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Showing 261 to 280 of 18686 Records
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2022 (12) TMI 1304
Unexplained source of deposits - whether amount routed through bank account and registries existed in the name of M/s Vardhman Industrial Estate and its concern, proves the genuineness of transactions? - CIT (Appeals) deleted these additions based on the evidences furnished by the assessee in the form of confirmation from M/s. Vardhman Industrial Estate and its sister concern that they have paid the assessee these moneys - HELD THAT:- These moneys are routed through banking channels and they are verifiable. The finding of the ld. CIT (Appeals) that the documents show that lands were registered in the name of M/s. Vardhman Industrial Estate where the assessee acted only as an agent in facilitating the purchase of land from farmers on behalf of M/s. Vardhman Industrial Estate. As observed that the ld. CIT (Appeals) deleted these additions based on these evidences where major portion of the lands were registered in the name of M/s. Vardhman Industrial Estate and a small portion to its sister concern.
Addition being cash deposits into bank account - CIT (Appeals) was of the view that it would be unreasonable to add the entire amount as these proceeds emanate from the business of the assessee which is on-going. The ld. CIT (Appeals) also observed that assessee had opening balance of Rs.24,05,867/-. Therefore, the ld. CIT (Appeals) considered the peak credit of this account as undisclosed income of the assessee and worked out the peak credit at Rs.21,59,522/-.
CIT (Appeals) on appreciation of evidences furnished by the assessee deleted the additions of Rs.76,50,000/- and Rs.10,50,000/- and restricted the peak credit in respect of cash deposits into bank account at Rs.21,59,522/- which, in our opinion, is justified. Therefore, we see no good reason to interfere with the findings of the ld. CIT (Appeals). Thus, we sustain the order of the ld. CIT (Appeals) and reject the grounds raised by the Revenue.
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2022 (12) TMI 1303
Revision u/s 263 - notice to a non-existent entity - deduction u/s.80IC was wrongly allowed as it appears that the assessee firm was not carrying out manufacturing activities at the factory premises - HELD THAT:- Since, the notices issued by the revenue authorities were after the date of closure of the business they have been rightly returned answered. Since, the closure of the business as no operations could be carried and no employees were available at the premises of the factory, the notices have been returned. Hence, it cannot be concluded that during the financial year period from 01.04.2011 to 31.12.2012 was not in existence. The derivation of the ld. PCIT cannot be held to be correct.
Had the manufacturing activities were carried out as on date the notices could have been served.From the record, it is clear that the manufacturing activities were not being carried out from 31.12.2012 and the cancellation of registration on 04.03.2013 was also on record. Hence, the notices could not be served and it is a fact that the manufacturing activity was not carried out as on the date of issue of notice. It certainly does not give raise to a conclusion that there was no manufacturing activity during the year 01.04.2011 to 31.12.2012.
It is not worthy to conclude that the permanent closure of the business was done w.e.f. 31.03.2014. It is a fact on record that the permanent closure of the business was done w.e.f. 31.03.2014 and polynomial interpolation cannot be resorted to conclude that the assessee was not into manufacturing during the period 01.04.2011 to 31.12.2012.
The authorization given by the assessee was not affixed by requisite court fee. Hence invalid.
The validity or invalidity of the letter of authority cannot be a matter of proceedings u/s. 263 especially when the assessee reaffirmed the details filed by the AR.The assessee sold products to only two concerns at Bangalore namely, M/s. Creative International Pvt. Ltd. and M/s. Texport Overseas Pvt. Ltd.
The bills have been duly examined. The transport bills have been duly filed before the AO which consists of South India Freight Carriers and Uttarakhand Logistics. The transport charges have been paid by the recipient. The central Sales Tax declarations/'C' Form have been duly filed. Hence, there is no reason to suspect the sales without bringing any material to prove that the bills are phoney or the entities which received the goods are bogus. Hence, the conclusion of the ld. PCIT cannot be supported.
The sale invoices to those two concerns do not give any information as to how the goods have been sent to Bangalore from Roorkee. The sale invoices clearly shows that the goods have been sent by freight carrier companies named above and the recipient "to pay" the freight charges.
