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2020 (9) TMI 1268 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Condonation of delay of 338 days in filing appeal - defects pointed out by the Registry, are not removed within the 7 days period as prescribed under the Rule, 26 of the National Company Law Appellate Rules, 2016 - HELD THAT:- Admittedly, the Impugned Order was passed by the Tribunal on 27.05.2019 certified copy of the Order was delivered on 10.07.2019. As per Section 421 of the Act. The Appellant was required to file the Appeal within 45 days i.e. till 24.08.2019. However, the Appellant has filed the Appeal on 28.08.2019 i.e. beyond the period of Limitation. The Office after scrutiny of the Memo of Appeal intimated the defect to the Appellant on 01.10.2019 and on the same day the Memo of Appeal was returned to the Appellant. The Appellant was supposed to cure the defects within 7 days and has to file the Appeal on or before the 08.10.2019. However, the Appellant has refiled the Appeal on 28.07.2020 i.e. a delay of 338 days.
It is pertinent to note that if the defects pointed out by the Registry, are not removed within the 7 days period as prescribed under the Rule, 26 of the National Company Law Appellate Rules, 2016. The Appeal is treated to be a fresh Appeal and in such a situation, this Appellate Tribunal cannot condone the delay beyond 45 days.
This Tribunal cannot condone the delay beyond 45 days. Thus, the Application for condonation of delay of 338 days is dismissed.
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2020 (9) TMI 1267 - ITAT PUNE
Addition of difference in excess of 10% between sale value and stamp duty value - AO show caused as to why the difference in stamp duty value and sale value should not be added to the total income in terms of section 43CA - HELD THAT:-Admittedly the AO find the difference between sale value and stamp duty value but, did not refer to DVO for determination of fair market value u/s. 50C(2) and 50C(3) of the Act but however he adopted the procedure contemplated u/s. 43CA of the Act wherein it explains the consideration received or accruing as a result of the transfer of an asset is less than the value adopted or assessed or assessable by any authority of a State Government, the value adopted by such authority shall be deemed to be the full value of consideration for the purpose of profits and gains from transfer but however in our opinion is subject to the satisfaction the provisions contemplated in sub-section (2) of section 43CA - Admittedly, there was no occasion left to AO in assessment proceedings to refer the issue to the DVO for determination of fair market value. As discussed above, the assessee placed reliance on the orders of this Tribunal and they are on record by way of legal compilation.
This Tribunal in the case of K.K. Nag Ltd. [2012 (6) TMI 184 - ITAT PUNE] for A.Ys. 2005-06 and 2006-07, order dated 25-05-2012 held that the AO ought to have referred the matter to the Valuation Officer instead of straightaway deeming the value adopted by the Stamp valuation authority as the full value of consideration. In a such situation where the assessee claims before the AO that the value adopted or assessed by the Stamp valuation authority exceeds fair market value, the AO shall adopt the course mentioned in section 50C(2)(a) of the Act.
In the present case, the assessee contended before the CIT(A) about the AO not referring the matter to the file of Valuation Officer but however on the alternative plea the CIT(A) restricted the addition to the extent indicated above. Since, the contention made before us that it is mandatory for AO referring to DVO for determination of fair market value in our considered opinion, we deem it proper to remand the issue to the file of AO to follow the procedure contemplated under the Act. The assessee is liberty to file all evidences in support of its claim. Thus, the order of CIT(A) is set aside. Appeal of assessee is allowed for statistical purpose.
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2020 (9) TMI 1266 - ITAT PUNE
Exemption u/s 11 - benefit of exemption claimed by the assessee u/s 11 and 12 disallowed by AO following the assessments made in the assessee’s own case for the earlier years wherein the exemption claimed was disallowed for allegedly violating the provisions of section 13(1)(c) - HELD THAT:- Section 13(1)(c)(ii) show that in case any income or property of the trust is used either directly or indirectly for the benefit of trustee or any person referred to sub-section (3) of section 13, the benefits granted to the trust u/s. 11 shall be forfeited. However, the first proviso to section 13(1)(c) provides an exception. According to first proviso benefit derived by the trustee or the person mentioned in sub-section (3) shall not debar the trust from availing the benefit of section 11 and 12, if : (i) the trust is created or established prior to the commencement of the Act; and (ii) the benefit extended to the trustee or the person referred to in sub-section (3) is in compliance with the mandatory terms of the trust.
In the present case, the assessee has placed on record a copy of the Trust Deed at pages 40 to 48 of the paper book. The Trust Deed is in Marathi language. The English translation of the Trust Deed is at pages 49 to 53 of the paper book. A perusal of the trust deed shows that the trust was created in the year 1930 i.e. much prior to the enactment of Income Tax Act, 1962. Thus, the first condition to fall within the scope of proviso to section 13(1)(c)(ii) of the Act is satisfied.
