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Showing 141 to 160 of 2015 Records
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2018 (12) TMI 1877
Revision u/s 263 - Whether twin conditions of the assessment order being erroneous as well as prejudicial to the interests of the Revenue are to be satisfied? - HELD THAT:- AO had called for the details during the assessment proceedings and had further issued a notice u/s 154 and after being satisfied, has dropped the 154 proceedings. Therefore, it is clear that the AO has applied his mind to the information filed by the assessee and therefore, the assessment order cannot be said to be erroneous. The issues raised by the CIT as the mistakes/discrepancies are of factual nature and not against the law, therefore, for this reason also, the assessment order cannot be said to be erroneous.
We also agree with the contention of the learned Counsel for the assessee that the CIT cannot direct the AO to redo the assessment without pointing out the errors committed by the AO and without giving a finding as to how the assessment order is erroneous. From the literal reading of the order u/s 263, we find that the CIT pointed out certain discrepancies and then subsequently reproduced the assessee’s submissions and then directed the AO to redo the assessment. Thus, there is no finding whatsoever, as to whether the assessee’s contentions were acceptable to him or not and as to how the assessment order is erroneous. Therefore, the revision order passed by the Pr. CIT is not sustainable. The assessee’s appeal is accordingly allowed.
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2018 (12) TMI 1876
Revision u/s 263 - CIT observed that A.O.has not applied his mind and has allowed the claim of expenses viz. Medical Conference Expenses which were prohibited by Medical Council of India (MCI) - Assessee submitted that the A.O. in these cases has examined the issues and has duly applied his mind. He submitted that as a result of this application of mind, the A.O. has disallowed the sales promotion articles, which were found to be covered under freebies to doctors, prohibited under MCI guidelines and CBDT Circular - HELD THAT:- CIT's observation that the A.O. has not followed these MCA Guideline and CBDT Circular is totally misplaced. As regards the examination of conference expense is concerned, the ld. CIT has held that the same were not examined by the A.O. by holding that the concerned ledger accounts were not available in assessment record. This, in our considered opinion, is not at all sustainable in view.
There is no rule that the A.O. is supposed to obtain and keep in the assessment records, the copy of all the ledger account which he has examined. Furthermore, the ld. CIT is fully aware of the case law cited by the assessee before him wherein similar expenses were allowed by the ITAT. He has not followed the same holding that it has been appealed against in High Court. Just because the ITAT order has been appealed before High Court, it will not cease to have binding effect on the ld. CIT. It will always be considered to be a permissible view. Hence, if the A.O. adopts a legally permissible view the same cannot be the subject to revision u/s. 263 of the Act.
While concluding, the ld. CIT has observed that the A.O. shall take into account the binding judicial precedence which may become available on the subject. In this connection, we note that in assessee's own case the ITAT [2018 (7) TMI 1883 - ITAT MUMBAI]has allowed the assessee's appeals and dismissed the Revenues appeals. The issue involved was the allowability of similar expenses. In this view of the matter, we find that admittedly the decision of tribunal is binding upon the A.O. Hence the order u/s. 263 of the Act by the ld. CIT will be of no consequence.
A.O. has already made the necessary enquiries in this regard. Here it is a case that the A.O. has made some enquiry and the ld. CIT is not satisfied and he wants another enquiry to be done. This direction u/s. 263 is not sustainable legally. This proposition draws support from the decision of the Hon'ble jurisdictional High Court in the case of CIT vs. Gabriel India Ltd. [1993 (4) TMI 55 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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2018 (12) TMI 1875
Addition as deemed rent on unsold flats shown as stock in trade - HELD THAT:- It is seen that similar issue came up for consideration before the Pune Bench of the Tribunal in M/s. Cosmopolis Construction [2018 (9) TMI 1621 - ITAT PUNE] has held that no rental income can be computed when flats are held as stock in trade. In reaching this conclusion, the Tribunal relied on certain other judgments and the orders. In the absence of any distinguishing fact, having been brought to my notice by the ld. DR and respectfully following the precedent, we overturn the impugned order on this score and direct to delete the addition. - Decided in favour of assessee.
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2018 (12) TMI 1874
Validity of reopening of assessment u/s 147 - HELD THAT:- Where the Assessing Officer has reopened the assessment mechanically without application of mind and as well as following the decision of this Tribunal in the case of Narain Dutt Sharma Vs ITO [2018 (4) TMI 427 - ITAT JAIPUR] we hold that the reopening of the assessment is not valid and the same is quashed.
