Try our new portal www.taxtmi.com for a better experience!

Home

Case Laws

Home Case Index All Cases Income Tax Section Wise 2021 2021 (6) This

Law
Court
Citation	- -
Landmark
Order by

Advanced Search Options

Case Laws

Showing 41 to 60 of 1185 Records

2021 (6) TMI 1145

Addition u/s 69A - undisclosed and unexplained income of the assessee being Gold and Jewellery seized - presumption u/s 132(4A) r.w.s. 292C takes the AO to a conclusion that the gold in question belongs to the assessee, as it was seized from the assessee and as the assessee could not produce cogent material to rebut the aforesaid presumption the additions have been made - HELD THAT:- The original challans seized with the gold bullion and gold jewellery supported the claim of the assessee. In the statement recorded u/s 131 assessee reiterated this contention.

DDIT (Inv.), Kolkata and Investigation Wing at Chennai conducted verification with M/s. B.B. Jewellers and M/s Lalithaa Jewellery Mart Pvt. Ltd. The claim of the assessee has been supported and proved by the independent verification done by the Investigation Wing with the third party Jewellers in Chennai. Lack of distinctive identification numbers of the gold bullion on the challans seized, along with the gold from the assessee, was the grounds on which the AO made the addition - CIT(A) has rightly stated that this cannot be a basis of making this addition. Decided against revenue.
2021 (6) TMI 1144

Preferential allotments of shares - promoter related entities - price manipulation activities - LTCG in order to convert unaccounted income into accounted income with nil payment of tax as LTCG was exempt from tax -basis for holding the appellants guilty of Section 12A(a),(b) and (c) of the SEBI Act read with Regulation 3 and 4 PFUTP Regulations is, that a prudent investor would not have purchased the shares of a Company which had weak fundamentals and financials and that no one in their right mind would buy the shares unless there was a pre-existing arrangement of reaping in huge profits.

HELD THAT:- We are of the opinion that the role of the preferential allottees, exit providers and LTP contributors were far more serious than the role of the appellants. The role of the appellants in the instant case is, that they had purchased the shares off market from the six entities who in turn have purchased it from the promoter Company. Whereas, the preferential allottees have been let off, the appellants have been penalized only on the ground of being in proximity with the Company and its directors which finding is perverse in as much as we find that there is no direct connection of the appellants with the Company, its promoters, promoter company or noticees nos. 9 to 11, 75, 77 to 80 who were the main manipulators and the kingpin in the entire scheme.

The six entities are not promoter related entities. They have acquired the shares from the promoter Company but they do not become the promoters. The fact that they were de facto controlling the Company is not a relevant issue as it still does not make them promoters of the Company. Thus, merely because the appellants had purchased the shares through off market from the six entities does not and cannot lead to a conclusion that the appellants are connected with the Company or with noticee no. 9 or with promoter related entities or its directors. The finding that appellants were in close proximity or had a connection with the Company, directors etc. is patently erroneous.

The six entities had purchased the shares from a promoter Company, namely, noticees 15 to 19 and thereafter the six entities sold it to the appellants. Whereas the notices no. 15 to 19 have been exonerated by the impugned order, the appellants have been booked for having a close proximity with the Company. We find that the appellants have not purchased the shares from the Company.

The issue of weak fundamentals would equally apply to the preferential allottees who were allotted the shares at rate of Rs. 10/- per share but these preferential allottes have been let off. Therefore the standard of weak fundamentals cannot be applied in the case of the appellants especially when on the same footing the preferential allottees have been let off. We are of the opinion that it is business prudence to purchase at a lesser price and sell it at a higher price when the market is up thereby earning profits. Making profits in our opinion cannot be termed illegal or manipulative or fraudulent or violative of the PFUTP Regulations.

We are also find that the WTM has given a categorical finding that noticee no. 9 was the master mind who manipulated the price with Company and its directors and intermediaries for the benefit of the preferential allottees. These preferential allottees have been let off. We find that there is no direct connection of the appellants with noticee no. 9. There is no involvement of collusion or price manipulation of the appellants and thus there cannot be any violation of regulations 3 & 4 of the PFUTP Regulations.

Six entities had an active role to play in the management of the affairs of the Company from February / March - 2012 onwards. A direct connection has been established between the six entities and the Company and noticee no. 2. The six entities had also acquired the preferential shares of the promoters and therefore we are also of the opinion that the six entities were closely associated with the Company from February / March – 2012 onwards and throughout the period when the preferential allotments were made.

