs was transferred to the account of corporate debtor by way of RTGS.
The corporate debtor has come out with the clear defence that they have paid the entire amount and nothing is due and payable. In such situation, it was expected from the financial creditor to explain as to what happened to earlier cheque of the corporate debtor - It is now well-settled that this authority cannot act as a recovery Tribunal. The financial creditor did not produce required documents to show that they received the application from the corporate debtor requesting the loan. The documents showing that the so-called application was duly processed by them and later on it was granted. The financial creditor did not produce the document showing that thereafter they issued in favour of the corporate debtor the letter informing that the loan proposal is granted as requested, etc.
The corporate debtor come out with clear defence that financial creditor owes nothing against them. They filed interpleader suit disclosing the nature of alleged transaction. It cannot be said that their contention in the suit may be correct but competent civil court having felt that there exists prima facie case in favour of the corporate debtor have issued and an interim prohibitory order against financial creditor and others stating they cannot recover the amount claimed herein - this Authority is not a forum for a recovery of amount.
The corporate debtor has explained the nature of transaction and financial creditor did not produce adequate evidence to prove that it owns financial debt against the corporate debtor. In this summary enquiry, the correctness of assertion of financial creditor and defence of the financial creditor cannot be entered into - the evidence as produced by the financial creditor is not enough and cannot be safely relied on.
The corporate debtor is a solvent company. Generally, solvent company will not take a risk to go into CIRP for non-payment of ₹ 25 lakhs. From evidence on record, it is held that the financial creditor may not owe financial debt as claimed by them in their application. Hence, there is no question of any default by the corporate debtor - petition dismissed.
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2019 (12) TMI 1458
Maintainability of application - initiation of CIRP - corporate debtor committed default in payment of its dues - existence of debt and dispute or not - service of notice - whether there is any distinction drawn between other normal units and banked units under the power purchase agreement? - HELD THAT:- The electricity generated by the petitioner through its solar power plant could be injected into the electricity grid maintained by the DISCOM to be consumed by various consumers. Thereafter, the DISCOM acknowledges the receipt of particular of renewable energy and issues generation credit note (GCN). Then on the basis of energy settlement/report, the petitioner raises the invoice as per the units consumed by the end consumer - the energy settlement/report talks about two different units, i. e., other units and bank units. Whereas the corporate debtor claims that the energy generated by the petitioner is directed injected to the DISCOM and is banked and agreed and thus, there is no distinction between the normal units and the banked units.
There is no provision or discussion regarding the normal units and the banked units in the entire solar power purchase agreement and addendums executed between the parties. Evidently, there has been an agreement of sale of electricity and purchase of electricity by and between the petitioner and the corporate debtor - there is a clear liability of payment of unpaid invoices in terms of the solar power purchase agreement and addendums between the parties, wherein the corporate debtor has agreed to buy the energies generated and supplied to the DISCOMs under the definitive arrangements and with the obligation to pay the said amounts within the stipulated agreed time. The liability of the corporate debtor cannot be absolved under the premise that they are liable to pay only at 3.70 per unit basing on the distinction drawn between the banked units and the other/normal units.
This Adjudicating Authority, on perusal of the documents filed by the creditor, is of the view that the corporate debtor defaulted in paying the outstanding unpaid invoices raised by the petitioners in terms of the power purchase agreement and addendums thereto and also placed the name of the insolvency resolution professional to act as interim resolution professional and there being no disciplinary proceedings pending against the proposed resolution professional, therefore the application under section 9 is taken as complete - petition admitted - moratorium declared.
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2019 (12) TMI 1457
Capital loss or allowable business deduction - difference between purchase price of Stock Appreciation Right ('SAR') and the sale price of such SAR at the time of exercise by the employees - HELD THAT:- As decided in own case [2017 (10) TMI 1531 - ITAT DELHI] above expenditure on account of employee stock option scheme is an ascertained liability for deduction and further also held that the expenses debited is cost of employee stock option plan in the profit and loss account is an allowable expenditure. The Ld. departmental representative also could not point out any other judicial precedent against the above judicial precedents cited by the Ld. authorized representative. - Decided in favour of assessee.
