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Showing 221 to 240 of 1442 Records
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2022 (2) TMI 1223 - BOMBAY HIGH COURT
Maintainability of petition - Levy of Tax - payments of royalty made by the subsidiary companies to the petitioner - allegation is that such royalty amounts to consideration for transfer of right to use of trademarks and technical know-how - HELD THAT:- We are loath to entertain this writ petition by exercising our discretion because (i) the petitioner can approach this Court in its appellate jurisdiction under section 27 of the MVAT Act at the appropriate time; and (ii) the petitioner is free to rely on the decision in Mahyco Monsanto Biotech (India) Pvt. Ltd. [2016 (8) TMI 717 - BOMBAY HIGH COURT] before the appellate authority to have the impugned order reversed since such decision will prevail, if it is applicable, over any previous contra decision of the Tribunal.
However, in the peculiar facts and circumstances, viz. pendency of this writ petition on the file of this Court for quite some time and that a Constitutional issue touching Article 286 of the Constitution is sought to be raised, we are inclined not to relegate the petitioner to the first appellate remedy but to give it opportunity to prefer an appeal before the Tribunal directly, if it so chooses, so that any infirmity in the impugned order can be brought to its notice, including the decision of this Court in the case of Mahyco Monsanto Biotech (India) Pvt. Ltd. for its correction.
It is made clear that such appeal may not be entertained unless the requisite pre-deposit is made by the petitioner for preferring an appeal before the Tribunal. There is a statement in the writ petition that the requisite pre-deposit for approaching the first appellate authority has already been made. If indeed that is so, it would constitute half of the pre-deposit for filing an appeal before the Tribunal. The balance pre-deposit together with an acknowledgment of the amount of pre-deposit that has been made, may be filed along with any appeal that the petitioner may wish to prefer before the Tribunal. In the event the petitioner prefers an appeal before the Tribunal within six weeks from today.
Petition disposed off.
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2022 (2) TMI 1222 - CALCUTTA HIGH COURT
Validity of SCN - Jurisdiction - HELD THAT:- There is an interim order in the matter passed on November 29, 2016 staying the impugned show-cause notice, initially for four weeks and was extended from time to time.
Considering the submission of the parties and in view of the fact that this is a revenue matter which has been hanging for more than five years and no proceeding could be progressed after the issuance of impugned show-cause notice which the petitioners should have responded by filing the reply/representation/objection to the impugned show-cause notice, the issuance of notice by an authority cannot be treated as a final decision or conclusion of the matter by that authority and cannot be automatic presumption that at the final decision on the impugned show-cause notice, authority will go against the petitioners.
At the time of hearing, petitioners shall be entitled to take all the points raised by them in this writ petition as well as in the short written notes of argument and the respondent/authority concerned shall deal with the same while taking a final decision on the aforesaid impugned show-cause notice within four weeks from the date of making such representation/objection and shall communicate his decision to the petitioners within two weeks thereafter.
Petition disposed off.
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2022 (2) TMI 1221 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Maintainability of application - seeking to declare the Applications filed under Section 7 and 95 of IBC, 2016 filed by the Respondents as Applications filed with malicious intent - HELD THAT:- The crux of the contention pertains to the indecision of the Financial Creditor in not taking a decision on the CTS proposal given by the Applicants. In any case, this Tribunal cannot pass any direction to the Financial Creditor to accept or reject an OTS proposal. Also the non-acceptance of the OTS proposal by the Financial Creditor would not act as an embargo for this Tribunal to pass an order ¡n an Application filed under Section 7 and 95 of IBC, 2016.
Application dismissed.
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2022 (2) TMI 1220 - ITAT AHMEDABAD
TP Adjustment - addition on account of adjustment in arms length price - AO while computing the total income of the assessee, made an adjustment in terms of provisions of section 92CA(1) on account of determination of arm's length price of international transaction entered into by the assessee - HELD THAT:- Since the Ld. CIT(A) adjudicated the issue following his order for Assessment Year 2004-05 which has been adjudicated by the ITAT vide its order for the said year [2010 (9) TMI 1150 - ITAT AHMEDABAD] as afore-stated, restoring the issue to the A.O. for fresh adjudication., the issue stands covered by the decision of the ITAT in the case of the assessee for Assessment Year 2004-05 as above. Accordingly, the issue is restored back to the A.O. to be decided in accordance with the direction of the ITAT in Assessment Year 2004-05.
Disallowance of claim of depreciation made by AO reducing the depreciation claimed for the year under consideration by enhancing depreciation for A.Y. 2001/02 - HELD THAT:- In view of the above, since admittedly identical issue stands decided against the assessee in the preceding year i.e assessment year 2004-05 [2010 (9) TMI 1150 - ITAT AHMEDABAD] the issue raised in the present ground stands squarely covered by the same following which we confirm the order of the Ld. CIT(A) upholding the disallowance of depreciation.