We are, thus, of the opinion that the six entities were closely connected with the Company and its directors and had a role to play in the formulation of the scheme of issuance of preferential allotment, pumping of the price through LTP contributors and providing an exit mechanism for the preferential allottee. Consequently, in our opinion, the order of the WTM insofar as the six entities are concerned does not suffer from any manifest error of law.
2021 (6) TMI 1143

Jurisdiction - levy of penalty - it was held by the High Court that it is clear and apparent that the impugned orders of penalty dated 30.1.2014, as contained in Annexure-12 to the writ applications, are actually the orders passed in review, in exercise of the powers under Section 9A (4) of the Act, read with Rules 14 (10 ) and (11) of the Rules, and these orders have been passed without any previous sanction in writing, of the Commissioner of Commercial Taxes, and have also been passed beyond the period of un-extendable limitation of one year.

HELD THAT:- There are no reason to interfere with the impugned judgment and order passed by the High Court.

SLP dismissed.
2021 (6) TMI 1142

ESI/PF disallowance - Assessee’s and revenue’s plea that the same has been paid before the due date of filing sec. 139(1) return and after the due date prescribed in the corresponding statutes; respectively - HELD THAT:- Legislature has not only incorporated necessary amendments in Sections 36(va) as well as 43B vide Finance Act, 2021 to this effect but also the CBDT has issued Memorandum of Explanation that the same applies w.e.f. 1.4.2021 only. It is further not an issue that the foregoing legislative amendments have proposed employer’s contribution; disallowance u/s 43B as against employee’s contribution u/s 36 (va) respectively.

Keeping in mind the fact that the same has been clarified to be applicable only with prospective effect from 1.4.2021, we hold that the impugned disallowance is not sustainable.

The impugned ESI/PF disallowance is directed to be deleted therefore. Decided in favour of assessee.
2021 (6) TMI 1141

Directing an investigation under Section 26(1) of the Competition Act, 2002 - contravention of Section 3(1) read with Section 3(4) and Section 4(1) and 4(2) of the Competition Act - nature of the impugned order passed under Section 26(1) of the Act - Administrative order or not - prior notice and opportunity of hearing is mandatory at the stage of issuing direction to the Director General to hold inquiry under Section 26(1) of the Act or not - HELD THAT:- An order under Section 26(1) of the Act passed by the Commission is an 'administrative direction' to one of its wings departmentally and without entering upon any adjudicatory process - Section 26(1) of the Act does not mention about issuance of any notice to any party before or at the time of formation of an opinion by the Commission on the basis of information received by it.

Whether the Commission has acted in consonance with the settled law? - HELD THAT:- In the case on hand, the informant has filed information and appended material papers, which according to the informant support its allegations. It was submitted by the learned Additional Solicitor General that the Commission has also called upon the informant to file a Certificate under Section 65B of the Indian Evidence Act and the penalty for incorrect information is upto Rs. One Crore under Section 44 of the Competition Act - It is expected that an order directing investigation be supported by 'some reasoning' which the Commission has fulfilled. Therefore, it would be unwise to prejudge the issues raised by the petitioners in these writ petitions at this stage and scuttle the investigation. Therefore, the impugned order does not call for any interference.

Petition dismissed.
2021 (6) TMI 1140

Partition of joint family property - Maintainability of application - whether Suit No. 1101 of 1997 filed by the plaintiff Somasundaram challenging the compromise decree dated 06.08.1984 was barred under Order XXIII Rule 3A? - compromise decree questioned by High Court - HELD THAT:- A party to a consent decree based on a compromise to challenge the compromise decree on the ground that the decree was not lawful, i.e., it was void or voidable has to approach the same court, which recorded the compromise and a separate suit challenging the consent decree has been held to be not maintainable. In Suit No.1101 of 1987, the plaintiff prayed for a declaration declaring that the decree passed in O.S. No. 37 of 1984 is sham and nominal, ultravires, collusive, unsustainable invalid, unenforceable and not binding on the plaintiffs - On the basis of grounds which have been taken by the plaintiff in Suit No.1101 of 1987, the only remedy available to the plaintiff was to approach the court in the same case and satisfy the court that compromise was not lawful. Rule 3A was specifically added by the amendment to bar separate suit to challenge the compromise decree which according to legislative intent to arrest the multiplicity of proceedings. We, thus, do not find any error in the judgment of trial court and High Court holding that Suit No.1101 of 1987 was barred under Order XXIII Rule 3A.