The raw materials were also purchased from Bangalore which do not give any credence to the factum of purchase. Factually incorrect. No goods have been purchased from Bangalore. The Poly Yarn was purchased from Delhi and Erode
The expenses incurred on account of electricity & wages do not suggest any manufacturing activity carried out at the premises.
The amounts have been duly examined by the AO as per the observation at page no. 2 of the Assessment Order. The electricity bills and invoices details have been duly examined and accepted by the AO with reference to books of accounts and bills. In the absence of any remark, no adverse conclusion could be drawn with regard to the provisions of Section 263 - Appeal of the assessee is allowed.
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2022 (12) TMI 1302
Illegal detention of consignment of the petitioner of dry dates imported vide Home Consumption Bill of Entry - HELD THAT:- Considering the fact that the respondent No.3 has no objection to the release of the detained goods subject to the decision of this Court, in wake of the the Country of Origin Certificate of the consignment being genuine, the respondent No.3 has not found it necessary for any further evidence to be adduced for continuing this detention. In wake of that there will be no requirement for the Court to further adjudicate upon any of these aspects. This petition, is, therefore, disposed of as having become infructuous.
Petition dismissed.
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2022 (12) TMI 1301
Cancellation/revocation of customs broker licence - main ground on which the impugned order assailed is the bar of limitation - HELD THAT:- In the present case, the date of license report is unknown and in this context, it would be relevant to refer to a decision of a learned Single Judge of this Court in the case of M/S. AM. AHAMED & CO. VERSUS THE COMMISSIONER OF CUSTOMS (IMPORTS) [2014 (9) TMI 237 - MADRAS HIGH COURT]. This Court, in an identical situation, where the date of offence report was unavailable, has proceeded on the basis that in such a situation it would be appropriate to adopt the date of suspension as the relevant date. This order is stated to have attained finality by both learned counsel before me and thus the settled position as on date is to the effect that where the date of offence report is unavailable, a legally appropriate substitute would be the date of suspension for purposes of computation of limitation.
In the present case, the date of order of suspension is 20.09.2018 and hence, the overall period of nine months, as stipulated in para 7.1 of the aforesaid Circular, expires on 19.06.2019. The impugned order being passed on 21.10.2019, is barred by limitation on this ground as well - In the considered view of the Court, delay, whether attributable to the revenue or, for that matter, the broker, would not extend the timelines as set out both in the Circular and Regulations. No doubt there was no response on the part of the broker in responding to the enquiry report. However, nothing prevented the officer to have taken action scrupulously in line with the time periods set out under Regulation 17 of CBLR Regulations and para 7.1 of the Circular, even sans any co-operation on the part of the noticee.
The impugned order is found to be barred by limitation and is set aside on this score. This writ petition is allowed.
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2022 (12) TMI 1300
Revocation of Customs Brokers License - levy of penalty - allegation of Manipulation and fabrication of lab reports - of Obtaining fabricated test reports to avoid the detection of the true identity of goods to bypass the restrictions imposed by Ministry of Commerce - allegation of import of Superior Kerosene Oil (SKO) in the guise of Industrial Composite Mixture Plus/Low Aromatic White Spirit - fundamental charge against the appellant is that the appellant tried to influence the officers of the custom laboratory, kandla for issuing fabricated test report in order to avoid the material getting classified as SKO (Superior Kerosene Oil) falling under Customs Tariff heading No.27101910 which is of restricted nature.
HELD THAT:- The notice has alleged that though the imported goods were SKO falling under Customs Tariff Heading No. 27101910 but the same were misdeclared as ICMP (Industrial Composite Mixture Plus) falling under Customs Tariff heading 27101910 - The main charge of misconduct against the appellant is that he had tried to influence the officers of Kandla Laboratory and take care that the ‘final boiling point’ of the cargo should be below 240 Celsius. It has been alleged that this was done in order to ensure that the goods imported by the various importers through the appellant did not qualify as SKO but qualified as ICMP. It is seen that other than alleged manipulation of final boiling point, there is no other manipulation by the appellant from the officers of the chemical laboratory, Kandla.
From the test report, it is seen that the requirement of final boiling point for SKO is 300 Degree Celsius maximum. Thus, if final boiling point of any petro chemical exceeds 300 degree Celsius the same would not qualify as SKO.