Disallowance as per Rule 8D r.w.s. 14A(2) - Sufficiency of own funds - HELD THAT:- We are aware of the proposition of law settled by the Hon’ble Apex Court in the case of CIT (large tax buyer unit) vs. Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT] which was followed in another recent decision of the Hon’ble Apex Court in the case of South Indian Bank Ltd [2021 (9) TMI 566 - SUPREME COURT]to the effect that where there is a finding of fact that interest free funds available to the assessee was sufficient to meet its investment it will be presumed that the investments were made from such interest free funds.
Therefore it is settled law that where sufficient own funds are available and the investments have been made out of mixed funds, no disallowance u/s. 14A is called for. In the facts of the present case, the assessee had canvassed the facts before the Ld. CIT(A) that it had own funds of 28,524.85 lacs and had generated cash of 4,770.83 lacs during the year. That in the past 10 years from 1995-96 to 2004-05, the assessee was having sufficient own funds ranging from 20,593 lacs to 20,011 lacs which was more than sufficient for making the impugned investments of ₹ 6902 lacs. Since these facts have remained uncontroverted by the Ld. CIT(A) as also the fact that the investments have been made out of mixed funds, we have no hesitation in holding that no disallowance of interest u/s. 14A was warranted in the impugned case.
Disallowance of administrative expenses - assessee has contended that other than depositing cheques of dividend earned no other expense was incurred by the assessee - HELD THAT:- The counter of the Revenue to the same we find does not address this contention of the assessee and is purely presumptive, that considering the huge amount of administrative expenditure incurred some amount must relate to the earning of exempt income. But at the same time considering the quantum of investment made, some amount of expenses must have been incurred in relation to maintaining the same and earning income therefrom. Considering the entire facts and circumstances therefore the disallowance of expenses with respect to administrative expenses is restricted to ₹ 1,00,000/-The balance disallowance of Rs,.13,00,410/- is directed to be deleted.
Disallowance on account of writing off of irrecoverable balances - whether irrevocable balances written off by the assessee were capital or revenue in nature? - HELD THAT:- There is nothing on record clarifying the exact purpose for which the expense was incurred. The assessee has claimed that the same related to the first installment paid in lieu of technical collaboration agreement entered into with a party namely M/s. Consultare Makaya Aso. Ltd. Besides this, the assessee has referred to the Government approval granted for making the payment. We have perused the contents of this document and except for stating that it relates to technical knowhow fees.,there is nothing else in the said document to bring out the exact nature of the payment.Even the Revenue, we find has no basis for treating the same as capital in nature. It goes without saying that the real test for determining whther the payment was revenue or capital in character entirely depends on the pupose for which it was incurred. The same can be determined from the technical collaboration agreement. In the absence of the same, the claim of either of the parties merits no consideration and it is not possible to adjudicate on the issue. We, therefore, considerate it fit to restore this matter to the Assessing Officer to determine the nature of the amount written off by the assessee from the contents of the technical collaboration agreement and any other document which he considers necessary. The A.O. is directed thereafter to adjudicate this issue in accordance with law. Needless to add, the assessee be granted due opportunity of hearing.
Disallowance of deduction claimed for new power plant made by AO denying the benefit u/s 80IA - HELD THAT:- We see no reason to interfere in the order of the Ld. CIT(A) who has followed the order of the ITAT in assessment year 2001-02 [2016 (9) TMI 1625 - ITAT AHMEDABAD] while denying the claim of deduction u/s. 80IA of the Act on new power plant.
Disallowance of captive power plant denying the benefit u/s 80IA - whether for the purpose of computing profits earned by captive power plant for the purposes of claiming deduction u/s.80IA(4) of the Act, the credit for captive consumption of electricity is to be the selling price adopted by the State Electricity Board i.e. (GEB) or the purchase price of GEB? - HELD THAT:- This identical issue, it has been pointed out to us by the Ld. Counsel for the assessee, has already been dealt with by the Jurisdictional High Court in the case of Gujarat Alkalies & Chemicals Ltd. & Alembic Ltd [2012 (3) TMI 267 - GUJARAT HIGH COURT] - Decide in favour of assessee.
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2022 (2) TMI 1219 - SUPREME COURT
Onerous condition of payment of 50% of the amount awarded - transfer of cases already instituted before National Consumer Disputes Redressal Commission to the State Consumer Disputes Redressal Forum - whether the present appeal would be governed under the Consumer Protection Act, 2019 or under the erstwhile 1986 Act? - HELD THAT:- In terms of Section 67 of the 2019 Act, no appeal against the order of National Commission shall be entertained by the Supreme Court unless the person has deposited fifty per cent of the amount required to be paid. Whereas, under the 1986 Act, by virtue of a proviso inserted vide Central Act 62 of 2002 w.e.f. 15.3.2003, the condition was that no appeal shall be entertained by the Supreme Court unless the person who is required to pay the amount deposits fifty per cent of the amount or fifty thousand, whichever is less.