Disallowance of bad debt written off - AO was of the opinion that since the debt has not been routed through the profit and loss account and had not been considered as income, as mandated u/s 36(1)(vii) of the Act, the same was not allowable - HELD THAT:- Money receivable from a client by a share broker is to be treated as debt and even if a part of debt has been offered to income, the assessee will get the benefit of writing off of the entire amount of debt as is claimed as having becoming bad. Therefore, the only issue which needs to be looked into is as to whether a part of the debt written off was offered to income in this year or earlier years or not. Therefore, it will be in the fitness of things if this aspect is re-examined by the AO. Accordingly, we restore this issue to the file of the AO with a direction to verify and examine as to whether the assessee has offered to tax a part of the debt being claimed as bad and written off as income in earlier assessment years or in this year in form of brokerage or interest or not. If it has so been done, the AO shall allow the amount claimed as bad debt and written off as deduction. The assessee will be given due opportunity by the AO to present its case.
Disallowance made u/s 14A - assessee made suo moto disallowance - HELD THAT:- We agree with the proposition of the Ld. AR that disallowance u/s 14A cannot in any case exceed the exempt dividend income. We, therefore, set aside the issue and remit the issue back to the file of the AO to work out the disallowance by calculating the average investment under Rule 8D (2)(ii)/(iii) by taking those only investments which have actually yielded the divided income during the relevant year and if the same exceeds the dividend income then restrict the same to the extent of exempt income only. Here, since the assessee has suo moto disallowed an amount u/s 14A of the Act, the disallowance should not exceed this amount. AO shall give proper opportunity to the assessee before deciding the issue. Accordingly, ground allowed for statistical purposes.
Accrual of income - Addition being notional addition made on account of transfer of merchant banking licence by the assessee to another of its group company - HELD THAT:- Guided by the ratio laid down by BALBIR SINGH MAINI, CS ATWAL [2017 (10) TMI 323 - SUPREME COURT] we are unable to agree with the contention of the Revenue that the impugned amount would be said to have accrued to the assessee company - As decided in ADITYA BIRLA TELECOM LIMITED [2016 (10) TMI 1326 - ITAT MUMBAI] there can be no notional transaction with reference to fair market value in absence of any specific enabling provision in the Act and the full value of consideration has to be taken based on the price that has been contracted between the parties and further that there was no scope for imputing consideration on a notional basis. Therefore, it is our considered opinion that consideration cannot be imputed on a notional basis for the transfer of the merchant banking licence as the same has neither been received, realised and nor is capable of being received or realised. Accordingly, we set aside the order of the Ld. CIT (A) on the issue and direct the AO to delete the addition.
Disallowance of provision made for expenses in respect of legal and professional charges, recruitment charges expenses and software license expenses - Lower authorities have disallowed these provisions on the ground that the liability for payment of expenses has not crystallised during the year - HELD THAT:- Admittedly, the assessee is following mercantile system of accounting in which the income of expenditure has to be accounted for on accrual basis. There is no dispute about the method of accounting being followed. The only doubt, as been raised by the lower authorities, is whether the liability for payment of these expenses had crystallised during the year under consideration. A perusal of the invoices filed by the assessee in this regard also does not throw any light on the issue. To this extent, we are in agreement with the lower authorities that the assessee should establish that the services were rendered and utilised for the year under consideration. Therefore, we deem it fit to restore this issue to the file of the AO to verify as to whether the services for which these invoices have been raised and for which the assessee had made provision have been received and utilised during the year under consideration. If it is so found, then the AO shall allow the impugned provision as deduction in this year only.