Benefit to be granted to the assessee or the person referred to in sub-section (3) in application or uses of the property or income of trust is concerned, the use or application of the property should be in compliance of the mandatory terms of the trust - From perusal of English translation of the Trust Deed it appears that the trustees were in possession of the residential part of the property on second floor. As per the assertions of ld. AR, the legal heirs of the author of the trust were in possession of part of property on ground floor as well. Admittedly, there is a clear mandate in the trust deed that part of the property which is in possession of author of the trust shall be for the sole purpose of occupancy by the author of the trust or his legal heirs. The part of the property which is subject matter of dispute are 3 shops on ground floor of the building. From the perusal of English translation of Trust Deed the details of the property in possession of the author of the trust at the time of execution of Trust Deed is not discernible. Under such circumstances, we are of considered opinion that this issue needs a re-visit to the Assessing Officer. Representative of both the sides concur on the point that the part of property referred to in the Trust Deed has to be clearly identified. AO is directed to ascertain the part of property which was in the possession of author of the trust at the time of execution of the trust in the year 1930, qua which mandate has been given for the exclusive use by the author of the trust and his legal heirs.
In case the shops under question are part of the property which was in possession of the author of the trust deed at the time of execution, then the assessee clearly falls within the exception as mentioned in proviso to section 13(1)(c)(ii) of the Act.
As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to A.Y. 2010-11 and A.Y. 2011-12, we respectfully follow the order of the Tribunal for A.Y. 2010-11 and A.Y. 2011- 12 and restore this issue to the file of the Assessing Officer for deciding the same afresh as per the same direction as given.
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2020 (9) TMI 1265 - NATIONAL COMPANY LAW TRIBUNAL, INDORE
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Time Limitation - acknowledgement of the debt in the balance sheets of the corporate debtor - HELD THAT:- It is not in dispute that in this case the loan account was declared to be an NPA on 10.04.2014. This proceeding was filed on 19.09.2018. So it appears that it was filed beyond the period of three years from the date on which the right to apply was accrued to the Bank. Having noted so, we have to consider whether the period of Limitation said to be extended because the corporate debtor's balance sheets show that the debt is still to be payable.
In case of 'V. Padmakumar' [2020 (3) TMI 1244 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], Hon. NCLAT dealt with this aspect and held that If the argument is accepted that the Balance Sheet / Annual Return of the 'Corporate Debtor' amounts to acknowledgement under Section 18 of the Limitation Act, 1963 then in such case, it is to be held that no limitation would be applicable because every year, it is mandatory for the 'Corporate Debtor' to file Balance Sheet/ Annual Return, which is not the law."
Thus, the acknowledgement of the debt in the balance sheets of the corporate debtor does not help the financial creditors to maintain this time barred application.
OTS Proposal submitted by the Corporate Debtor - HELD THAT:- Admittedly it was submitted to the bank on 18/9/2017 i.e., beyond a period of three years from the date of default. Hence it does not bring the claim of the financial creditor within limitation. In view of the above facts, it is not felt necessary to enter into resolving the controversy whether the OTS proposal given by the corporate debtor without prejudice to its rights to contest the claim can be said to be acknowledgement of the debt or not?
In this case also the debt of default is 10.06.2014 (i.e., the date of NPA). This application under Section 7 IBC is filed on 19.09.2018. Hence it is filed beyond the period of Limitation.
Application dismissed.
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2020 (9) TMI 1264 - NATIONAL COMPANY LAW TRIBUNAL BENGALURU BENCH
Seeking to pass an order of injunction restraining the Respondent from leaving the jurisdiction of this Tribunal without its leave - seeking direction to Respondent to extend necessary cooperation in discharge of his functions under the provisions of Code - Sections 19 & 33 of the I & B Code, R/w Rule 11 & 13 of NCLT Rules.
Extension of co-operation - HELD THAT:- Though more than one year was over, the Applicant could not make substantial progress in liquidation process in order to follow time lines as prescribed under the Provisions the Code. So far as extending co-operation by the Respondent is concerned, it is settled position of law that all the concerned people, which includes Directors/MD, in respect of the affairs of the Corporate Debtor, and Managing Directors are required to extend co-operation to IRP/RP/Liquidator. The Applicant himself states in the Application that the Respondent was extending cooperation to him except for the last 20 (twenty) days, which is nothing but un-tenable contention/allegation made for the reasons best known to him. It (sic) goes without saying that the Respondent is under legal obligation to extend his co-operation.