This Court held that serious hardship would be caused to the consumers if the cases already instituted before National Consumer Disputes Redressal Commission were required to be transferred to the State Consumer Disputes Redressal Forum. Thereafter, the proceedings instituted before the commencement of 2019 Act would continue before the fora corresponding to the provisions under the 1986 Act.
The change of forum and period of limitation have been held to be procedural law even in the judgments reported in VIDEOCON INTERNATIONAL LTD. VERSUS SECURITIES & EXCHANGE BOARD OF INDIA [2015 (2) TMI 735 - SUPREME COURT] and MARIA CRISTINA DE SOUZA SODDER VERSUS MARIA ZURANA PEREIRA PINTO [1978 (8) TMI 225 - SUPREME COURT].
The onerous condition of payment of 50% of the amount awarded will not be applicable to the complaints filed prior to the commencement of the 2019 Act - application allowed.
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2022 (2) TMI 1218 - DELHI HIGH COURT
Seeking direction to appellant to deposit the amount equivalent to the arrears of lease rentals in respect of the premises leased to the appellant - HELD THAT:- The fact that it is not disputed that the appellant had taken on lease the premises from the respondents and is continuing to occupy the same is sufficient ground for the Arbitral Tribunal to have directed the respondents to deposit the arrears of rent payable in terms of the leases (which as stated earlier are not disputed).
There is no denying the fact that the business of the appellant may have been adversely impacted due to the outbreak of Covid-19, however, that may not absolve the appellant from its contractual obligations to pay the lease rent. The respondents are not in the business of running a restaurant and therefore it is doubtful whether they can be mulcted with the risks attendant to running that business. This Court concurs with the prima facie finding returned by the Arbitral Tribunal that the financial commitments of appellant may not be dependent on the business operated by the appellant.
The security deposit furnished by the appellant to the respondents in terms of the lease agreements is required to be dealt with in terms of the agreements. Thus the contention that the same may be adjusted from the arrears of rent cannot be accepted - Appeal dismissed.
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2022 (2) TMI 1217 - ITAT CHENNAI
Late remittance of ESI and PF dues - dues were remitted by the assessee well before due date of filing of return of income u/s 139(1) - HELD THAT:- In the light of aforesaid judicial precedents especially the decision of Hon’ble High Court of Madras in CIT v. Industrial Security & Intelligence India (P.) Ltd. [2015 (7) TMI 1063 - MADRAS HIGH COURT] and keeping in view the fact the Special Leave Petition (SLP) [2017 (7) TMI 1087 - SC ORDER] filed by the revenue against the decision of Hon’ble Rajasthan High Court favoring assessee has already been dismissed by Hon’ble Supreme Court [2017 (7) TMI 1087 - SC ORDER] we are inclined to take a view favoring the assessee. Accordingly, we would hold that the provisions of Sec.43B would override the provisions of Sec.36(1)(va) and accordingly, the employees’ contribution as paid by the assessee before due date of filing of return u/s 139(1) would still be an allowable deduction notwithstanding the fact that the payment was made beyond due date as specified in the relevant statute governing those welfare funds.
So far as the effect of amendment brought in by Finance Act, 2021 is concerned, we find that Finance Act, 2021 has proposed amendment to Sec.36(1)(va) and Sec.43B to clarify the position that Sec.43B would never apply to such contributions. The controversy as to the date of applicability of amendment arises in view of the fact that both the Memorandum as well as the Finance Bill state that relevant amendment will take effect on 01/04/2021 and apply to Assessment Year 2021-22 and subsequent assessment years. The submissions of the revenue would be that the amendment is merely clarificatory in nature and would have retrospective operation. However, the assessee would maintain that the provisions would have prospective operations only and the pre-amended period would be largely guided by the ratio of judicial pronouncements favoring the assessee - Decided in favour of assessee.
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2022 (2) TMI 1216 - ITAT BANGALORE
Condonation of delay - delay of 310 days - HELD THAT:- As in the present case, there is no denial on the part of the assessee about the service of the order on the assessee and after receipt of the order of the CIT(Appeals), to whom the assessee wants to entrust the work of filing appeal before the Tribunal is his own concern and this explanation does not constitute sufficient ground to condone the delay. Therefore we find no merit in the application for condonation of delay. Accordingly, we are of the considered view that the assessee has failed to make out a sufficient and reasonable cause for condonation of delay and reject the petition for condonation of delay. Being so, we refrain from going into other grounds of appeal on merits. Appeal of the assessee is dismissed in limine.
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2022 (2) TMI 1215 - MADRAS HIGH COURT
Refund of the Input Tax Credit and Capital Goods Credit - typographical error - Section 142(11)(b) and Section 142 r/w Section 58(4) of CGST Act, 2017 - HELD THAT:- The credit which was earned by a registered dealer or an assessee under the erstwhile Tamil Nadu Value Added Tax Act, 2006, Central Excise Act, 1944 and Finance Act, 1994 r/w CENVAT Credit Rules, 2004 are indefeasible in nature. The Hon'ble Supreme Court in COLLECTOR OF CENTRAL EXCISE, PUNE VERSUS DAI ICHI KARKARIA LTD. [1999 (8) TMI 920 - SUPREME COURT], has held that credit availed under the provisions of the erstwhile Central Excise Act, 1944 and Central Excise Rules, 1944 are indefeasible and are intended to reduce the cascading effect of the tax to benefit the consumers.
