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Showing 361 to 380 of 1280 Records
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2022 (10) TMI 921
Recovery of MODVAT Credit - procurement of welding electrode - recovery of the credit premised on the definition therein having excluded consumables, which the impugned goods were held to be, from the enumeration therein - whether welding electrodes are consumables as held by the original authority or are used in the manufacture of excisable goods and, therefore, eligible for MODVAT credit as claimed by the assessee?
HELD THAT:- There is no doubt that welding electrodes deplete by usage but with the material in the electrodes transferred to the liner and the restoration renders it fit for continued production of cement.
MODVAT credit is available on procurement of goods that are inputs with capital goods being entitled to the extent of conformity with Explanation of that expression in rule 57Q of Central Excise Rules, 1944. Doubtlessly, there is no mention of consumables in the said Explanation but neither is it certain that that consumables has little to do with manufacturing process for depriving eligibility for MODVAT credit - Absence of welding electrodes for deployment on liners, which are capital goods, impedes production and, therefore, its use is essential for production.
Proceedings of the original authority, based on the finding that the impugned goods are consumables for the reasons stated therein, have ignored that the characteristics of consumables does not attach to welding electrodes, and, therefore, the consequential recovery of MODVAT credit in the impugned order is incorrect - Appeal allowed - decided in favor of appellant.
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2022 (10) TMI 920
Levy of penalty under Section 11AC - suppression of fact or any mala fide intention on the part of the appellant or not - Debonding of unit - HELD THAT:- There is no dispute about the duty and interest which were already paid by the appellant on pointing out by the audit - From the bare reading of the Section 11AC prevalent at the relevant time, it is found that in the section an exception is provided if any duty is paid within one year from the due date or the show cause notice issued covers normal period of one year, the ingredients for imposing penalty under Section 11AC is only that if the duty was not paid by reason of fraud or collusion or willful mis-statement or suppression of fact or in contravention of any of the provision of this act or rules made therein with intent to evade payment of duty.
The appellant was very conscious while debonding of the unit and duty so payable on the stock of the goods as on 03.01.2008 was calculated and paid the duty on that basis. The departmental officers have issue NOC enabling the appellant to exit from EOU status however, there are some transaction of the goods from 03.01.2008 till 28.01.2008 on which also the duty by EOU was supposed to be paid. The appellant was well aware that the duty due on the stock was required to be paid for debonding of the EOU. Though, the appellant have paid the duty on the stock as on 03.01.2008 but knowing that some goods were lying from 03.01.2008 to 28.01.2008 but have not paid the duty.
Once the appellant have obtained the NOC and unit was debonded, they intentionally avoided the payment of short duty. It is only on pointing out by the audit they have paid the duty, this fact clearly shows that the appellant knowing that before debonding, on all the goods lying in the factory they are required to pay the duty but they consciously not paid the duty which amounts to suppression of fact on their part.
There are no infirmity in the impugned order upholding the penalty under Section 11AC therefore, the same is upheld - appeal dismissed.
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2022 (10) TMI 919
Validity of SCN issued - price escalation during GST era for goods supplied pre GST era - levy of duty of excise or GST - Demand of differential excise duty alongwith interest and penalty under Section 11A(4) - supplies made during September 2016 to November 2016 - upward revision of price - provisions of Section 142 (2) (a) of the CGST Act ignored.
The Commissioner (Appeals) also rejected the appeal on the ground that under Section 142(2)(a) of CGST Act, the GST can be paid only in case where the price of any goods or service or both was revised upward on or after the appointed day. In this case the Commissioner (Appeal) has not treated it as upward revision of price but held that the 10% of the amount had already formed the part of the assessable value and was not a result of upward revision of price. Hence, it was held by the Commissioner (Appeals) that the amount paid by M/s IOCL in the month of April, 2018 was leviable to Central Excise duty and not GST.
HELD THAT:- The show cause notice is bad as it has been issued ignoring the provisions of Section 142 (2) (a) of the CGST Act, which is a provision to remove such difficulties for the transitional period - Appeal allowed - decided in favor of appellant.
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2022 (10) TMI 918
Revision of order of assessment - Section 34 of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- The order was sought to be revised under Section 34 of the Act by the first respondent, by issuing a notice dated 10.02.1998. By the impugned order, the order of the Appellate Commissioner was revised by holding that the petitioner had subsequently accounted the transactions and modified the accounts and therefore, there was a case for imposing penalty and also restoring the order of the original authority.