Since we have quashed the reopening of the assessment and consequential reassessment, therefore, we do not propose to go into the other grounds regarding the additions sustained by the ld. CIT(A).Appeal of the assessee is allowed.
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2018 (12) TMI 1873
Reopening of assessment u/s 147 - Whether parallel proceedings under Section 158-BC as well as under Section 148 of the Income Tax Act is impermissible in law? - HELD THAT:- The block assessment is undertaken with reference to Section 132-A of the Income Tax Act. Now block assessment proceedings are initiated and actions under Section 158-BC are commenced. Pursuant to the block assessment made, based on the informations received on account of search operations, the reopening of the assessment is also simultaneously done with reference to the assessment years 1995-1996 and 1996-1997 alone. Thus, the reopening of the assessment is initiated based on other reasons.
The learned Senior Standing Counsel also clarified that reopening of the assessment is taken with reference to two assessment years based on the materials available with the Assessment Officer. The notice issued under Section 148 of the Act itself stipulates that the Department has received information that the writ petitioner has made an investment of ₹ 45,71,26,016/- from U.K. Companies and also incurred expenses during the year ended 31.3.1995. But the writ petitioner has not admitted any income accrued or received based on the investment during the previous year ended 31.3.1996 relating to the assessment year 1996-1997.
The learned Senior Standing Counsel for the Department also clarifies that these informations or materials are independent and unconnected with the block assessment made with reference to Section 158-BC for ten years. Thus, when the Assessing Officer has got reason to believe under Section 147 of the Act, then they are empowered to issue notice under Section 148 of the Act and deal with the case under Sections 147 to 153 of the Act and by following the procedures contemplated under the provisions of the Act.
When the Income Tax Department come out with a plea that the reopening of the assessment is made based on the independent informations and the documents available, it is left open to the assessee to seek the reasons from the Department, which was already given to the writ petitioner and accordingly, submit his defence to the reasons stated and allow the Assessing officer to assess the income and pass final orders of assessment under the Act.
In the present cases on hand, the reasons for reopening of the assessment had already been provided to the writ petitioner. Thus, the writ petitioner ought to have given his explanations/objections in respect of the reasons stipulated in the reply by the Income Tax Department. Contrarily, if this Court adjudicate the merits and demerits, the same would cause prejudice to the Income Tax Department in concluding the reassessment proceedings with reference to Sections 147 to 153 of the Act.
The very object and purpose of the reassessment and reopening of the assessment is to ensure that the tax evaders are dealt in accordance with law. If the assessee failed to disclose the actual income to the Department in a parallel assessment year, the Assessing Officer is empowered to reopen the assessment with reference to Sections 147 to 153 of the Act. Once the proceedings are commenced under Section 148 of the Act, then this Court must allow the Assessing Officer to adjudicate the reassessment and arrive a conclusion and pass assessment orders by affording opportunities to the assessee and by following the procedures. This being the concept and the object sought to be achieved under the provisions of the Act and by quashing the very notice, the very purpose of the proceedings would be defeated.
Even in the case of Dayanidhi Maran vs. Assistant Commissioner of Income Tax, Non-Corporate Circle-1, Chennai [2018 (10) TMI 811 - MADRAS HIGH COURT] this Court had reiterated the principles that no writ petition can be entertained against the notice in a routine manner. Judicial review against such statutory notices are limited and the aggrieved persons are at liberty to submit their explanations/objections with reference to the reasons stated in the impugned notice and participate in the proceedings so as to reach a logical conclusion.
In the present cases on hand, admittedly there was search operations. Admittedly, certain materials were secured by the Authorities Competent. Admittedly, in its order dated 15.11.1996, the Assistant Commissioner of Income Tax provided opportunity to the writ petitioner to inspect all those documents. However, opportunities proposed to be provided was informed by the Assistant Commissioner of Income Tax.
However, now the learned Senior Standing Counsel for the Income Tax Department made a submission that an opportunity will be provided to the writ petitioner by following the procedures. This being the submission made, this Court is of an opinion that complete opportunity as contemplated under the Act must be provided to the assessee, enabling him to submit his explanations/objections and the documents if any along with the statements for the purpose of concluding the proceedings in all respects and to ensure that the proceedings reaches its logical conclusion.
