Rectification of mistake - HELD THAT:- We find that a mistake has crept in cause title and hence the present corrigendum is being passed. The lead order in the bunch of appeals is in the case of Udit Jain and by mistake ITA number has been mentioned as 5386/Del/2017 as against ITA No. 5380/Del/2017.
Maintainability of appeal - low tax effect - Monetary limit - HELD THAT:- The tax effect is less than one crore and therefore, in the light of the Circular dated 8/8/2019 issued by the CBDT, fixing the monetary limit, the present appeal is dismissed as withdrawn. However, the question of law is left open. The appeals are not covered under the Exceptional Clause of the Circular dated 8/8/2019.
Deactivation of petitioner's DIN - certain defaults allegedly made by the petitioner in respect of a particular company - HELD THAT:- There shall be stay of operation of the publication dated November 1, 2017, pertaining to the de-activation of the present petitioner only, in respect of other companies than the company in respect of which the petitioner has allegedly defaulted, till disposal of the writ petition.
Let the matter appear for hearing on January 14, 2020.
Exemption u/s 10(37) denied - assessee has sold the land voluntarily, and it is not case of compulsory acquisition of land by SMC - failure to qualify definition of “Compulsory acquisition” and ought to have held acquisition of impugned agricultural land by Surat Municipal Corporation (SMC) eligible for exemption under section 10(37) - HELD THAT:- As per letter no. ACT/SR/3161 dated. 31.08.2010 it has been clearly mentioned by the SMC that nature of payment was “compulsory acquisition” (Land/ Building).It is further seen from the perusal of letter no. TBT/OUT/ 4089/ 22 dated. 23.09.2014that land in question was placed under reservation by the Government of Gujarat vide order dated Notification No. GH/V/100 of 2004/DVP/1403/3307/L dated. 02.09.2014 under the provision of section 20 of Gujarat Town Planning & Urban Development Act 1976 at the disposal of the SMC to acquire the land under section 77 of Bombay Provincial Municipal Corporation Act, 1949 for erection of Sewerage Treatment Plant. Thus, it was a case of compulsory acquisition of land for which the SMC under the instruction of Government of Gujarat for which the SMC has also given a certificate dated 12.08.2010 [letter no. ACT/SR/NO2861] wherein nature of payment to the assessee is described against compulsory acquisition of land at Dindoli. The ITAT- D- Bench, Ahmedabad in the case of ITO v. Dipak Kalidas Pauwala in I.T.A.No.2685/Ahd/2011 dated. 14.08.2015 wherein the Tribunal has held the that said land in Dindoli ( at Block no. 305) was acquired by SMC for sewerage Treatment Plant are agricultural land which has been compulsory acquired by SMC under the provision of section 107 of GTP & UD Act, 1976 as the land needed for the purpose of Town Planning Scheme or Development Plan shall be deemed to be meaning for public purpose within the meaning of Land Acquisition Act , 1894 (I of 1894) and eligible for exemption under section 10(37)
Thus land in question was compulsory acquisition by the SMC under the direction of Government of Gujarat. Hence, conditions stipulated in section 10(37) is satisfied. In view of above facts and circumstances, land was compulsory acquired by SMC, hence, conditions as laid down in section 10(37) are duly satisfied. See ITO v. Dipak Kalidas [2015 (8) TMI 1268 - ITAT AHMEDABAD] which has been confirmed by the Hon`ble Jurisdictional High Court of Gujarat in T [2016 (4) TMI 431 - GUJARAT HIGH COURT] - Decided in favour of assessee.
Income accrued in India - PE in India - Indo-Germany Tax Treaty - Whether VGSIPL should not be the Appellant's PE merely due to the fact that it is the Appellant's group company? - as pr assessee Transaction between the Appellant and VGSIPL are on principal to principal basis and there is no agency relationship - HELD THAT:- V W Group sales is an independent and separate entity, which is engaged in selling of fully built up cars imported from the assessee, Volkswagen AG and Skoda India to dealers and distributors. Thus, VW Group cannot be regarded as a PE of assessee in India.