Seeking restraint on Respondent from leaving the Country - HELD THAT:- The presence of Respondent is not required before the Adjudicating Authority, but may be required before Arbitral Authorities. And Arbitral Authorities, by law have judicial powers to ensure witness in the case pending before them. It is relevant to point out here that proceedings pending here are only liquidation proceedings, wherein presence of Respondent is not required. It is for the Applicant to initiate Criminal proceedings against the Respondent, if circumstances so warrant and thus seek appropriate relief which include to prohibit the Respondent to leave the Country.
Application dismissed.
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2020 (9) TMI 1263 - MADRAS HIGH COURT
Validity of Look Out Circular issued by the Ministry of Home Affairs, Bureau of Immigration - nature of the proceedings - whether in the nature of criminal proceedings and the jurisdiction exercised by the learned Single Judge is a criminal jurisdiction or not - HELD THAT:- It is evident from the facts of this case that there are criminal cases pending against the appellant, including one registered by the Central Bureau of Investigation, and the appellant C.Sivasankaran is named as accused at Serial No.13 in FIR No.9 of 2018, dated 13.4.2018 of Bengaluru - It is in this background that the Look Out Circular appears to have been issued, and as per the amendment referred to by the learned Single Judge, such a circular can be issued in larger public interest. The genesis of the Look Out Circular, therefore, is the pendency of criminal cases against the appellant and it is in this context that the Look Out Circular came to be challenged by the appellant. The writ petition, therefore, was clearly intended to seek an order to enable the appellant to move out of the country by getting the bar of Look Out Circular lifted, the obvious consequence and likelihood whereof is avoiding of criminal proceedings that have been initiated under the Code of Criminal Procedure.
Reliance can be placed in the case of Ram Kishan Fauji v. State of Haryana and others [2017 (3) TMI 1780 - SUPREME COURT] where it was held that The irresistible conclusion is that the Letters Patent Appeal was not maintainable before the Division Bench and, consequently, the order passed therein is wholly unsustainable and, accordingly, it is set aside.
The Look Out Circular that came to be the subject matter of challenge before the learned Singe Judge did arise out of the various criminal proceedings that were pending against the appellant. The prayer, therefore, in the writ petition was clearly for a declaration that the Look Out Circular in the purported exercise of powers under Section 10B of the Passport Act, 1967 is arbitrary and an abuse of authority, vitiated by mala fides, and hence, should be declared to be without jurisdiction - The sequence of facts, and the consequence towards which the writ petition is aimed at, clearly relate to criminal proceedings that have led to the issuance of the circular. This may involve the guarantee of liberty to a person under Article 21 of the Constitution, but the genesis of the action is connected with the criminal prosecutions pending against the appellant, the umbilical cord whereof has not yet snapped. The contention that it only involves civil rights of the appellant is, therefore, not correct because the relief revolves around consequences arising or likely to arise as a result of criminal prosecution.
The issuance of a Look Out Circular is an exercise of authority under the Office Memorandum dated 27.10.2010 and such a circular can be issued in larger public interest, as already held by the learned Single Judge after taking into account the amendment in the said memorandum. The appellant's claim of immunity under the foreign passport, therefore, may not arise - The letter and intent, as well as the crux of the background in which the writ petition was filed clearly relates to the criminal proceedings pending against the appellant and, therefore, the nature of the jurisdiction exercised by the learned Single Judge would be a writ in the criminal jurisdiction, hence a Letters Patent Appeal under Clause 15 of the Letters Patent of Madras High Court would not be maintainable.
Appeal dismissed.
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2020 (9) TMI 1262 - NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD
Condonation of delay of 358 days in the application which has already been tiled under Section 9 of IB Code - HELD THAT:- The instant application is the original application and the delay cannot he condoned as prayed in the application.
The instant application is dismissed as not maintainable.
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2020 (9) TMI 1261 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - Conflicting orders have been passed by the two Members comprising the Bench of Adjudicating Authority (National Company Law Tribunal) - mandate of Section 419(5) of the Companies Act, followed by the two members or not - HELD THAT:- It is deemed appropriate to dispose of this appeal with direction to the same Bench of the Adjudicating Authority, which passed two conflicting orders, to make a reference to Hon’ble President, NCLT, if not already made, in terms of Section 419(5) of the Companies Act, 2013, for hearing on the issues and points on which the two Members of the Bench had divergent view in the split verdict so that the matter is placed before a third Member for hearing and the Company Petition is decided in accordance with the opinion of the majority of the Members who heard the case including the member before whom it is placed.
Matter to be referred to Hon’ble President, NCLT - the appeal is accordingly disposed of.
