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Showing 61 to 80 of 1398 Records
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2020 (10) TMI 1338
Unexplained jewellery - Contention of assessee that if the correct quantity of jewellery (i.e. 671.53 gms is considered instead of 771.83 gms) and if the credit for jewellery in the hand of his son is also given then there would remain no excess jewellery - HELD THAT:- We find that CIT(A) has noted that total jewellery of 771.83 gms valued at Rs. 31,27,296/- was found from the possession of the assessee and his wife. The figure of 771.83 gms noted by the CIT(A) appears to be incorrect as in the copy of the panchnama which has been placed by the assessee in the paper book shows the total weight of the jewellery found to be 671.534 gms with the value of Rs 31,27,296/-. CIT(A) has given credit of jewellery of 600 gms (500 gms for the wife of the assessee and 100 gms for the assessee) and no credit has been given for jewellery to the son of the assessee. The fact that the family of the assessee consists of himself, his wife and son is not disputed.
We find that CBDT vide instruction no. 1916 dated 11.05.1994 has issued guidelines which inter alia states that in case of person not assessed to wealth tax, gold jewellery ornaments to the extent of 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male member of the family need not to be assessed.
In the present case, we find that CIT(A) has given credit for jewellery only to the assessee and his wife and no credit has been given to assessee’s son. If the credit for 100 gms of jewellery to the son of the assessee is granted, then there would remain no unexplained excess jewellery in the hands of the assessee and therefore no addition is called for. We, therefore, direct the deletion of addition upheld by the CIT(A). The ground of assessee is allowed.
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2020 (10) TMI 1337
Maintainability of application - Seeking stay on further proceedings of the Arbitral Tribunal consisting of 2nd, 3rd and 4th Respondents with regard to the dispute between the Applicant and the 1st Respondent - section 9 of the Arbitration and Conciliation Act - whether or not leave is required to continue the Arbitral Proceedings?
HELD THAT:- Though the Eleventh Schedule of IBC was amended, Section 279 of the Companies Act 2013, which is correspondent to Section 446 of the Companies Act, 1956 has not been deleted or amended. As per sub-Section 2 Clause (94A) the definition of the term “winding up” means winding up under this Act or liquidation under the Insolvency and Bankruptcy Code, 2016, as applicable. The word “applicable” indicates that the Eleventh Schedule not confined to Insolvency and Bankruptcy alone and also applicable to winding up took place under the Companies Act - Section 238 of the Insolvency and Bankruptcy Code, 2016 states that ‘the provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law’, the provision is exhaustive. Thus, whenever a special law gives out a specific provision which is clear and unambiguous and on the same subject there is a different provision in the general law and there is an inconsistency between the two, the special law will prevail and the principles of harmonious construction will have no role to play.
The time frame in winding up on just and equitable grounds is not an important condition. The very object of introducing the IBC 2016 and restricting its operation to solvency of the Company alone and provision for revival of the company within time fixed and keeping the liquidation as last resort makes it clear that time frame is important under the Code while it is not so under Section 279 of the Companies 2013 Act - An Adjudicating Authority that commences exercising of its power by entertaining a petition by a creditor on account of default by the Corporate Debtor enters into the sphere of resolution process which again deals with money and money alone ends up under liquidation. If there is a suit for title pending before the civil court. Adjudicating Authority normally would not be able to reject the leave in such cases. It is to be noted that the tribunals of limited tribunals of limited jurisdiction do not have power to issue declaratory decrees.
The definition of the word "claim" is found in Section 3(6), Section 3(11) defines "Debt", Section 3(12) defined "default" and Sections 3(13) to 3(18) of the Insolvency and Bankruptcy Code 2016 deals with financial aspects. Therefore the very word ‘claim' is relatable to a right of payment. Such right of payment may arise on account of debt or on account of any breach of contract provided such breach gives right to a payment. In such circumstances the provisions of Companies Act which deals with cases of winding up generally cannot be read harmoniously with IBC which is a Special Law.
Section 33(5) of the IBC Code has to be interpretted on its own language. Further, as discussed, when there is no inconsistency IBC would prevail over. Such view of the fact no leave is required to continue of pending proceedings - Any order passed under Section 9 of the Arbitration and Conciliation Act upsetting the view of the tribunal taken, amounts to sitting over the order of the Tribunal ruling same amount to its jurisdiction. The purpose of Section 9 of the Arbitration and Conciliation Act is not to upset any order passed by the Tribunal. When the Tribunal has passed an order rejecting the contention of the claimant questioning the jurisdiction to continue the proceedings. Such order is amenable to challenge under Section 34 of the Arbitration and Conciliation Act, 1996, while challenging the Award.
This Court is of the view that interim orders cannot be granted. The Court is also aware of the limitation to intervene the arbitral proceedings. Section 5 of the Arbitration and Conciliation Act also indicated that no judicial authority shall intervene in the arbitral proceedings except where provided in this part - Application dismissed.