In the case of present assessee the care is manufactured by the Audi AG outside India and constitutes a separate and independent activity. As noted earlier the car is sold to VW Group for further sale in India and VW Group sale is not acting on behalf of Audi AG nor is Audi AG selling cars through VW Group sales. Moreover, the cars are sold on principle to principal basis. Hence, we are of the view that Assessing Officer was not justified in invoking section 9 of the Act and the Article 5 of Indo-Germany Tax Treaty for taking view that assessee has PE in India.
Levy of interest under section 234B & 234C - HELD THAT:- Considering the fact that the assessee is a foreign company and tax resident of Germany. The entire income of the Audi AG is subject to tax deducted at source under section 195 of the Act. The assessee has no liability to pay advance tax and the fact that we have already hold that income earned by assessee is not taxable in India, we direct the Assessing Officer to recompute the tax/interest by following the decision of the jurisdictional High Court in case of NGC Network Asia LLC [2009 (1) TMI 174 - BOMBAY HIGH COURT]
TP Adjustment - Arms Length Price in respect of shared services at Rs.Nil. - assessee is a market research company - HELD THAT:- We find from the perusal of Clause 6 of the said agreement , it specifically excludes from within its ambit, the services which are in the nature of shareholder services or services which have been provided by the group company to another for the exclusive benefit of the other. Hence the argument of the revenue that the services rendered are in the nature of shareholder activities cannot be accepted as the same is without any basis. We find that as per Clauses 11 and 12 of the said agreement, SMSL is appointed as a pooling entity for all costs incurred by each of the group companies in rendering the shared services and thereafter to allocate the same to the various group companies based on benefits the respective companies had derived.
There is a binding agreement between parties to render services and contribute costs ; that there is a recognition by all group entities of the need for such services ; that SMSL is a special purpose vehicle existing for the sole purpose of pooling of costs ; that no costs for rendering of any shareholder/stewardship services are charged under the Shared Resources Allocation Agreement and that no costs for rendering any exclusive group company specific services are charged under the Shared Resources Allocation Agreement.
PO has accepted the segmentals so prepared. This demonstrates that the ld TPO agrees that the support and assistance under the Shared Resources Allocation Agreement are integral to rendition of the Market Research Services. Further when the TPO had accepted the receipts and payments towards the Market Research Services (rendered and received) by the assessee to be at arm's length by applying Internal TNMM, and when, the segmental margin have been arrived at after debiting the payments under Shared Resources Allocation Agreement, which segmentals have been accepted by the ld TPO for benchmarking the Market Research Services and accepting the same to be at arm's length , we find that automatically the payments under the Shared Resources Allocation Agreement also stand benchmarked. It is therefore improper of the ld TPO to then once again separately benchmark payments under Shared Resources Allocation Agreement and subject them to a CUP analysis.
We further find that the co-ordinate bench of this tribunal in assessee’s own case for the Asst Year 2008-09 , being the first year of operation of Shared Resources Allocation Agreement, had upheld the method of benchmarking adopted by the assessee. It is well settled that Internal TNMM based on segmental data would always be preferable over Extenal TNMM. On applying Internal TNMM , the margin from services rendered to international AEs is 22.04% , whereas the margin from services rendered to other international Non-AEs is 4.29%; and hence no adjustment is required to be made with respect to payments made under the Shared Resources Allocation Agreement.
We find that the ld TPO ought not to have determined the ALP of the payment made under the Shared Resources Allocation Agreement at Rs Nil.
Cost incurred on Shared Resources Allocation Agreement - It would be pertinent to note here that the payment made under Shared Resources Allocation Agreement had been duly subjected to deduction of tax at source, except an amount of ₹ 73.81 lakhs which was suo moto disallowed by the assessee for failure to deduct tax at source, and that no refunds have been claimed by the recipients thereon. Hence the actual claim by the assessee for the year under consideration is ₹ 6.77 crores only and therefore it is erroneous to make an addition of the entire amount of ₹ 7,50,68,892/-. This is only made as a passive observation by us as we direct the ld TPO to delete the entire adjustment made towards payment of cost contribution charges pursuant to Shared Resources Allocation Agreement. - Decided in favour of assessee.