We having found that Suit No.1101 of 1987 being barred under Order XXIII Rule 3A, it is not necessary for us to enter into correctness or otherwise of the grounds taken in the plaint for questioning the compromise decree dated 06.08.1984. The compromise decree dated 06.08.1984, thus, could not have been questioned in Suit No. 1101 of 1987.

Partition of joint family of three branches - main plank of submission on behalf of respondent No.1 is that after the partition dated 07.11.1960, the three branches had separated and joint family status came to end - HELD THAT:- In Bhagwan Dayal Vs. Reoti Devi, [[1961 (9) TMI 90 - SUPREME COURT]], this Court examined the principles of Hindu Law and principles of Hindu Joint Family. In paragraph 16, it was held that the general principle is that every Hindu family is presumed to be joint unless the contrary is proved; but this presumption can be rebutted by direct evidence or by course of conduct.

It is the case of the defendant No.1 that the compromise decree dated 06.08.1984 is nothing but implementation of agreement dated 08.03.1981. It is, thus, clear that the case of D-1 is that there was partition of all properties standing in the names of three branches and allocated to different branches on 08.03.1981, which has been subsequently implemented by consent decree dated 06.08.1984. As per the case of defendant, the Vasudeva Textiles Mills was given to the branch of Rangasamy, property at Coonoor was taken by D-1 and properties at Somnur by D-4 - When the D-1 comes with the case that there was partition on 08.03.1981 of all immovable properties standing in the names of three branches, which was implemented on 06.08.1984, the conclusion is irresistible that family was joint and had the three branches were not part of joint Hindu family, there was no occasion for attempting any partition on 08.03.1981 as claimed by D-1. The fact that defendant No.1 is coming with the case that there was partition on 18.03.1981 itself proves that three branches were joint till then as per case of D-1 himself.

It is concluded that all three branches have equal share in the Tatabad residential property, i.e., Item No.X of Schedule 'B' of plaint in Original Suit No.1101 of 1987. This residential property being not a part of O.S.No.37 of 1984, there is no bar in seeking partition of the said property by the plaintiff. Accordingly we declare that plaintiff/defendant No.7, defendant No.1 and defendant No.4 are entitled to 1/3rd share jointly in the aforesaid Item No.X of Schedule 'B' of the suit property ( 1/3rd share each to K. Rangasamy branch, S.K. Kumarasamy branch and S.K. Chinnasamy branch). Accordingly, a preliminary decree for partition shall be drawn for the aforesaid property.

Civil appeal partly allowed.
2021 (6) TMI 1139

Duty drawback - demand on the grounds that the Applicant did not receive the export proceed against the 02 Shipping Bills within specified period and in the remaining Shipping Bills, the export proceeds were not realized in full - whether the recovery of proportionate drawback amount from the Applicant in respect of the remaining 174 Shipping Bills on account of shortfall in realization of export proceeds is valid?

HELD THAT:- Application has contended that export proceeds in respect of the remaining 174 Shipping Bills were fully realized, however, the Bank has deducted some amount on account of Bank charges. Government observes that the issue of Bank charges was also raised by the Applicant before the original authority but the same was not considered. Central Board of Indirect taxes & Customs, vide Circular No. 33/2019- Customs (issued vide F. No. 609/19/2019-DBK) dated 19.09.2019, has clarified that duty drawback is not recoverable where the export proceeds realized are short on account of bank charges deducted by foreign banks. The said instructions are clarificatory in nature. Thus, Government holds that the entire matter pertaining to the deduction of bank chargers and recovery of proportionate drawback amount corresponding thereto needs to be relooked.

It would be in the interest of justice that the matter is remanded back to the original authority with the direction to decide the matter afresh, on merits, as far as it pertains to the deduction of bank charges and recovery of proportionate drawback amount on account thereof, keeping in view the instructions contained in Board’s Circular dated 19.09.2019 - Revision application disposed off.
2021 (6) TMI 1138

Maintainability of petition - availability of appellate remedy - Validity of assessment order - erroneous application (exercise of Jurisdiction) of provisions of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- As far as the judgment of the Hon'ble Supreme Court of India in the case of M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [2021 (3) TMI 384 - SUPREME COURT] is concerned, as rightly pointed out by the learned Government Advocate appearing on behalf of the respondents, the matter went to the Hon'ble Apex Court by way of regular appeal and the Hon'ble Supreme Court of India, while adjudicating the final orders passed by the Appellate Tribunal, formed an opinion that the issuance of show cause notice itself was by an improper authority. Thus, by citing the said finding, the appellate remedy otherwise provided under the Statute cannot be dispensed with, and in the event of accepting the said contention, in all such cases, every litigant will approach the High Court by way of writ petition bypassing the appellate remedy, which is not desirable and cannot be accepted.