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2020 (10) TMI 1336
Condonation of delay in filing appeal - petition rejected on the ground of the same having barred by limitation - HELD THAT:- The undisputed factual matrix of the case is that the Adjudicating Authority had passed the order on 26.06.2019, there is no dispute so far as the order being communicated to the petitioner and as such the appeal ought to have been filed by 26.09.2019 that is three months' period provided u/s 107 of the Chhattisgarh GST Act of 2017. The appeal in the instant case has been filed on 16.12.2019 that is even after the three months from the date limitation expired. Sub-section 4 of Section 107 of the Chhattisgarh GST Act confers the Appellate Authority with the power to condone the delay, if the appeal is filed within a period of one month from the date limitation stood expired.
The fact that there is an upper limit of one month provided in the statutes itself for preferring an appeal beyond the prescribed period of three months itself establishes the fact that beyond that extended period of one month after the expiry of period of limitation, the Appellate Authority becomes functus officio and would not be in a position to entertain the appeal nor does he have the power to condone the delay.
The issue so far as condonation of delay is concerned beyond the limit permissible under the statutes came up for consideration before the Supreme Court recently in the case of M/s N.V. International vs. State of Assam and others [2019 (12) TMI 1515 - SUPREME COURT]. In the said judgment, the Hon'ble Supreme Court though under the provisions of Arbitration Act had considered the aspect whether the authority could condone the delay beyond the permissible period provided under the statutes, disallowing the contention and dismissing the appeal observed that once when the period is prescribed beyond the said period, the authority does not have the power to entertain the application for condoning the delay or else it will defeat the statutory purpose.
This Court does not find a strong case made out by the counsel for the petitioner in the instant case calling for an interference to the order passed by the Respondent No. 3 - Petition dismissed.
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2020 (10) TMI 1335
Whether the statement made by the officer of the petitioner was without any power or authority and does not bind the petitioner? - HELD THAT:- The petitioners must be made to pay for the judicial time they have consumed but seeing our approach in the earlier matter, learned senior counsel himself was circumspect from beginning and thus, it is considered appropriate to only impose Rs.10,000/- as costs on the State Government for having approached this Court. The cost be recovered from the officer who took such a decision to come to this Court without taking any action against the officers and that too belatedly or responsible for the delay.
The costs be deposited with the Mediation and Conciliation Project Committee within a period of four weeks and a certificate of recovery be filed in this Court within the same period of time.
SLP dismissed on the ground of delay.
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2020 (10) TMI 1334
Input Tax Credit - Purchase of Lift would be available to Hotel as it has been used in the course or for the furtherance of business - lift installed is a part of immovable property, or not - capital goods are used in providing taxable services - compliance with the requirements of section 16 of CGST Act 2017 - Blocking of credit in terms of section 17(5)(d) of CGST Act, 2017 - HELD THAT:- As per the Section 17 (5) of CGST Act mentioned above, the Input tax credit shall not be available on the goods and services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business - The definition of immovable property is not provided under GST Act. According to section 3 (26) of the General Clauses Act, 1882, “Immovable property shall include land, benefits to arise out of land and things attached to the earth, or permanently fastened to anything attached to the earth”. According to section 3 of the Transfer of Property Act, 1882, “Immovable property does not include standing timber, growing crops or grass”.
The impugned item 'lift' merits classification as 'plant and machinery' and since 'plant and machinery' is excluded from the term 'immovable property', for the purpose of 17(5) (d), again appellant has pleaded that the plant and machinery includes certain foundations and structures however certain structures and foundations are excluded from Plant and Machinery and these are, land, building or any other civil structures, telecommunication towers and pipelines laid outside the factory premises - the lift installed in the building for the purpose of furtherance of business cannot be deemed to be a part of the building or an immovable property just because of the fact that it was fastened in the civil structure of the building by way of nuts, bolts and fasteners. Further, the lift so installed in his Hotel is not a customized lift but a pre-designed lift. These lifts require a specified area in a building and can easily be installed by fastening nut and bolts and other fasteners in the building and no specific modification or alteration is required in the building structure. Thereafter these lifts can be disassembled without causing any structural damage to the building and reassembled on need and can be resold in open market.
Lift purchase does not qualify as goods but is works contract resulting into an immovable property. High rise buildings' sanctioned plan includes lifts or escalators as fixtures - the appellant has not made any statement regarding capitalization of lift expenses.
Thus, the ITC is not admissible on purchase of Lift as per the Section 17(5) (d) of CGST Act, 2017.
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2020 (10) TMI 1333
Money Laundering - Validity of summons issued - violation of the provisions contained in Section 160 Cr.P.C. - HELD THAT:- The respondent submits presence of the petitioners is being sought for seeking some queries from them and they have been summoned as witness(es) and the interest of justice shall suffice if the petitioners, all residents of Karnataka, in this pandemic situation, may be directed to join the enquiry through Video Conferencing. The date and timing of such Video Conferencing shall be shared by the investigating officer with the petitioners so that there should not be any inconvenience for anyone in joining such enquiry.