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2020 (9) TMI 1260 - MADRAS HIGH COURT
Suit for recovery of money with interest - Allegation is that the suit pronote has been fabricated to wreck vengeance - main defence taken by the defendant is that the pro-note was not executed by him - HELD THAT:- The subject matter of the suit is Ex.A- 1 pro-note. The lender and the witness to the Pro-note had deposed their presence during the execution of the pro-note by Ex.A-1. No contra evidence to dislodge the case of the plaintiff adduced by the defendant - Relatives witnessing the pro-note transaction, is not a circumstances to draw suspicion. In addition to the witness to the execution, the scribe PW-3 also examined by the plaintiff and he has deposed that he saw the defendant affixing his signature and thumb impression. The defendant who denies the signature and thumb impression, not taken any steps to refer the disputed signature and thumb impression for comparison by experts. The Courts below pointing out this, had compared the disputed signature with the admitted signature found in the vakalat and summon and found to be from same person.
Ex.A-1 being a negotiable instrument, the special rules of evidence under chapter XIII of the Negotiable Instruments Act is applicable. Under section 118 of the Negotiable Instruments Act, until the contrary is proved, the presumption of consideration and date are in favour of the plaintiff. The plaintiff burden is only to prove it execution - In this case, the plaintiff had satisfactorily proved the execution through PW-2 and PW-3. Thus the burden has shifted to the defendant to prove the contrary. He has not taken any steps to positively prove the contrary. In the said circumstances, the Courts below after recording the reason for invoking section 73 of the Evidence Act had proceeded to arrive at a conclusion.
The defendant though had pleaded that the pro-note was not executed by him, he has not placed any acceptable proof to disbelieve the ocular evidence of PW-2 and PW-3. The best way to disprove is by calling the expert. This option was not exercised by the defendant - this Court is of the view that this is a fit case to exercise section 73 of the Evidence Act.
This Court finds that the final Court of facts had held the plaintiff has proved the execution of the pro-note by the defendant and the said debt still un discharged - there are no substantial question of law for interfering the concurrent finding of the Courts below - appeal dismissed.
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2020 (9) TMI 1259 - KARNATAKA HIGH COURT
Deduction u/s 80IB - Unaccounted money, found during the search proceedings and explained as on money received, are eligible for deduction under Section 80IB(10) as held by ITAT - Whether Tribunal was right in holding that, transactions entered into, with the buyers of flats, are eligible for deduction, even though there is violation of the sub-Sections(e) and (f) of Section 80IB(10), on the ground that these transactions were entered into before the amendments to sub-Section (3) and (f) of Section 80IB(10)? - HELD THAT:- For the reasons assigned by us in the order passed today in [2020 (9) TMI 1138 - KARNATAKA HIGH COURT] the substantial questions of law are answered against the revenue and in favour of the assessee.
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2020 (9) TMI 1258 - BOMBAY HIGH COURT
Validity of assessment order - levy of sales tax - local sale or inter-state sale - movement of goods from the State of Maharashtra to Mumbai High - HELD THAT:- On reading of the judgment in THE COMMISSIONER OF SALES TAX VERSUS M/S. PURE HELIUM (INDIA) LTD. [2012 (2) TMI 5 - BOMBAY HIGH COURT], it is evident that this Court has held that movement of goods from the State of Maharashtra to Mumbai High does not constitute a movement from one state to another state; Mumbai High does not form part of any state in the Union of India. Thus the very basis on which revenue sought to assess the sale as an inter-state sale was found absent. This being the position, foundational view taken by Respondent No.2 that movement of goods from the State of Maharashtra to Mumbai High is a sale within the territory of the State of Maharashtra is factually and legally unsound. Article 286 of the Constitution of India, particularly clause 1(a) thereof clearly says that no law of a state shall impose or authorize the imposition of a tax on the supply of goods or of services or both, where such supply takes place outside the state.
Prima facie, impugned order of assessment is without jurisdiction. Therefore, as an interim measure, we direct that no coercive steps shall be taken by the Respondents against the Petitioner on the basis of the order of assessment impugned.
Stand over to 1st October, 2020.
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2020 (9) TMI 1257 - ITAT DELHI
TP Adjustment - comparable selection - HELD THAT:- There cannot be any dispute with respect to that for the comparability analysis the functions performed, assets employed and risks assumed of the assessee is required to be compared strictly with each of the comparable companies. Unless they are found to be distinct, they cannot be excluded merely because they have been excluded in some other assessee’s case. However in the present case, the issue is when a particular comparable company is excluded from the comparability analysis in assessee’s own case for earlier years, for whatever reasons, even if same was excluded following some judicial precedent of other assesses, judicial discipline requires that we follow - We direct the learned transfer pricing officer/assessing officer to exclude (1) E Clrex Services Ltd, ( 2 ) Infosys BPO Limited and ( 3) TCS E Serve Limited and then work out the margins of the comparable. Accordingly, ground number 2 – 3 of the appeal of the assessee is allowed.
Disallowance u/s 14A - HELD THAT:- When the assessee has not earned any exempt income during the year, there cannot be any reason to disallow any expenditure during the year. This principle has been laid down by many judicial authorities. In view of this we direct the learned assessing officer to delete the disallowance u/s 14 A of the act as assessee has not earned any exempt income. Thus ground number 4 of the appeal is allowed.