Jurisdictional error should not result in exoneration of liability. Jurisdictional error, if any committed, is technical, and thus, rectifiable. In such circumstances, the Courts are expected to quash the order passed by an incompetent authority and remand the matter back for fresh adjudication. Contrarily, if an assessee is exonerated from liability, undoubtedly, the purpose and object of the Act is defeated.

The growing practice in the High Court is to file writ petitions under Article 226 of the Constitution of India without exhausting the statutory remedies provided under the Act. The points raised in this regard are statutory violations. However, even such statutory violations can be dealt with by the Appellate authorities or the Appellate Tribunals. This apart, in a writ petition, if such orders are passed with jurisdictional errors and quashed without any remand, then an injustice would be caused to the very spirit of the statute enacted for the benefit of the public at large. Thus, Courts are expected to be cautious, while granting exoneration of liability merely on the ground of jurisdictional errors, if any committed by the authorities competent - the authorities competent are not expected to commit such jurisdictional errors in a routine manner. In these circumstances, review of such orders by the higher authorities are imminent to form an opinion that there is willful or intentional act for commission of such jurisdictional errors, enabling the assesses to get exonerated from the liability. Liability and jurisdictional errors are distinct factors, and therefore, Courts are expected to provide an opportunity to the Department to decide the liability on merits and in accordance with law with reference to the provisions of the Act and Rules and guidelines issued by the Department.

Large number of writ petitions are filed without exhausting the statutory appeal remedies and High Court is also entertaining such writ petitions in a routine manner. Keeping such writ petitions pending for long time would cause prejudice to the interest of the assessee also. Thus, such statutory provisions regarding the appeal are to be decided at the first instance, enabling the litigants to avail the remedy by following the procedures as contemplated under law. Such writ petitions are filed may be on the ground of jurisdiction or otherwise. However, the Courts are expected to ensure that all such legal grounds available to the parties are adjudicated before the proper forum and only after exhausting the statutory remedies, writ petitions are to be entertained.

This Court has no hesitation in arriving a conclusion that the petitioners are bound to exhaust the statutory appellate remedy as contemplated under the provisions of the TNVAT Act. Thus, the petitioners are at liberty to approach the appellate authority by filing appeal/revision and by following the procedures contemplated. The delay, if any occurred, for filing the appeal, shall be condoned by the appellate authority and the appeal shall be taken on file to be adjudicated on merits and in accordance with law and by affording opportunity to all the parties concerned.

The writ petition disposed off.
2021 (6) TMI 1137

Dishonour of Cheque - insufficiency of funds - legally enforceable debt - discharge of burden of prove - rebuttal of presumption under Sections 118 and 139 of the N.I. Act - whether an authorised signatory of a company or firm would be liable for prosecution under S. 138 of the N.I. Act without the company being arrayed as an accused? - HELD THAT:- The liability of the revision petitioner is only statutory because of his legal status as the Managing Partner of the firm. Every person signing the cheque on behalf of the firm/company on whose account a cheque is drawn does not become the drawer of the cheque. Such a signatory is only a person duly authorised to sigh the cheque on behalf of the firm/company.

It is clear from Section 138 of the N.I. Act that in spite of the demand notice referred to above, the drawer of the cheque failed to make payment within 15 days from the date of receipt of notice. Admittedly, no notice was issued to the firm as contemplated under the Act before lodging the complaint - Hence the firm cannot be held liable at this stage. Since no statutory notice was issued against the firm within the time prescribed, the respondent has no sufficient cause for invoking the jurisdiction of this court to implead the firm as an accused in exercise of powers under Section 142 of the N.I. Act.

There can be no vicarious liability unless there is a prosecution against the firm. The vicarious liability gets attracted when the condition precedent laid down in Section 141 of the N.I. Act can satisfy. Thus, it can be safely concluded that if the prosecution proceedings against the firm were not taken by the complainant for the offence under Section 138 of the N.I. Act, it is certainly a bar for proceeding against the other person coming within the ambit of sub-sections (1) and (2) of Section 141 of the N.I. Act. In view of the above reasoning and discussion, the conviction and sentence concurrently passed by the two courts below are contrary to the dictum laid down by the Apex Court in Aneeta Hada [2012 (5) TMI 83 - SUPREME COURT] and, therefore, cannot be sustained. The conviction and sentence are, accordingly, set aside.

