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Showing 61 to 80 of 1677 Records
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2019 (12) TMI 1620 - ITAT JAIPUR
Nature of land sold - agricultural land as exempted u/s 2(14)(iii)(b) despite the fact that the said land was falling within 8 kms of the municipal limit - HELD THAT:- As remanded the matter for considering the distance from the Municipal limits to the land in question as on 06.01.1994. The adjudication of the issue requires a proper verification and supporting evidence which has not been provided by the parties before us. Accordingly, we cannot decide this issue conclusively in the absence of the necessary evidence on this point. Hence this matter is set aside to the record of the AO to conduct a proper enquiry and also consider the evidence, if any, to be filed by the assessee in support of his claim that the distance from the Municipal limits to the area in which the land is situated is less than 8 kms as on 06.01.1994.
When the land in question is treated as capital asset and not as agricultural land excluded from the definition of capital asset as per the provisions of section 2(14)(iii)(b) - Once the main issue involved in the assessee’s appeal is set aside to the record of the AO, this issue is also consequently set aside to the record of the AO for deciding afresh after giving an opportunity of hearing to the assessee.
We may clarify that the Hon’ble High Court has specifically made it clear that no opinion has been expressed on the merits of the case and it is open for the Tribunal to consider the same and take an independent view after taking into account new facts after verification and it will not being influenced by the decision of the High Court. AO is also directed to decide the issue afresh as per the law and facts emerging from the investigation and enquiry to be conducted on this point. Appeals are allowed for statistical purposes.
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2019 (12) TMI 1619 - DELHI HIGH COURT
Profiteering - HELD THAT:- Learned counsel for the Respondents has tendered in Court the report prepared by the Directorate General of Anti-Profiteering dated 25.02.2019 which forms the basis of the impugned order. Unfortunately, the same has not been filed by the Petitioner which should actually have been filed by the Petitioner along with the petition. Subject to the Petitioner depositing the amount of Rs. 5,06,78,069/- with the Respondents within four weeks, the impugned order shall remain stayed.
The amount, if deposited, shall be put in a fixed deposit for a period of one year. The disbursement of the amount deposited shall abide by any further orders that may be passed in the petition.
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2019 (12) TMI 1618 - ITAT BANGALORE
Validity of reopening of asst. u/s 148 - Disallowance made u/s 40(a)(ia) - TDS u/s 194C - assessee has not deducted tax at source from transport payments and hence addition u/s 40(a)(ia) is warranted - HELD THAT:- There is no dispute with regard to the fact that the assessee is an individual. The provisions of sec.194C shall not apply to individual except in a situation mentioned in sec.194C of the Act. We notice that the provision of sec.194C has undergone change w.e.f 1/10/2009 and it will apply to individual, if he falls under the category of “specified invididual”.
A reading of amended provisions as well as pre-amended provisions would show that the provision of 194C shall apply in respect of an “individual” in a particular year, only if he is liable to get his accounts audited u/s 44AB of the Act for the financial year immediately preceding that year in question.
Assessee shall not be liable for deducting tax at source from transport payment, if his accounts of the immediately preceding financial year i.e FY 2008-09 (A.Y 2009- 10) are not be liable for audit u/s 44AB of the Act. In the letter furnished by the assessee before the AO, the assessee has claimed that he was not liable for getting his accounts audited u/s 44AB of eh Act in the immediately preceding financial year.
For the limited purpose of examining the above said claim of the assessee, we restore this issue to the file of the AO. If the assessee has maintained books of account for the immediately preceding year and he was not liable for getting his accounts audited u/s 44AB then the impugned disallowance is not warranted. If the AO was satisfied that the assessee has not maintained books of accounts, then the claim of the assessee needs to be accepted that the provisions of sec.44AB shall not apply in the immediately preceding year. In that case also, the impugned disallowance is not warranted. If the assessee has maintained books of accounts for the immediately preceding year and the same is liable to audit u/s 44AB of the Act, then the impugned disallowance needs to be sustained.
Accordingly we direct the AO to examine all these aspects after affording adequate opportunity of being heard. The order passed by the ld CIT(A) on this issue is accordingly set aside.
Validity of reopening of assessment, the assessee did not furnish the copy of reasons recorded by the AO. In the absence of the same we are unable to express any view on this issue. In the result, the appeal of the assessee is treated as allowed for statistical purposes.