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2018 (12) TMI 1872
Addition towards contribution to the State Renewal Fund - HELD THAT:- As relying on own case [2017 (8) TMI 1382 - ITAT JAIPUR] State Renewal Fund was set up to provide safety to the employees working under the state owned entities in case of restructuring/wind-up/closure of the undertaking. Based on the study done by the State Government, the assessee has provided an amount of ₹ 20 lacs for the purposes of welfare and benefit of the employees. As following case of Principal CIT vs Rajasthan State Seed Corporation Ltd 2016 (9) TMI 59 - RAJASTHAN HIGH COURT] we affirm the order of the CIT(A) who has rightly deleted the disallowance made by the AO towards contribution to State Renewal Fund.
Disallowance for depositing the employees contribution to PF & ESI beyond the prescribed time limit provided in respective Act - Whether the employees contribution to PF & ESI are governed by the provisions of section 43B and not by section 36(1)(va) r.w.s. 2(24)(x) of the IT Act.? - HELD THAT:- Admittedly, the employees’s contribution to PF has been paid before the due date of filing of return of income u/s 139(1) of the Act. The issue is no more res integra in light of various judicial pronouncements of M/S. STATE BANK OF BIKANER & JAIPUR AND JAIPUR VIDYUT VITARAN NIGAM LTD. [2014 (5) TMI 222 - RAJASTHAN HIGH COURT], M/S. UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LIMITED, UDAIPUR [2014 (8) TMI 677 - RAJASTHAN HIGH COURT] and JAIPUR VIDYUT VITRAN NIGAM LTD AND RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD [2014 (1) TMI 1085 - RAJASTHAN HIGH COURT] - We accordingly affirm the order of the ld CIT(A) who has rightly deleted the disallowance made by the AO towards employees contribution to PF.
Disallowance of energy conservation fund - expenses was not incurred wholly and exclusively for the business purchases and it is only application of income - HELD THAT:- As relying on own case [2017 (8) TMI 1382 - ITAT JAIPUR] the disallowance on account of contribution to energy conservation fund made by the Assessing Officer is directed to be deleted. This ground is allowed.
Addition of contribution to Rajasthan Bhawan - HELD THAT:- Assessee got the rebate of 75% as well as the right to use the accommodation by its officers/employees visiting Mumbai. Accordingly, in view of the fact that the assessee has received the benefit in the shape of accommodation against the said expenditure for construction of Rajasthan house, we hold that the claim of the assessee is an allowable expenditure u/s 37(1) of the Act and the AO is directed to allow the same. In view of the same, ground no. 1 of assessee’s appeal is allowed.
Disallowance of 50% of the expenses incurred on publicity and advertisement - Addition on the ground that in lot of entries, details of expenditure are not appearing in the ledger account without providing opportunity to furnish such detail ignoring the explanation given about the nature of the expenditure incurred which is wholly and exclusively for the purpose of business - HELD THAT:- The matter is remanded to the file of the AO to examine the details of expenditure incurred under the head publicity and advertisement after providing reasonable opportunity to the assessee. In the result, the ground is allowed for statistical purposes.
Disallowance of the prior period expenditure on the ground that it could not be ascertained whether the expenses crystallized in the previous year or not - HELD THAT:- The incurrence of expenditure for the purposes of business is not been disputed by the Revenue. Further, the ld AR has explained that the expenditure has been booked after seeking the approval from the competent authority during the year and the same is consistent with the accounting practice of booking the expenses in earlier years. We accordingly donot see any basis for disallowance of the expenditure so claimed by the assessee. In view of the same, the AO is directed to allow the same and the ground no. 3 of assessee’s appeal is allowed.
Disallowing the claim of deduction u/s 80IA - Excluding the indirect income but at the same time not excluding the indirect expenses - HELD THAT:- Firstly, it is not under dispute that revenues in form of sales of services, FDR interest income and other income are not eligible for deduction u/s 80(IA) and hence, the said action of the AO is hereby confirmed. The second issue relates to allocation of indirect expenses incurred at the Head office in form of employees and administrative/establishment expenses. The ld AR has contended that the assessee has worked out the allocation of indirect expenses as per the directions of the Coordinate Bench in AY 2011-12 and as per its working, the indirect expenses allocable to the eligible undertakings amounts to ₹ 18,49,771. Further, taking the same into account, as per the revised working, it is eligible for deduction u/s 80IA at ₹ 8,56,70,349 as against original claim of ₹ 12,21,63,337. The matter is accordingly set-aside to the file of the AO to examine and verify the said revised working so furnished by the assessee available at assessee’s paperbook pages 7-8 after providing reasonable opportunity to the assessee, and where the same is found to be in compliance with the directions of the Coordinate Bench referred supra, allow the same to the assessee. In the result, the ground of appeal is allowed for statistical purposes.
