TMI Tax Updates - e-Newsletter
January 25, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
Standard Operating Procedure (SOP) to be followed by exporters - In case, any refund remains pending for more than one month, the exporter may register his grievance
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GST:
Attachment of Petitioner’s bank account - Section 83 though uses the phrase ‘pendency of any proceedings’, the proceedings are referable to section 62, 63, 64, 67, 73 and 74 of the Act and none other. The bank account of the taxable person can be attached against whom the proceedings under the sections mentioned above are initiated. Section 83 does not provide for an automatic extension to any other taxable person from an inquiry specifically launched against a taxable person under these provisions. - Order quashed - provisional attachment vacated.
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GST:
Demand of GST - order issued u/s 73 ignoring the request for granting further time to submit reply to Show cause notice (SCN) - Principles of natural justice - matter restored before the adjudicating officer.
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GST:
Place of supply - Rate of GST - Petitioner is the SEZ unit - e-auction by the respondents - taking delivery in the State of auction - the acknowledgment of goods at Marayoor Forest Department Depot does not result in termination of movement of goods but results in further movement of goods at the hands of recipient to SEZ. So the final destination i.e. SEZ in the case on hand is the supply point. - Held as Inter-state supply and liable to Zero rated supply.
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Income Tax:
Condonation of delay in filing return - reasonable cause of delay - genuine hardship - disagreement of the promoters and investors creating deadlock in the adoption of audited accounts of the petitioner - the expression ‘genuine hardship’ should receive liberal consideration, the instant case was a fit case for condonation of delay.
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Income Tax:
Denial of claim of weighted deduction u/s 35(2AB) - No merit in the orders of authorities below in restricting weighted deduction claimed u/s 35(2AB) on the ground that DSIR had not approved the said expenditure.
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Income Tax:
Unexplained advance - Assessee has to prove its claim that it has rotated money of the beneficiaries and provided accommodation entries to the beneficiaries against certain commission only. The assessee should produce those beneficiaries before the Assessing Officer in support of its claim of having engaged only in providing accommodation entries to the beneficiaries.
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Income Tax:
Assessment u/s 153A - the disallowances made for the Assessment years which were unabated/concluded assessments as on date of search cannot be made in the search assessments in the absence of any incriminating material found in the course of search
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Income Tax:
When the assessee has been allotted certain shares as consideration for property transfer, then the question of value of those shares by invoking Section 56(2)(vii)(c) of the Act, does not arise. When a value is fixed for a share allotted, it reflects the market value of the asset transferred.
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Income Tax:
Penalty u/s 271(1)(c) - Salary income - The dispute is not that the salary income was not offered to tax by assessee in his return of income which is an admitted position but the question is whether such salary income has been found during the course of search and the answer to that in not in affirmative. - No penalty.
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Income Tax:
As per the section 71(1), from one head can be set off against the income from another head of income. - even if the said income is treated as an income assessed u/s 68, still the assessee is entitled to set off of the said income against the business loss
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Customs:
The Circulars like Circular No.74/1999-Cus dated 05.11.1999 as well as the Circular No.31/2000-Cus dated 20.04.2000 could not have restricted or denied the benefit of Drawback or DEPB if such manufacturing was done by 100% EOU Units and then exports were made by such 100% EOUs. - The denial of benefit to the Assessee under the guise of a clarification for which, no power was bestowed on the Central Board.
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Customs:
Levy of penalty u/s 112(a) of the Customs Act - Penalty on CEO for abetment - Meaning of word abetment is "to help someone in wrong doing" - In the instant case such wrong doing had its effect in the Mumbai Customs jurisdiction and appellants had aided the importer in such wrong doing. Therefore, penalty under Section 112 was rightly involved.
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FEMA:
Merchanting Trade Transactions (MTT) – Revised Guidelines
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Indian Laws:
Dishonor of Cheque - insufficiency of funds - compounding of offences - Court while exercising power u/s 147 of the Act, can proceed to compound the offence even after recording of conviction by the courts below.
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IBC:
Matching of liquidation value in the resolution plan under IBC - No provision in the Code or Regulations has been brought to our notice under which the bid of any Resolution Applicant has to match liquidation value arrived at in the manner provided in Clause 35 - the object behind prescribing such valuation process is to assist the CoC to take decision on a resolution plan properly.