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2019 (12) TMI 1617 - ITAT MUMBAI
Estimation of income - Bogus purchases - A.O. made addition by estimating GP on such alleged bogus purchases - HELD THAT:- As in case of bogus purchases where sales are accepted and assessee has filed quantitative details of purchases and also stock register reflecting goods received, the addition is required to be made only to the extent of difference between the GP declared by the assessee on normal purchases vis a vis bogus purchases.
We restore the matter back to the file of the A.O. to restrict the addition to the extent of lower GP declared by the assessee in respect of bogus purchases as compared to GP on normal purchases. The assessee is also directed to give full details to the A.O. with regard to GP earned on normal purchases and also GP earned on alleged bogus purchases. Appeals of the assessee are allowed in part for statistical purposes only.
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2019 (12) TMI 1616 - ITAT DELHI
Disallowance of claim of exemption u/s 54/54F - HELD THAT:- The undisputed fact is that by selling the property situated in India, the assessee has purchased a residential property in Auckland, New Zealand. It is equally true that the amendment has been brought in section 54 vide Finance Act, 2014 w.e.f 01.04.2015. We are of the considered opinion that the Legislature, in its wisdom, has given effect to the amended provision from 01.04.2015 and, therefore, there is no ambiguity as the said provisions are effective from A.Y 2015-16.
Similar view was taken by the Authority for Advance Rulings, New Delhi in the case of Dipankar Mohan Ghosh [2018 (1) TMI 947 - AUTHORITY FOR ADVANCE RULINGS, NEW DELHI]. Moreover, we find that the decision heavily relied upon by the first appellate authority has been reversed by the Hon'ble High Court of Gujarat [2016 (12) TMI 351 - GUJARAT HIGH COURT]. We find that the Hon'ble High Court has held “We are of the opinion that benefit of section 54F before its amendment can be extended to a residential house purchased outside India” - Appeal of assessee allowed.
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2019 (12) TMI 1615 - ITAT MUMBAI
TP adjustment - AMP expenses - International transaction - HELD THAT:- We find that all the decisions which have been claimed by the learned counsel of the assessee to be in his favour are based on the premise that there was no agreement between the parties to incur the AMP expense. It was also found that there was no arrangement or obligation between the parties to incur those expenditure. However in the present case we find that this plank miserably fails. Even the decision of ITAT in assessee’s own case for earlier year doesn’t help the assessee as subsequently there was an amendment in the agreement between the parties. These amendment have already been mentioned in the above said submissions.
In the present case there is a mutual agreement in existence between the assessee and its AE to incur AMP expenses and further that agreement is also existing to allocate or apportion or to contribute the AMP cost or expense. The agreement also clarifies that the level of AMP expense allocation or apportionment contribution is based on the benefit received. Thus when there is an agreement that the overseas associated enterprise will share the AMP expense of the assessee when benefitted, undoubtedly the AMP expense becomes an international transaction and the TPO cannot be debarred from examining the said international transaction with respect to the arms length price.
This becomes amply clear from the fact that the overseas associated enterprise has also contributed a sum towards its contribution to the AMP expense incurred by the assessee. The contention of the learned counsel of the assessee that the sum has been paid not by way of any expense having been incurred by the assessee towards AMP expense of the overseas associated enterprise but to enable the assessee to meet certain rate of return of income. The submission is not at all acceptable. Firstly this is not emanating out of the agreement. It is only an explanation carved out by the assessee. The claim of the learned counsel of the assessee that the contribution is meant to ensure that the assessee has a margin of 5% income in the manufacturing segment and 3% margin in the distribution segment is at best a self-serving statement.
As pointed out by the learned department representative this claim itself shows that assessee is having scant regard to the Transfer Pricing mechanism. It shows that assessee has a predetermined margin and thereafter went around finding comparables to justify the same. This is totally in constraint of the Transfer Pricing laws and jurisprudence. On this plank itself this explanation fails. Further it defies logic that overseas AE will pay gratuitous sum to the assessee, without any benefit to itself.
As relying on case of BMW Ltd. [2017 (11) TMI 715 - ITAT DELHI] we remit the issue to file of the assessing officer to follow the direction of the ITAT as above and determine the arm length price in this regard. As regards to the other adjustment in this regard being claimed by the assessee, the same are consequential. The AO shall consider the same afresh and decide as per law. The ld. Counsel of the assessee claimed that the TPO should not be given second innings. We find the same is not tenable in light of facts and case laws referred hereinabove.