There are no reason to sustain the impugned order - This writ petition is allowed.
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2022 (10) TMI 917
Seeking appointment of a sole arbitrator to adjudicate upon the disputes arising out of the three agreements executed between the parties, being intrinsically connected with each other - Doctrine of separability - doctrine of kompetenz-kompetenz encompassed in the arbitration jurisprudence - Section 11(6) read with Section 11(12) of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Recently a three-judge Bench of this Court in case of Intercontinental Hotels Group (India) Pvt. Ltd. & Anr. Vs. Waterline Hotels Private Limited [2022 (1) TMI 1171 - SUPREME COURT] while dealing with an application filed under Section 11(6) read with Section 11(12)(e) of the Arbitration Act for appointment of a sole arbitrator on the basis of an arbitration clause contained in the agreement which was unstamped document, took notice of the earlier decisions as also the issue referred to the Constitution Bench and observed that Although we agree that there is a need to constitute a larger Bench to settle the jurisprudence, we are also cognizant of time-sensitivity when dealing with arbitration issues. All these matters are still at a pre-appointment stage, and we cannot leave them hanging until the larger Bench settles the issue. In view of the same, this Court-until the larger Bench decides on the interplay between Sections 11(6) and 16-should ensure that arbitrations are carried on, unless the issue before the Court patently indicates existence of deadwood.
If the facts of the present petitions are examined, it deserves to be noted that the execution of three agreements, namely, Onshore Service Agreement, Lease Agreement and Drilling Service Agreement between the petitioner and the respondent has not been disputed. The identical clause-23 for Arbitration contained in all the three agreements has also not been disputed - The efforts to amicably resolve the disputes through Mediation having failed, the petitioner thereafter also agreed vide letter dated 1st September, 2021 to consolidate the disputes under the three agreements to be heard by a sole arbitrator in one single arbitration, as proposed by the respondent. The petitioner also proposed the names of the arbitrators, however, the said names were not agreeable to the respondent. The respondent also failed to propose any names for the appointment of a sole arbitrator.
Since the arbitration agreements contained in all the three agreements namely, Onshore Service Agreement, Lease Agreement and Drilling Service Agreement were not disputed by the respondent, and since the respondent itself had proposed to consolidate the disputes under the said agreements and to refer them to a sole arbitrator in one single arbitration, the court is of the opinion that now it does not lie in the mouth of the respondent to say that the petitions seeking appointment of a sole arbitrator should not be entertained, as the matter with regard to the determination of requisite stamp duty under the Maharashtra Stamp Duty Act on the two agreements is pending before the Collector.
Since the respondent had proposed and the petitioner had agreed to consolidate all the disputes arising out of the three agreements, namely, Onshore Service Agreement, Lease Agreement and Drilling Service Agreement, and to refer them to a sole arbitrator in a single arbitration for adjudication, it is ordered as such.
Petition allowed.
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2022 (10) TMI 916
Dishonor of Cheque - proceeds against a company which has already been sold out - vicarious liability of the Director - Whether the petitioner No.2, being the Managing Director of the company is responsible as per provision of section 141 N.I. Act, while he had not issued the cheques in question? - HELD THAT:- There is no quarrel at the Bar that before issuing cheques in question, the company has been sold out. Despite the cheques were issued by the accused, which returned unpaid on presentation to the banker due to not availability of the fund in the account of the accused. There is nothing on the record to show that the company was legally forbidden from making payment of the cheque amounts on account of the same being sold out. This being the position the accused persons cannot be allowed to escape from the penal liability and to seek the shield that the company being sold out.
In the case in hand the petitioner No.2 had not issued any cheque. There is no averment in the complaint petitions as to how and in what manner the petitioner No.2 was responsible for the conduct of the business of the Company or otherwise responsible to it in regard to its functioning, though an omnibus statement is made in paragraph No.2 of the complaint that he and the accused No.3 and 4 are the person responsible for conduct of the business of the company. How he is responsible for dishonour of the cheque has also not been stated. Nothing is averred in the said Affidavit against the petitioner No. 2 - Shri Shiv Kumar Kanoi, let alone any averment that he was the person responsible for day to day conduct of the affairs of the company. As stated herein, the complainant had made averment against one Joydev Kumar Kanoi as Director the company in the Affidavit. Thus, the bald assertion made in paragraph 2 of the complaint do not satisfy the requirements of Section 141 of the Act.