The conviction and sentence are, accordingly, set aside. The Crl.R.P. is allowed. The revision Petitioner is found not guilty of the offence under Section 138 of the N.I. Act and he is acquitted of the said offence.
2021 (6) TMI 1136

TP Adjustment - comparable selection - Functional dissimilarity - HELD THAT:- Companies need to be rejected as comparable as functionally not comparable with captive service provider like assessee - we direct Infosys BPO to be excluded from the list of comparables and remand Universal Paint to Ld.AO/TPO for fresh consideration.

TCS e-Serve Ltd - company is into high-end KPO services and an assessee rendering low end BPO services cannot be compared with it. Further, this company has been excluded due to absence of segmental information - we direct Ld.TPO to exclude this company from the list of comparables.

BNR Udyog Ltd. (segmental) - As observed from annual report placed this company has segmental information of medical transcription and revenue earned under this segment is Rs.147.40 Lacs. It is also been observed that various other decisions by co-ordinate Benches of this Tribunal has remanded this comparable back to Ld.TPO, for proper analysis and fresh consideration. See Indegene (P) Ltd vs ACIT [2017 (8) TMI 1576 - ITAT BANGALORE] Thus we set aside this comparable back to Ld.TPO for considering it afresh.

Excel Infoways Ltd. (segmental) - Objection raised by Ld.CIT DR stands clarified, as this company for year under consideration made a statement under 133 (6) regarding allocating entire employee cost to IT-BPO segment, with no allocation to other segment, which amounts to almost 49% of its total revenue during the year under consideration - We therefore agree with contention raised by assessee regarding this comparable not satisfying employee cost filter.

Acropetal Technologies Ltd - We direct the Ld.AO/TPO to correct the margins in respect of Acropetal Technologies Ltd.

Consider Accentia Technologies Ltd., Informed Technologies Ltd., and Jindal Intellicon Ltd., these comparables in the final list of comparables in accordance with law.

Computing negative working capital adjustment - We find that in the case of Lam Research India (P.) Ltd. [2021 (2) TMI 183 - ITAT BANGALORE] and Software AG Bangalore Technologies (P.) Ltd. [2016 (3) TMI 1384 - ITAT BANGALORE] passed by this Tribunal, it has been held that negative working capital adjustment shall not be made in case of a captive service provider as there is no risk and it is compensated on a total cost plus basis. We therefore direct Ld.TPO to compute the ALP in accordance with the directions contained in this order
2021 (6) TMI 1135

Dismissal of appeal by CIT-A as non effective - CIT-A held appeal filed by the appellant as not maintainable - applicability of the provisions of section 249(4)(b) - CIT (A) ought to have given the assessee an opportunity to explain her case - Whether Commissioner of Income-Tax (Appeals) erred in holding that the appellant is liable to pay any advance tax and that there was failure as mentioned in Sec.249(4)(b) - HELD THAT:- We find that the provisions of section 249(4)(b) are applicable to the case on hand since the assessee has not filed the return of income, nor has paid the advance tax payable by her. Therefore, she ought to have filed an application under the proviso to section 249(4)(b) of the Act for exemption from the application of section 249(4)(b) of the Act. In such circumstances, The CIT (A) had no choice but to dismiss the appeal as it was defective.

Purely in the interest of justice and taking the prayer of the assessee into consideration, we set aside the issue to the file of the CIT (A) with a direction to the assessee to file the application under the proviso to section 249(4)(b) of the Act within a period of one month from the date of receipt of this order and thereafter, the CIT (A) shall dispose of such application of the assessee and decide on the issue of exemption from the application of the provisions of section 249(4)(b) and thereafter, the CIT (A) shall also decide the appeal on merits. Needless to mention that the assessee shall be given a fair opportunity of hearing. Assessee’s appeal is treated as allowed for statistical purposes.
2021 (6) TMI 1134

TP Adjustment - MAM selection - authorities below while adopting the TNMM Method by making an adjustment u/s. 92CA of the Act on the whole Operating Cost incurred by the eligible Assessee - HELD THAT:- The contention of the assessee is primarily acceptable and the decision cited by the learned AR in respect of the assessee’s contention is supportive of such conclusion. However, the learned DRP has given a finding that the figures as given by the assessee needs to be verified. According to the DRP, the assesseee has not maintained separate segmental details and the claim has been based only on internal reports without any certificate from the auditor.