Disallowance of royalty - We find that it is the claim of the assessee that payment of royalty is an international transaction and assessee has submitted the benchmarking report and the Transfer Pricing Officer has not made any adjustment. In this view of the matter, the Transfer Pricing officer has not made any adjustment. Hence, it was not open to the AO to apply the benefit test and make the disallowance u/s.37(1) of the Act, without proper examination of all aspects of the claim. We find that assessee’s submission in this regard have not been properly appreciated by the Assessing Officer, hence, in our considered opinion, the aforesaid issue deserves to be remitted to the AO for fresh consideration. We direct accordingly.
Royalty payment claimed on payment basis u/s.40(a)(ia) - Claim which is now being claimed to be allowable on payment basis u/s.40(a)(ia) of the Act, we find that the same was disallowed in the earlier year by applying the Section 37(1) of the Act holding the same that it is not for the purpose of the business. Once it was held that the said payment was not allowable for A.Y.2009-10, the same cannot be claimed to be allowable in A.Y.2010-11 on payment basis u/s.40(a)(ia). Hence, this claim of the assessee is not sustainable, hence, we uphold the orders of the authorities below, disallowing the royalty payment paid to Diageo North America pertaining to A.Y.2009-10 which has been claimed on payment basis u/s.40(a)(ia) in the present assessment year.
Disallowance of expenses incurred for liason office at Sri Lanka - AO disallowed the same on the ground that assessee had not carried out any business activity in Sri lanka Or received any income from Sri Lanka - HELD THAT:- We find that assessee was incurring expenses in respect of liason office expenses at Sri lanka. It is undisputed that during the current year as well as previous year no income was received on account of activities of the liason office. No detail for the activities conducted by the liason office is also on record. In the earlier year also this claim was rejected. Accordingly, we do not find any infirmity in the order of the assessing officer in this regard.
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2019 (12) TMI 1614 - ITAT SURAT
Rejection of books of account u/s. 145(3) - Addition on Account of low GP - CIT(A) observed that the assessee has explained the reason in fall of GP due to increasing in turnover from the previous year. Accordingly, the addition made by the AO on account of GP was also deleted - HELD THAT:- We find that ld.CIT(A) has given his finding that the books of account are duly maintained and presented before the AO during the course of assessment proceedings. Therefore, provisions of Section 145(3) are not applicable. Similarly, the fall in GP was explained as turnover during the year also had increased from Rs.14 crore to Rs.38 crore. Similarly, the A.Y. 2012-13, the GP dropped from 2.19% to 1.41% as the turnover increased from 10 crore to 41 crore. Further, the AO has not found any defects in the maintenance of the books of account, hence the GP of addition made by the AO was rightly deleted by the ld. CIT(A). In the light of above discussion of the finding of the ld. CIT(A), we find no infirmity in the order of the ld. CIT(A). Hence, the appeal of the Revenue is accordingly dismissed.
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2019 (12) TMI 1613 - ITAT AHMEDABAD
Nature of expenditure - Disallowance of Trademark License Utilization fees - maintainability of expenditure incurred by way of license fees to the licensor of the trademark as revenue expenditure - HELD THAT:- The claim of the assessee for payment of user license fees based on turnover is deductible as revenue expenditure. In our view, where the licensor continues to be owner of the capital asset i.e. trademark ‘Vimal’, the assessee cannot be said to have acquired any capital asset by making payment of user license fee. The interpretation of certain restrictive covenants by the AO is totally misplaced. The contractual obligations are ordinary in commercial parlance and does not grant any valuable right to the licensee. The advantage earned by the assessee by use of the license is neither permanent nor ephemeral but is linked to the use of the trademark owned by the licensor.
The expense towards use of trademark was clearly laid out for the purpose of ongoing business carried on by the assessee and fee paid for use of such trademark is clearly deductible as revenue expenditure. The assessee herein has been merely granted a license to use trademark on payment of license fee determined on the basis of a formula laid down in the agreement.
The right to use can neither be assigned at the wishes of licensee nor is the licensor prohibited to terminate the user license agreement executed with licensee. Thus, licensor retains the inherent control over the manner of use of trademark. Thus license fee paid for mere use of capital asset which continues to belong to someone else thus cannot be regarded to be in the capital field in the hands of licensee. We thus see no error in the conclusion drawn by the CIT(A) in favour of the assessee.