List on 19.11.2020 and in the meanwhile, petitioners shall cooperate in the enquiry through video conferencing and their personal appearance shall not be insisted upon till the next date of hearing.
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2020 (10) TMI 1332
Non- compliance of the provisions of Regulation 16(1) of Securities and Exchange Board of India (Issue of Listing of Debenture Securities) Regulations, 2008 - Penalty on the appellant imposed under section 15A(b) and 15HB of the SEBI Act - Appellant is a housing finance company, and at present, is undergoing corporate insolvency resolution process - HELD THAT:- As the adjudicating authority by order declare moratorium for prohibiting the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement or order in any court of law, tribunal, arbitration panel or other authority.
In our view, the provision is clear and explicit and needs no further elaboration. Pursuant to a moratorium declared under section 14 the institution of suits or proceedings against the corporate debtor is prohibited or continuation of a suit or proceedings. Further, execution of any judgement or order in any court of law, tribunal, arbitration panel or other authority is also prohibited.
Thus, where a moratorium has been declared under section 14 of IBC, the authority which in the instant case is SEBI/AO will have no jurisdiction to institute any proceedings. Where a proceeding has already been instituted and during the pendency of the proceedings a moratorium order is passed under section 14 then the authority is prohibited from continuing with the proceedings. This is clear from a bare reading of the provisions of section 14(1) of the IBC.
The contention of the respondent that the word 'proceedings' depicted in section 14(1) has to be given an expansive meaning cannot be considered either by the adjudicating officer as it would amount to contempt of court. In any case, the prohibition is on the institution of a proceeding. In the instant case, the moratorium kicked in when the petition was filed on November, 2019 under Rule 5(a)(i) of the Insolvency and Bankruptcy (Insolvency and liquidation proceedings of financial service provider and application to Adjudicating Authority) Rules, 2019 and thereafter it was admitted on 3rd December, 2019. The adjudicating officer issued notice subsequently on 24th December, 2019. It is quite clear that the proceedings was initiated by the adjudicating officer after the moratorium had come into effect. In our view no proceedings could be instituted in view of section 14(1) of the Act.
We are also of the opinion that external aid can only be considered when there is an ambiguity in the provision. In this regard, the provision of section 14 is very clear and explicit and there is no room for any ambiguity. Further, the Supreme Court has categorically explained the effect of section 14 of the IBC. We, therefore, find that the adjudicating officer could not have considered the report of the insolvency committee to come to the conclusion that he had the power to proceed under SEBI law inspite of a moratorium having come into effect under section 14 of the IBC.
For the reasons stated aforesaid, the impugned order imposing a penalty and proceeding to recover under section 28A of the Act upon failure to pay cannot be sustained and is quashed. Since the proceedings could not be instituted, we also quash the show cause notice and the entire proceedings. The appeal is allowed.
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2020 (10) TMI 1331
Import of prime quality SS CR coils - exemption denied on the ground that the goods are not of prime quality - Benefit of N/N. 12/2012-Cus dated 17.03.2012 (Sr. No. 330) - HELD THAT:- List the Civil Appeal in the first week of February 2021.
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2020 (10) TMI 1330
Penalty proceeding u/s 271AAC - unexplained income u/s 69 (A) - action of the Respondent Income Tax Officer in rejecting the explanation offered by the petitioner - petitioner, argues that the order passed is cryptic in nature as also the Officer has not assigned any reason for carrying out re- assessment in the case of the petitioner - HELD THAT:- We are of the considered view that all material facts necessary for adjudication were recorded and considered by the Officer and as such the order cannot be said to be in violation of principles of natural justice, even though it may be short in nature.
Since disputed questions of fact are raised before us, we refrain from adjudicating the same, reserving liberty to the petitioner to prefer a statutory appeal which is an equally efficacious remedy.
As such, present petition stands disposed of.
At this stage, learned counsel for the petitioner submits that limitation may not come in the way of adjudication of the appeal.
Shri Rishi Raj Sinha, learned counsel for the Income Tax Department, states that if an appeal is preferred within a period of four weeks from today, the issue of limitation shall neither be raised nor allowed to come in the way of adjudication of the appeal on merits, more so keeping in view current Pandemic Covid-19.
Statement is accepted and taken on record.
Shri Rishi Raj Sinha, learned counsel appearing for the Income Tax Department, states that as on date no coercive action stands taken against the petitioner in terms of the demand raised pursuant to the passing of the impugned order and that position would be allowed to be maintained if the petitioner were to file an appeal within a period of four weeks from today.