Alleged manipulation of the final boiling point by the officers of Kandla laboratory at the behest of the appellant - HELD THAT:- It is seen that the appellant has alleged to have asked the officers of Kandla chemical laboratory to show that the max. boiling point is below 240 degree Celsius. The motive for doing this is supposed to be that the goods should not qualify as SKO. It is not understood as to how by getting report manipulated to show that the final boiling point is below 240 degree Celsius, the appellant could have achieved the objective of getting out of the specifications of SKO as extracted from the test report of CRCL, New Delhi reproduced at para 9.3 of the show cause notice. By putting the final boiling point below 240 degree Celsius, it is obvious that the goods would qualify as SKO and not get out of requirements of being SKO.
It is not understood as to how the appellant could have helped the importers by manipulating the final boiling point of the samples to below 240 degree Celsius as alleged in the show cause notice. The objective of taking the goods out of the description of SKO could only have been achieved if the final boiling point was above 300 degree Celsius. This dichotomy has not been clarified in the impugned order. Since all the charges essentially flow from this fundamental charge of manipulating test report therefore, the impugned order in the present stage cannot be sustained unless the above dichotomy is explained.
The impugned order is set aside and the matter is remanded to the original adjudicating authority for fresh decision after giving opportunity to the appellant to defend themselves. Appeal is allowed by way of remand.
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2022 (12) TMI 1299
Approval of resolution plan - several applications - HELD THAT:- Although we have disposed of several applications today but still there are different I.A.s filed in the IL&FS group. These matters pertain to year 2019, 2020, 2021 & 2022.
There being several applications, we request Mr. Raunak Dhillon to prepare details of all applications year wise. It is needless to say that for those applications whose chart is prepared it need not be prepared again - List these applications on 19th and 20th January, 2023 at 02.00 P.M.
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2022 (12) TMI 1298
Seeking to intervene in the proceedings filed by the Liquidator of the Corporate Debtor - seeking clarification as to whether he is allowed to scrutinise and investigate the transactions executed by the Directors of the ‘Corporate Debtor’ beyond two years prior to the date of ICD and also to see the relevant documents from the Promoters - HELD THAT:- We do not find any illegality in the observation of the Learned Adjudicating Authority that there is no provision in the Code, with respect to impleadment of any Creditor apart from the Creditors who have triggered the CIRP. Needless to ad, the Appellant is at liberty to pursue other legal remedies, if so advised.
Appeal dismissed.
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2022 (12) TMI 1297
Taxablity - services of healthcare or predominantly cosmetic in nature or not - Melasma - Birth Mark Treatment - Hypertrichosis Treatments - Hair Laser Comb Treatment - time limitation - HELD THAT:- The appellant undertakes diagnosis, which is an art and act of diagnosing disease by symptoms and thereafter prescribing the necessary remedial treatment, diagnosis is not a simple guesswork. The appellant clinics employs qualified doctors who have completed post graduation in Dermatology. The appellant first undertakes a diagnosis of a new patient, which is done by the qualified Dermatologist for which they collect consultation charges. Pursuant to diagnosis, treatment is prescribed, the appellant clinic also prescribed the preventive measure and/or post treatment precaution. Preventive care means a measure taken to prevent disease from occurring or recurring rather than curing it. The appellant clinics are ‘clinical establishment’ involved in Alopathy treatment, which is a recognised system of medicine in India. The appellant have been held to be clinical establishment by the Court below - the services provided by the appellant, save and except for ‘hypertrihosis treatments’ and ‘hair laser comb treatment’ fall under healthcare services and are accordingly exempt under Notification No. 25/2012-ST.
Services rendered by the appellant assessee in respect of Hypertrichosis Treatments and Hair Laser Comb Treatment are held taxable under “Cosmetic and Plastic Surgery” service.
Invocation of extended period of limitation - HELD THAT:- The appellant had maintained proper records of the transaction and has taken registration under the provisions of Service Tax and were making regular compliances. Few returns were pending for which plausible explanation has been given being non-availability of the concerned staff. The appellant has regularly deposited their admitted taxes and have also paid tax and filed pending ST-3 returns during the course of investigation. The demand has been raised by the Revenue based on the accounts and records maintained by them. Accordingly, the extended period of limitation is not invocable.