Not carrying forward the Long Term Capital Loss - HELD THAT:- A.O. may consult the files of the previous years and if the amount is due and unclaimed, the same may be allowed - We find no infirmity in these directions of the ld. CIT(A). The Assessing Officer is directed to verify the claim of the assessee and allow the same, in accordance with law. Hence, we dismiss this ground of revenue.
Addition u/s 14A - absence of any satisfaction note recorded by the ld. A.O. - HELD THAT:- D/R, could not demonstrate that the Assessing Officer has recorded satisfaction, as required under law, prior to invoking Rule 8D of the Income Tax Rules, 1962 (‘Rules’). Thus, this issue is covered in favour of the asses=see by the order of this Bench of the Tribunal in the case of REI Agro Ltd. vs. DCIT [2013 (9) TMI 156 - ITAT KOLKATA] - Decided against revenue.
Disallowance made u/s 40(a)(ia) - HELD THAT:- Revenue accepted the claim of the assessee that payment made to parties to the tune of ₹ 30,000/- were not a single transaction and hence, Section 194C of the Act, does not apply. As regards payments to Vyapar Bharati Press, he accepted the submission that TDS @ 1% was deducted on the payments and hence Section 40(a)(ia) of the Act is not applicable. In case of payments to NG Gosai Printing Pvt. Ltd., as it was purchase of goods, he held that the provisions of Section 194C of the Act, does not apply. Regarding the payment to Jivan Ratan Chatterjee Legal, he submitted that the payment of ₹ 31517/-, was towards advocate fees and service tax and as the advocate fees was less than ₹ 30,000/-, Section 194J of the Act, does not apply. Similarly, he has analysed each and every payment and came to a conclusion that provision of tax deduction at source do not apply. D/R, could not contradict these factual findings of the ld. CIT(A).
Addition made on account of sale of rights in property and carry forward of loss to future years - HELD THAT:- The assessee has sold the rights in property in the Assessment Year 2013-14 and 2014-15. The assessee declared the same as income from capital gain in its return of income for these Assessment Years. Assessing Officer has accepted this claim of the assessee and assessed the income under the head capital gains. During the current Assessment Year 2015-16, the Assessing Officer treated the income from sale of right in property as income from business. The assessee disputed the same before the ld. CIT(A). Its case is that the income in question is assessable under the head capital gains and not under the head income from business of profession. He relies on the decision of the Hon’ble Supreme Court in the case of Radhasoami Satsang vs. CIT [1991 (11) TMI 2 - SUPREME COURT] for the proposition that consistency should be followed by the Assessing Officer when the facts permeating over the years are the same. - Decided against revenue
Allowance of deduction of CSR expenses - HELD THAT:- Revenue does not dispute the finding of the ld. CIT(A) that the expenditure is in question is allowable u/s 80G of the Act. The ld. CIT(A) has not held that the expenditure is allowable u/s 36 /37 of the Act. It is not the case of the ld. CIT(A) that Explanation 2 to Section 37 of the Act, does not come into play. He was of the view that deduction in question is allowable under chapter VIA and not under chapter IV. As this finding has not been challenged, in this ground, we dismiss the same.
Allowance of deduction of education cess u/s 37(1) - HELD THAT:- As decided in ITC LTD. VERSUS ACIT, RANGE-8, KOLKAKTA [2019 (4) TMI 1574 - ITAT KOLKATA] section 40a(ii) applies only on taxes such than earn cess(es). We therefore reject the Revenue’s contentions supporting the impugned disallowance. The assessee's instant substantive ground is accepted. The Assessing Officer is direction to verify all the relevant facts and allow the impugned cess (es) as deduction u/ s 37.