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2020 (10) TMI 1329
Exotic species - inclusion of vulnerable exotic animals/birds species in the definition of “exotic live species” in Part I (a) of the Advisory for dealing with import of exotic live species in India - nature and extent of immunity contemplated by the Advisory as also whether it would cover other vulnerable exotic live species which are not mentioned in the Appendices to the CITES - HELD THAT:- It appears that a Voluntary Disclosure Scheme has been introduced by the Central Government which gives an option to all the citizens of India to voluntarily declare their stock of exotic species enumerated in Appendices I, II and III of the CITES – International Convention, if at all they are in possession thereof, within six months from the date of issuance of Advisory i.e. w.e.f. 11th June, 2020 (Annexure P-2 collectively to the memo of this writ petition). As per the Scheme, the declarer will submit themselves to the provisions of the Scheme and thereafter maintain a statutory record as prescribed under the Scheme for any addition or reduction in the declared stock of exotic species, which will enable the Government to have a unified information system for the stock of exotic species at the State or Central Government level.
The window of six months for voluntary disclosure by allowing immunities only to those declarers who opt to file their voluntary disclosure declaration within six months from the date of issuance of the Advisory. Immunity is not provided to the declarers opting to disclose the stock once the period of six months is over from the date of issuance of the Advisory. The immunity contained in Clause I (b) of the Advisory as stated hereinabove for the declarers is not further clarified in the said Advisory. The petitioner is seeking directions so far as immunity is concerned, under the Voluntary Disclosure Scheme that there shall be no investigation into the acquisition or possession of exotic species once the declarer voluntarily discloses as per the Scheme - Once the immunity is granted under the Voluntary Disclosure Scheme, the respondent cannot investigate about the ownership, possession, trade, transportation, breeding, act of keeping, buying, selling and exhibiting such exotic animals/birds which are voluntarily disclosed by the declarer. The declarer would not be required to produce any documentation in relation to the exotic live species if the same has been declared within six months from the date of issuance of Advisory as per Part I Clause (b) of the Voluntary Disclosure Scheme. After six months’ period is over, from the date of issuance of the Advisory the declarer shall be required to comply with the documentation requirement under the extant laws and regulations.
Voluntary Disclosure Scheme invites the declarers, in public interest, by conferring immunity to them for a limited period (here six months) to promote the voluntary disclosure. Once such voluntary disclosure is made within the time limit prescribed, no inquiry or action can be initiated by the respondent for possession, breeding or transportation of the exotic species within India by the officers of any Government agency or Department whether of Central Government or State Government. Such action of subsequent inquiry by the Government after voluntary disclosure would be wholly illegal, arbitrary, unreasonable, unsustainable and would defeat the very purpose of the Voluntary Disclosure Scheme.
In view of the Article XIV to be read with affidavit filed by the respondent No. 1, especially in para 8L and 8AA to 9A, it has been expressed by the respondent that suggestion of the petitioner to enlarge the scope of the Advisory to all exotic live species is acknowledged because there are still other vulnerable exotic live species which are not mentioned in the Appendices I, II and III to the International Convention – CITES. Thus, the further Advisory can always be issued by the respondent keeping in mind the provisions of Article 48A and to be read with Article 51A(g) of the Constitution of India which are about protection and improvement of the environment and to safeguard the forest and wild life of the country. This obligation of the State extends to protecting exotic live species, beyond the Appendix to the CITES - International Convention.
The respondents are not obliged to make laws only in terms of CITES and can widen the scope of restrictions, having regard to the local conditions and circumstances - writ petition disposed off.
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2020 (10) TMI 1328
Appeal decided against dead person - Assessee expired after filing this appeal - no legal representative of the assessee has not been brought on record - HELD THAT:- None has appeared on behalf of the assessee when this appeal was called for hearing through video conference due to prevailing COVID-19 pandemic situation.
As noted that the assessee has already expired on 19.02.2019 after filing this appeal however, till the date the legal representative of the assessee has not been brought on record. Accordingly, the appeal of the assessee is not maintainable and liable to the dismissed. Appeal of the assessee is dismissed.
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2020 (10) TMI 1327
Seeking grant of Regular Bail - framing of charges - examination of PWs has not yet been commenced - HELD THAT:- Keeping in view the fact that the examination of PWs has not been commenced and that co-accused of the petitioner, namely, Nitish Singhal, has been granted regular bail by this Court vide order dated 26.8.2020 (Annexure P-10), it is deemed appropriate to grant regular bail to the petitioner.
Petition allowed.
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2020 (10) TMI 1326
Condonation of delay - Levy of late filing fee under section 234E of the Act for belated filing of TDS returns - assessee had filed appeals beyond due date for the reason that at the time of introducing section 234E by the Finance Act, 2015, there was an ambiguity and no clear directions regarding levy of late filing fee under section 234E of the Act for belated filing of TDS returns - HELD THAT:- In case, the appeal is not filed within due date prescribed under the Act, then it is for the assessee to give sufficient reasons which prevented from filing of appeal within due date, but the reasons given by the assessee shall come within the expression 'sufficient cause'. Various Courts and Tribunals have explained the term "sufficient cause". As per the settled principle a case that arguable/favorable points/contention on merits should not be shut out on the presumption of limitation, leading to such a case being thrown out at the threshold itself in limine.
The Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. MST Katiji and Others [1987 (2) TMI 61 - SUPREME COURT] while laying down principles for considering matters of condonation of delay in filing appeals have stated that substantial justice should prevail over technical considerations.
ITAT, Bangalore Bench in the case of Dr. C. Fernandes Co-operative [2019 (1) TMI 1059 - ITAT BANGALORE] held that sufficient cause ought to be interpreted in a manner which subserves and advances cause of substantial justice. In this case, on perusal of record, we find that the reasons given by the assessee for not filing the appeals within the time allowed under the Act comes under the expression "sufficient cause" and hence, we are of the considered view that learned CIT(A) erred in not condoning the delay in filing appeals. Therefore, we condone the delay in filing appeals and restore the matter back to the file of the CIT(A) to decide the issues involved in these appeals on merits. Appeals filed by the assessee are treated as allowed for statistical purposes.
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2020 (10) TMI 1325
Levy of GST - activity of development and sale of land - Classification of the activity - taxable value of the supply - admissibility of ITC - HELD THAT:- In the present case, it is found that the applicant has proposed to undertake the required project and therefore has filed the application for clarification on the questions under the Act. Therefore, the application is covered under Section 95(a) of the Act.
The issue is sale of developed land for which no testing is required. Further we find support of admitting the present application in the judgment of Hon'ble Supreme Court given in the case of NATIONAL CO-OPERATIVE DEVELOPMENT CORPORATION VERSUS COMMISSIONER OF INCOME TAX, DELHI-V [2020 (9) TMI 496 - SUPREME COURT]. The Court was of the opinion that a vibrant system of Advance Ruling can go a long way in reducing taxation litigation. This is not only true of these kinds of disputes but even disputes between the taxation department and private persons, who are more than willing to comply with the law of the land but find some ambiguity - thus, in terms of Section 97(2) of the Act, the present application is admitted.
Whether the activity of development and sale of land is taxable under GST or otherwise?
Ruling as per Amit Gupta, Member:-
HELD THAT:- In the present case since there is no construction of any civil structure on the developed plot by the applicant there is no need of completion certificate by the applicant. For the area as a whole there will be development activities as per local bye laws but the same is not a part of sale to the end customer. There is absolutely no provision of completion certificate by any competent authority in respect of sale of land - there is no contractual relationship between the applicant and the end customer. In paragraph 5 (b) of schedule H there is intention for sale to buyer and therefore there is agreement between the parties. In the present case the entire consideration is to be received at the time of sale deed for the sale of land upon payment of applicable stamp duty. So, the sale of developed plot cannot fall under paragraph 5(b) of schedule II - since the sale of developed plot does not constitute supply of goods or services, there is no question of tax (CGST/SGST) on the sale of land. All other questions are not required to be answered since there is no tax on the sale of land.
Ruling as per Shri Anurag Mishra, Member:-
HELD THAT:- The applicant is going to undertake substantial development of the land before giving it out for sale to the end customers. Since these development activities are covered in clause (b) of paragraph 5 of schedule II therefore the sale of developed land will be treated as supply of service in terms of paragraph 5 of schedule II and thus, taxable in the eye of law.
Since both the members have different views on the taxability of 'sale of developed land/plot', the other issues related to it becomes irrelevant and hence, the ruling cannot be given to such related issues.
Since there are different views, a reference is made to the Appellate Authority for hearing and decision on said issue in terms of Section 98 (5) of the Act ibid which provide that where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for hearing and decision on such question.
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2020 (10) TMI 1324
Disallowance on account of commission paid to various parties for rendering various services - assessee contended that the said expenditure was allowable u/s 37 as the said expenditure was wholly and exclusively incurred for the purpose of business of the assessee and therefore covered u/s 37 - A.O disallowed the said commission on the ground that assessee has failed to furnish the evidences corroborating that the said expenditure was incurred for the purpose of business wholly and exclusively or out of the business and commercial consideration - HELD THAT:- We observe that in this case the Coordinate Bench in assessee’s own case in A.Y 1988-89 has decided the issue in favour of the assessee whereas, the issue has been decided against the assessee in all subsequent years commencing from AY 1994-95 to 1999-00. Since all the assessment years right from AY 1994-95 to 1999-00 the issue is decided against the assessee, we, therefore, respectfully following the decisions of the Coordinate Benches from AY 1994-to 1999-00 uphold the order of CIT(A) on this issue by dismissing the ground raised by the assessee.
Addition u/s 40A(9) of the Act in respect of contribution to Utmal Employees Welfare Fund - HELD THAT:- We find that the issue is squarely coved in favour of the assessee by the decision of the Coordinate Bench of the Tribunal in assessee’s own case for the A.Y 1994-95 to 1997-98 and 1999-2000 - Since the facts are materially same, therefore, we are inclined to set aside the order of CIT(A) on this issue and direct the A.O to allow the deduction towards contribution to Utmal Employees Welfare Fund. Accordingly the ground No. 2 raised by the assessee is allowed.