Levy of penalties - HELD THAT:- As there is no suppression of facts with malafide intention to evade payment of service tax, penalty under Section 78 is set aside - the penalty of Rs. 10,000/- imposed under Section 77 of the Finance Act, 1994 for filing ST-3 late, is upheld.
Appeal disposed off.
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2022 (12) TMI 1296
VCES scheme - Non-issuance of notice of rejection - Recovery of service tax alongwith interest and penalty - Non-payment of service tax due on the GTA services availed by them under reverse charge mechanism during the period April 2008 to March 2013 - failure to take service tax registration and failure to file returns as required under law - HELD THAT:- The VCES scheme has provided itself contents and has been explained by the Board in terms of various circulars issued. Once a declarant files a declaration admitting the tax liability for the period upto December 2012 in Form VCES-1, Revenue has to issue the acknowledgment in VCES-2 or reject the same by issuing a notice to the declarant. If no such rejection is done, the declarant proceeds to make the payment of the declared liability and intimates to the concerned designated authority who issues the final discharge certificate in Form VCES-3. In the present case it is not even the case of the Revenue that VCES declaration filed by the appellant has been rejected or even a notice for such rejection has been issued. It is settled law that the notice for rejection of the declaration has to be issued within thirty days as per Board Circular No 174/9/2013-ST.
In absence of any such notice for rejection, it is but natural that appellant would act as per VCES-2 issued to him acknowledging the declaration. Appellant paid the declared liability and intimated the designated authority of the payment made. Even then the designated authority has not issued the settlement memo under Form VCES-3. Appellant cannot be faulted for the reason as stated in the impugned order.
Section 111 of the Finance Act, 2013 clearly provides that in case there is some liability or the declaration made is found to be improper substantially, then a show cause notice for confirming the additional tax liability would be issued under Section 111. No such notice has also been issued. In absence of notice under Section 111, there cannot be a case for rejection of the declaration made by the appellant under VCES scheme. It is for the Revenue/designated authority to issue VCES scheme and failure to issue the same cannot be the ground for proceeding against the appellant. Revenue should set its record right.
Demand made for the period January 2013 to March 2013 - HELD THAT:- The appellant paid the entire amount even prior to issuance of show cause notice. The benefit of Section 73(3) of the Finance Act, 1994 should have been extended to them by not issuing the show cause notice. As all amounts were paid prior to the issuance of show cause notice, the proceedings initiated cannot survive in terms of Section 73(3) of the Finance Act, 1994.
Appeal allowed.
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2022 (12) TMI 1295
Process amounting to manufacture or not? - whether ‘aluminium dross and skimming’ arising in the course of manufacture is excisable after 10th May 2008? - HELD THAT:- It is seen from the decision of the Hon’ble High Court of Bombay in HINDALCO INDUSTRIES LIMITED VERSUS THE UNION OF INDIA, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [2014 (12) TMI 657 - BOMBAY HIGH COURT] that dutiability of the impugned goods, which had been held by the Tribunal to be excisable even after the amendment inserting Explanation in section 2(d) of Central Excise Act, 1944 with effect from 10th May 2008, did not find favour in the light of several decisions.
In the light of the decision of the Hon’ble High Court of Bombay in their own matter on the very same impugned goods in HINDALCO INDUSTRIES LIMITED VERSUS THE UNION OF INDIA, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [2014 (12) TMI 657 - BOMBAY HIGH COURT], which was affirmed by the Hon’ble Supreme Court in UNION OF INDIA VERSUS HINDALCO INDUSTRIES LIMITED [2019 (3) TMI 1933 - SC ORDER] holding that nothing survives for consideration in these Special Leave Petitions and the Civil Appeal. The Special Leave Petitions and the Civil Appeal are dismissed.
The impugned orders do not survive and accordingly are set aside to allow the appeals - Appeal allowed.
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2022 (12) TMI 1294
Validity of remanding the case - Whether, the Tribunal, being a last fact finding authority and empowered to examine and adjudicate the factual and legal issues, has erred in remanding the appeal back to the Assessing Authority when all the material for deciding the case were available on record? - HELD THAT:- Through the present revisions, the assessee has tried to raise a question of law that whether the Tribunal which is the last fact finding court and empowered to examine and adjudicate the factual and legal issue, has erred in remanding back the matter to the assessing authority when all the materials for deciding the case was available on record. The matter of remand by various authorities, Tribunals and courts have been under active consideration of this Court and also of the Hon’ble Apex Court for quite a long time.