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2019 (12) TMI 1612 - ALLAHABAD HIGH COURT
Reopening of assessment u/s 147 - case was reopened for assessment u/s 147 in respect of assessment year 2010- 2011 since the assessee had not filed return of income for the assessment year 2010-2011 - HELD THAT:- The records of the case, however, reveals that the assessee, in fact, had filed return of income for the assessment year 2010-2011. As such non - filing of return by the assessee could not possibly have been the reason for re - opening of assessment under section 147 of the Income Tax Act, 1961.
If the assessee had not disclosed income or concealed income, the reason for re - opening of assessment ought to have reflected otherwise, in the notice dated 30th March, 2017.
In that view of the matter – on a very short and narrow compass – we are of the view that the notice dated 30th March, 2017, issued under section 148 of the Income Tax Act read with order dated 05th September, 2017, issued by Income Tax Officer-3 (4), Kanpur, cannot be sustained in law and is liable to be set aside and is accordingly, set aside.
Setting aside of the notice dated 30th March, 2017, read with the consequential order dated 05th September, 2017, however, shall not, in any manner, stand in the way of the Income Tax authorities to proceed further in the matter in accordance with law.
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2019 (12) TMI 1611 - ITAT MUMBAI
Revision u/s 263 - Deduction u/s 80P - as per CIT AO has erroneously allowed the deduction under section 80P(2)(d) on the interest received of M/s Vadasinor Pragati Samaj Co-operative Credit Society Ltd. resulting into under assessment of tax - HELD THAT:- Assessee is entitled for deduction on interest earned from Co-operative Bank which are primarily a Co-operative Society, thus, in our view, the deduction allowed by AO are in accordance with various judicial pronouncement, which cannot be branded as erroneous. The jurisdictional High court in Gabriel India Ltd [1993 (4) TMI 55 - BOMBAY HIGH COURT] held that power of suo-moto revision under section 263 of the Act, is in the nature of supervisory jurisdiction and can be exercised, if the circumstances specified therein exist.
Two circumstances must exist to enable the Commissioner to exercise the power of revision under this sub-section viz. (i) The order should be erroneous; and (ii) by virtue of the order being erroneous and prejudicial must have been caused to the interest of revenue. Further, the order cannot be termed as erroneous unless it is not in accordance with law, if the Assessing Officer acting in accordance with law make certain assessment, the same cannot be branded as erroneous by Commissioner simply because, according to him, he order should have been written more elaborately.
As we have noted above, the order passed by AO though not speaking, however, is in accordance with law, so far as deduction under section 80P is concerned. Therefore, in our consider view, the twin condition as enunciated under section 263 are not furnished in the present case. Therefore, the ld. PCIT was not justified in treating the assessment order for revising it by exercising power under section 263.
As we have noted earlier that ld. PCIT while issuing show-cause notice himself has recorded in the show-cause notice itself that Assessing Officer has erroneously allowed the deduction under section 80P(2)(d) on interest received from a Credit Co-operative Society. Hence, we are not convinced with the submission that issue was not examined by Assessing Officer as the language of show-cause notice itself suggest that Assessing Officer erroneously allowed the deduction. Hence, the grounds of appeal raised by assessee are allowed, resultantly, the revision order passed by ld. PCIT is quashed
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2019 (12) TMI 1610 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Recovery of dues - priority of claims - whether the second charge holder has any right to claim priority over the first charge holder? - HELD THAT:- This question has already been answered in the court itself and the Liquidator is directed to distribute the funds strictly adhering to the ratios as arrived by him for the first charge holder as per the Code. If at all any grievance on the part of the second charge holder, they may approach the competent court but they have no authority to approach this Bench.
Application disposed off.
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2019 (12) TMI 1609 - SUPREME COURT
Decree of partition - failure to examine any of the attesting witnesses to the Will as required vide Section 68 of the Evidence Act - HELD THAT:- The summons/notice were issued to Mr. M.N. Sharma, Advocate to appear as a witness but he could not be served and hence was not examined. Ramesh Kumar, it is submitted, was not summoned or examined as he was none other than the husband of Raj Kumari and would not have supported execution of the Will. The High Court has accordingly held that the Will being registered was proved in terms of section 71 of the Evidence Act. This finding of the High Court is unacceptable, for recourse to Section 71 of the Evidence Act is impermissible without examination of Ramesh Kumar. It would not matter if Ramesh Kumar is husband of Raj Kumari. Section 71 of the Evidence Act would come into operation, once and if all the attesting witnesses deny or do not recollect the execution of the document, that is, the Will. In that event, the execution can be proved by other evidence. The respondent accepts that Ramesh Kumar though a witness was not summoned and asked to depose as a witness and therefore, it cannot be said that Ramesh Kumar as an attesting witness had denied or did not recollect execution of the Will.