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2018 (12) TMI 1871
Complicity of the petitioners in the commission of the alleged crime - bundle of lies and product of malice - HELD THAT:- Considering the peculiar facts and circumstances, it is directed that investigation of the case shall go on but the petitioners shall not be arrested till the submission of police report under section 173(2) Cr.P.C. subject to their extending full cooperation during investigation.
Petition disposed off.
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2018 (12) TMI 1870
Disallowance u/s 14A r.w.r. 8D - expenses incurred to earn the exempt income - Sufficiency of own funds - HELD THAT:- The assessee was having its own fund sufficient to invest the money to the tune of ₹ 4.81 crores which yielded tax free income. When a person who was having its own fund more than the investment then it would be presumed that the investment was made out of his own fund. In the case of HDFC Bank Ltd [2016 (3) TMI 755 - BOMBAY HIGH COURT]. It is specifically held that the no disallowance is permissible u/s 14A of the I.T. Act, 1961 if, the investment in tax free securities has been made from interest free funds. In the group concern case titled as CIT Vs. Palm Grove Beach Hotels Pvt. Ltd. [2016 (7) TMI 959 - BOMBAY HIGH COURT]as held that the no disallowance u/s 14A r.w. Rule 8D of the Act is required if, the assessee uses it is own fund for the investment to earn the exempt income
No disallowance u/s 14A r.w. Rule 8D of the Act is required in the present case, therefore, we are of the view that the finding of the CIT(A) is wrong against law and facts, therefore, we set aside the finding of the CIT(A) on this issue and delete the addition raised on account of u/s 14A r.w. Rule 8D of the Act. Accordingly, this issue is decided in favour of the assessee against the revenue.
Addition under the head of income from house property - deemed income from unsold unit/ flat which was closing stock of the appellant as per provisions of Sections 22 and 23 - HELD THAT:- In view of the law relied upon the law representative of the assessee i.e. M/s. Runwal Constructions Vs. ACIT and M/s. C.R. Developments P. Ltd. Vs. JCIT [2015 (5) TMI 1161 - ITAT MUMBAI], we are of the view that the finding of the CIT(A) on this issue is wrong against law and facts whereas the case of the assessee has duly been covered by the law mentioned above, therefore, by honoring the orders mentioned above. We deleted the addition raised by assessee on account of notional income of vacant flats. Accordingly, this issue is decided in favour of the assessee against the revenue.
Addition to net profit as on profit and loss account while computing book profit u/s 115JB being disallowed u/s 14A r.w. Rule 8D - HELD THAT:- As relying on L & T FINANCE LIMITED VERSUS DEPUTY COMMISSIONER OF INCOME TAX-CIRCLE 2 (2) , MUMBAI [2018 (3) TMI 210 - ITAT MUMBAI] we are of the view that the no adjustment u/s 14A r.w. Rule 8D of the Act is required while assessing book profit in view of the provision u/s 115JB of the Act except to the extent of explanation u/s 115JB of the Act. Accordingly, we allowed the claim of the assessee and decided the issue in favour of the assessee against the revenue.
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2018 (12) TMI 1869
Characterization of receipt - Industrial Promotion Subsidy by way of refund of Sales Tax paid - Whether subsidy received by way of refund of sales tax paid is capital in nature? - HELD THAT:- As decided in own case [2017 (4) TMI 44 - ITAT PUNE]the said incentive received by the assessee under PSI, 2007 Scheme in the form of refund of sales tax was capital receipt and not liable to tax. The said ratio laid down by the Tribunal is squarely applicable to the facts and issues raised in the present case also, since the subsidy by way of refund of sales tax has been received by the assessee under the said scheme itself. We are referring to the order of Tribunal in this regard but the same is not being reproduced for the sake of brevity. Following the same parity of reasoning, we hold that the subsidy received by assessee under the PSI, 2007 Scheme by way of refund of sales tax is not taxable being capital receipt, in the hands of assessee. The grounds of appeal raised by assessee are thus, allowed.