In such an event the DRP should have called upon the Assessee to furnish the required details. When in principle adjustment cannot be made in respect of transaction with unrelated parties u/s.92 of the Act, the DRP should have called for the required details, rather than not adjudicating even on the principle. We are therefore of the view that in principle we agree to the proposition put forward by the assessee in ground No.6. We, however, remand the issue to the AO/TPO to call upon the assessee to given the correct figures based on certificate from the auditor and thereafter make adjustment in respect of ALP only in respect of transactions with AE. Thus, the ground of appeal is treated as allowed for statistical purposes.

Computing the arm's length price of the international transactions - TPO treating the Exchange fluctuation gain as non-operating in nature and excluded the same from computation of Operating margins of the eligible Assessee while computing the arm's length price of the international transactions - HELD THAT:- Foreign exchange has been treated as the part of the operating profits, if they are integral to the process of the export of the software or if they arise out of operating income of the assessee. In view of the aforesaid decision SAP LABS INDIA (P.) LTD. [2010 (8) TMI 676 - ITAT, BANGALORE], ELECTRONICS FOR IMAGING INDIA PVT. LTD. [2016 (2) TMI 1123 - ITAT BANGALORE] AND M/S. KHF COMPONENTS PVT. LTD. [2016 (7) TMI 811 - ITAT BANGALORE] we are of the view that the foreign exchange gain has to be treated as part of the operating profit of the assessee. We hold and direct accordingly.
2021 (6) TMI 1133

TP Adjustment - Comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected from final list on the basis of turnover and size.

Negative working capital - We find that in the case of Software AG Bangalore Technologies (P.) Ltd. [2016 (3) TMI 1384 - ITAT BANGALORE] passed by this Tribunal, it has been held that negative working capital adjustment shall not be made in case of a captive service provider as there is no risk and it is compensated on a total cost plus basis. We therefore direct Ld.TPO to compute the ALP in accordance with the directions contained in this order after affording assessee opportunity of being heard.

Disallowance of deduction of ESOP expenses - HELD THAT:- We hold it to be revenue expenditure, eligible to be allowed under section 37.
2021 (6) TMI 1132

TP Adjustment - comparable selection - Application of on-site revenue filter - HELD THAT:- We found the submissions by Ld.AR to be true and accordingly direct Ld.AO to include R.S Software Ltd. ,Evoke Technologies Ltd., CG-Vak Software and Exports Ltd. to the final list of comparables.
2021 (6) TMI 1131

Levy of GST - pure services or not - Abhivahan Shulk collected by the Government of Chhattisgarh - applicability of reverse charge mechanism - Whether as each transaction is separate transaction and Abhivahan Shulk charged is always less than Rs 5000/- per transactions and is not covered by the definition of continuous supply of service u/s 2(33) of the CGST Act 2017, hence exempt under sl.no No 9 of the Notification No 12/2017?

HELD THAT:- The contention put forth by the applicant that the activity involved herein is in relation to a function entrusted to a State Government / Municipality under Article 243W of the Constitution is misplaced and not sustainable under law Accordingly it is held that the afore discussed activity of granting permission by the Forest Department of the State of Chhattisgarh and the said “Abhivahan permission shuck” paid for the same is not eligible for NIL rate of GST, provided under Sr. no. 4 & 5 of Notification No. 1212017-Central/State Tax (Rate), dated 28-6-2017.

The coal mined / raised in the said allotted mine located at Gore Palma, Raigarh was for the intended purpose of utilization at the End Use Plant viz. Marwa Thermal Power Plant located at Marwa, Janjgir Champa, Chhattisgarh having configuration / capacity of 2 x 500 MW. It is further evident from the letter no. 04-02/Coal Block/GP-111/221 dated 22.5.2020 by the applicant, available in public domain, addressed inter-alia to the Department of Forest, Government of Chhattisgarh citing reference to F.No. 8-91/2010-FC dated 18.4.2017 vide which lease has been transferred to CSPGCL., informed about the compliance status regarding the conditions of transfer of lease in respect of diversion of Forest land - The applicant's contention that each transaction is a separate transaction and Abhivahan Shulk charged is always less than Rs 5000/- per transaction and is not covered by the definition of continuous supply of service u/s 2(33) of the CGST Act 2017, hence exempt under sl.No. No 9 of the Notification No 12/2017 is not tenable, in as much as, the coal block has been allocated by virtue of the above cited allotment order dated 14.9.2015 for generation of power at their Marwa Thermal power plant and consequent to mining of coal from the coal blocks supra, this coal mined are moved from Forest to their place of business and for this movement of coal a permission is granted by the Forest department of the Chhattisgarh Government and a transit fee is being paid by the applicant for the transit pass issued in this regard by the said Forest department of Chhattisgarh.