In Pooja Ravinder Devidasani Vs. State of Maharashtra and another, [2014 (12) TMI 1070 - SUPREME COURT], Hon'ble Supreme Court held that putting criminal law into motion is not a matter of course. A Magistrate taking cognizance of an offence under Section 138/141 of the N.I. Act, making a person vicariously liable has to ensure strict compliance of the statutory requirements.
The impugned order of taking cognizance against the petitioner No.2 by the learned Addl. Chief Judicial Magistrate, Dibrugarh, under section 138 N.I. Act, dated 30.04.2016, stands set aside and quashed - petition allowed in part.
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2022 (10) TMI 915
Inactions in not initiating actions in demanding/recovering GST collected from the television subscribers/customers since the year 2017 till date - non-issuance of appropriate notices calling upon them to register under the provisions of GST Act to carry out business activities legally - violation of principles of natural justice - HELD THAT:- The Assistant Commissioner (ST) No. II, Khammam, being the proper officer under the Central Goods and Services Tax Act, 2017 as well as under the Telangana Goods and Services Tax Act, 2017 are directed to take an appropriate decision in the matter within a period of three months from the date of receipt of a copy of this order.
Petition disposed off.
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2022 (10) TMI 914
Maintainability of petition - availability of alternative remedy of appeal - Violation of principles of natural justice - validity of assessment order - validity of Section 4 of the IGST Act read with Section 5 of the Central Goods and Services Tax Act, 2017 - Circular No.31/05/2018-GST, dated 09.02.2018 - HELD THAT:- Without going into merits of the matter, this Court, in the interests of justice, felt it appropriate to dispose of the writ petition giving liberty to the petitioner to approach the appellate authority provided under Section 107 of the CGST Act. It is left open to the petitioner to raise all the grounds raised in the writ petition before the appellate authority.
The Writ Petition is accordingly disposed of.
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2022 (10) TMI 913
Refund alongwith interest - period April 2019 to September 2019 - period October 2020 to December 2020 - HELD THAT:- Mr. Mishra states that department has reviewed that order and has also filed an appeal under sub-Section (2) of Section 107 of Central Goods and Services Tax Act, 2017 (CGST Act). In effect, Mr. Mishra states that even department has not accepted the impugned order and, therefore, petitioner is entitled to refund of Rs.88,46,01,539/- together with interest, if any.
The respondents shall process petitioner’s original application for refund together with interest and pay the amount on or before 31st October 2022. At the same time, petitioner is at liberty to file such an application, should they wish to - the impugned order dated 29th July 2022 is hereby quashed and set aside - Petition disposed off.
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2022 (10) TMI 912
Levy of penalty under Clause A of Sub Section 1 of 129 of the Central Goods and Services Tax Act - seeking release of detained goods - alleged discrepancy in the E-way bill generated by the petitioner for movement of its excavator from project site in Kerala to its branch office in Dhamra Port, Doshinga Village, Dist Bhadrak, Odisha - HELD THAT:- Prima facie, it appears invocation under Section 129(3) of the Act for imposing penalty under Section 129(1)(a) of the Act appears to be misplaced as there is no supply either within the meaning of Section 7 of the Central Goods and Services Tax Act, 2017 or within the meaning of provisions of the Integrated Goods and Services Tax Act 2017. Ultimately, the purpose of E-way bill is to ensure that there is no leakage of revenue when the goods are on the move. Prima facie it appears that there is no supply for attracting of levy either under the provisions of the Central Goods and Services Tax Act, 2017 or the Integrated Goods and Services Tax Act 2017.
The petitioner is directed to pay a sum of Rs.2,50,000/- to the credit of the respondents and furnish a bond for the remaining amount to the satisfaction of the respondents. On such compliance being observed by the petitioner, the respondents shall release the excavator which was seized on 24.09.2022 together with the lorry on which the excavator was being transported - Once the petitioner complies with the requirements of this order, the respondents shall release the excavator and the lorry forthwith in which the excavator has been transported.
Petition allowed.
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2022 (10) TMI 911
Levy of GST - valuation of Supply - transport of goods - inclusion of value of free diesel filled by service recipient under the accepted terms of contractual agreement in the fleet(s) placed by GTA service provider - HELD THAT:- Section 15 of the CGST Act, 2017 provides that the value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply - Section 15 of the CGST Act, 2017 mandates that the value of supply shall include among other things, any other amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both.