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2018 (12) TMI 1868
TP Adjustment - assessee company was engaged in manufacturing and trading activity - TNMM method - HELD THAT:- The first aspect of the issue is that admittedly, the assessee is carrying on two separate divisions i.e. two separate activities; one is the manufacturing and second is trading. AO had considered the operations of assessee in entirety and held it to be one activity. In the preceding year, the assessee was held to be in carrying on two activities. There is no dispute to the same. Accordingly, we hold that the assessee is engaged in two separate activities; one is manufacturing and the second is trading.
Coming to the second step, wherein it is the duty of Assessing Officer / TPO to benchmark two activities separately. Accordingly, we direct the Assessing Officer / TPO to apply TNMM method and go through the comparables selected by assessee and determine the arm's length price of international transactions entered into by assessee with its associated enterprises under the umbrella of manufacturing activity and also as part of trading activities. The two activities have to be benchmarked separately and independently, for which reasonable opportunity of hearing shall be provided to the assessee. Accordingly, we remit the issue back to the file of Assessing Officer / TPO in this regard. The grounds of appeal raised by Revenue are thus, allowed for statistical purposes.
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2018 (12) TMI 1867
Works Contract - Composite contract or not - making of supply of goods and services which are inter connected and inter-dependent on each other even though BOQ mentions separate value of goods and services - pre GST Period Contract - separate Sale and Service Billing in Pre GST period - contract for designing, installation and setting up of Automatic Fare Collection System for Lucknow Metro Project shall amount - Supply of Service or Work Contract - principal supply - rate of GST - LMRC Project - Rate of 18% or 12% to be charged after considering Rate Change Notification No. 1/2018- Integrated Tax (Rate) dated 25/01/2018 and all other provisions of GST Laws?
Whether a contract can be treated as Composite Contract under GST if it involves making of supply of goods and services which are inter - connected and inter - dependent on each other even though BOQ mentions separate value of goods and services? - HELD THAT:- If the goods and services are naturally required to work together in an inter-connected and inter dependent manner and are required to complete the principal service as clearly stipulated in the illustration of the 'composite supply', the services will fall under the category of 'Composite Supply'.
Whether a pre GST Period Contract can be treated as Composite Contract in GST even though there was separate Sale and Service Billing in Pre - GST period? - HELD THAT:- If the goods and services works together in inter-connected and inter-dependent manner and fall under the category of 'Composite Supply', the Contract executed under Pre- GST period would be treated as Composite Contract in GST era as in the GST era both sale and supply of services both are covered under GST Laws. Accordingly, the Contract laid down under Pre GST era be covered under Composite Contract in GST era under GST Laws, if the conditions for 'Composite Supply' are satisfied.
Whether contract for designing, installation and setting up of Automatic Fare Collection System for Lucknow Metro Project shall amount to a Composite Contract with Principal Supply being Supply of Service or Work Contract? - HELD THAT:- The end structure or machinery that cannot be located/ moved or shifted elsewhere at frequent intervals will be considered as immovable property. Therefore, we find that the contract given to the applicant by LMRC for designing and installation of the Automatic Fare Collection System which cannot be shifted or moved to other places/ buildings at frequent intervals and is meant for permanent beneficial of the building i.e. Stations under LMRC; will fall under the 'Works Contract'.
GST rate to be charged on LMRC Project i.e. Whether 18% or 12% to be charged after considering Rate Change Notification No. 1/2018- Integrated Tax (Rate) dated 25/01/2018 and all other provisions of GST Laws - HELD THAT:- Vide Notification No. 20/2017-Integrated Tax(Rate) dated 22.08.2017, the entries against serial number 3 for item (iii) in column (3) and the entries relating thereto in the Notification No. No. 1/2018-Integrated Tax (Rate) dated 25.01.2018, were substituted with “(v) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Service Tax Act, 2017, supplied by way of construction, erection, commissioning or installation of original works pertaining to,- (a) railways, excluding monorail and metro; attracting the duty rate @ 12% - Later, vide Notification No. 1/2018-Integrated Tax (Rate) dated 25.01.2018 the notification No. 8/2017-Integrated Tax (Rate) was amended and the word `excluding' was substituted by 'including' also classifying that the Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Service Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity would attract duty at the rate of 12%.