Disallowance on account of expenditure incurred in relation to oil exploration u/s 42 - CIT(A) confirmed the order of the Assessing Officer by holding that the word ‘used’ denotes actual usage and not merely ready for use and as the actual usage happened in the next assessment year, deduction under section 42 of the Act would not be allowable in the current assessment year and would be allowed in the following assessment year - HELD THAT:- After hearing both the parties and perusing the language of section 42(1)(b) of the Act, we observe that the language of section 42(1)(b) provides that deduction of any expenditure incurred by the assessee, whether before or after such commercial production in respect of drilling or exploration activities or services or in respect of physical assets used in connection with business except the assets on which depreciation is admissible under section 32 of the Act. After carefully analyzing the provisions, we observe that in the section that the expenditure on acquiring asset is to be allowed when such expenditure is incurred on acquisition of asset which is used in business of the assessee. In the present case the assessee incurred Rs. 54,72,697/- on acquisition of asset which was used for the purpose of business in the assessment year 2001-02. The Ld. CIT(A) has opined that the term ‘used’ in the language of the section denotes actual usage and not ready to use, which in our opinion is correct. In this case, we observed that the section does specify the use of the said assets which has to be the year in which the asset is used for the purpose of business. Accordingly, we inclined to uphold the order ld. CIT(A) on this issue by dismissing the ground no. 3 raised by the assessee.
Nature of expenditure - expenses towards obtaining a license to use SAP-R/3 software and its implementation in the organization by treating the same as capital expenditure - HELD THAT:- After hearing the rival parties and perusing the material on record, we observe that the issue is squarely coved in favour of the assessee by the decision of Coordinate Bench in assessee’s own case [2018 (4) TMI 385 - ITAT MUMBAI] to hold that the expenditure incurred by the assessee on computer software is revenue in nature.
Disallowance u/s 14A of the Act on account of interest - HELD THAT:- As decided in own case [2018 (4) TMI 385 - ITAT MUMBAI] investment in tax free securities coming out of assessee's own funds in case the same are in excess of the investments made in the securities (notwithstanding the fact that the assessee concerned may also have taken some funds on interest) applies, when applying Section 14A of the Act. Thus, the decision of this Court in HDFC Bank Ltd. [2016 (3) TMI 755 - BOMBAY HIGH COURT] for the first time on 23rd July, 2014 has settled the issue by holding that the test of presumption as held by this Court in Reliance Utilities and Power Ltd.. while [2009 (1) TMI 4 - BOMBAY HIGH COURT] considering Section 36(1)(iii) of the Act would apply while considering the application of Section 14A - Decided in favour of assessee.
Addition on account of gain on extinguishment of sales tax deferred loan liability - Capital or revenue receipt - HELD THAT:- The assignment has not been accepted by the Sales-tax Department and, therefore, there is no question of cessation or remission of the liability.Besides the deemed loan from the Sales-tax Department is not a loss or expenditure or a trading liability and, therefore, the provision of section 41(1) of the Act is not applicable. The sales-tax originally collected by the assessee was an expenditure which has been allowed to the assessee by treating it as a deemed loan. Once the said amount has been treated as a loan, it loses its characteristic of sale-tax liability. Such deemed loan is not a loss or expenditure or a trading liability and, hence, does not come within the ambit of section 41(1) of the Act.
In the present case the pre-payment of a deferred sales-tax loan liability at the net present value, does not result in any ‘benefit’ to the assessee. Besides the case of the assessee is squarely covered by the decision of the coordinate bench in Cable Corporation of India Ltd. [2019 (7) TMI 167 - ITAT MUMBAI] wherein on identical facts, the Tribunal has concluded that the assignment of such liability, at the net present value, cannot be charged to tax either under section 41(1) of the Act or under section 28(iv) of the Act.The provisions of section 28(iv) of the Act are not applicable to the facts of the present case as monetary benefit is not covered by the said section.
In the present case of the Appellant, the Appellant has, in fact, paid a consideration to the other Company for taking over its obligation, which amount is lesser than the amount payable to the Sales-tax Department. . This issue is covered in favour of the assessee by the decision of the Apex Court in the case of CIT vs. Mahindra & Mahindra Ltd. [2018 (5) TMI 358 - SUPREME COURT] wherein the Apex Court has held that waiver of loan is a monetary benefit and, hence, it does not come within the ambit of section 28(iv) of the Act. Therefore, the amount is to be regarded as capital receipt which is not chargeable to tax.
Computation of deduction u/s 80HHC as made by the AO by rejecting the manner of computation by the assessee - Appeal decided in favour of assessee
Re-computation of claim of deduction under section 80IA of the Act by ld. CIT(A) as made by the AO qua captive power plant - HELD THAT:- We observe that the issue is covered by the jurisdictional high court decision in the case of CIT vs. Reliance Industries Ltd. [2019 (2) TMI 178 - BOMBAY HIGH COURT] in favour of the assessee wherein on identical facts, the High Court has held that deduction under section 80IA of the Act is to be computed at the rate at which the electricity is supplied to the consumers and not the rate at which the board purchases the electricity.