In the instant case although the supplier i.e. the applicant in the course of normal business transaction was required to include the cost of fuel, but for the wordings (read terms and conditions which apparently suites themselves) inserted in the agreement that too between two private entities, are trying to circumvent the statute, which appears was not the intent of the Parliament - It is observed that without the fuel the vehicle does not operate (run) and without running i.e. moving from one place to another, the act of transportation of goods by road does not happen. The goods transport service has the integral component of moving of goods from one place to another and for this to undertake a vehicle in running condition, an operator etc. are required. The running condition of a vehicle cannot be achieved without the fuel, as in absence of fuel the vehicle cannot move from one place to another to transport the goods.
The input i.e. fuel, to run and operate the vehicle, provided free of cost by the recipient of the service, for transportation of goods, shall form part of value of supply in view of Section 15 of the CGST Act, 2017, as the cost of this input has to be paid by supplier of services but incurred by the recipient (as per the terms and condition of the agreement) as for the purpose of levy of GST, cost of all the inputs, whether provided free of cost or not, has to be included in the value of supply - the value of free diesel filled by service recipient will be subjected to the charge of GST by adding the free value diesel in the value of GTA service, under the Central Goods and Services Tax Act, 2017 & Uttarakhand Goods and Service Tax Act, 2017.
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2022 (10) TMI 910
Levy of GST - payments made by PTCUL to UK CAMPA as Compensatory Afforestation Value - Net Present Value and recovery made towards dwarf species cost - payments made by PTCUL to Divisional Forest Officer (DFO) towards lease rent - scope of Government as laid under section 2(53) of the Central Goods & Service Tax (CGST) Act, 2017 - supply of services or not - section 12AA registered entity of The Income Tax Act 1961 or not - reverse charge mechanism or not - GST on compensation paid by PTCUL to DFO, the Government of Uttarakhand - heading of the GST tariff.
Whether UK CAMPA, falls under the ambit of the definition of “Government” as laid under section 2(53) of the Central Goods & Service Tax (CGST) Act, 2017? - HELD THAT:- There is no doubt that Forest (Conservation) Act, 1980 in the state of Uttarakhand is also implement and regulated by the Forest Department of State Government of Uttarakhand and the UK CAMPA is under the aegis of Forest Department of State Government of Uttarakhand, as they administer, manage and regulate the said act - in the calculation sheet and on the body of the said letters, 18% GST has been calculated, this clearly and evidently shows that GST is leviable on such demands raised for UK CAMPA by the Forest Department of State Government of Uttarakhand and that the applicant has been sanctioning the requisite funds - UK CAMPA falls under the category of State Government as defined in Section 2(103) of the CGST Act, 2017 which specifies that “State” includes a Union Territory with Legislature.
Whether services rendered by UK CAMPA for which compensation is paid by PTCUL, qualifies as a 'supply of services' as per section 7 of CGST Act, 2017? - HELD THAT:- If grants are given freely in which the grantor does not receive any benefit in return, then they are not consideration for any supply and are therefore outside the scope of GST but if the grantor receives a benefit in return, then the grant is treated as a consideration for the supply and in the instant case the applicant has admitted that the amount paid is to compensate for loss of land by land' and 'trees by trees', which imply that although the assignment of the value has to be calculated for loss of land by land' and 'trees by trees', but the said “assignment of the value” also includes consideration for various other activities viz. assisted natural regeneration, conservation and protection of forests, infrastructure development, wildlife conservation and protection and other related activities and for matters connected therewith or incidental thereto - both of the two major elements i.e. Supply is done for a consideration and Supply is done in course of furtherance of business are fulfilled as the services rendered are through the Forest Department of State Government of Uttarakhand, for which compensation is paid by PTCUL, qualifies as a 'supply of services' as per section 7 of CGST Act, 2017.
Whether services supplied by UK CAMPA, which is a section 12AA registered entity of The Income Tax Act 1961, be covered under Serial No 1 (Chapter 99) of Notification No 12/2017-Central Tax (Rate) dated 28th June 2017 read with section 11 of the CGST Act 2017? - HELD THAT:- It is opined that charity means generosity and helpfulness especially toward the needy or suffering that is to say aid given to those in need. The list of activities given in the above said notification are the activities which are eligible for exemption but for the exemption to come into picture the act of charity has to be fulfilled and in the instant case, the money is being charged and collected for specific purposes, which evidently does not constitute “charity' and hence services rendered through the Forest Department of State Government of Uttarakhand, is not covered under Entry No 1 (Chapter 99) of Notification No 12/2017 - Central Tax (Rate) dated 28th June 2017 read with section 11 of the CGST Act 2017.