Since, in the instant case, the composite supply of work contract is being provided by a sub-contractor to the main contractor i.e. Government Authority, the same shall be covered under the amendment carried out vide the notification dated 25.01.2018, the same shall now attract duty at the rate 12%.
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2018 (12) TMI 1866
Recovery proceedings - Proceedings under Section 201(1) and 201(1-A) of the Income Tax Act being initiated for the alleged failure on the part of the petitioners to deduct the Tax Deducted at Source (TDS) on certain foreign remittances - petitioners have also initiated proceedings under Section 10 of the Insolvency and Bankruptcy Code, 2016 seeking initiation of Corporation Insolvency Resolution Process (CIRP) and sought for further time from the respondents - HELD THAT:- When the respondents are not going to take any coercive measures, and they are going to treat the impugned orders as only intimation of demand, without enforcing the demand and the impugned orders are only the orders passed under Section 201(1-A)(3) of the Income Tax Act, and since the financial year of the petitioners is 2010-2011, as per Section 201(1-A)(3) of the said Act, the respondents, before expiry of seven years, namely on or before 31.03.2018, should make an order under Section 201(1) of the said Income Tax Act and in default for failure to deduct the whole or any part of tax from a person who is resident in India, the second respondent, after giving notice, has passed the present impugned orders and since the impugned orders are passed under Section 201(1) and 201(1-A) of the Income Tax Act, it is to be treated only as an intimation of the existing demand sent to the assessee holding PIN, and hence, it cannot be construed as coercive measures being taken against the petitioner-Companies.
Once an order of moratorium is granted by the NCLT, the legal fiction under Section 14 of the IBC will come to the rescue of the corporate debtor. Therefore, taking into consideration all the abovesaid provisions of law and also the ratio laid down by the Apex Court [2018 (8) TMI 1775 - SC ORDER], as also the Delhi High Court [2017 (9) TMI 1907 - DELHI HIGH COURT] holding that when once the Moratorium is granted by the NCLT, it will continue till the completion of Corporate Insolvency Resolution Process or until it approves the resolution plan under Section 31(1) of the IBC or passes an order of liquidation of corporate debtor under Section 33 of the IBC, as the case may be, the present Writ Petitions shall stand disposed of, directing the respondents to keep the impugned orders in respect of both the petitioners, in abeyance, till the disposal of the proceedings pending before the NCLT, Mumbai and also the further appeal(s), if any that may be filed by any of the parties to these Writ Petitions.
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2018 (12) TMI 1865
Classification of goods - Breaded Cheese - classifiable as 'cheese' under Heading 0406 or otherwise? - rate of GST - Applicability of S. No. 13 of the Schedule-II appended to Notification No. 1/2017-Central Tax (Rate), dated June 28, 2017.
Whether the subject goods retain the characteristics of cheese even after being coated with batter and bread crumbs and pre-cooked partially, as is done in the case of the subject goods?
HELD THAT:- It is found from the manufacturing process described as well as from label and packaging of goods that these are not cheese per se but have been converted into an article of cheese having the identity and characteristics of snack foods. Here it will be pertinent to mention that a number of similar items are available in the market which are normally based on flour, potatoes, soybeans, pulses etc. but all such items are not bought and sold as the ingredients of which they are predominantly composed (Potatoes, Flour, etc.) but as distinct snack food articles. Similar is the case of subject goods as after undergoing the manufacturing process and packaging, they lose the identity of cheese and acquire that of a snack food article made from cheese.
It is found from the label/ packaging of the goods that the percentage of cheese is not more than 55%, which indicates that though cheese is the major component of the goods but it cannot be said to be present in such quantity that it predominates or overwhelms the presence of other ingredients. It is observed that the percentage of other ingredients is as high as 45%, which should prevent the goods from retaining the character of cheese. Therefore acceptance of these goods as cheese would not be the correct position.
Since, the cheese balls themselves are not specified in the tariff and they are admittedly a food preparation, hence they are classifiable as 'Food preparations not elsewhere specified or included' under Heading No. 2106.
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2018 (12) TMI 1864
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The provisions of Section 7 (2) and Section 7 (5) of IBC have been complied - After a conjoint reading of the aforesaid provision along with Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, it is satisfying that a default has occurred and the application under sub section 2 of Section 7 is complete. The name of the IRP has been proposed and there are no disciplinary proceedings pending against the proposed Interim Resolution Professional.
Petition admitted - moratorium declared.