Adjustments/additions for the purpose of computing book profit u/s 115JA - Disallowance u/s 14A, Reduction of deduction u/s 80IA relating to profits of power generation operation from captive power plants, Disallowance u/s 80-IA relating to profits of power generation operation through DG Sets and Disallowance of deduction of tax paid u/s 115-O on distributed profits - HELD THAT:- The issue of adjustments made under section 14A of the Act will not survive as we have deleted the addition under section 14A in our decision in ground no. 7 supra/. Moreover the issue is also covered by the decision of the coordinate bench in AY 19999-00 - Similarly the issue of profits derived from DG sets not allowed as reduction from book profit u/s 80-IA is covered in favour of the assessee by the same decision of the coordinate bench in AY 1999-00 -Therefore the adjustments on account of disallowance under section 14A and profits derived from DG sets not allowed as reduction from book profit u/s 80-IA are allowed in favor of the assessee. The third adjustment on account of disallowance of Deduction of tax paid u/s 115-O while computing book profit is covered against the assessee by the order of the coordinate bench for AY 1999-00 - Accordingly the issue is decided against the assessee. The ground is partly allowed.
Claim of deduction in computing book profit under section 115JA of the Act under section 80HHC based on book profit and not tax profit - HELD THAT:- We find that the issue is arising out of the records before the authorities below and does not require any verification of facts or details. We are therefore admitting the same and restoring to the file of the AO to examine and decide as per facts and law. The additional ground is allowed for statistical purpose.
Reduction in depreciation arising on account of AO's action to disregard transfer of Bangalore undertaking as 'slump sale' - HELD THAT:- After hearing the parties and perusing the decision of the tribunal in AY 1998-99 has granted relief to the assessee by treating the transfer of Bangalore undertaking as a 'slump sale'. Hence, the consequential reduction in Depreciation by the Department in all subsequent years needs to be eliminated. We are therefore directing the AO accept the depreciation as calculated by the assessee. The additional ground is allowed.
Addition made by the AO on account of Interest on borrowed funds for setting up new cement plants - HELD THAT:- We find that issue is settled in favour of the assessee by the decisions of the coordinate benches in assessee own case right from AY 1994-95 to 1999-00 which were upheld by the Hon’ble High Court.
Addition on account of VRS expenses - CIT(A) allowed the appeal of the assessee on this issue by holding that entire VRS expenses were allowable in year it is incurred. Thus, VRS payment even if treated as deferred revenue expenditure by the assessee are allowable in the year in which they are incurred - HELD THAT:- After considering the rival contentions and perusing the facts of the assessee in the light of the jurisdictional High Court in the case of CIT Vs Bhor Industries [2003 (2) TMI 20 - BOMBAY HIGH COURT] we are inclined to dismiss the ground no. 3 raised by the revenue as the issue is squarely covered in favor of the assessee.
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2020 (10) TMI 1323
Criteria of payment of minimum wages - petitioners were directly engaged by the Department as casual workers - HELD THAT:- Court is of the view that the petitioners were engaged in 2013 and some causal workers were engaged prior to 2013 directly by the Department, therefore, merely on the ground that the petitioners were engaged in 2013, the criteria of payment of minimum wages cannot be changed. It is apt to note here that the petitioners and those casual workers who were engaged prior to 2013 had a common similarity i.e. these sets of casual workers were directly engaged by the Department. Thus, for the reason that they were engaged after 2013, they cannot be denied payment of minimum wages and they cannot be compelled to serve them through outsourcing. The decision of changing the service conditions of the petitioners that they shall be engaged through outsourcing is impermissible in law. In so far those causal workers, who have been engaged through outsourcing, they have no similarity with the petitioners.
The respondents cannot discriminate with the petitioner in the guise that after 2013, the Group D cadre has been declared as dying cadre. Be that as it may, the respondents cannot deny the same wages to the petitioner.
All the writ petitions are disposed of with the direction to the respondents to continue the petitioners as casual workers in the Department as they were directly engaged by the Department and they shall be paid minimum of wages as were being paid to similarly engaged daily wagers who were engaged prior to 2013. The petitioners are not entitled for regularization of their services as the Department has not framed any regularization policy. In case, the Department chooses to frame regularization policy for casual workers (Group ‘D’ employees) in future, the petitioners will be at liberty to raise their claim. It is made clear that those who have been engaged through outsourcing will not be entitled to the benefit of this judgment.
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2020 (10) TMI 1322
Disallowance of interest paid - excess payment of interest to a related party - CIT(A) held that the excess interest was just 1 % per annum and well within tolerable limits and deleted the additions - HELD THAT:- We do not find any infirmity in this finding of the ld. CIT(A). In the result, we dismiss Ground No. 1 of the revenue .