On going through the contents at Sl.No. 9 of Notification no. 12/2017-Central/State Tax (Rate), dated 28-6-2017 claimed by the applicant, that the exclusion clause mentions that nothing contained in this entry shall be applicable for “transport of goods”. It is worth notable that the said entry does not refer to “any service relating to transport of goods”, rather it simply specifies only about non applicability of the said exemption in respect of “transport of goods” - In the case in hand it is ultimately for the movement / transport of coal from the allotted coal block located in a Forest place to the Thermal Power Plant, permission is granted by the Forest Department of Chhattisgarh and for which the impugned “Abhivahan permission shulk” or transit fees is being paid by the applicant - the applicant is not eligible for exemption as provided under sr. no. 9 of Notification no. 12/2017-Central Tax (Rate), dated 28-6-2017, claimed by the applicant.

There is no doubt as regards the fact that CSPGCL, the applicant is a business entity and from the said entry at sr. no. 6 of Notification no. 12/2017-Central/State Tax (Rate), dated 28-6-2017, it becomes very evident that if any services, including the three services excluded in clauses (a) to (c), are provided by the Central Government, State Government or local authority to any business entity, they would not be eligible for Nil rate of GST provided therein.

The Abhivahan permission Shulk for the permission granted by the Forest Department merits classification under the residuary Heading 9997 for other services with the tax rate of CGST@ 9% and CGGST@ 9% and the applicant is liable for GST on the said “Abhivahan permission Shulk”, under reverse charge basis in terms of Serial No. 5 of the Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017 (as amended).
2021 (6) TMI 1130

Classification of goods - rate of GST - Waterproof Trellis support for climbing plants manufactured by using bamboo and High-Density Polyethylene - HELD THAT:- Only those tools, implements, etc., made of base metals are classifiable under Chapter 82 of the Tariff and items whose working part is not one of the base metals are to be classified according to the constituent material of the working part - in Chapter 8201, the specifics are spades, shovels, mattocks, picks, hoes, forks and rakes, axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and the subsequent phrase “and other tools of a kind used in agriculture” is a general expression following the specific enumeration. The specifics mentioned are all of which has a working edge as required for a tool to be classified under Chapter 82. Thus only those hand tools which are of base metal and has a working edge, used as a hand tool in agriculture merits classification under this residual entry.

The product at hand is definitely not made of base metal nor it has a working edge as required of a tool under this Chapter and therefore the applicant's product by no stretch of imagination could be classified under Chapter 8201, as claimed by the applicant. Classification under a Heading is to be governed only by the relevant Tariff-entries, Heading-description, etc. Heading 8201, does not envisage that all items used in an agriculture field would be covered therein. The instant product can also not be classified under 8201 as Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry - The impugned product is purely a support made of bamboo for creeper vegetables/ crops. Thus the conclusion that the applicant is not eligible for exemption from tax on the said waterproof Trellis support for climbing plants using Bamboo and High-Density Polyethylene', provided under Notification no. 2/2017-Central Tax (Rate), dated 28-6-2017.

Section II CHAPTER 14 of Customs Tariff covers Vegetable plaiting materials; vegetable products not elsewhere specified or inducted. Tariff item 14011000 covers “Bamboos” in its ambit. Chapter note 2 of Chapter 14 specifies that Heading 1401 applies, inter alia, to bamboos (whether or not split, sawn lengthwise, cut to length, rounded at the ends, bleached, rendered non-inflammable, polished or dyed), split osier, reeds and the like, to rattan cores and to drawn or split rattans. Accordingly, the subject item is classifiable under CTH 14011000.
2021 (6) TMI 1129

Recruitment and training expenditure and retention bonus expenditure - Allowable revenue expenditure - staff recruitment expenses have been incurred mainly for payment to third party recruitment agency and access to various job sites like Naukri.com and the referral books - HELD THAT:- As respectfully following decision of coordinate bench in assessee's own case [2018 (4) TMI 638 - ITAT DELHI] we allow grounds of appealand direct ld AO to treat Training, staff Recruitment and retention bonus as revenue expenditure.