TP Adjustment - consideration of SEZ Unit setting up expenses and Ireland branch expenses as operating in nature while computing the margin of the assessee and consideration of unrealized foreign exchange gain/loss while computing the margin of the assessee - HELD THAT:- The issue with regard to foreign fluctuation expenses, the Chennai Bench in the case of Infac India Pvt. Ltd. vs. DCIT [2018 (10) TMI 1814 - ITAT CHENNAI] , we direct the Assessing Officer to exclude the loss on account of foreign fluctuation from the operating expenses for computing the PLI (Profit Level Indicator). This ground of appeal of the assessee is allowed.
Companies not passing the forex filter and the employee cost filter need to be deselected as comparable.
Assessee is engaged in product engineering services thus companies functionally dissimilar with that of assessee need to be deselected from final list.
TPO had applied related party filter of greater than 25%
Disallowance of working capital adjustment - We are inclined to direct the Assessing Officer to consider the working capital adjustment as computed by him while determining the ALP of international transactions of the assessee with its AEs. Thus, this ground of appeal of the assessee is partly allowed.
Erroneous imputation of interest on recovery of expenses - HELD THAT:- As relying on M/S. ALLIANZ CORNHILL INFORMATION SERVICES PRIVATE LIMITED VERSUS THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE 2 (1) TRIVANDRUM [2018 (6) TMI 279 - ITAT COCHIN] we direct the Assessing Officer to adopt interest at the rate of 8.15% p.a. while computing the ALP. This ground of the assessee is partly allowed.
Disallowance of finance lease payments u/s. 37 - HELD THAT:- Assessee is entitled for financial lease charges as revenue expenditure only if it has not claimed depreciation on the leased asset. The assessee had not explained whether it claimed depreciation on the leased asset or not. In other words, the assessee is entitled to financial lease charges only in the event if it does not claim depreciation on such leased asset since depreciation on such leased asset is to be claimed by the lessor only. The assessee is not the owner of the leased assets. Once the assessee proves that it has not claimed depreciation on the assets taken on lease, the assessee is entitled for lease rentals paid by the assessee as a revenue expenditure. With this observation, we remit this issue to the file of the Assessing Officer to examine the assessee’s Profit and Loss account and balance sheet with reference to the agreements entered into by the assessee with the lessor. This ground of appeal of the assessee is partly allowed for statistical purposes.
Disallowance of interest expenses on account of interest free loans advanced to related parties - HELD THAT:- Since this ground of appeal of the assessee is allowed since the assessee was having sufficient funds in the form of reserves for granting loans to its sister concerns.
Disallowance of additional expenditure incurred owing to the misconduct of the employees u/s. 37 - HELD THAT:- The assessee has neither produced any documents before the Assessing Officer nor produced before the DRP nor even before us. The nature of the expenditure has not been substantiated by the assessee. Hence, we do not find any infirmity in the order of the CIT(A) and confirm the ground. Thus, this ground of appeal of the assessee is dismissed.
Non consideration of inadvertent disallowance of the same expense twice - HELD THAT:- This issue is remitted to the file of the Assessing Officer to ascertain the correct position of the disallowance. Thus, this ground of appeal of the assessee is partly allowed for statistical purposes.
TP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- Assessee is engaged in the business of software development and related services to its Associated Enterprises (AEs), SSIPL, wholly subsidiary of EMC Corporation, USA and the assessee was registered under SEZ on 14th August, 2008 for rendering IT and ITES to EMC Group of Companies and is compensated on mark up on cost basis for services provided and know how, copy rights etc. and other commercial and marketing services owned by EMC, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Confiscation - section 130 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- The petitioner has already paid the amount, which is more than the amount of fine in lieu of confiscation, in terms of the order of confiscation passed under section 130 of the Central Goods and Service Tax Act, 2017, the respondents are directed to forthwith release the conveyance.
Deduction u/s 80P(2)(a)(i) - HELD THAT:- Assessee’s claim regarding deduction u/s. 80P(2)(a)(i) cannot be rejected on this basis that assessee is a Souharda Sahakari and therefore, cannot be regarded as a co-operative society. But after holding so, set aside the order of CIT(A) and restore the matter back to the AO for fresh decision regarding allowability of deduction u/s. 80P(2)(a)(i) after examining other conditions for allowing such deduction because those conditions are not examined by the AO till now.