Non granting the full credit of tax deduction at source claimed by the appellant in its return of income - HELD THAT:- AO is directed to verify the credit claim of the assessee and if found in order may allow the credit claimed by the assessee for tax deduction at source. Accordingly, ground number 6 of the appeal is allowed.
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2020 (9) TMI 1256 - PUNJAB & HARYANA HIGH COURT
Seeking grant of Regular Bail - principle of parity - HELD THAT:- On the principle of parity the petitioner deserves to be granted regular bail.
It is deemed appropriate to grant regular bail to the petitioner - the petitioner is directed to be released on regular bail on his furnishing bail and surety bonds to the satisfaction of the trial Court/Duty Magistrate concerned - petition allowed.
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2020 (9) TMI 1255 - MADRAS HIGH COURT
TDS u/s 195 - disallowance of BD commission - Tribunal remitting the issue of disallowance of BD commission without deciding whether the appellant was liable to deduct tax at source - Whether the appellant was not able to deduct tax source in respect of the BD commission paid by it considering the provisions of the Act and the DTAA between India and US particularly when the recipient did not have any permanent establishment in India? - HELD THAT:- There can be no quarrel with regard to the aspect that the Tribunal is the final fact finding Authority. Nevertheless, the jurisdiction of the Tribunal is confined to the lis before it and more particularly in the instant case, it is the assessee's appeal and they cannot be worse off in their appeal and the Tribunal has no jurisdiction to direct the AO by virtually reopening the proceedings concluded under Section 201 of the Act pursuant to the order passed by the CIT(A) concerned.
Tribunal ought to have referred to the said order and if, in its opinion, the order does not bind the Tribunal, then, adequate reasons ought to have been assigned by the Tribunal in that regard. We find that nothing was recorded by the Tribunal in the impugned order.
Argument of Revenue of the impugned order will clearly show that the impugned order is an order of remand with a direction to the Assessing Officer to redo the matter and that no substantial question of law would arise in this appeal for the Court to interfere with the impugned order - We do not agree with the said submission since the legal position is that an order or a judgment has to be read in its entirety and cannot be read in a truncated fashion. Thus, what flows from the observations and directions in paragraph 11 of the impugned order has to be read along with paragraph 13. In fact, in paragraph 11, there are pointed observations to the Assessing Officer, which appear to be wholly adverse to the assessee.
Which we need to point out is that the Tribunal observed in paragraph 11 that the AO has to examine as to whether there was any concerted effort to shift profits by camouflaging it as commission on sales. This was never the case of the Revenue either before the AO or before the CIT(A) or for that matter before the Tribunal. The tenor of the observations gives a different impression to the transaction done by the assessee, which, in our considered view, was not called for. In the light of the above discussions, we hold that the Tribunal exceeded in its jurisdiction while remanding the matter to the AO, which has the effect of reopening a concluded proceedings vide order dated 03.2.2014 passed by the concerned CIT(A).
Accordingly, the above tax case appeal is allowed and substantial question of law Nos.1 and 2 are answered in favour of the assessee.
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2020 (9) TMI 1254 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Penalty for violation of Regulations 3 and 4 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’) - trading activities in the illiquid Stock Options at BSE - non-genuine trades which was 81.38% of the total trades executed in the Stock Options Segment of BSE - HELD THAT:- As buying and selling of equivalent quantities within the day may not be illegal but if the trades were done with ulterior purposes then the same are non-genuine. In the instant case, we find that one party is making a profit and the other party is making a loss. In addition, there is proximity in the time of sell orders at a higher price and the same quantity is being reversed to the same party in a lower price within a fraction of seconds or few minutes. We find that contracts got matched between the same parties. We fail to understand as to why the Appellants who made the transactions repeatedly incurred substantial losses within a few minutes. Given the fact that there was proximity of time between buy and sell orders one can reasonably point to some kind of manipulative exercise with prior meeting of minds especially when one can see it plainly that it was a clear case of synchronised trading namely that a synchronised trade is one where the buyer and seller enter quantity and time of shares they wish to transact at the same time.
From the aforesaid cumulative analysis of the reversed transactions with the counter party, quantity, time and significant variation of the price clearly indicates that the trades were non-genuine and had only misleading appearance of trading in the securities market without intending to transfer the beneficial ownership. One finds it to be naive to presume that the perception of the two counter parties to a trade changed within few seconds/minutes and positions were interchanged and the contracts were changed where one party made profit and the other party ended up making losses every time without prior meeting of mind. It is not a mere coincidence that the Appellants could match the trades with the counter party with whom he had undertaken the first leg of respective trade. In our opinion, the trades were non-genuine trades and even though direct evidence is not available in the instant case but in the peculiar facts and circumstances of the present case there is an irresistible inference that can be drawn that there was meeting of minds between the Appellants and the counter parties, and collusion with a view to trade at a predetermined price.