This is a case which was before the Commercial Tax Tribunal which is the last fact finding court and clothed with both power of deciding the appeal on law and fact, had remanded back the matter to the assessing authority setting aside both orders of the assessment as well as of the first appellate authority.
In the present case, the Tribunal which was deciding the second appeal was required to frame the point of determination and thereupon records its finding and the decision taken by it, but only after noting the arguments of both the parties, the Tribunal remanded back the matter to the assessing authority to consider certain documents and make fresh assessment - The Hon’ble Apex Court in SHIVAKUMAR & ORS VERSUS SHARANABASAPPA & ORS [2020 (4) TMI 907 - SUPREME COURT] while considering the scope of remand had held order of remand is not to be passed in a routine manner because an unwarranted order of remand merely elongates the life of the litigation without serving the cause of justice. An order of remand only on the ground that the points touching the appreciation of evidence were not dealt with by the trial court may not be considered proper in a given case because the first appellate court itself is possessed of jurisdiction to enter into facts and appreciate the evidence.
In the present case, the Tribunal has not recorded any finding to the effect that the assessing authority has failed to deal any issue or has not considered the same which was essential for the right decision of the suit. The Tribunal had only required the revisionist-Company to place certain documents before the assessing authority on the basis of which the assessing authority was to arrive at the finding. The documents mentioned in the judgment was already brought to the notice of the assessing authority through the reply submitted by the assessee on show-cause notice on 12.03.2020 and the same was dealt with by the assessing authority in its assessment order - The order of remand has to be seen within the parameters of Rule 23, 23A and 25 of and not beyond that. Apart from Order 41 of CPC, there is no other provision which provides for the concept of remand. It is a borrowed provision by the taxing authorities from Code of Civil Procedure, 1908. The taxing authorities as well as the Tribunal should first understand the concept of remand before applying it. It should not be in a casual manner. Long litigation in commercial and business matter only spoils the image of the State and its functionaries and cause great loss to business world.
Tribunal was not correct in remanding back the matter to the assessing authority when all the material was before it and should have dealt with each of the material and decided the same - the order dated 08.08.2022 passed by the Tribunal is hereby set aside and the matter is remitted back to the Tribunal to decide both the appeals of the assessee in accordance with law on the material available on record, as expeditiously as possible.
The revisions stands partly allowed.
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2022 (12) TMI 1293
Cancellation of registration of petitioner - Non filing of returns for a period of six months - It is the case of the petitioner that the petitioner had filed returns for the defaulted period but did not file any appeal under Section 107 against Ext.P3 order of cancellation - HELD THAT:- This writ petition is liable to be allowed. The show cause notice issued to the petitioner in this case is produced as Ext.P2. A perusal of Ext.P2 shows that the same has been issued in Form GST Reg 31. The said form is one for suspension of revocation and not for cancellation of registration.
The notice is absolutely vague and it is not clearly specified with any clarity, the reasons for proposing cancellation even the period for which there was alleged failure to file returns is not specified.
The quashing of the impugned order of cancellation will not have the effect of absolving the petitioner of any fiscal liability. The petitioner will be required to file all defaulted returns together with tax, late fee, interest, penalty etc., within a period of two weeks from the date on which the registration of the petitioner is restored in compliance with this judgment - Petition allowed.
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2022 (12) TMI 1292
Maintainability of petition - availability of alternative remedy of appeal - Refund claim - Intermediary services - Circular bearing No.159/15/2021-GST dated 20.09.2021 - learned counsel for the respondents submits that in view of availability of equitable and alternative remedy by way of an appeal to the Appellate Authority as well as the Tribunal, the present petition is not maintainable - HELD THAT:- In the light of the submission and the Circular dated 20.09.2021 which has come into effect during the pendency of the present writ petition, it is opined that the impugned orders as well as the refund orders at Annexure-K dated 11.02.2019, Annexure-L dated 22.05.2019, Annexure-M dated 25.05.2019 and Annexure-N dated 14.12.2019 deserve to be set aside and the matter deserves to be remitted back to the concerned respondents for reconsideration afresh in accordance with law.