The Delhi High Court allowed exemption subject to exceptions in a case with multiple respondents represented by various advocates. The court issued notice for further proceedings and ordered respondent No. 3 to address the petitioner's jurisdictional issue first before proceeding on merits.
Denial of exemption u/s 11(2) - claim of the assessee was rejected primarily on the ground that the purpose of accumulation is not mentioned but the objects were mentioned in form 10 - HELD THAT:- Assessee trust has duly mentioned the purpose of accumulation i.e. to compensate the trading members or a constituents, where a trading member being declared a defaulter on the stock exchange. To our opinion, this was the sole object of the trust for which this protection fund was created and thus sufficiently satisfy the requirements of section 11(2) of the Act. We also note that similar claim of the assessee has been allowed in the earlier years by the Revenue. The case of the assessee finds support from the decision of BOCHASANWASI SHRI AKSHAR PURSHOTTAM PUBLIC CABLE TRUST [2019 (3) TMI 1405 - SC ORDER] held that non specification of purpose for which the funds were accumulated by assessee trust under section 11(2) would not be fatal to the exemption claimed.
As relying on BHARAT KALYAN PRATISTHAN VERSUS DIRECTOR OF INCOME TAX (EXEMPTION) [2007 (1) TMI 98 - DELHI HIGH COURT] held that specification of certain purpose or purposes is needed for accumulations of the trust’s income under section 11(2) of the Act however, the details of the purposes for which the income was accumulated need not be specified. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to allow the claim of the assessee under section 11(2) of the Act. The ground NO.1 is allowed.
Interest charged by the AO under section 234A - HELD THAT:- There is no delay in filing the return of income by the assessee trust. We have perused the provisions of section 234A of the Act and are of the opinion that the interest under section 234A is attracted only where the return is furnished after the due date as envisaged u/s 139(1) of the Act or is not furnished at all by the assessee. In the present case, the assessee has duly filed the return of income well within the time under section 139(1) - CIT(A) has not adjudicated the matter and simply directed the AO to dispose of the petition under section 154 of the Act. In our opinion, the charging of interest under section 234A is apparently wrong and against the provisions of the Act. Accordingly, we direct the AO to delete the interest charged.
Interest charged under section 234C - CIT(A) instead of adjudicating the issue directed the AO to dispose of the pending application filed by the assessee under section 154 - HELD THAT:- We have perused the provisions of Section 243C of the Act and observed that the interest under section 234C of the Act is to be charged on the returned income and not the assessed income and therefore the interest under section 234C has wrongly been charged by the AO. Accordingly, we direct the AO to charge interest under section 234C of the Act as per the provisions of the Act. The ground No.4 of the appeal is allowed for statistical purpose
Exemption under 10(23EA) - claim was not made by the assessee during the filing of return of income but as alternative at the appellate stage before CIT(A) - HELD THAT:- Issue is squarely covered in favour of the assessee by the order of the Hon’ble Bombay High Court in the case of DIT(E) vs. Exchange M/s. National Stock Investment Protector Fund Trust [2019 (1) TMI 799 - BOMBAY HIGH COURT] the appeal filed by the Revenue is dismissed.
Validity of arrest of the corpus – Sureshbhai, son of Ugarchand Gadhecha, by the State Tax Officer-3, Enforcement, DIV-2, Ahmedabad - HELD THAT:- The corpus – Sureshbhai, son of Ugarchand Gadhecha, who was arrested by the State Tax Officer-3, Enforcement, DIV-2, Ahmedabad, and who is in judicial custody at Sabarmati Central Jail at Ahmedabad since 06.12.2019, and who is produced before this Court today pursuant to the order of this Court dated 12.12.2019, is set at liberty, forthwith.
This order is passed reserving liberty to the State Authorities.