As urged by the learned counsel for the Appellants that the penalty awarded is excessive and harsh and, therefore, prayed that in the event the order is affirmed the Tribunal may consider reducing the penalty amount taking into consideration the financial status of the Appellants and the negligible transactions executed by the Appellants.
We have perused the orders passed by the AO. We find that the AO has taken into consideration not only the factors contained in Sec. 15J of the SEBI Act but has also taken into consideration the number of total trades, the artificial volume generated, the loss incurred, etc while imposing the penalty. It may be stated here that the minimum penalty under Sec. 15HA is Rs.5Lacs and maximum penalty is Rs. 25 crores or three times the profit made. We find that the AO has excercised its discretion which is neither harsh nor arbitrary. We do not find any error in the quantum of penalty imposed by the AO.
We do not find any merit in the appeals and the same are dismissed with no order as to costs.
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2020 (9) TMI 1253 - APPELLATE AUTHORITY FOR ADVANCE RULING, BIHAR
Classification of goods - Product Sand - to be classified under Tariff Heading 2505 or not - taxable at 5% or not - reverse charge mechanism - serial number 64 of notification number 12/2017 Central/State Tax (Rate), dated 28.06.2017 - HELD THAT:- Serial number 64 of the notification deals with assignment of right to use any natural resources. The instant case does not involve assignment of any right to use any natural resource. It is not in dispute that the Respondent engaged is in the business of exploiting sand from the river beds and that the right to explore for, exploit/extract sand is assigned by the Government for consideration, generally termed royalty. Upon extraction of the sand, the Respondent is free to sell it in the market. The Merriam Webster Dictionary defines the word “use” as “to do something with (an object, machine, person, method, etc.) in order to accomplish a task, do an activity, etc.”. The activity of the Respondent is no way involved with “using” the sand extracted by it to accomplish any activity or any task. In fact, the Respondent actually parts with the sand extracted by it rather than making any use of it.
Once it is held that the activity in question does not fall within the scope of the said serial number 64, the claim for exemption made by the Respondent fails.
The services provided by Government to the Respondent are classifiable under the heading 997337 viz. “licensing services for the right to use minerals including its exploration and evaluation” and that the rate of tax applicable to this activity is 18% with effect from 01.07.2017 itself - in the instant matter the services provided by the Government to the Respondent do not fall within the scope of serial number 64 of the impugned notification number 12/2017.
The Respondent has all along been discharging his tax liability in the matter of the service under consideration in this matter, at the rate of 5% on reverse charge basis. This fact is significant since it indicates that for a considerable period of time since the implementation of GST, the Respondent has admitted that services provided by the Government to him in this matter are not exempt and hence do not fall within the ambit of the said serial number 64 of the impugned notification number 12/2017 (supra). Even his appeal before the Authority for Advance Ruling was limited to the issue of whether 5% was the rate applicable to the activity in question. There was no contention on behalf of the Respondent before the said Authority that the said activity was exempt from tax.
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2020 (9) TMI 1252 - ITAT AHMEDABAD
Non maintainability of appeal on low tax effect before ITAT - Addition u/s 68 - bogus LTCG on penny stock - HELD THAT:- Tribunal has identified the appeals involving tax effect by virtue of relief given by the CIT(A) below Rs.50 lakhs on 14/08/2019 and dismissed those appeals. On 14/08/2019, no such Circular was available. The subsequent Circular, in any case, would not make the order of the Tribunal suffering from an apparent error. The Circular No.23 of 2019 or Office Memorandum F.No.279/Misc./M-93/2018-ITJ (PT.) nowhere contemplates that these will be applicable w.e.f. 08/08/2019, i.e. the date when Circular No.17 of 2019 was issued.
In cases involving long term capital gains and short term capital gains exemption through penny stocks, we find that the CBDT has since come out with a special order communicated vide office memorandum dated 16.09.2019 stating that monetary limits fixed for filing appeals in these cases before the Tribunal, High Court and Supreme Court shall not apply in case of assessee claiming bogus LTCG/STCG through penny stock and appeal shall be filed on merits. The special order thus talks about filing of appeal in such cases and therefore, it relates to any appeal in such cases which can be filed pursuant to such an order on and after the date of such special order and therefore doesn't contemplate a situation where the appeal which has already been filed prior to issuance of such a special order by the Revenue which shall be read and understood as filed pursuant to such special order.