Disallowance of depreciation on UPS - Assessee had claimed depreciation on UPS @ 60% by treating the same as part of computer and peripherals whereas the AO restricted the depreciation to 15% by holding that UPS was plant and machinery and not a part of computer and peripherals - HELD THAT:- This issue is no longer res judicata and there are a catena of judgments wherein it has been held that UPS is an essential part of computer system as a computer cannot function in isolation without the basic accessory. The leading case in this point is the judgment of the Hon’ble Delhi High Court in the case of CIT vs. BSES Yamuna Power Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT]. Therefore, respectfully following the same we direct the AO to allow depreciation on UPS @ 60%.
Disallowance of depreciation on fixed assets - disallowance has been made on the ground that the assessee could not submit complete bills for verification pertaining to purchase of fixed assets HELD THAT:- AR has submitted as due to computer related issues and pressure of last dates, complete invoices could not be filed but now 77.45 % of the invoices/payments were verifiable. Therefore, it is our considered opinion that it will be in fitness of things if this issue is restored to the file of the AO to re-examine the assessee’s claim and, thereafter, pass order in accordance with law after providing due opportunity to the assessee. It is so directed accordingly. Accordingly, ground stands allowed for statistical purposes.
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2019 (12) TMI 1456
Permission for withdrawal of Advance Ruling application - whether the frozen chicken with unregistered brand name supplied by them be classified under NIL rate of GST? - HELD THAT:- Since the applicant himself have sought withdrawal of the instant application, the applicant is permitted to withdraw the application.
The application for advance ruling filed by the applicant is dismissed as withdrawn at the behest of the applicant.
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2019 (12) TMI 1455
Exemption from GST - telecommunication service to GHMC- Hyderabad, Telangana - GST amounts are being remitted by the applicant to Government as per the notifications issued from time to time - exemption as per entry No. 3 of CGST Notification No. 12/2017-(R) dated 28th Jun 2017 opining that the telephone services are being used for performing functions under article 243W of Constitution - HELD THAT:- In terms of Sec. 2(69) of the CGST Act, the recipient of the service i.e. GHMC falls within the definition of ‘local authority’ and hence the services provided by the applicant are said to have been rendered to the local authority.
The applicant have not produced any evidence by way of contract/agreement/other document during written/oral submissions suggesting that the services provided by them do not involve any supply of goods. In the absence of the same it cannot be held that the services provided by the applicant are “Pure Services”.
In order to be eligible for exemption under entry No. 3 of the Not. No. 12/2017- CT (R), the service must be by way of any activity in relation to any of the aforesaid functions. It appears that the telephone services are basically used by the personnel of the GHMC in their offices and provision of the said services has no relation whatsoever to the above mentioned functions.
Reliance can be placed in the case of Hon’ble Supreme Court in the case of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY & ORS. [2018 (7) TMI 1826 - SUPREME COURT] wherein it was held that “exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification”. - Applying the ratio of the above judgements to the present case, it can be concluded that telephone services provided by the applicant cannot be regarded as pure services and these cannot be held as the activities in relation to any of the functions entrusted under Article 243W of the Constitution on the strength of the words “in relation to”. In their application & enclosures also, the applicant has not adduced/provided any substantiation to show establish the category.
The services provided by the applicant are not eligible for exemption as provided for under entry No. 3 of the Not. No. 12/2017-CT(R) dated 28.06.2017(as amended) - Since the services provided by the applicant are taxable services, the tax invoices issued by the applicant should indicate the amount of tax which shall form part of the price at which such supply is made as required under Sec. 33 of the CGST Act, 2017.
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2019 (12) TMI 1454
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - financial debt - existence of debt and dispute or not - HELD THAT:- The application made by the financial creditor is complete in all respects as required by law. It clearly shows that the corporate debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the petition. In view of this, this Adjudicating Authority admits this petition and orders initiation of CIRP against the corporate debtor.
Petition admitted - moratorium declared.
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2019 (12) TMI 1453
Rectification of mistake u/s 254 - HELD THAT:- There is a mistake apparent from record in the above lines recorded in order dated 20.12.2019 which is now suo moto corrected vide this Corrigendum and it should read as under:
“…..The learned counsel for the assessee placed before the Bench , Balance Sheet of the said Lalitha Jewellery Mart Private Limited which has reserves and surplus to the tune of ₹ 289.29 crores as at 31.03.2015….”