Maintainability of application - initiation of CIRP - matter is pending before the Debt Recovery Appellate Tribunal against the order passed under the SARFAESI Act, 2002 - ‘Financial Creditor’ from initiating any coercive steps subject to deposit of money by the ‘Corporate Debtor’ - time limitation - HELD THAT:- In B.K. Educational Services Private Limited V. Parag Gupta and Associates [2018 (10) TMI 777 - SUPREME COURT], the Hon’ble Supreme Court held that the Limitation Act, 1963 is applicable to applications filed under Sections 7 and 9 of the ‘I&B Code’ from the inception of the Code, and as such Article 137 of the Limitation Act gets attracted.
The Limitation Act, 1963 was also made applicable by insertion of Section 238A of the ‘I&B Code’.
In the present case, in fact the default took place much earlier. It is admitted that the debt of the ‘Corporate Debtor’ was declared NPA on 1st December, 2008 as has been noticed by the Adjudicating Authority - ‘Asset Reconstruction Company (India) Ltd.’- (Financial Creditor) cannot derive any benefit of the action taken under ‘SARFAESI Act, 2002’ which is guided by separate provisions of limitation - Admittedly, the ‘Financial Creditor’ took action under the ‘SARFAESI Act, 2002’ in the year 2013. Therefore, the second time it become NPA in the year 2013 when action under Section 13(2) was taken.
In the present case, the account was declared NPA since 1st December, 2008 and therefore, the suit was filed. Thereafter, any document or acknowledgment, even after the completion of the period of limitation i.e. December, 2011 cannot be relied upon. Further, in absence of any record of acknowledgment, the Appellant cannot derive any advantage of Section 18 of the Limitation Act. For the said reason, the application under Section 7 is barred by limitation, the accounts of the ‘Corporate Debtor’ having declared NPA on 1st December, 2008.
The Adjudicating Authority having failed to appreciate the aforesaid fact, the impugned order dated 1st May, 2019 rejecting the objections of the ‘Corporate Debtor’ and the impugned order dated 31st May, 2019 passed by the Adjudicating Authority admitting the application under Section 7 are set aside - appeal allowed.
Nature of expenditure - Non-compete fee paid - deferred revenue expenditure as per CIT-A as against capital as held by the Assessing Officer - HELD THAT:- As fairly agreed by both the sides that the issue was now squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case in the Assessment Years 2003-04, 2005-06, 2006-07 & 2007-08 [2016 (6) TMI 1388 - ITAT CHENNAI] CIT(A) has not erred in holding that the non compete fees paid by the assessee is allowable as deferred revenue expenditure. We find no reason to interfere in the order of the learned CIT(A) on this issue. Consequently, Ground No.2.1 to 2.3 of the Revenue’s appeal stands dismissed.
Disallowance made u/s.40A(9) in respect of the assessee’s contribution to the benevolent fund - HELD THAT:- As in the assessee’s own case [2016 (6) TMI 1388 - ITAT CHENNAI] held that the contention of the appellant that contribution made by it to the Benevolent Fund constituted under a memorandum of settlement u/s 18(1) of the Industrial Act is statutory in nature and hence covered by exception provided under section 40A(9) is acceptable. Accordingly, direct the AO to allow contribution made by the appellant to the Benevolent Fund. The appellant, therefore, succeeds on this ground - Ground Nos.3.1 and 3.2 of the Revenue’s appeals stands dismissed.
Disallowance of provision of gratuity - an eligible deduction u/s.40A(7) or not? - HELD THAT:- As perused the orders passed by the learned Assessing Officer giving effect to the order of the Income Tax Appellate Tribunal for the earlier Assessment Years, wherein the Assessing Officer has allowed the assessee’s claim. This being so and also considering the fact that the learned CIT(A) has followed the judicial discipline in following the order of the Tribunal in the assessee’s own case referred to supra, we find no reason to interfere in the order of the learned CIT(A). Consequently, Ground Nos.4.1 and 4.2 of the Revenue’s appeals stands dismissed.