Petition allowed by way of remand.
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2022 (12) TMI 1291
Confiscation and detention of goods and conveyance - interaction, interplay and inter se application of Section 129 and Section 130 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- As could be seen from the impugned order, the penalty amount is Rs. 2,14,690/-. The fine and other charges are demanded to the extent of Rs.11,92,726/- and the tax is demanded of Rs.2,14,690/-.
By way of interim relief, it is directed that the respondents shall release the goods and conveyance of the petitioner, confiscated and detained pursuant to the aforementioned order No. 8 dated 21.04.2022 passed in FORM GST MOV-11, subject to the following conditions imposed - application disposed off.
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2022 (12) TMI 1290
Classification of goods - HSN code - rate of GST - eco-friendly expandable paper wrap (honeycomb paper for wrapping) - to be classifiable under 48239013 or 48084090? - HELD THAT:- It is observed that the Tariff Item 4823 covers articles of paper and Tariff Item 48239013 has description as “Packing and Wrapping Paper” and all type of packing and wrapping paper will fall in 48239013 which is a specific tariff item for packing and wrapping paper - As per Rule 3(a) of General Rules for the Interpretation of Import Tariff, the heading which provides the most specific description shall be preferred to headings providing general description. The Tariff item 48239013 contains specific description of Packing and wrapping paper. The product “eco-friendly expandable paper wrap (honeycomb paper for wrapping)' is manufactured from the kraft paper and adhesives and the same is used in wrapping/packing as such Rule 3(a) of General Rules for the Interpretation of Import Tariff will apply and the same merits classification under HSN 48239013.
In the landmark judgement of RAMESWARLAL MURLIDHAR VERSUS STATE OF ORISSA [1981 (4) TMI 254 - SC ORDER], Hon'ble Supreme Court has observed that, Paper may be presented in plain sheets or in exercise books or in big rolls. It may be thick or thin, light to heavy, bleached or coloured, according to the requirement of purchasers. The form in which the paper is presented or sold is not a conclusive test, but the use to which it is put would furnish a guiding principle.
Although, there is no specific entry for the product 'eco-friendly expandable paper wrap (honeycomb paper for wrapping) in Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, there is an entry most akin to the product and process ( at Sr. No. 157 of Schedule III of Notification No.1/2017 CENTRAL TAX (Rate) Dated 28-6-2017 and attracts 9% CGST and 9% SGST or 18% IGST.
In the instant case the assessee have themselves declared their product to be “a packing material used for packing of goods as a cushioning material, separators or edge protector to make shipping cartons of goods and as pallets and pallet boxes” - Hence the eco-friendly expandable paper wrap (honeycomb paper for wrapping) merits to be classified under heading 48239013.
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2022 (12) TMI 1289
Benefit of concessional rate of GST - Supply of works contract to the Indian Railways - construction services - classified under Entry 3(v)(a) of Notification No. 8/2017-Integrated Tax (Rate) dated 28.06.2017 or not - HELD THAT:- The entry 3(v)(a) of Notification No. 8/2017-lntegrated Tax (Rate) dated 28.06.2017 prescribes the rate of 12% for Composite supply of works contract {as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017}, other than that covered by items (I), (ia), (ib), (ic), (id), (ie) and (if) of the above notification supplied by way of construction, erection, commissioning, or installation of original works pertaining to railways, including monorail and metro.
Immovable property has not been defined in the CGST Act. Definition of Immovable Property is given in Clause 3 (26) of General Clauses Act, 1897 which says that "immovable property shall include land, benefits arising out of land and things attached to earth, or permanently fastened to anything attached to earth. " - As per Section 3 of the Transfer of Property Act 1882, the phrase "attached to earth" means- (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.
The goods involved in repair and maintenance of 'open line' as well as in 'construction line' are welding material and paints are consumed purely during the execution of contract and hence the same shall not be treated as 'transfer of property in goods', as lawful convey and absolute transfer of ownership of the said property i.e. consumable goods does not take place.