In this case, the petitioner had admittedly filed Form GST TRAN- 1 on time viz., 16.11.2017 but with mistakes. If the system which has been put in place to implement the provisions of GST and the Rules made thereunder does not facilitate rectification of mistakes in TRAN-1, such input tax credit has to be refunded back as retention of such amount by the department would be contrary to Article 265 of the Constitution of India. It would amount to collection of tax without authority of law. Ultimately the purpose of allowing an existing assessee to transition the credit was only a facilitation under the provisions of the respective GST Act and the Rules made thereunder - Input tax credit and/or capital goods credit which was validly availed under the provisions of the respective enactments which got subsumed into GST enactment cannot be denied. It has to be allowed to be carried forward for being adjusted towards tax liability under the GST regime, if indeed such credit was validly availed lying un-utilized in either the CENVAT account or VAT returns prior to the implementation of GST.
The writ petition not withstanding the fact that the petitioner has got an alternate remedy before the Appellate Commissioner against the impugned order, as the officers acting under the provisions of the GST Act are bound by limitation under the Act - the respondents are therefore directed to either allow the rectification of TRAN-1 or in the alternative accept manual filling of TRAN-1 or make a suitable credit entry in the Electronic Cash Register of the petitioner after satisfying that the amount sought to be transmitted was indeed lying unutilised in the respective accounts of the petitioner as on 30.06.2017.
Petition allowed.
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2022 (2) TMI 1214 - CALCUTTA HIGH COURT
Violation of principles of natural justice - opportunity of hearing not not afforded by petitioner - authorized representative of the petitioner was not able to attend because of contacting COVID-19 - cancellation of the Ex-bond Bill of Entries and for release of the goods in question - HELD THAT:- This writ petition is disposed of by granting liberty to the petitioner to file an appeal against the impugned order of adjudication dated January 21, 2022 within a week. The petitioner also will be entitled to make an appropriate application for release of the goods in question, which the appellate authority shall consider in accordance with law.
Application disposed off.
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2022 (2) TMI 1213 - GUJARAT HIGH COURT
Release of the goods and the conveyance - requisite amount towards tax and penalty already deposited - Areca Nuts - perishable goods - HELD THAT:- It has been brought to our notice that the requisite amount towards tax and penalty aggregating to ₹ 9,55,840/- has already been deposited by the supplier i.e.M/s. Izaan Trading. It appears that the supplier has paid tax twice; first in point of time on 19.11.2021 and second in point of time 18.12.2021 alongwith the penalty. If the amount towards the tax and penalty has already been deposited, there should not any problem in ordering release of the goods and the conveyance. Even otherwise the goods are Areca Nuts. The goods could be said to be perishable in nature.
The respondent no.3 is directed to release the goods as well as the conveyance at the earliest. If the Department wants to proceed further with the inquiry, it may do so in accordance with law - application allowed.
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2022 (2) TMI 1212 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN
Classification of supply - supply of goods or supply of services - supply of food and beverages (as per illustrative list mentioned in Statement of Facts above) by the eating joints - Dine In - Take Away - Delivery - applicable tax rate on the supply made by the applicant - Input tax credit if supply is treated as supply of goods and if supply is treated as supply of services - HELD THAT:- The applicant will have a dedicated central kitchen for the preparation of food items and there will be various eating joints under the brand name of applicant from where the food preparations will be offered to the customers. The consumers will only have access to such eating joints. A substantial part of cooking process of majority food items will be carried out at the central kitchen and the eating joints will receive the pre-cooked or semi-cooked preparations from the kitchen in different forms, containers or packaging having a shelf life as applicable for the food item. The preparations may be sent to the outlets in packed form to be offered to the customers as such or to be further processed for offering the food items or dishes at the choice and desire of consumers - the activity of sale of aforementioned food items alongwith services thereof to be performed by the applicant in respect of central kitchen/ eating joints by way of Dine In, Take away & delivery is covered under 'supply' as per section 7 of the CGST Act. 2017 and liable to tax as per section 9 of the CGST Act, 2017.
As per explanatory notes to the scheme of classification under heading 9963: Accommodation, Food and Beverage service, the activity to be performed by the applicant will be classified under heading 996331 “services provided by Restaurants, Cafes, and similar eating facilities including take away services, Room services, and door delivery of food”.