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IBC:
Initiation of CIRP - The corporate debtor has tried to challenge the genuinely of the corporate guarantee agreement but the same is a lame excuse. It seems that corporate debtor anticipating the triggering of I & B Code against it, had filed a suit challenging the authority of executant of corporate guarantee agreement and endeavored to defeat the claim of the applicant
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PMLA:
Money Laundering - The impugned order confirming the provisional attachment order is passed without application of mind and without understanding the law, it is liable to be quashed with regards to mortgaged properties in question - there is no nexus whatsoever between the alleged offence and the Appellant Banks as institutions who are the mortgagee of the properties in question which were purchased from the bank’s money and mortgage of the same with them.
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SEBI:
Non-compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Standard Operating Procedure for suspension and revocation of trading of specified securities
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Service Tax:
Services rendered in Jammu & Kashmir - When there is a statutory definition which is clear and unambiguous, it must be applied regardless of the consequences - the services rendered by the appellant in J&K are exempted services and must be treated as such while computing the ineligible/reversible CENVAT credit under Rule 6 (3) of CCR, 2004.
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Service Tax:
Non-speaking order - demand of service tax - The order is just quoting the provisions of the law and clarifications issued by the Board from time to time. It does not discuss in any way the applicability of the same to the present set of facts - Matter restored before the adjudicating authority
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Central Excise:
Special Audit - Section 14AA of the Central Excise Act, 1944 - When the learned Single Judge had remanded the matter to “the Commissioner” for fresh consideration, such exercise should have been carried out by such Commissioner who at that point of time was vested with such power under Section 14AA of the Central Excise Act, 1944.
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Central Excise:
Cenvat credit on the Special Additional Duty (SAD) - SAD paid by them by debiting under Target Plus scheme - Cenvat credit is available in respect of the SAD debited in Target Plus scheme.
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Central Excise:
Valuation - inclusion of transportation charges - In the first SCN the value is sought to be determined in terms of Section 4(1)(a) read with Rule 4 and 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, whereas in the present SCN demand is sought to be made by invoking Rule 8 of the Valuation Rules ibid. - Matter remanded back.
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Central Excise:
Valuation - clearance of pipes - inter-connected undertakings - arms length price - Rule 10 (a) would apply only if such clause is specified in the Show Cause Notice under which the alleged relationship fitted.
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VAT:
Non-compliance with the pre-deposit - It is obvious that the Tribunal could not have stated that it cannot travel beyond the direction passed by the First Appellate Authority with regard to the condition of pre-deposit for entertaining the appeal as per the provision Sub-section (4) of Section 73 of the GVACT Act.
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VAT:
TN VAT - digital photography - the activity of digital photography as carried on by the petitioner herein, is a service as contemplated under the provisions of the Finance Act, 1994 levying service tax and the petitioner is, already, remitting service tax on the said receipts. - levy of service tax and value added tax are mutually exclusive.
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (1) TMI 933
Attachment of Petitioner’s bank account - fraudulent availing of Input Tax Credit - proceedings have been launched against the Petitioner under section 67 section 70 of the Act - Primary defence of the Respondents is that even if section 62, 63, 64, 67, 73 and 74 mentioned in section 83 of the Act are not referable to the case of the Petitioner, since a summons is issued to the Petitioner in pursuant to the inquiry initiated against M/s.Maps Global under section 67 of the Act, by the issuance of summons the proceedings get extended to the Petitioner also.
HELD THAT:- The analysis of section 83 of the Act will show that such interpretation is not permissible and not contemplated by the legislature. Section 83 read with Rule 159(1), and the form GST DRC-22, lay down a scheme as to how provisional attachment in certain cases is to be levied. Section 83 though uses the phrase ‘pendency of any proceedings’, the proceedings are referable to section 62, 63, 64, 67, 73 and 74 of the Act and none other. The bank account of the taxable person can be attached against whom the proceedings under the sections mentioned above are initiated. Section 83 does not provide for an automatic extension to any other taxable person from an inquiry specifically launched against a taxable person under these provisions. Section 83 read with section 159(2), and the form GST DRC-22 show that a proceeding has to be initiated against a specific taxable person, an opinion has to be formed that to protect the interest of Revenue an order of provisional attachment is necessary.