Gratuity when computing the book profits u/s.115JB - HELD THAT:- As in the case of Greaves Chitram Ud Vs. DCIT [2006 (3) TMI 563 - ITAT MUMBAI] held that the gratuity liability, which was based on actuarial valuation, was deductible from the book profits as ascertained liability. As the facts and circumstances of the appellant are exactly similar to the case discussed above and as it has not been denied by the Assessing Officer that the provision for gratuity has been made on actuarial basis, hold that the Provision for Gratuity should not be added back to book profits. The appellant succeeds on this ground.
Characterization of income - sale of carbon credits - revenue of capital receipts - HELD THAT:-Respectfully following the decision of the Co-ordinate Bench of this Tribunal in the case of Ambika Cotton Mills Limited [2014 (3) TMI 428 - ITAT CHENNAI] and the decision in the Sri Velayudhaswamy Spinning Mills (P) Limited [2015 (4) TMI 132 - ITAT CHENNAI] as also on account of the fact that the legislature has by intent providing for taxing of the receipts from the sale of carbon credits under a special provision of Section 115BBG w.e.f 01.04.2018 and as the appeals relate to the period before this date, the receipts arising to the assessee herein on the sale of carbon credits is held to be capital receipt. Consequently, the order of the learned CIT(A) and that of the learned Assessing Officer on this issue stands reversed.
Additional depreciation claim in respect of the fixed assets acquired in the second half of the financial year 2010-11 relevant to the Assessment Year 2011-12 - HELD THAT:- CIT(A) has followed the judicial discipline in following the decision of the Hon’ble Jurisdictional High Court in the case of M/s. Brakes India Limited vs. The Deputy Commissioner of Income Tax, [2017 (4) TMI 511 - MADRAS HIGH COURT] when deciding identical issue for the Assessment Years 2013-14 and 2014-15, respectively following the decision of the Hon’ble Jurisdictional High Court in the case of M/s. Brakes India Limited vs. The Deputy Commissioner of Income Tax, Chennai referred to supra, the Assessing Officer is directed to grant the assessee additional depreciation on the plant and machinery installed in the second half of the financial year preceding the Assessment Year 2012-13 - Decided in favour of assessee.
Infringement of Rights of the appellant as a bonafide lender - Depositories shall not allow transfer of securities from DP account - HELD THAT:- The impugned order notes that Karvy had raised funds pledging securities from banks and NBFCs and therefore was aware that rights of those entities would be impacted by the said order. As such, even if they could not be heard while passing the impugned order atleast on their representation they were entitled to be heard. It is on record that the appellant wrote to SEBI on November 23, 2019 (received by SEBI on November 25, 2019, 23rd and 24th being Saturday and Sunday). It is also an undisputed fact that lending against securities is a normal and permitted business activity of banks and NBFCs and SEBI is fully aware of the same. Therefore, we are of the considered view that the impugned order has prejudiced and adversely affected the rights of the appellant as a bonafide lender. Since it is the impugned order which has impacted the rights of the appellant, not arraying NSE and NSDL as parties, though their arraying might have brought in more facts on table, does not impact the maintainability of this appeal.
Accordingly, without commenting on the merit of the case, we direct the WTM of SEBI to hear the appellant on the basis of their representation dated November 23, 2019 and / or any other additional representation which they may like to make. If the appellant is desirous to make any additional representation it shall be made latest by December 4, 2019. Thereafter, the WTM of SEBI shall consider the representation(s) of the appellant and, after giving an opportunity for personal hearing, pass an order as per law latest by December 10, 2019
Initiation of proceedings by the Stage GST officers where Central GST officers have already initiated the proceedings - proper officer - sections 5 and 6 of the Gujarat Goods and Services Tax Act, 2017 - It was submitted that there cannot be two parallel investigations under the State Act as well as the Central Act - HELD THAT:- Issue Notice returnable on 23rd January, 2020.
By way of ad-interim relief, the respondents are restrained from taking any coercive action against the petitioner pursuant to the impugned inquiry proceedings.