CBDT low tax effect circulars issued from time to time wherein the tax effect have been progressively increased by the -Revenue with a view to minimize the litigation has been read by the Courts and the Tribunal, and even the CBDT has also clarified latter, that these CBDT Circulars shall apply not just to future appeals but also to pending appeals and therefore, where the appeal has already been filed'by the Revenue and is pending, such appeal has been held to be covered by a subsequent low tax effect circular and dismissed on account of low tax effect. However, in the instant case, the issue is regarding carving out an exception from such low tax effect limits and that too, not just by a general order but by way of a special order where such appeals can be filed, therefore, unless the special order has been passed by the CBDT and an appeal is filed pursuant to such a special order, the exception cannot be read and understood to apply to existing appeals which have already been filed prior to issuance of the special order. Therefore, we are of the considered view that the CBDT Circular no. 23 of 2019 should be read along with special order of the CBDT dated 16.09.2019 in respect of appeals filed pursuant to such special order and shall thus apply to all appeals filed on or after 16.09.2019 by the Revenue where the tax effect may be low but the appeal can still be filed by the Revenue on merits.
In the instant case, the appeal of the Revenue was filed on 22.05.2019 and therefore, the present appeal was not filed pursuant to such a special order of the CBDT dated 16.09.2019 and thus, the matter doesn't fall in any exception as so prescribed by the CBDT in its earlier circular dated 8.8.2019 and the special order doesn't apply in the instant case and the appeal has thus rightly been dismissed by the Bench on account of low tax effect in light of CBDT's circular dated 8.8.2019. Miscellaneous Applications filed by the Revenue are dismissed.
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2020 (9) TMI 1251 - MADRAS HIGH COURT
Seeking provisional release of goods - Used Rubber Tyre Cut in Two Pieces - Section 110A of the Customs Act - Mis-declaration of goods - prohibited goods or not - HELD THAT:- The issue is covered in the decision in the case of M/S. BLACK GOLD TECHNOLOGIES VERSUS UNION OF INDIA, THE COMMISSIONER OF CUSTOMS, TUTICORIN, THE ASSISTANT COMMISSIONER OF CUSTOMS (SIIB) , TUTICORIN [2020 (9) TMI 137 - MADRAS HIGH COURT] where it was held that petitioners are entitled to provisional release of the goods under Section 110A of the Customs Act, 1962.
The respondents are directed to assess and permit the provisional release of the goods in question upon payment of applicable duties of customs subject however to the eventual adjudication. The respondents shall release the goods after assessing and collecting the customs duty and other charges provisionally within a period of three weeks from the date of receipt of a copy of this order. The adjudication proceedings can go on. The respondents will bear in mind the usual approach adopted in the case of provisional release of goods in terms of 110A of the Customs Act.
Petition allowed.
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2020 (9) TMI 1250 - APPELLATE AUTHORITY FOR ADVANCE RULING, HARYANA
Input Tax Credit - inputs/ Capital Goods used or intended to be used for creation of covered logistics facility space (warehouse) to be rented out for storage purposes - credit on inputs, if the goods and services are consumed and used in construction of covered logistic facility space when the said Input Tax Credit would be utilized in order to discharge and pay CGST and HGST/IGST on rent received from tenants of the warehouse - restriction imposed under Section 17(5)(d) of the CGST Act 2017 - HELD THAT:- In the instant case, the construction has been done by the Appellant for itself i.e. with all intentions to retain its ownership rights, and is only going to lease it to the other party. Thus the construction has been done, without any doubt, in the Appellant's own account. The same, in the light of what is clearly expressed in Section 17, sub-Section (5), clause (d) ibid, is not entitled to ITC on the inputs/ input services.
The AAR has correctly observed that the applicant was engaged in the business of logistic services including warehouses constructed for the applicant's business of letting out; that, Section 17(5)(d) renders ITC unavailable in respect of goods and services received for construction of immovable property(other than Plant and Machinery) on Taxpayer's own account, including when such goods or services or both are used in the course of furtherance of business.
Hon'ble court in M/S. SAFARI RETREATS PRIVATE LIMITED AND ANOTHER VERSUS CHIEF COMMISSIONER OF CENTRAL GOODS & SERVICE TAX & OTHERS [2019 (5) TMI 1278 - ORISSA HIGH COURT] has concluded that they do not intend to hold it [the provision of Section 17(5)(d/] as ultra-vires (Para 20 of the Order). Thus it is clear that the Hon'ble High Court has provided a liberal construction and the same as such is not law, particularly as the Department has challenged the same in the Hon'ble Supreme Court. The Appellant has itself admitted that the Hon'ble Apex Court has issued the notice. Thus the case shall be listed for arguments - The department has filed an appeal against the said judgment of the Hon'ble Orissa High Court in CHIEF COMMISSIONER VERSUS SAFARI RETREATS PRIVATE LIMITED [2020 (3) TMI 1150 - SC ORDER]. The case is presently pending after notice of admission. In view of the CBIC's ibid instruction, the case has not attained finality. The same is therefore not binding in the present case.