In present facts since the eating joints of the appellant are not intended to be located in any premises having hotel accommodation services. Hence the case of the applicant is not covered in exclusion as premises will be as standalone restaurant(s) - the supply of food by the entity partially or completely cooked in the central kitchen through or from the various eating joints would be covered by 'restaurant service' and the supply of all the items of food and beverages offered by the eating joints/central kitchen of applicant are classifiable under HSN 9963 under SI. No. 7(ii) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended time to time and are taxable at the rate of 5% (without ITC).
Classification and applicable tax rate on the supply - HELD THAT:- In the instant case supply made by the applicant is classifiable under Chapter, Section or Heading 9963 under SI. No. 7(ii) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended time to time and is taxable at the rate of 5% (without ITC).
Availability of Input Tax Credit (ITC) to the applicant if the supply considered as supply of goods or as supply of service - HELD THAT:- Supply to be made by the applicant is covered under “restaurant service”, as defined in notification No. 11/2017- Central Tax (Rate) as amended and attract 5% GST provided that credit of input tax charged on goods and services used in supplying the service has not been taken. The aforesaid notification is prescribing rate with specific condition, no option is provided. Wherever the intention to provide option is there, it is clearly mentioned by providing multiple rates 'with ITC' and 'without ITC'. Thus, the applicant is not entitled to take ITC as per condition laid down at SI. No. 7(ii) of Notification No. 11/2017 - CT (Rate) dated 28.06.2017.
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2022 (2) TMI 1211 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN
Exemption from GST - services supplied by the applicant by way of educating and training physical, mental and spiritual practices of Yoga - benefit of exemption under N/N. 12/2017-CT Rate dated 28.06.2017 under entry number 80? - HELD THAT:- The activity of offering of various courses of Yoga for improving mental and physical wellness for consideration in form of fees is covered under 'supply' as per section 7 of the CGST Act, 2017 - On going through entry 80 of the Notification No. 12- CT(R) dated 28-06-2017, it is said that there should be training or coaching in recreational activities.
The entry No. 80 of the Notification No. 12/2017-CT(R) dated 28-06-2017 and entry No. 711 of the Notification No. 11/2017-CT(R) dated 28-06-2017, we are of the view that services by way of training or coaching of various Yoga courses by applicant for consideration, is not exactly for “Recreation activity” whereas the same is for 'Physical well-being activities' and hence, it is not covered under entry No. 80 of the Notification No. 12/2017-CT(R) dated 28-06-2017. Further, as per circular No. 66/40/2018-GST dated 26.09.2018, only those services which provided by entity registered under Section 12AA of the Income Tax Act, 1961 by way of advancement of religion, spirituality or yoga, are exempt. The essence of the said circular is to provide exemption in respect of services of advancement of yoga to only those entities who registered under Section 12AA of the Income Tax Act, 1961 - the intention of the law maker in respect of entry No. 80 of the Notification No. 12/2017-CT(R) dated 28-06-2017, is to provide benefits of GST exemption to only those entities which are registered under Section 12AA of the Income Tax Act, 1961. This intention also confirmed from the aforesaid circular No. 66/40/2018-GST dated 26.09.2018. As the applicant (as mentioned in their written submission) is not registered under Section 12AA of the Income Tax Act, 1961, therefore in light of the circular, the applicant is not eligible to avail benefits of entry No. 80 of the Notification No. 12/2017-CT(R) dated 28-06-2017.
The training or coaching of various courses of Yoga for consideration by the applicant is nothing but “Physical well-being service and more suitably covered under Service Description “Physical wellbeing including health club and fitness centre” under Entry No. 711 of the Notification No. 11/2017-CT(R) dated 28-06-2017 and attracts GST @ 18% as per Entry No. 35 of the Notification No. 11/2017-CT(R) dated 28-06-2017.
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2022 (2) TMI 1210 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN
Classification of goods - Distillers Wet Grain Solubles (DWGS) - DWGS is by-product or residues? - to be classified under Tariff Entry 2309 of GST Tariff or otherwise? - “DWGS” which is sold as Cattle Feed in the Trade are to be classified under Tariff Entry 2309 of GST Tariff? - HELD THAT:- Entry no. 102 of the N/N. 2/2017-Central Tax (Rate), dated 28th June, 2017 clarifies the picture of feeds, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake etc. As far as relevancy of term 'cattle feed' in the case, it is opined that DWGS (Distillers Wet Grain Solubles) cannot be categorized as cattle feed mere being slight valuable in the market and mere installation of huge machinery for its production. The items/description of goods falling under entry No. 102 is quite different from DWGS and only for the purpose of just availing the benefits of exemption under Notification No. 2/2017-Central Tax (Rate), dated 28th June, 2017, it cannot be termed as 'cattle feed'. Entry No. 102 of the said notification is separate entry and items pertaining to this entry do not fit in the frame as by-product or residue whatever name it called of brewery, generated during the process of manufacturing of alcohol - As per meaning provided in Wikipedia, the Brewing is the production of beer by steeping a starch source (commonly cereal grains, the most popular of which is barley/wheat) in water and fermenting the resulting sweet liquid with yeast.