Filing of Form GST TRAN-2 - transitional Input tax credit - inability to claim input tax credit on various eligible goods - extension of time period beyond what is prescribed for filing of revised GST TRAN-I - Section 140 of the Central Goods and Service Tax Act, 2017 (CGST Act) read with Rule 117 of the Central Goods and Services Tax Rules, 2017 - vires of Rule120A of the CGST Rules - CBIC Circular No.39/13/2018-GST dated 03.04.2018 - HELD THAT:- The Petitioners remained under the confusion created by the misleading language in Form GST TRAN-1 & TRAN-2. We have to be mindful of the fact that the introduction of GST has revamped the entire taxation regime in the country. GST seeks to consolidate multiple taxes into one. GST legislations have incorporated transitional provisions to ensure that the transition to the GST regime is smooth and that the input tax credit/ benefits earned in the erstwhile taxation regime are not lost. Input tax credit is a property within the meaning of Article 300A of the Constitution of India. The taxpayers could not be deprived of the same, without authority of law. In terms of the transitional provisions, there was ambiguity and confusion amongst taxpayers. This was accentuated with technical glitches, which resulted in several tax payers not being able to file the requisite Form GST TRAN-1 within time.
In M/s Blue Bird Pure Pvt. Ltd [2019 (7) TMI 1102 - DELHI HIGH COURT] also, the court accepted the error in filling up of the requisite information to be inadvertent and directed the Respondents to either open the online portal or to enable the petitioner to file the rectified Form GST TRAN-1 electronically or accept the same manually - The factual position in the present case is not any different and thus, we allow all petitions and direct the respondents to either open the online portal so as to enable the respective petitioners to file the Form TRAN-1 and TRAN-2 electronically, or to accept the same manually on or before 06.01.2020, if not already, filed pursuant to the interim order dated 01.05.2019.
Respondents shall proceed to process petitioners’ claim in accordance with law once the Form GST TRAN–1 and TRAN-2 are filed - Petition allowed.
Duty Drawback - Refund of IGST - transitional credit - Vires Section 16 of the IGST Act, 2017 read with Section 54 of CGST Act, 2017 and Rule 96 of CGST Rules, 2017 - Circular No. 37/2018- CUSTOMS dated 09.10.2018 - HELD THAT:- Though, the challenge in the present petition is also to the vires of the circulars enumerated above, however, Petitioners are primarily concerned with the refund of IGST paid on goods exported by them during the transitional period. The Respondents’ concern is well founded that the Petitioners should not take undue advantage of the drawback scheme. The purpose behind impugned circular is to ensure that the exporters do not claim AIRs of duty drawback and simultaneously avail tax neutralization under GST as this would amount to exporter availing double benefits of neutralization of taxes. However, the fact remains that at no point of time, the petitioners declared that they would forego the claim of IGST refund. During the transitional period, Petitioners have inadvertently claimed benefit under a wrong provision, since there was lack of clarity with respect to the refund of IGST. Should we deny the benefit simply for this mistake when the cardinal rule is that taxes should not exported?
Government would have to embrace initiatives that would help the taxpayers in the transformation to the new regime. This would require understanding the difficulties faced by the industry which would be crucial step for success of GST law. Instant case is one such example where Petitioners have been victim of technical glitches on account of confusion during transitional phase. We are thus of the view that taxpayers like the Petitioners should not be denied the substantive benefit of the IGST paid by them on exports.
The Petitioners have enclosed the cost analysis which captures the denial of IGST refund causing severe financial crunch to the exporters business. The impact is significant. To us such an error, that is purely inadvertent and not intentional, should not come in the way of calming refund of IGST. The respondents have also been alive to the situation and in matters relating to technical glitches, they have constituted IT Redressal Grievance Committees to address the grievances of the taxpayers - there is no reason as to why the Petitioners should not be extended similar benefit. Since the Respondents have expressed their apprehension about double benefit of neutralisation of taxes, it would be appropriate that before issuing final directions, Respondents verify the extent of the duty drawback availed by the Petitioners and also whether they have availed duty drawback / CENVAT credit of Central Excise and Service Tax component in respect of the exports made by them.
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