Addition made on account of delay in deposit of employees’ contribution to PF & ESI u/s 36 (1)(va) r.w.s. 2(24)(x) - CIT-A deleted the addition - HELD THAT:- CIT(A) applied the judgment of the Hon’ble Jurisdictional High Court in the case of CIT vs. M/s. Vijay Shree Ltd.[2011 (9) TMI 30 - CALCUTTA HIGH COURT] and CIT vs. REI Agro Limited [2013 (12) TMI 1517 - CALCUTTA HIGH COURT] and allowed the claim of the assessee. We find no infirmity in this finding. Hence, we dismiss this ground of the revenue.
Sales tax incentive received by the assessee from the Govt. of West Bengal as being capital receipt and hence no taxable - CIT(A) held that the sales tax incentive received from the Government of West Bengal is capital in nature - HELD THAT:- We find that the Kolkata ‘C’ Bench of the ITAT, in the case of ACIT, CC-3(2) vs. Shantinath Detergents Pvt. Ltd. [2020 (3) TMI 964 - ITAT KOLKATA] in the case of a group concern of the assessee and has considered an identical facts and adjudicated the same in favour of the assessee.
On a query from the Bench, the ld. D/R, could not demonstrate that the scheme under which the Sales Tax incentive was given to the assessee was different from the scheme under which sales tax incentive was given to Shantinath Detergents Pvt. Ltd. On facts, he could not distinguish this case from that of the case of Shantinath Detergents Pvt. Ltd. Hence, we find no infirmity in the order of the ld. CIT(A). We uphold the same by applying the proposition of law laid down by the ITAT, in the case of Detergents Pvt. Ltd. (supra). Hence Ground Nos. 3, 4 & 5 raised by the revenue are dismissed.
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2020 (10) TMI 1321
CIRP under process - Corporate Debtor is exploring the possibilities of seeking resolution plan - HELD THAT:- The Resolution Professional is directed to make a representation before the Noida Authority with all the details to seek their consent for the purpose of seeking a resolution plan. The representation shall be made within three working days along with the necessary documents, the Noida Authority shall take a decision within two from the date of the receipt of the representation. The Resolution Professional after receiving the response from the Noida authority is directed to file short affidavit with regard to the state of affairs on next date of hearing.
List on 18.11.2020.
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2020 (10) TMI 1320
Addition u/s 40(a)(a) - whether assessee failed to bring any evidence on record to the effect that the payments made are covered under circular No.723 of 1995 and that the non-residents ship owners/charters had filed returns u/s 172 - addition on account of interest and on account of insurance expense claimed on vehicle - addition on account of depreciation, petrol and repair expenses claimed on vehicle - disallowance of expenses being web designing and development expenses which is intangible and capital in nature - disallowance of expenses for market survey and production of commercial film for broadcasting on TV Channels - disallowance of expenses being payment made for making advertisement film which is in the nature of an intangible asset - addition made on account of under invoicing of sales made to sister concern - addition more particularly when AO has pointed out specific examples of under invoicing which has been dismissed by way of generic finding - crucial findings of AO including that sister concern operates from tax exempt jurisdiction and assessee has incurred huge advertisement expenses in foreign markets - Whether the Appellate Tribunal has erred in stating that net profit of 46.38% is not possible when the Hon'ble Karnataka HC has held in CIT vs. Vesesh Infotechnics Ltd. [2012 (9) TMI 70 - KARNATAKA HIGH COURT] that even a profitability of 94.8% is possible?”
HELD THAT:- Having gone through the materials on record, we are of the view that none of the questions as proposed by the revenue could be termed as the substantial questions of law. All the questions proposed are on factual aspects of the matter.
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2020 (10) TMI 1319
Seeking admission of claims filed by the claimants after expiry of last date of submission of claims as per the public announcement in Form-B - seeking modification of the list of stakeholders filed with the Hon’ble NCLT - HELD THAT:- The applicant shall implead the parties/claimants whose claims are filed belatedly and the delay thereof is sought to be condoned in the instant IA. The applicant shall file an amended memo of parties by impleading the said parties within one week. On filing the same, let notices be issued to the said respondents as per amended memo of parties for 02.12.2020 and applicant shall collect the notices from the Registry and send the same by speed post immediately to the respondents at their registered addresses attaching therewith copy of the application and the entire paper book and the copy of this order - List on 02.12.2020.
Service of notice to respondents - HELD THAT:- Though notices were directed to be served on 09.09.2020 but the applicant failed to serve the notices to the respondents. At the request of the applicant’s counsel issue fresh notices to the respondents in the IA for 10.11.2020 and applicant shall collect the notices from the Registry and send the same by speed post immediately to the respondents at their registered addresses attaching therewith copy of the application and the entire paper book and the copy of this order.
Reply be filed within one week after receipt of notice with a copy in advance to the counsel opposite - List on 10.11.2020.
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