The supply provided by the applicant does not fall under the category of 'new construction' as the applicant is not doing any work relating to new construction. Even in case of work relating to 'construction lines' wherein new railway tracks are constructed, the applicant is not constructing new railway line and only supplying completion and finishing services in respect of 'construction lines' wherein the applicant has to provide welding work and painting work - The supply provided by the applicant do not fall under the category of ' all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable' in case of construction lines. Even in case of Open Lines, the railway lines which are replaced on completion of shelf life are not abandoned or damaged structures. Further, there is no erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise during execution of contracts by the applicant.
As such, the applicant is not entitled to benefit of entry 3(v)(a) of Notification No. 8/2017-Integrated Tax (Rate) dated 28.06.2017 because- (i) there is no contract for building, construction, fabrication, completion, erection, Installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property, (ii) there is no transfer of property in goods (whether as goods or in some other form) involved in the execution of contracts and (iii) The supply is not by way of construction, erection, commissioning, or installation of original works.
The appropriate rate of IGST payable by the applicant on services provided on 'construction line' as well as 'open line' is 18%.
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2022 (12) TMI 1288
Composite works contract services - Local authority or not - Governmental Authority or not - services supplied to Uttar Pradesh Jal Nigam involving construction & design of prestressed concrete cylinder pipelines (PCCP) and pumping plant for the purpose of supplying water to the Khurja Sewerage Treatment Plant Project from the Mundakhera Reservoir to the pond of Khurja STPP - ancillary works such as development of roads/paths, drain septic Tanks, sewer line, water supply system, external electrification, service connection to building, etc - Entry 3(iii) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.
HELD THAT:- The definition of local authority in the CGST Act includes within its ambit any other authority legally entitled to or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund. Thus, for the purpose of the GST Laws, any authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund qualifies as a local authority.
The Apex court in the UNION OF INDIA & ORS. VERSUS RC. JAIN & ORS. [1981 (2) TMI 200 - SUPREME COURT] has held that that the authority should be elected by the inhabitants of the area. As per Section 4 of the UPWSS Act, the UPJN shall consist of Chairman and members appointed by the state government. As such, the UPJN is not elected by the inhabitants of the area but the same is established by the state. Therefore, the said is not satisfied in the case of UPJN - Apex court in the RC Jain case has held that that the authority must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. The autonomy may not be complete and the degree of the dependence may vary considerably but, an appreciable measure of autonomy there must be. Perusal of the UPWSS Act reveals that the UPJN is not enjoying appreciable nature of autonomy.
Whether the UPJN is Governmental Authority? - HELD THAT:- The UPJN is a body corporate formed by the State legislature under UPWSS Act enacted by the UP State Legislature. As such, the first requirement of a governmental authority stands fulfilled in the present case. Further, as per Section 3 of the UPWSS Act, UPJN is a body corporate established by the Government of U.P., as such, the second requirement of governmental authority has also been fulfilled in the present case. Moreover, the UPJN is constituted for the development and regulation of water supply and sewerage services in the State of U.P. Under the Section 14 of UPWSS Act, UPJN is inter alia entrusted with the function to operate, run, and maintain any waterworks and sewerage system. As per Article 243W read with Twelfth Schedule of the Constitution of India, water supply for domestic, industrial and commercial purposes and public health, sanitation conservancy and solid waste management is a function of municipality. In view of the above, the requirement that the authority must be established to carry out any function entrusted to a Municipality under article 243 W of the Constitution has also been fulfilled in the present case. Thus, the UPJN is a governmental authority.
By way of Notification No. 15/2021-Central Tax (Rate) dated November 18, 2021, the lower rate of tax of 12% provided by Entry 3(iii) of Notification No.11/2017- Central Tax (Rate) dated June 28, 2017, was restricted to works contract supplied to Central Government, State Government, Union territory and a local authority only. As the UPJN does not qualify as a local authority and it qualifies as a governmental authority, tax rate of 18% is applicable on the works contract services provided to UPJN by way of Entry 3(xii) of Notification No. 11/2017- Central Tax (Rate) dated June 28, 2017.