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2018 (12) TMI 1863
Assessment u/s 153A - incriminating material found in search or not? - addition made is of share application received u/s 68 of the Act and addition of commission paid allegedly for the share application money and finally a disallowance u/s 14A - HELD THAT:- In the case on hand, the assessee filed its original return of income on 31/08/2008. The time limit for issual of notice u/s 143(2) of the Act, was 30/09/2009. The search and seizure operation was conducted in this case on 18/02/2013. The statutory period for issual of notice u/s 143(2) of the Act, in the case of the Assessment Years had expired prior to the date of search operation. Hence the assessment for the impugned Assessment Year has not abated. Additions in question are not based on any incriminating material found during the course of search.
No incriminating material has been found during the course of search. The alleged statements recorded from entry operators have admittedly been retracted and the Assessing Officer has not based the additions on these statements. Even otherwise, when copies of the alleged statements recorded by the revenue officials have not been given to the assessee, no addition can be made based on such evidence which is not confronted to the assessee. The contents of the statements are also not brought out in detail in the assessment order. Only a general reference is made that there were certain statements recorded from various entry operators by the investigation wing. No addition can be made on such general observations. We also find that the assessee has not been given an opportunity to cross-examine any of these persons, based on whose statements, the revenue claims to have made these additions. The Hon’ble Supreme Court in the case of Kishinchand Chellaram vs. CIT [1980 (9) TMI 3 - SUPREME COURT] had held that opportunity of cross-examination must be provided to the assessee.
Even otherwise, it is not clear as to which of these statements were recorded during the course of search operation or whether the statements were recorded during the course of survey operations. It is well settled that a statement recorded during the course of survey operation cannot be used as an evidence under the Act.
Only a general statement has been made that the investigation wing had recorded some statements. There is no evidence whatsoever that cash has been routed from the assessee company or that any cash was deposited by the assessee company. There is no material whatsoever brought on record to demonstrate that the alleged cash deposit made in the bank account of a third party was from the assessee company. No opportunity to cross-examine any these parties was provided to the assessee.
Thus, none of these material gathered by the Assessing Officer can be categorized as incriminating material found during the course of search or found during the course of any other operation under the Act. Thus, we hold that the additions in question are not based on any incriminating material. - Decided in favour of assessee.
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2018 (12) TMI 1862
Taxability - delayed payment charges on reimbursement of amount by client to Applicant - payment made by them beyond the time stipulated by the stock exchange and SEBI and for which payment is deducted by the stock exchange from the applicant's account - HELD THAT:- The delayed payment charges squarely get covered under GST for the purpose of taxation. The applicant is regularly providing services of 'trading of securities on behalf of customers' which is a supply of service on which the applicant is admittedly paying GST. Delayed payment charges are also linked to the above services of 'Trading of securities on behalf of customers' and GST on the same shall be payable in view of Section 15(2)(d) of CGST Act, 2017 and the UPGST Act, 2017.
Thus, Applicant is liable to pay GST on the delayed payment of charges which are overdue from the client towards trading of securities and reimbursed to them.
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2018 (12) TMI 1861
Estimation of income - Bogus purchases - HELD THAT:- AO had specific information in his possession to indicate that certain purchases made by the assessee in the impugned assessment years are not genuine. It is also evident, the assessee could not conclusively prove that the purchases claimed to have been made from the declared source are genuine. However, the departmental authorities have not disputed the sales effected by the assessee, meaning thereby, the assessee might have purchased the goods from some unknown parties/source.
For this reason alone the assessing officer has estimated the profit at 12.5% of the non genuine purchases. Therefore, the dispute now is only with regard to the profit rate to be applied for estimating the income on non genuine purchases. After considering the overall facts and circumstances of this particular case we are of the considered opinion that estimation of profit @ 5% of the alleged non genuine purchases would be reasonable. We direct the assessing officer to restrict the addition in both the Assessment Years under appeal to 5% of the non genuine purchases. We make it clear, our aforesaid decision is purely on the basis of facts involved in the present appeals.