Even on the question of “other evidence” we have grave and serious reservations. It is apparent that late father of Raj Kumari and Surinder Pal Sharma and grandfather of appellants Meenakshi Sharma and Veena Malhotra being a displaced person had applied for a two-room accommodation which was allotted to his wife Suhagwanti on 15.03.1972 as by then he had expired - It has also come on record that Madan Lal, the eldest sibling was earning and in service at the time of allotment. There is also evidence that Madan Lal had contributed and financially helped at the time of marriage of his sisters namely Raj Kumari and Puran Devi.
Clearly, Surinder Pal Sharma had not propounded and referred to the Will in his reply, which defence was taken by him for the first time in his written statement. This is also clear from the cross-examination of Surinder Pal Sharma wherein he had accepted as correct that the Will was not challenged by Raj Kumari in the court of law as she had come to know about the Will during the pendency of the present case.
The Will which purportedly makes the bequest, is oddly described as a Will Deed. This possibly explains why Surinder Pal Sharma had claimed in his reply, that he was the owner of the tenement even during the lifetime of the mother Suhagwanti. It is in this context that we have read the different portions of the testimony of Raj Kumari and Surinder Pal Sharma; the notice and the reply to hold that there exists grave doubt whether the “Will Deed” was executed and is a “Will” as it purports to be. The marriage of Veena Malhotra as per her wish is not challenged. The testator was an illiterate lady. Even if we are to accept signatures of the testator and the witnesses, we cannot ignore “other evidence” that Suhagwanti and her family members did not understand the true nature of the document executed. There are substantial and good reasons to legitimately suspect and question execution of the Will, which Surinder Pal Sharma, as the propounder of the Will, has not been able to repel and remove so as to satisfy this Court that the Will was validly executed. For these reasons, we would hold that execution of the Will has not been proved by “other evidence” in terms of Section 71 of the Evidence Act.
The present appeal should be allowed and the judgment of the High Court should be set aside.
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2019 (12) TMI 1608 - ITAT SURAT
Revision u/s 263 - Addition u/s 14A r.w.r. 8D - HELD THAT:- Assessee has taken unsecured loans, which have been utilized for the purpose of investment in shares of private limited companies controlled by the family members and investment in partnership firm. Such investment was at Rs.26.55 crores as on 31.03.2013 and Rs.27.17 crores as on 31.03.2014. The assessee has paid interest of Rs.2,91,18,343/- on unsecured loans and claimed deduction out of income, which has been during allowed by the AO. CIT viewed that such interest is not allowable under section 14A and under section 57(iii) as investment made was related to exempt income and interest expenses were incurred for earning income from other source. However, it is noticed that there was negative income from partnership firm and no dividend income has been earned during the year under consideration, therefore, no expenditure has been incurred for earning exempt income, hence, disallowance under section 14A read with Rule 8D cannot be made as held by the Hon’ble Gujarat High Court in the case of CIT v. Corrtech Energy Pvt. Ltd [2014 (3) TMI 856 - GUJARAT HIGH COURT]
Hon`ble Supreme Court in CIT v. Max India Ltd. [2007 (11) TMI 12 - SUPREME COURT] reiterated that the phrase "prejudicial to the interests of the Revenue" as used in section 263(1) of the Act must be read in conjunction with the expression "erroneous" and unless the view taken by the Assessing Officer is found to be unsustainable in law, the powers under section 263 of the Act cannot be invoked.
The order passed by the AO, in our opinion, shall be deemed to be erroneous in so far as it prejudicial to the interest of the Revenue, if the Pr. CIT would have specifically pointed out which of inquiries or verification should have been carried out by the AO in this regard and the AO failed to carry out those inquiries and verification as desired by the Pr. Commissioner of Income-tax. Since the Pr. CIT has not suggested the basis of inquiry or verification to be carried out by the AO, the order passed by the AO cannot be deemed to be erroneous in so as far as it is prejudicial to the interest of the Revenue.
We are of the opinion that the AO has adopted one possible legal view sustainable in law on the issue and mere invoking proviso based on revenue audit objection amounts non application of mind. Merely just because the view taken by the AO was not found acceptable does not mean that the AO has failed to make requisite enquiries. Thus, the view taken by the AO was plausible view, which cannot be disturbed by the Pr.CIT. Therefore, we find that twin condition were not satisfied for invoking the jurisdiction under section 263 of the Act. Therefore, in absence of the same the ld. Pr.CIT was not correct in exercise the jurisdiction under section 263 of the Act. In view of these facts and circumstances, we quash the impugned order passed under section 263 of the Act and allow the appeal of the assessee.