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2022 (12) TMI 1287
Reopening of assessment u/s 147 - Reasons to believe - accommodation entry receipts - HELD THAT:- On perusal of the reasons recorded, the assessment is sought to be reopened for verification of the facts which are already on record as to whether the amount received by the assessee and reflected in the regular books of accounts pertains to any accommodation entry or not. It is not in dispute that the assessee returned that amount within a short span of two months. Therefore, it appears that under the guise of reopening the assessment, AO wants to have a roving inquiry. Under the circumstances, it cannot be said that AO had any tangible material to form an opinion that the income chargeable to tax has escaped the assessment.
In case of Inductotherm (India) (P.) Ltd. v. M. Gopalan, Deputy CIT [2012 (9) TMI 16 - GUJARAT HIGH COURT] the Division Bench of this Court observed that for a mere verification of the claim, the power of reopening of assessment could not be exercised and the AO cannot seek to undertake a fishing or a roving inquiry and seek to verify the facts which are already on record, as if it were a scrutiny assessment.
Thus from reasons recorded to reopen the assessment, we are of the opinion that under the guise of reopening the assessment, the AO wants to have a roving inquiry. In absence of any tangible material to form an opinion that the income chargeable to tax has escaped assessment and in absence of any satisfaction recorded by the Assessing Officer by merely relying upon the information received from the Office of DCIT Central Circle 2(2), Mumbai, the impugned action of reopening the assessment while exercising power under section 148 of the Act cannot be sustained. - Decided in favour of assessee.
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2022 (12) TMI 1286
Reopening of assessment u/s 147 - new tangible material available on record - reasons to believe - reopening based upon the audit objection - necessity of independent application of mind - HELD THAT:- In the present case, the entire material was available with the Assessing Officer during the original assessment and therefore, there was no failure on part of the assessee to disclose truly and fully all material facts necessary for assessment and based upon such material supplied by the petitioner, the Assessing Officer passed the original assessment order.
It appears that the notice for reopening is based upon the audit objection and there is nothing on record to suggest that such reopening is made on account of new tangible material available on record. It is therefore, apparent that there is change of opinion by the AO to reopen the assessment for the Assessment Year 2011- 2012, more particularly, when the issue raised in the reopening assessment is already considered during the original assessment proceedings.
AO cannot have any jurisdiction to issue the notice u/s 148 for reopening the assessment for the year under consideration more particularly, when the assessment is sought to be reopened beyond a period of four years as held by the Supreme Court in case of Commissioner of Income tax v. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT]
AO issued notice under section 148 of the Act only to make a roving inquiry into the facts which were already considered by the Assessing Officer at the time of framing the original assessment under section 143(3) of the Act. It appears that the Assessing Officer now wants to re-verify the facts which is not permissible to be an acceptable ground for exercising powers to reopen the assessment.
The impugned notice issued u/s 148 by the respondent exercising the powers to reopen the assessment for the Assessment Year 2011-2012 is illegal and liable to be set aside. Appeal of assessee allowed.
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2022 (12) TMI 1285
Disallowing lease equalization charge claimed as a deduction from gross lease rentals received by the assessee in respect of finance lease of assets - difference between cost of asset leased minus the depreciation claim and the lease deposit received - Tribunal held that the amount taken to the lease equalisation fund was not an allowable business expenditure as it was an appropriation of profit - HELD THAT:- This issue is no longer res integra as the same has been answered by the Supreme Court in Commissioner of Income Tax-VI v. Virtual Soft Systems Limited [2018 (4) TMI 1472 - SUPREME COURT] as examined the guidelines issued by the Institute of Chartered Accountants of India (briefly referred to hereinafter as ‘ICAI’) and also referred to Section 211 of the Companies Act, 1956 to emphasize that Accounting Standards prescribed by ICAI shall prevail until Accounting Standards are prescribed by the Central Government.
Method of accounting followed as derived from ICAI Guidance Note is a valid method of capturing real income based on the substance of finance lease transaction. The rule of substance over form is a fundamental principle of accounting.
No force in the contentions of the Revenue that the accounting standards prescribed by the Guidance Note cannot be used to bifurcate the lease rental to reach the real income for the purpose of tax under the IT Act.
Bifurcation of lease rental as per the accounting standards prescribed by the ICAI allowed. Moreover, there is no express bar in the IT Act regarding the application of such accounting standards - Decided in favour of assessee.
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