Appeal dismissed.
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2020 (9) TMI 1249 - APPELLATE AUTHORITY FOR ADVANCE RULING, HARYANA
Classification of services - recovery of various charges including Preferential Location Charges (PLC) from the Buyers - applicability of GST rate of 12% or 18% where sale/transfer of constructed property has taken place before issuance of completion/Occupation certificate (CC/OC) - GST rate of 5% or 18% where sale/transfer of constructed property has taken place before issuance of CC/OC under new projects which commence on or after 01.04.2019? - PLS collected along with consideration for sale of properties is outside the scope of supply where sale/transfer of constructed property is entered into by the Applicant after issuance CC/ OC or not? - PLS attracts concessional rate of tax/exemption or not - adjustment/refund of the excess GST amount paid as (18% less 12%) or (18% less 5%) or (18% less Nil)?
GST rates on construction service - HELD THAT:- With one-third of the total transacted value of an immovable property being attributable to the Land/ share of Land, the 5% GST Rate, viz. two-third of (3.75+3.75), claimed by the Appellant pertains to the other than Affordable Residential Projects to commence w.e.f. 1.04.2019 - Similarly 12% GST Rate, viz. two-third of (9+9) claimed by the Appellant pertains to other projects including commercial projects - Similarly 12% GST Rate, viz. two-third of (9+9) claimed by the Appellant pertains to other projects including commercial projects.
Preferential Location service - Whether Preferential Location Service (PLS), is Construction Service? - HELD THAT:- It is clear from the Appellant's pleas that they are claiming the rates of 5% or 12% for Preferential Location service and simultaneously claiming these services as Construction Service/ a component of Construction Service. It is also clear that the claim includes entitlement to abatement of one-third from the value/ consideration of landed/ immovable property - As admittedly stated by the Appellant, the different rates of the houses can be on account of different locations. Thus premiumness of a location attracts a commensurate consideration which the buyer pays for an identified advantage, viz. view/ direction/ sunlight/ airiness/ vicinity/ serenity/ parking facility etc. etc., or a combination of these. This makes the provided service an exclusive service capable of providing even by a dealer in immovable property. The same therefore need not necessarily be a component of construction service.
Conditions for taxation of PLS - whether the provisioning of Preferential Location Service (PLS) would be considered as provided even when the entire consideration for the immovable property is received after the issue of Completion Certificate or Occupation Certificate? - HELD THAT:- The answer, even prima-facie, is yes, since the service is identifiable separately from the construction service in the same way as a property agent's service is separate from the sale of a landed property or renting of a landed property.
Whether PLS is a component of immovable property? - HELD THAT:- Preferential Location Service is integrally linked to, and is provided through, an Immovable Property/ Real Estate/ Landed Property but it is identifiable as a separate and exclusive Service - “Construction of Complexes/ Buildings' and “Preferential Location' are separate and different activities. Usually, all the houses/floors in a complex/building may not have preferential location. Therefore, a builder may not charge the PLC (preferential location charges) in respect of all the houses/floors. Thus, Construction of a Complex, Building etc. is an independent activity/ service in itself, even without Preferential Location, and vice-versa.
Classification of PLS - HELD THAT:- The construction service is the construction simplicitor whether in respect of single or multiple dwelling units or residential or commercial buildings. In the Scheme of Classification, the service of provisioning of preferential location is not classified/ classifiable under construction service - the PLS service can be offered/ provided even after issue of CC/ OC i.e. at the time of selling of the immovable property and thus would fall beyond the scope of Construction Service.
Building Completion & Finishing Services - Heading: 9954/ Group 99547 - HELD THAT:- From the descriptions it is clear that the Preferential Location Service cannot be classified under this Group/ any of the above Accounting Codes.
Real Estate Services - Heading 9972 - HELD THAT:- From the description of entries under Real Estate Services it is clear that PLS would classify under Group 99722 and the SAC 997222 or 997223.
Classification of service - HELD THAT:- The most appropriate entry wherein the instant Service, viz. to be provided by M/s. DLF Ltd., is classifiable is Heading 9972, Group 99722 and Service Accounting Code (SAC) 997222 viz. “Building sales on a fee or commission basis or on contract basis”. Where the sale of a piece of land is being made as a 'stock in trade' the preferential location service shall classify under SAC 997223 viz., “Land sales on a fee or commission basis or on contract basis”.
Rate of GST - HELD THAT:- PLS classifies under SAC 997222 and attracts the rate of 18% (9% under CGST Act vide Entry (iii) under Column (3) against the Serial Number '16' of the Notification 1 1/2017-CT(R) dated 28.06.2017 as amended.
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