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2019 (12) TMI 1607 - TELANGANA HIGH COURT
offences alleged against the accused are falling within the purview of Serious Fraud Investigation under the provisions of Companies Act or not - Whether the offences of similar nature, relating to the affairs of the Company if investigated into under different First Information Reports by Police would cause prejudice to the accused? - Whether the Court can direct investigation into the offences, registered under different F.I.Rs. but pertaining to similar/ same act of accused be transferred to one agency for effective investigation?
HELD THAT:- The law is well settled by the Apex Court in its recent judgment that failure to repay a loan is not a criminal offence unless there is a fraudulent intent.
A careful perusal of the provisions of Companies Act, 2013, demonstrates that the irregularities in conducting the business and affairs of the company would stand on a special category for investigation and that is the reason why experts in various fields of the Corporate Law are sought to be appointed as members of the team of investigators. It is evident that criminal acts under Sections 409, 410 and 420 of I.P.C. are general offences/crimes, whereas the case on hand falls within the offence relating to company affairs is falling within a special category that requires special kind of investigation unlike normal investigation into general offences under I.P.C. - It is the duty of the State to ensure that every citizen of the Country should have the free and fair investigation and trial. The preamble and the Constitution are compulsive and not facultative, in that free access to the form of justice is integral to the core right to equality, regarded as a basic feature of our Constitution. Therefore, such a right is a constitutional right as well as a fundamental right. Such a right equally be protected to the accused and to the victim depending upon the facts of the case. Therefore, such a right is not only a constitutional right but also a human right. Any procedure which comes in a way of a party in getting a fair trial would be violation of Article 14 of the Constitution of India.
Thus, the investigation should be judicious, fair, transparent and expeditious to ensure compliance with the basic rule of law. These are the fundamental canons of our criminal jurisprudence and they are quite in conformity with the constitutional mandate contained in Articles 20 and 21 of the Constitution of India.
The underlying ratio of criminal jurisprudence is to protect the rights of not only the aggrieved but also of the accused. Where similar offences are registered in various police stations and they are falling within the Companies Act (a special legislation) and normal police are investigating into the offences at various police station limits, this will lead to absurdity, confusion, conflict of views and consume long time. On the other hand, it will cause harassment to the accused besides humiliation as she will be forced to run from pillar to post every day during investigation.
Respondent are directed to assign the investigation in the aforesaid crimes to SFIO, Hyderabad, by obtaining necessary orders from the State Government, if necessary - 2nd petitioner shall be released on her furnishing a personal bond for Rs.50,00,000/- with two sureties to the like amount to the satisfaction of the Metropolitan Sessions Judge, Nampally, Hyderabad - Petition disposed off.
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2019 (12) TMI 1606 - CESTAT NEW DELHI
Retesting of seized goods - it is stated that all the items have been manufactured by him in his workshop and he did not get these items registered under Archaeological Survey of India, Act nor he registered under AAI Act - HELD THAT:- The adjudicating authority while deciding the matter has not taken into consideration the request made by the appellant and the supplier of the three items Mr. Mukesh Kumar Kumawat for retesting of the seized goods. From perusal of the entire proceedings, it is found that there is force in the submissions which has been made by the appellant as well as by Mr. Mukesh Kumar Kumawat.
The confiscation of three impugned items including the penalty on Shri Rahul Chauhan and Shri Mukesh Kumar Kumawat do not appear to be justified. However, the original authority is directed to get the subject goods retested from the recognised Gem & Jeweller laboratory for determination of the classification of the goods and whether they fall under category of antique and accordingly the matter is remanded to the adjudicating authority to get the goods retested and decide the matter afresh.
Appeal allowed by way of remand.
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2019 (12) TMI 1605 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Vacation of ex-parte interim relief granted - arising of hardship as the company's project i.e. construction of hospital is going on - HELD THAT:- Looking to the undertaking given by the Respondent the appeal is disposed off. This order will continue till the disposal of the main Company Petition which is pending before NCLT. No order as to cost.
Respondent is directed to file reply to the Company Petition No.98/CB/2019 which is pending before NCLT, Cuttack Bench, Cuttack before 19th December, 2019.