Under which heading of the GST tariff shall the said supply of service be covered? - HELD THAT:- The services provided through the Forest Department of state Government of Uttarakhand falls under the Heading 999799 - “Other services nowhere else classified” in the “Group 99979- other miscellaneous services” and hence not covered under Serial No 6 of the Notification No 12/ 2017 and it is observed that the above services under Heading 999799 does not figure in the Notification No. 12/ 2017 and hence is liable to tax.
Identification of person liable to deposit such GST with the Government authorities i.e. is such payment covered under the Reverse Charge mechanism or normal forward charge rules? - HELD THAT:- The applicant being a business entity is liable and mandated to follow the provisions of the Notification No. 13/2017-Central Tax (Rate) dated 28th June, 2017 and is liable to pay due tax under reverse charge mechanism on the total assigned value for which demand is raised by the Forest Department of State Government of Uttarakhand, as per the provisions of the CAMPA Act.
Whether compensation paid by PTCUL to DFO, the Government of Uttarakhand, is subject to levy of GST? - HELD THAT:- In the Section 7 of the CGST Act, 2017 it has been mandated that “the expression - supply includes - all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business”, and the consideration (although termed as “compensation” by the applicant) is actually “Premium or Annual Lease” as evident from the demand letters of the DFO, submitted by the applicant on 08.08.2022 - both of the two major elements i.e. Supply is done for a consideration and Supply is done in course of furtherance of business are fulfilled by the DFO of the Forest Department of State Government of Uttarakhand and hence services rendered for which “Premium or Annual Lease” is paid by PTCUL, qualifies as a 'supply of services' as per section 7 of CGST Act, 2017.
Under which heading of the GST tariff shall the said supply of service be covered? - HELD THAT:- It is found that at Heading 997212 under the head of “Description of Service”, “Rental or leasing services involving own land or leased non-residential property”, have been kept, and it is opined that the services provided by the DFO of the Forest Department of State Government of Uttarakhand falls under the above Heading and hence not covered under Serial No 6 of the Notification No 12/ 2017 and it is observed that the above services under Heading 997212, does not figure in the Notification No. 12/ 2017 and hence is liable to tax.
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2022 (10) TMI 909
Taxability - coal rejects whose invoice is raised by Applicant upon washery/job-workerInput Tax Credit (ITC) of GST and Compensation Cess of raw coal brought from its supplier and transferred to washery/job worker for cleaning - admissible proportion of Input Tax Credit.
Whether the “coal reject” whose invoice is raised by Applicant upon washery job-worker, is taxable under GST Act and Compensation Act in the hands of Applicant? - HELD THAT:- The coal rejects generated during the process of Coal washing are nothing but Coal with higher percentage of Ash content. HSN 2701 covers “Coal; briquettes, avoids and similar solid fuels manufactured from coal”. Therefore. Coal rejects are rightly classifiable under HSN 2701 and as per Notification No. 01/2017- Central Tax (Rate) dated 28.06.2017. 2.5% Central GST is also leviable for the same heading i.e. 2701 under schedule-I, further, as per Notification No. 01/2017- compensation cess (Rate) dated 28.06.2017. Rs. 400 per tonne is leviable as compensation cess under Chapter Heading Sub-heading 2701 - Coal rejects are to be classified under HSN 2701 and are taxable at 5% GS T Rate + Rs. 400 PMT Compensation Cess.
Whether Applicant is eligible to avail Input tax Credit of GST and Compensation Cess of raw coal brought from its supplier and transferred to washery job worker for cleaning? - HELD THAT:- Where the goods are being received in lots or installments. the registered person shall be entitled to take credit upon receipt of the last lot or installment. Thus, if the applicant fulfils the eligibility conditions as prescribed under Section 16 of CGST Act, 2017 & PGST Act, 2017 and if the type of ITC do not fall under the categories prescribed under Section 17 of CGST Act, 2017 & PGST Act, 2017. the applicant is eligible to avail Input Tax Credit of GST and Compensation Cess of raw coal brought from its supplier and transferred to washery/job worker for cleaning. Further, the “principal” shall be entitled to avail ITC in relation to goods sent directly to the premises of job-worker.