In the instant case, it is fact that in the process of manufacturing of alcohol, the 'starch portion' present in the wheat grain is utilized through distillation process. Means 'starch present in the wheat grain' is being processed in brewery. Hence, main key element i.e. 'starch' is present here. Further, the applicant company is a kind of brewery where brewing or distilling process are being undertaken. In the result of manufacturing process of alcohol, several residues, dregs and waste are come into picture - As far as nature of DWGS (Distillers Wet Grain Solubles) is concern, it is nothing but brewing or distilling dregs and waste as it is come out in the picture as a result of brewing or distilling process.
DWGS (Distillers Wet Grain Solubles) is an inevitable outcome in the process of manufacturing of alcohol. Apart from nomenclature whether it is residue or by-product, we find that it is a kind of brewing or distilling dregs & waste and is classifiable under Chapter / Heading/Sub-heading / Tariff item 2303 of GST Tariff.
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2022 (2) TMI 1209 - CALCUTTA HIGH COURT
Deduction u/s 80IB(5) - Scope of definition of the term “manufacture” which included “process” - process of making poultry feeds as manufacture or production of article or thing - assessee claimed deduction on the ground that the activity done by them in their factory is a manufacturing activity by manufacturing poultry feed and, therefore, they are entitled for deduction - AO said there was no manufacturing done by the assessee but what was done by the assessee is mixing various product, each one of them had an individual identity and cannot be construed to be an input for manufacturing of poultry feed - HELD THAT:- The process involves steam cooking which is done after the materials are mixed and the assessee has a one tonne per hour boiler which generates steam at 10 kgs/cm2 pressure and they also have insulated pipeline which carries the steam to the pellet section. The pressure reducing valve (PRV) is fitted before the pellet section which is reducing the pressure from 10 kgs to 1.5 kg/cm2 which will ensure that the steam entering the conditioning section is released slowly into the material for good conditioning. Thereafter, there are two other conditioning processes in which the poultry feed comes into contact with steam which is stated to ensure that the starch contained in the feed is gelatinised which is better for the growth of the chicken and at that level the feed attains a temperature of 850C thereby all the bacteria like E Coli, salmonella and other microbes get destroyed.
After conditioning, the product goes in the pelleting section, then to the cooling section, then to the crumbling section, then to the sieving section and after passing the quality control test, it is ready for bagging. The assessee had also furnished details as to what are the raw materials required to make the poultry feed.
We would be well-justified in following the decision in Sona Vets Pvt. Ltd. [2020 (3) TMI 130 - CALCUTTA HIGH COURT] which had considered the same product as that of the product produced by the assessee. Therefore, we hold that the tribunal was right in confirming the order of the CIT(A) and granting relief under Section 80IB of the Act. In the result, the substantial questions of law framed on this issue are decided against the revenue.
Disallowance under Section 14A - ITAT directed the assessing officer to compute the disallowance as per Rule 8D by taking into consideration only those shares which have yielded dividend income in the year under consideration - HELD THAT:- Though the Tribunal has noted the decision of the Tribunal in REI Agro Ltd. [2013 (12) TMI 1517 - CALCUTTA HIGH COURT],there are several other decisions on the said point and the machinery provision under Rule 8D can be applied only with regard to the shares which yielded dividend income in the year under consideration. Therefore, we find that the tribunal rightly applied the legal principle and granted relief.
Accordingly, the substantial question of law framed on the said issue, namely, the deduction under Section 14A of the Act is decided against the revenue.
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2022 (2) TMI 1208 - GUJARAT HIGH COURT
Stay of demand - waiver of 20% of the pre-deposit essentially on four grounds (i) high pitched assessment (ii) only source of income through Avani Petrochem Pvt. Ltd. (iii) stereo type order passed by the Principal Commissioner and (iv) adverse effect on the financial affairs due to the Covid-19 pandemic - HELD THAT:- In the case on hand, unfortunately, the respondent No.2 has not considered anything and has just mechanically declined to grant relief as prayed for by the writ applicant. When the writ applicant pointed out to the respondent No.2 that the case on hand is one of high pitched assessment, the same came to be dismissed by the respondent No.2 by merely saying that the issue has been discussed threadbare during the assessment proceedings - finding recorded by the respondent No.2 is that the assessment order came to be passed by the Assessing Officer after granting sufficient opportunities and after due consideration of all the relevant aspects of the matter and, therefore, the issue of high pitched assessment need not be considered. The findings recorded in para-3 of the order dated 17.12.2021 are not appealing to us at all. The matter has not been considered by the respondent No.2 in its proper perspective. Many times in the over zealousness to protect the interest of the Revenue, the authorities render their discretionary orders susceptible to the complaint that those have been passed without any application of mind.
We fail to understand what is so magical in the figure of 20%. To balance the equities, the authority may even consider directing the assessee to make a deposit of 5% or 10% of the assessed amount as the circumstances may demand as a pre-deposit. The “High Pitched Assessment” means where the income determined and assessment was substantially higher than the returned income. For example, twice the returned income or more.