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2019 (12) TMI 1604 - KERALA HIGH COURT
Legality of the notices and assessment orders issued to the petitioners - retrospective applicability of section 25(1) of the KVAT Act - time limitation for re-opening assessments - five year period for re-opening assessments under the unamended provisions of section 25(1) of the KVAT Act had already expired - residual power of State legislation so as to amend the provisions of section 25(1) of the KVAT Act through the Kerala Finance Act, 2018 - applicability of savings clause under section 174 of the SGST Act.
Whether under the provisions of section 25(1) of the KVAT Act, as amended by the Kerala Finance Act, 2017, and before the repeal of the KVAT Act on June 22, 2017, the six year period of limitation for re-opening assessments could be relied upon to issue pre-assessment notices in cases where, by March 31, 2017, the five year period for reopening assessments under the unamended provisions of section 25(1) of the KVAT Act had already expired? - whether the amendment to the third proviso to section 25(1) of the KVAT Act, through the Kerala Finance Act, 2017, would enable the revenue to re-open assessments in cases where, by March 31, 2017, the five year period for re-opening assessments under the unamended provisions of section 25(1) of the KVAT Act had already expired? - HELD THAT:- It is now well-settled that on the expiry of the period of limitation prescribed under a fiscal statute for re-opening an assessment, the assessee gets a valuable right in the form of immunity from assessments under the Act. The said vested right/immunity cannot be taken away through any power of extension of the period of limitation, exercised after the expiry of the said period, by any authority in whom such power to extend is conferred by the statute. The power to extend a period of limitation must be exercised before the expiry of the normal period.
Whether a legislative amendment can confer such a power on a statutory authority to take away a right/immunity that has accrued to an assessee? - HELD THAT:- It is well-settled that the Legislature can, through a retrospective amendment of the statutory provisions, take away such vested rights that have accrued to assessees. But, was there such a retrospective amendment in the instant cases? As already noticed, the amendment in question was expressly made effective only from April 1, 2017. The period for reopening assessments under section 25(1) of the Act was enlarged from five years to six years only with effect from April 1, 2017. The provisions of section 25(1), save the third proviso thereto, have therefore to be construed as having only a prospective operation.
In the instant cases, it can be seen that the purpose of the amendment to the third proviso to section 25(1) of the KVAT Act was only to extend the time for re-opening those assessments where the period of limitation for re-opening under the unamended provisions was to expire by March 31, 2017. The object of the amendment was to permit a re-opening of such cases till March 31, 2018. The amendment has to be viewed in the backdrop of the introduction of the new regime of GST in the State with effect from June 22, 2017, on which date the KVAT Act was repealed by the State Legislature - the circumstances under which the amendment was carried out clearly bring out the intention of the Legislature to permit a re-opening of past assessments under the KVAT Act up to March 31, 2018 and it is this intention that must be read into the third proviso to section 25(1), as amended with effect from April 1, 2017, so as to give it full effect.
Thus, while the main part of section 25(1) clearly indicates that the extended period of six years for reopening assessments is to operate prospectively with effect from April 1, 2017, the third proviso seeks to carve out those assessments, where the period of re-opening would have expired by March 31, 2017, for a differential treatment, by stating that in such cases, the re-opening could be carried out before March 31, 2018. To treat the said proviso as having only prospective effect would render meaningless the words used by the Legislature in the said proviso and accord to it the same meaning as the main provision.
Whether, after the CAA, 2016, and the repeal of the KVAT Act pursuant thereto, on June 22, 2017, the State Legislature retained any residual power of legislation so as to amend the provisions of section 25(1) of the KVAT Act through the Kerala Finance Act, 2018? - Whether the amendment to the provisions of section 25(1) of the KVAT Act, through the Kerala Finance Act, 2018, and the pre-assessment notices and assessment orders issued consequent thereto, could be justified by relying on the savings clause under section 174 of the SGST Act? - HELD THAT:- The amendments effected to section 25(1) of the KVAT Act, through the Kerala Finance Act, 2017, were before the repeal of the KVAT Act with effect from June 22, 2017. The provision as it stood then, and in particular the third proviso thereto, authorised the reopening of past assessments till March 31, 2018. The amendment effected through the Kerala Finance Act, 2018, with effect from April 1, 2018, enlarged the period for re-opening past assessments from March 31, 2018 to March 31, 2019. Under ordinary circumstances, and based on my findings above as regards the effect of the amendments brought into the third proviso to section 25(1) by the Kerala Finance Act, 2017, the legislative measures should have sufficed to justify a reopening of past assessments up to March 31, 2019, notwithstanding that the amendment itself was effective only from April 1, 2018. However, the intervention of the CAA 2016, and the consequent repeal of the KVAT Act with effect from June 22, 2017, has a bearing on the legality of the 2018 amendment. A distinction does exist between the saving of rights, privileges, immunities and liabilities under a repealed enactment, through a savings clause inserted in the new enactment traceable to the same legislative power, and an amendment brought in to a repealed enactment after the legislative power itself is taken away.