If the answer to above question is yes and ITC is admissible, what is the admissible proportion of Input Tax Credit? - HELD THAT:- The formula prescribed under Rule 42 of CGST & PGST Rules, 2017 for manner of determination of input tax credit in respect of inputs or input services and reversal thereof will be applicable in both cases i.e. GST and Compensation Cess. Therefore, the provisions prescribed under Rule 42 of CGST & PGST Rules, 2017 should be followed by the applicant and they have to make reversal in the proportion of exempt/taxable turnover.
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2022 (10) TMI 908
Classification of services - Bio-Mining and Scientific Closure of Legacy wastes at the dumpsite in Kureepuzha, Kollarn - services to be provided by the Applicant to the Superintending Engineer, Kollarn Municipal Corporation - eligibility for exemption under SI.No.3 of Notification No. 12/2017 dated 28.06.2017 as amended - HELD THAT:- The activities undertaken by the applicant are containment of waste, temporary storage of hazardous and non-hazardous waste, treating and disposing of the waste by processing in a facility that meets the legal standards. The ultimate goal of the activity is the reclamation of the land after clearing the waste and the activity undertaken by the applicant is the removal of waste as per the norms of Solid Waste Management Rules 2016. The activity of the applicant merits classification under SAC 9994 - Sewage and waste collection, treatment and disposal and other environmental protection services - Group - 99943 - Waste treatment and disposal services as per Annexure to Notification No. 11/2017 CT (Rate) dated 28.6.2017.
Whether the services rendered by the applicant are eligible for exemption as per entry at SL.No. 3 of the Notification No, 12/2017 CT (Rate) dated 28.6.2017? - HELD THAT:- In order to qualify for the exemption under the above entry, the following conditions are to be satisfied:-
a. The services must be pure services
b. It must be provided to the Central Government, State Government, Union Territory or local authority
c. The pure services must be by way of any activity in relation to any function entrusted to a Panchayat under Article 243 G of the Constitution or in relation to any function entrusted to Municipality under article 243 W of the Constitution.
As revealed from the records produced before this authority, the services rendered by the applicant are devoid of any incorporation of goods in the process of supply. Thereby the same is eligible to be classified as pure services excluding works contract service and other composite supplies involving the supply of any goods. Thereby the first condition is satisfied - the second condition is also satisfied - The Twelfth Schedule to the Constitution deals with the provisions that specify the powers, authority and responsibilities of Municipalities; it includes 18 matters. SI.No. 6 of the Twelfth Schedule to the Constitution under article 243W deals with Public health, sanitation conservancy and solid waste management. The services proposed to be extended by the applicant to the Kollam municipal corporation are Biomining and Scientific closure of existing waste at the dumpsite Kureepuzha, Kollam which is covered under this item. Thereby the 3rd condition is also satisfied.
Thus, the services provided by the applicant are exempted under Si.No. 3 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended.
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2022 (10) TMI 907
Additions for recovery of bad debts u/s 41 - As per appellant as recovered the bad debts of the companies, which got amalgamated with the appellant company, and, therefore, they are not taxable in the hands of the appellant and that the appellant was not the assessee for the purpose under Section 41 - whether the bad debt recovered by the appellant, which was written off by the amalgamating company, which got amalgamated, can be taxed in the hands of the appellant or not ? - HELD THAT:- Section 41 has to be considered as a complete Code by itself, as far as profit is chargeable to tax. Section 41 (1) cannot be read in isolation with Section 41 (4). The assessment contemplated under Section 41 (1) is the same as the assessment contemplated under Section 41 (4). Therefore, merely because there is no corresponding amendment in sub-clause (4), it would not mean that the provisions of Section 41 (1) will not apply.
The recovery of the debt is a right transferred along with the numerous other rights comprising the subject of the transfer. If the law permits the transferor to treat the whole or part of the debt as irrecoverable and to claim a deduction on that account, it is difficult to accept that the same right should not be recognised in the transferee.
We are of the view that the order of the Appellate Tribunal, confirming the order of the lower authority, is well reasoned and it requires no interference. Decided against assessee.
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2022 (10) TMI 906
Disallowance of employee’s contribution u/s. 36(1)(va) - HELD THAT:- As the assessee submitted that all the ESI amounts have been paid within the statutory time limits under the ESI Act. The counsel for the assessee stated that it was owing to a software error in filing Audit Report that the columns got interchanged, leading to the present misunderstanding. Assessee drew our attention (copies of Challaans for payment of Employees State Insurance Corporation) of the paper book to point out that all ESI contributions have been paid before the due dates as per the relevant Act. Accordingly, it was submitted that the matter may kindly be restored to the file of AO to carry out the necessary verifications. DR also did not object to the matter being restored to the file of the AO for the same.