The exercise of discretion is essentially the discernment of what is right and proper; and such discernment is the critical and cautious judgment of what is correct and proper by differentiating between shadow and substance as also between equity and pretence. A holder of public office, when exercising discretion conferred by the statute, has to ensure that such exercise is in furtherance of accomplishment of the purpose underlying conferment of such power. The requirements of reasonableness, rationality, impartiality, fairness and equity are inherent in any exercise of discretion; such an exercise can never be according to the private opinion.
It is hardly of any debate that discretion has to be exercised judiciously and, for that matter, all the facts and all the relevant surrounding factors as also the implication of exercise of discretion either way have to be properly weighed and a balanced decision is required to be taken.
The mandate of Parliament in sub-section (6) seems to be that the lower Assessing Officer should abide by and being bound by the decision of the appellate authority, should normally wait for the fate of such appeal filed by the assessee. Therefore, his discretion of not treating the assessee in default, conferred under sub-section (6) should ordinarily be exercised in favour of assessee, unless the overriding and overwhelming reasons are there to reject the application of the assessee under Section 220(6) - The application under Section 220(6) of the Act cannot normally be rejected merely describing it to be against the interest of Revenue if recovery is not made, if tax demanded is twice or more of the declared tax liability. The very purpose of filing of appeal, which provides an effective remedy to the assessee is likely to be frustrated, if such a discretion was always to be exercised in favour of revenue rather than assessee.
Civil application allowed - impugned orders passed by the respondent No.2 are set aside and the respondent No.2 is directed to consider the application filed by the writ applicant under Sections 220(3) and 220(6) respectively of the I.T. Act afresh in conformity with all the CBDT instructions and the parameters laid as above by providing an opportunity of being heard to the writ applicant and pass orders in accordance with law preferably within a period of two weeks from the date of the receipt of the writ of this order.
Section 251 of the Act clearly stipulates that in disposing of an appeal, the CIT (Appeals) can confirm, reduce, enhance or annul the assessment. Section 251 (1) (c) of the Act further provides that in other cases, he may pass such orders in appeal as he thinks fit. These words harmoniously read, definitely mean that powers of appellate authorities under the Act are wide enough. Such powers could not be intended to be drained out or rendered meaningless, if the power to grant stay against the recovery of disputed demand is to be taken away from the first appellate authority. Such implied, necessary and inherent power must necessarily be read into these provisions conferring the powers upon the appellate authority to modify the impugned assessment order in any manner. In specific terms, the first appellate authority can even enhance the taxable income, while he has the power to reduce or completely set at naught the assessment. The words "as he thinks fit" in Section 251 (1) (C) are not redundant, as no such redundancy can be attributed to the Parliament. Therefore, mere absence of words "power to grant stay" in Section 251 of the Act cannot mean that such powers are specifically excluded from the jurisdiction of the first appellate authority.
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2022 (2) TMI 1207 - ITAT RAIPUR
Revision u/s 263 by CIT - unexplained cash credit u/s 68 - HELD THAT:- A specific query as regards to source of cash deposits were raised during the course of limited scrutiny assessment and in reply thereof, the appellant disclosed “three sources” of cash receipts namely; out of professional receipts and withdrawal from the capital balances of partnership firm and withdrawal from bank loan, and further it was brought to the notice that, during the year under consideration the appellant has purchased a new house property out of the advance sale proceeds received by him against sale of other house property. The records of the assessment undoubtedly reveals that, all the transactions and entries were inquired into from the aforementioned statements with respect to sources there of and upon finding the discrepancies on such inquiries, same was brought to tax as unexplained cash credit u/s 68.
During the course of revisionary proceedings, it is evident that, the appellant indifferently disclosed “three sources” of cash receipts namely; out of professional receipts, withdrawal from the capital balances of partnership firm and withdrawal from bank loan, and established that there remained no un-disclosure before the lower tax authority.
We concur with the contention of Ld AR that, the statements were duly verified and discrepancies were taxed after due inquiries as embedded in the statutory provisions of law and the law laid down in MALABAR INDUSTRIAL CO. LTD. VERSUS COMMISSIONER OF INCOME-TAX [2000 (2) TMI 10 - SUPREME COURT]
PCIT sitting on the same fence overlooked the inquiries conducted by the lower tax authority like leaving the dead unattended and hence we do not concur with the views of Ld PCIT that, assessment lacks proper inquiry into sources of cash receipt / deposits for the reasons set in the preceding paragraphs.
Thus the assessment proceeding suffers from no-infirmity so far as the conduction of inquiry is concern; consequently, we do not hesitate in upholding the order of Ld PCIT with infirmity and quashed the revisionary order passed u/s 263. - Decided in favour of assessee.