While the new legislative power could justify the inclusion of a savings clause in the new legislation enacted in respect of the new levy of tax, to save accrued rights, privileges, immunities, etc., under the erstwhile enactment, the deletion of entry 54 of List II automatically denuded the State Legislatures of the power to further legislate on the subject of taxes on sale or purchase of goods, except to the limited extent retained under the Constitution. The power to amend a statute being a facet of the legislative power itself, the State Legislature could not have exercised a power to amend the KVAT Act, save to the extent permitted, when it did not retain any residual right to further legislate on the subject of taxes on sale or purchase of goods.
The amendments to section 25 of the KVAT Act, through the Kerala Finance Act, 2018 are declared illegal and unconstitutional inasmuch as they were beyond the legislative competence of the State Legislature - the assessments in respect of which the period of limitation for re-opening under section 25 of the KVAT Act was to expire by March 31, 2017 can be re-opened up to March 31, 2018 by virtue of the amendment to the third proviso to section 25(1) vide Kerala Finance Act, 2017 - the assessments in respect of which the period of limitation for re-opening under section 25 of the KVAT Act was to expire by March 31, 2018 cannot be re-opened up to March 31, 2019 or thereafter, by relying on the amendments introduced through the Kerala Finance Act, 2018 since the State Legislature did not have the power to amend the KVAT Act after the CAA 2016, and the repeal of the KVAT Act pursuant thereto, on June 22, 2017.
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2019 (12) TMI 1603 - ITAT DELHI
Validity of the order framed u/s 153A - as argued additions have been made without any reference to any incriminating material/evidence found during the course of search and seizure proceedings - HELD THAT:- It is true that the entire assessment is devoid of any reference to any incriminating material or evidence found during the course of search and seizure proceedings. We find that the AO has taken a leaf from the search operations conducted at the premises of Jain brothers and formed a belief that the assessee is one of the beneficiaries of the accommodation entries provided by the Jain brothers. However, the premises of the assessee were also searched and in the search proceedings, no incriminating material or evidence was found by the search party.
Share application money/premium received by the assessee has already been recorded in its books of account and return of income was already filed on 30.03.2007. No notice u/s 143(2) of the Act was issued and served upon the assessee and by necessary implication, return of income was accepted. The ratio laid down by the Hon'ble Delhi High Court in the case of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] squarely applies on the facts of the case in hand wherein the Hon'ble High Court has held that completed assessment can be interfered with by the Assessing Officer while making assessment u/s 153A of the Act only on the basis of some incriminating material unearthed during the course of search. - Decided in favour of assessee.
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2019 (12) TMI 1602 - ITAT AHMEDABAD
Addition u/s 271(1)(c) - Defective notice u/s 274 - whether the penalty is sustainable when the same has been initiated and levied without specifying the alleged guilt committed by the assessee either for “concealment of income” or furnishing of “inaccurate particulars of income”? - HELD THAT:- AO has not mentioned the specific charge in its penalty orders as to whether it was levied for concealment of income or for furnishing inaccurate particulars of income. No such definite finding is reflecting from the orders impugned before us. Therefore, in our considered view, the penalty levied by the AO and confirmed by the CIT (A) is not sustainable in the eye of law. The penalty is, thus, deleted. Hence, the ground of appeal of the assessee is allowed.
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2019 (12) TMI 1601 - ITAT MUMBAI
Disallowance u/s. 14A r.w.r. 8D - whether assessee has not earned any exempt income ? - HELD THAT:- It is an undisputed fact that assessee has not earned any exempt income during the year. Facts being identical respectfully following the said decision in assessee’s own case [2019 (6) TMI 1674 - ITAT MUMBAI] we do not find any infirmity in the order passed by the Ld.CIT(A) in deleting the disallowance on the ground that assessee has not earned any exempt income during the assessment year under consideration. - Decided against revenue.
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