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2019 (12) TMI 1452
Stay petition - as submitted that around 20% of the demand raised is already paid to Revenue and prayers are made to stay outstanding demand of tax and interest - HELD THAT:- As assessee placed before the Bench, the challans for payment of taxes to the tune of ₹ 9.26 crores post assessment framed by the AO , which challans are now placed in the stay petition file. The assessee has however not filed any financial statements / Balance sheet etc before the Bench to prove financial difficulties. The learned DR objected to grant of stay of outstanding demand of income-tax and interest thereon. After hearing both the parties and keeping in view entire factual matrix of the case and as per detailed discussions above, we are inclined to grant early hearing of the appeal which is now fixed for hearing before Regular Bench on 13th January 2020 and till then we direct Revenue not to take coercive action against the assessee for recovery of outstanding demand. Registry is directed to issue notice to both the parties fixing appeal .
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2019 (12) TMI 1451
Dishonor of Cheque - section 138 of Negotiable Instruments Act - time limitation - It is the contention of the learned Senior Counsels for the applicant that the payments alleged to have been made in the months of February 2016 and March 2016 would not revive the period of limitation since the amounts were said to have been paid only after expiry of the limitation - whether the claim of the respondent is barred by limitation? - HELD THAT:- A bare perusal of Section 18 in the Limitation Act would show that a fresh period of limitation would commence from the time where before expiry of the prescribed period for a suit or application, an acknowledgment of liability has been made. But in the matter on hand, as per the provisions of the Limitation Act, the period of limitation for both the loans got expired on 09.04.2011 and 29.03.2014 respectively. Even assuming that cash payments were made on 20.02.2016 and 22.03.2016 and the cheques were issued on 10.06.2016, everything had taken place after the period of limitation.
This Court while dealing with the time barred debt observed that there must be a distinct promise to pay the money and the promise must be in the form of writing signed by the concerned person or his authorised agent. But in this case, admittedly, no such written promise produced by the complainant.
Thus, the suit has been filed on a time barred debt and there was no legally enforceable liability for filing the criminal complaint - application disposed off.
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2019 (12) TMI 1450
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Operational creditor or not - existence of debt ad dispute or not - HELD THAT:- It is an undisputed fact that the operational creditor and the corporate debtor entered into an agreement of distributorship dated 3-4-2017. The petitioner is a distributor of the goods supplied by the corporate debtor. The petitioner is selling the product of the corporate debtor. Thus, the petitioner is rendering service to the corporate debtor. It cannot be said that the petitioner does not fall under the definition of 'the operational creditor'. The petitioner is a distributor for the goods supplied by the corporate debtor. It is nothing but a kind of service being provided to the corporate debtor in respect of the goods produced by the corporate debtor and the goods are being sold through the operational creditor - the contention of the learned counsel for the corporate debtor that the petitioner does not fall under the definition of 'the operational creditor' and the amount also does not fall under the definition of 'operational debt', cannot be agreed upon.
Presence of dispute in the form of a civil suit filed against the corporate debtor by the operational creditor or not - HELD THAT:- Section 5(6) of the I&B Code referred to above. It is true that the dispute includes pendency of suit. It is the specific case of the operational creditor that it has filed the civil suit against the corporate debtor in respect of the debt referred to in the petition. Therefore, there is a pre-existing dispute and as such the petition cannot be admitted under section 9 of the I&B Code - Similarly, the learned counsel for the corporate debtor also relied on decision of the Hon'ble NCLAT in the matter of Ashoke Ghosh [2020 (1) TMI 473 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], and contended that when a civil suit is pending it amounts to prior dispute and hence the petition cannot be admitted.
The present petition cannot be admitted for the reason that already a civil suit was filed by the operational creditor against the corporate debtor, which amounts to prior dispute. The petition cannot be admitted on this ground - Petition dismissed.
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