TP Adjustment - comparable selection - Thirdware solutions Pvt Ltd - HELD THAT:- This comparable has been considered in the case of assessee by Coordinate bench in WIPRO LIMITED C/O WIPRO ENERGY IT SERVICES INDIA PRIVATE LIMITED (FORMERLY KNOWN AS, SAIC INDIA PRIVATE LIMITED) [2018 (4) TMI 638 - ITAT DELHI] and has excluded the same. There is no change in facts and FAR of assessee or comparable shown to us.

Exclusion is Wipro technology services Ltd. - DRP though held that Wipro technology services Ltd is functionally comparable however not dealt with the argument of the assessee with respect to its transactions with Citigroup. In view of this, we find that there is controlled transaction in this company and therefore it cannot be included. We direct the learned AO/TPO to exclude the same.

E Info chips Bangalore Ltd - AO tried to draw the support for deriving the conclusion that this company passes the employee cost filter by showing the profit and loss of financial year 2010 – 11 however, the learned assessing officer has not given the profit and loss account schedules for the year ended on 31st of March 2010 of this comparable. The learned departmental representative could not show us any reason that why this schedules of the profit and loss account are not provided to the assessee. Even the learned DRP as we have already held is silent on this aspect. When the complete information about the comparable is not available in a reasonable manner, it cannot be considered for the comparability analysis of an international transaction of the assessee by including it. For this reason only, we direct the learned transfer-pricing officer to exclude this comparable.

Accordingly all the above three comparables i.e. Third ware Techonlogies Solutions Limited, Wipro technologies Ltd and E Infochips Banglore Limited are directed to be excluded from the comparability analysis. To this extent, the transfer pricing grounds of the appeal of the assessee are allowed.
2021 (6) TMI 1128

Seeking permission for withdrawal of petition - petiitoner does not press for the present petition at this stage with a view to file an appropriate application filed by the Partnership Firm in which the present petitioner is the partner.

HELD THAT:- Without expressing any opinion on the merits of the present petition, learned Advocate Mr. Mansuri is permitted to withdraw the present petition. It is needless to say that the application that may be filed by the petitioner in Special Civil Application No.23250/2019 shall be considered in accordance with law.

The present petition stands dismissed as withdrawn.
2021 (6) TMI 1127

Grant of permission to an accused to go abroad for employment - offence punishable under Sections 498A and 506(i) of the Indian Penal Code - HELD THAT:- The normal rule is that evidence in a case shall be taken in the presence of the accused. However, even in the absence of the accused, evidence can be taken but then his counsel must be present in the court, provided the accused has been granted exemption from attending the court. If the progress of the trial can be achieved even in the absence of the accused, the court can certainly take into account the magnitude of the sufferings which a particular accused person may have to bear with in order to make himself present in the court. However, one precaution which the court should take in such a situation is that the said benefit need be granted only to an accused who gives an undertaking to the satisfaction of the court that he would not dispute his identity as the particular accused in the case, and that a counsel on his behalf would be present in court and that he has no objection in taking evidence in his absence.

In the instant case, the offences alleged against the petitioner are punishable under Sections 498A and 506(i) of the Indian Penal Code. There will not be any need for the prosecution witnesses to identify him in the court as the offender. If the petitioner undertakes that he would appear before the trial court on all hearing dates as may be specifically directed by that court, he can be exempted from personal appearance before the court and he can be allowed to be represented through counsel and permission can be granted to him to leave the country for employment.

The petitioner is granted permission to go abroad for employment purposes on the condition that he shall file an undertaking in the form of affidavit in the Magistrate's Court concerned that he would appear before that court as and when required by that court - Petition allowed.
2021 (6) TMI 1126

TP Adjustment - Comparable selection - inclusion of MPS Limited in the final set of comparables - ALP of the international transaction of rendering `Information Technology Support Services’ - HELD THAT:- MPS Limited is not only engaged in rendering ITES but is also into Software Products business. In the absence of any segmental information relating to ITES, this company loses comparability with the assessee company, which is engaged in rendering only ITES. We, therefore, direct to exclude this company from the list of comparables.

To sum up, the impugned order is set-aside and the matter is restored to the file of the AO/TPO for re-computing the ALP of the international transaction of rendering `Information Technology Support Services’ in the light of our above discussion. Needless to say, the assessee will be allowed reasonable opportunity of hearing.