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2022 (2) TMI 1206 - ITAT VISAKHAPATNAM
Belated remittance of employees contribution to PF - Deduction made before the due date of filing of the return of income u/s 139(1) - HELD THAT:- Employees contribution to PF and ESI is allowable deduction if the same is paid before the due date of filing the return of income. In the case of APEPDCL [2016 (9) TMI 1040 - ITAT VISAKHAPATNAM] after considering the decision of Hon’ble Karnataka High Court in the case of Essae Teraoka (P) Ltd. [2014 (3) TMI 386 - KARNATAKA HIGH COURT] and the decision of coordinate bench of ITAT Hyderabad in the case of Tetra Soft (India) Pvt. Ltd. [2015 (10) TMI 1601 - ITAT HYDERABAD] and also taking support from the decision of Hon’ble Supreme Court in the case of CIT Vs. M/s Vegetables Products Ltd.[1973 (1) TMI 1 - SUPREME COURT] decided the issue in favour of the assessee.
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2022 (2) TMI 1205 - ITAT RAIPUR
Penalty u/s 271D - transaction of acceptance of cash trading advances violative of provisions of section 269SS - HELD THAT:- In the instant case, it is undisputed fact the assessee during the course of his regular business found accepted deposit in cash from five persons and transferred for the urgency of his principal, however the assessee dejectedly failed to establish vis-à-vis substantiate his proposition such receipts were trading advances in the light of evidential material such as sales invoices, delivery challans and vouchers etc. - the appellant also remained unsuccessful in proving any of the intractable circumstances which leads to acceptance of deposit in cash or even demonstrate his case falling within the realm of exceptions laid in the provision or evince of reasonable cause of led such violation, consequently we obstinate with the findings of tax authorities below. Once the violation of provisions of section 269SS is manifested, it inevitably triggers penalty provision as laid in section 271D unless the sheltered within the umbrella of 273B.
Hon’ble High Court of Judicature at Bombay in a similar circumstance in Manish Nitin Wadikar [2019 (6) TMI 444 - BOMBAY HIGH COURT] held that, where the assessee failed on a given sufficient opportunities to establish any reasonable cause of violation of provisions of section 269SS, per contra makes mere assertion against the proposition of tax authorities without any supporting material in substantiating such assertion, is essentially sufficient to draw conclusion against the assertion made by the assessee, consequently the penal provision shall follow.
Tribunal had occasioned to considered the correctness of levy of penalty u/s 271D for the violation of provisions of section 269SS triggered out of bonafide transaction but in the absence of any reasonable cause as contemplated in section 273B in the case of Deepak Sales & Properties Pvt Ltd [2018 (7) TMI 1314 - ITAT MUMBAI] Held that the penalty u/s 271D is invincible in the absence of reasonable cause.
We find no illegality in the penalty order; consequently, we upholding the order of Ld JCIT with no infirmity. - Decided against assessee.
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2022 (2) TMI 1204 - ITAT VISHKHAPATNAM
Exemption u/s 11 - registration u/s 12AA denied - Proof of charitable activity u/s 2(15) - assessee is a society registered under Societies Registration Act and is running educational institutions - whether the assessee is eligible for registration u/s 12A / 12AA? - HELD THAT:- The main objects are to provide education through English medium school to the rural population and also to encourage literary, library, cultural and sports activities - if the assessee society is genuinely carrying the charitable activity based on the objectives of the society, the registration u/s 12AA must be granted. For that matter, the primary duty of the Ld.CIT(E) is to examine the objectives of the Society and if he is having any doubt about the genuineness of the activity carried on by the assessee society, it is open to the Ld.CIT(E) to depute income tax officials to examine the objectives of the society by conducting enquiries and after receipt of the enquiry report, the Ld.CIT(E) is empowered to exercise his discretion based on the material available on record, whether to grant registration u/s 12A/12AA of the Act or not.
In the present case on hand, the Ld.CIT(E) simply rejected 12AA registration on the ground that the assessee has claimed exemption u/s 11 without having registration u/s 12AA during the A.Ys 2015-16 to 2017-18. In our opinion, the Ld.CIT(E) has not at all looked into the objectives of the society and simply rejected registration u/s 12AA based on the wrong claim made by the assessee during the A.Y.2015-16 to 2017-18.
Upon perusal of the order of the Ld.CIT(E), there is no such finding in the impugned order. The decisions, which were relied on by the Ld.CIT(E) has no application in the present case. After considering the provisions of section 12A and 12AA of the Act, we are of the view that the Ld.CIT(E) could have examined only the genuineness of the objectives of the Trust and it’s activities. There was no finding given by the Ld.CIT(E) that the objectives and activities of the Trust are not genuine. Therefore, we hold that the ground raised by Ld.CIT(E) for rejection of registration to the assessee cannot be sustained. In the light of the above findings, the impugned order passed by the Ld.CIT(E) is set aside. CIT(E) is directed to grant registration as requested by the assessee in terms of section 12AA of the Act. Accordingly, the grounds raised by the assessee are allowed.
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