Therefore, in the interests of justice, we are restoring the matter to the file of the AO to carry out the necessary verification to ascertain if the payments have been made within due date under the ESI/relevant Act. Appeal of the assessee is allowed for statistical purposes.
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2022 (10) TMI 905
Addition u/s 44DA - activities connected to PO/PE in India - services rendered by the overseas employees of home office of the assessee from Hong Kong for the activities performed for the project CMRL/KMRL - HELD THAT:- On careful examination and consideration of the findings of the ld. CIT (Appeals), the evidences placed on record by the assessee, we do not see any infirmity in the order passed by the ld. CIT (Appeal) in holding that the assessee has rightly offered the OCI as fees for technical services under the provisions of section 115A of the Act and the addition made under section 44DA of the Act is liable to be deleted. Ground raised by the Revenue is rejected.
Additional ground of appeal raised by the assessee in its cross objection with respect to allowability of deduction under section 37(1) of the Act pertaining to Education Cess, Senior & Higher Education Cess is concerned, it is the submission of the ld. Counsel that this ground is not pressed.
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2022 (10) TMI 904
Assessment post amalgamation - brought forward losses post amalgamation - scheme of merger/amalgamation was approved by the Hon’ble High Court of Calcutta - accumulated losses of amalgamating companies comprising of unabsorbed short term capital loss, unabsorbed long term capital loss, unabsorbed business loss would belong to the amalgamated company - Whether the provision of Section 72 and 74 would come into play with respect to set off of such accumulated loss of amalgamating companies against respective incomes of the amalgamated company? - HELD THAT:- The scheme once approved is binding on the Income-tax authorities and cannot be disturbed/reconsidered. We also take note of the findings given by the Co-ordinate Bench of ITAT, Kolkata in one of the assessee’s group companies in the case of Electrocast Sales India Ltd. [2018 (3) TMI 473 - ITAT KOLKATA] wherein also similar issue was dealt and held in favour of the assessee.
We also concur with the reliance placed by case of Select Holiday Resorts Pvt. Ltd.[2013 (1) TMI 187 - DELHI HIGH COURT] which deals with the similar issue present before us in the appeal. Considering the facts and circumstances of the present case which are similar to those dealt with by the Co-ordinate bench of ITAT, Kolkata and by the Hon’ble Delhi High Court (supra) and the detailed findings given by the Ld. CIT(A), we do not find any reason to interfere with the order of the Ld. CIT(A) on this issue. Accordingly, we allow the adjustment of brought forward business loss against the current year’s business income and also the set off of brought forward capital loss as claimed by the assessee. Thus, the grounds raised by the revenue are dismissed. Accordingly, the appeal of the revenue is dismissed.
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2022 (10) TMI 903
Income deemed to accrue or arise in India - taxation of entire revenue received by the Appellant from provision of legal services on Indian engagements as 'Fees for Technical Services' under the provisions of section 9(1)(vii) of the Act for the subject assessment year - DTAA between India and the UK - HELD THAT:- We note that the claim of the assessee in this case is that the issue is squarely covered in favour of the assessee by the decision in the case of Linklaters LLP [2019 (6) TMI 1502 - ITAT MUMBAI] Further, this has been countered by the Revenue by suggesting that the decision did not have the benefit of implication of the protocol amendment which, according to the Revenue, came into force from 27.12.2013, hence this decision is not applicable. Per contra, ld. Counsel of the assessee stated that this claim of the Revenue is not correct inasmuch as in the case of Linklaters LLP on the same issue of tax treaty eligibility was dealing with AYs 2011-12, 2012-13 & 2013-14 and the ITAT pronounced the rulings in the year 2017and 2019 respectively.
Hence it is the submission of the assessee’s counsel that Departmental authorities as well as the Departmental Representative’s submission that the Protocol, which provides for an extension of India-UK DTAA applicability to a UK based partnership, is effective only from AY 2015-16 and onwards and shall not apply to the year under consideration, is entirely incorrect and not in accordance with the judicial precedents.
We find ourselves in agreement with the submission of assessee. We note that CIT DR has distinguished the decisions cited by suggesting that the decision was rendered prior to the protocol amendment and CIT DR is also suggesting that these decisions are not applicable. However, we find that no contrary decision has been produced by the Revenue. Hence, the canons of judicial discipline comes into play and the decision of ITAT on this issue cannot be ignored by mere claim of the Departmental Authorities and Representatives that these decisions are not applicable inasmuch as they have been rendered without considering the implication of the protocol amendment.