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2018 (12) TMI 1860
100% EOU - Direction to second respondent to adjust the payment remitted by the petitioner to the Department towards the MOT charges - refund of the balance amount to the petitioner by considering the representation of the petitioner - HELD THAT:- It is not in dispute that the petitioner approached the respondent after having provided company license renewed periodically under Section 58 of the Customs Act 1962, and in-bond manufacture license under Section 65 of the Customs Act 1962 have agreed by their letter dated 23.02.2001 to the Cost Recovery Charges for the officer allotted to the unit, as prescribed by the department. No doubt, the petitioner has sought waiver of the Cost Recovery Charges, on the ground that the petitioner's unit was not function effectively till 31.05.2002 and commenced their operation only after 01.06.2002. However, the said claim made by the petitioner cannot be a ground to seek waiver as such having sought for appointment of an officer under the in-bond Manufacturing License. The petitioner is bound to pay the Cost Recovery Charges, even if the petitioner's company claims that no activity was commenced till 31.05.2002. The allocation of the officer to pay the Cost Recovery Charges for the officer allocated to the unit does not have any relation to the operational capacity of the petitioner's company. The petitioner's company is liable to pay the Cost Recovery Charges from the date of granting license and from the date on which, the officer was allocated to their unit to supervise the activities of the petitioner's unit.
As the amount of Cost Recovery Charges demanded from the petitioner as the same as also incurred by the department towards the pay of allowance of one post of bond officer created for the service of the petitioner's unit as per their request it is also clear that it is not for the petitioner to dispense with the allocated bond officer when they do not require such services.
This Court finds no infirmity in the orders passed by the second respondent and the second respondent order is a well reasoned one and there is no perversity as alleged by the petitioner. Next point to be considered regarding the issue of alternative remedy available as argued by the learned counsel for the respondents is power relating to alternative remedy is never a rule of law despite the existence of alternative remedy within a jurisdiction of description of this High Court to grant relief under Article 226 of the Constitution of India, since the petitioner has pleaded the jurisdictional error - In the present case, the petitioner has not made out any extraordinary circumstances for bypassing efficacious alternative remedy available and to grant relief under Article 226 of the Constitution of India. The order of the respondents is sustained and the writ petition is pending for the last ten years and it may not be appropriate to direct the petitioner to file before the Commissioner of Customs Appeal.
Petition dismissed - decided against petitioner.
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2018 (12) TMI 1859
Provisional release of goods - Levy of admitted duty plus differential duty - Section 18 of the Customs Act, 1962 - HELD THAT:- Since the directions contained in the impugned communication dated 7-4-2018 were for provisional release of the goods and in absence of final determination of the duty liability, the appeal filed by the appellant can be considered as pre-mature and cannot be entertained by the Tribunal at this juncture.
Appeal dismissed.
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2018 (12) TMI 1858
Seeking direction upon the bank to release collateral securities and issue a 'no due' certificate in favour of the petitioner without imposing any foreclosure/prepayment charges and/or penalties - HELD THAT:- The petitioner having foreclosed the credit facilities enjoyed by the petitioner from the respondent no. 1 in October 2016, such foreclosure is governed by the circular dated May 7, 2014 issued by Reserve Bank of India. With effect from May 7, 2014 therefore, the respondent no. 1 is not entitled to charge any foreclosure charges/prepayment penalties on floating rate term loan sanctioned to individual borrower such as the petitioner. The foreclosure happening subsequent to the circular dated May 7, 2014, the demand of the respondent no. 1 for foreclosure charges/prepayment penalties, is contrary to such circular, and therefore is without any basis.
By virtue of the interim order dated March 17, 2017, the respondent no. 1 deposited a sum of ₹ 13.35 lakhs with the respondent no. 1 as security for the prepayment charges and for issuance of the 'no due' certificate. The interim order dated March 17, 2017 put the respondent no. 1 upon notice that, should the decision of the respondent no. 1 to charge prepayment penalties found incorrect upon final hearing of the writ petition, interest as charged in respect of the credit card defaults, would be directed to be paid in respect of the deposit made in terms of such order until the refund thereof. Attention of the Court has not been drawn to any order of the Court modifying such order.
The respondent no. 1 having been found not to be entitled to the prepayment charges and having received the sum of ₹ 13.35 lakhs in terms of the interim order dated March 17, 2017, the respondent no. 1 will proceed to refund the sum of ₹ 13.35 lakhs received from the petitioner, along with interest, calculated at the rate at which interest is calculated for credit card defaults, commencing from the date of receipt of the sum of ₹ 13.35 lakhs from the petitioner, till the date of refund thereof to the petitioner - Since the direction is for refund of money, the petitioner, amongst other reliefs, is at liberty to execute this order as a decree of the Court.
Petition dismissed.
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