We may recap that the assessee is a firm of solicitors having office in the United Kingdom and providing legal services to its clients worldwide i.e. non-residents and residents of India. Assessee is a UK based Limited Liability Partnership with a majority of its partners being tax residents of the UK. During the previous year under consideration, the assessee provided legal services to its clients in India/ Outside India relating to activities carried out by such clients in India. The Revenue’s opinion was that assessee is not eligible for benefits of India-UK DTAA within the meaning of Article 4(1) of India-UK DTAA. Revenue’s suggestion is that assessee is a Limited Liability Partnership and is not liable for taxation in UK in its capacity as Limited Liability Partnership and its partners of an LLP in UK are taxable. That unless an entity is liable to taxation, it does not fall within the purview of a resident within the meaning of Article 4 (1) of the India-UK DTAA and is, therefore, not eligible for the benefit of India-UK DTAA.
We find that ITAT was considering the same issue in the case of Linklaters LLP [2019 (6) TMI 1502 - ITAT MUMBAI] and it has opined that assessee is entitled to the benefit of India-UK DTAA on the portion of its income from Indian engagements, which has been taxed in the UK in the hands of its UK tax resident partners. The case is supported by the case laws referred of the assessee in the following judicial pronouncements that the eligibility of a fiscally transparent partnership firm to avail of the tax treaty benefits is affirmed on the basis that the income of the partnership firm has been taxed in the foreign state in the hands of its partners.
Thus benefit of Article 4.1 is to be granted to the assessee in identical facts and circumstances of the case. Accordingly, we set aside the orders of the authorities below and decide the issue in favour of the assessee.
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2022 (10) TMI 902
Default u/s 201 - TDS was not reflected in Form 26AS available - As submitted assessee has already suffered TDS denying its credit will lead to double taxation - CIT(A) was aware of the fact that EIEL is under Corporate Insolvency Process wherein appellant was employed at designation of Senior Vice President (Finance) [Sr. VP (Finance)] - HELD THAT:- Section 31(1) of the Insolvency and Bankruptcy Code ( hereinafter referred as IBC) after the amendment of 2019, makes the Resolution plan binding on Central Government in respect of payment of dues arising under any law for the time being enforce. Further section 238 of the IBC specifically provides that the IBC overrides the provisions of any law that is inconsistent with the IBC.
In the case in hand EIEL was an assessee in default u/s 201 of the Act and sub-section 2 of Section 201 provides that such tax along with interest thereupon as recoverable under sub-section (1A), shall be a charge upon all the assets of the assessee in default.
It is admitted fact that order u/s 201/ 201(1A) of the Act for the relevant financial year stands passed against the assessee in default EIEL who was employer of the appellant. That being so, having taken recourse under law by raising a demand for non-deposition of TDS u/s 201 and interest u/s 201(1A) of the Act and which stands further determined and admitted under the Corporate Insolvency Resolution Process then there could have been no justification under law to deny the credit to the assessee because as such the Government’s claim of TDS stands satisfied and cannot be said to be still outstanding.
Even otherwise Section 205 of the Act is very crystal clear in its intention and clarifies that where tax stands deducted at source the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from the income. In the case in hand as noticed above, the deduction of tax from the salary of assessee is not disputed and Government’s claim of TDS stands satisfied under CRP and cannot be said to be still outstanding so as to deny its credit to the assessee.
CIT(A) has been carried away by irrelevant facts of assessee himself occupying the position of Vice President (Finance) of the assessee in default company. Ld. CIT(A) failed to appreciate that there is no provision under law for creating such a liability upon any individual by attributing malice upon him for being party to the default in deposit of TDS. Appellant was for all purposes merely an employee who was being paid salary by the company which has a distinct and independent identity to its employees. Assessee has also established by an admitted pay slip for the December, 2015 that in fact the assessee had left the services working for 30 days in December, 2015. Thus, at the time of end of relevant FY, the assessee was not even in position of any nature qua responsibility to deposit the TDS on behalf of the assessee in default.
No justification with Ld. CIT(A) to merely create a tax liability on grounds of propriety involved when otherwise there was no legal foundation. Thus substantial ground raised along with ancillary grounds no. 1 to 6 stand decided in favour of the assessee/appellant.
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