Power to provisionally attach bank accounts is a drastic power. Considering the consequences that ensue from provisional attachment of bank accounts, the Courts have repeatedly emphasized that this power is not to be routinely exercised. Under Section 83, the legislature has no doubt conferred power on the authorities to provisionally attach bank accounts to safeguard government revenue, but the same is within well-defined ambit. Only upon contingencies provided therein that the power under section 83 can be exercised. This power is to be used in only limited circumstances and it is not an omnibus power - It is therefore not possible to accept the submission of the Respondents that even though specified proceedings have been launched against one taxable person, bank account of another taxable person can be provisionally attached merely based on the summons issued under section 70 to him.
The order provisionally attaching the bank account of the Petitioner was without jurisdiction and is liable to be quashed and set aside - petition allowed - decided in favor of petitioner.
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2020 (1) TMI 931
Demand of GST - order issued u/s 73 ignoring the request for granting further time to submit reply to Show cause notice (SCN) - Principles of natural justice - opportunity of personal hearing not provided - HELD THAT:- A perusal of sub-section 4 of the Section 75 of “the Act” makes it clear that whenever an assessee, chargeable with tax and penalty makes a request in writing for opportunity of hearing, such an opportunity should be granted to him - Here, admittedly though a request was made on 4.12.2019 under Annexure-4 for personal hearing, however, without granting the same the impugned orders have been passed. Further, despite receipt of the request dated 3.12.2019 under Annexure-4 for grant of additional time for filing show cause, without passing any order on the same, the impugned orders have been passed.
There are no hesitation in coming to a conclusion that the impugned order under Annexure-5 Series have been passed in violation of the statutory requirements - matter remanded back to State Tax Officer, CT & GST Circle, Barbil – opposite party no.4 to proceed with the matter strictly in accordance with law - application allowed by way of remand.
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2020 (1) TMI 930
Stay on implementation and operation of the Show Cause Notice - release of seized goods alongwith vehicle - absence of document as per the requirement under Section 68 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- The petitioner is directed to deposit a sum of ₹ 7,50,000/before the respondent No.3 within a period of two weeks from today. Upon such deposit, the vehicle of the petitioner bearing number MP07GA8154 shall be released.
Petition disposed off.
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2020 (1) TMI 929
Filing of form GST TRAN-1 - transitional input tax credit - transition to GST regime - the grievance of the petitioners is essentially that they had come across a press release by the GST Council, which indicated that the last date for uploading the details in the GST portal for the purposes of carrying forward the accumulated credit from the erstwhile regime was extended up to 31.12.2017 - HELD THAT:- While it is a fact that the petitioners did not make an attempt to log into the system before 27.12.2017, the cut-off date prescribed by the respondents for uploading the TRAN-1 Form to the web portal, it is found that the petitioners were guided by a press release of the GST Council, which suggested that they could upload the statutory form on any date before 31.12.2017. Placing reliance on the said press release, the petitioners had submitted an E-mail on 30.12.2017, seeking a clarification as to when the web portal would open again so as to upload their respective TRAN-1 Forms.
The Delhi High Court in AMAN MOTORS VERSUS UNION OF INDIA & ORS. [2019 (11) TMI 1249 - DELHI HIGH COURT] , where in almost similar circumstances, the Court permitted the petitioners therein to file a Form TRAN-1 electronically on or before a specified date - Taking cue from the said judgment, it is deemed appropriate to allow these Writ petitions by quashing the impugned communications and directing the respondents to either open the online portal so as to enable the petitioners to file the Form TRAN-1 electronically or to accept the same manually on or before 31.12.2019.
While the respondents shall attempt to facilitate the filing of these TRAN-1 Forms electronically by making the necessary arrangements in the web portal, an insistence on manual filing shall be only in circumstances where the electronic filing is not possible - petition allowed.
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2020 (1) TMI 928
Levy of IGST - Place of supply - Rate of GST - Petitioner is the SEZ unit - e-auction by the respondents - taking delivery in the State of auction - purchase and forthwith supply the sandalwood purchased by the petitioner - zero rated supply or not - inter-state or intra state supply? - case of petitioner is that petitioner is located in a notified Special Economic Zone. Purchase of goods by a dealer located beyond the territorial limits of State of Kerala comes as interstate purchase of goods - HELD THAT:- the acceptance of delivery of sandal wood logs at Government Forest Department, Marayoor, is not the conclusive circumstance for deciding the place of supply of goods in the present regime of GST. Mr. Kumar does not dispute the circumstance that the petitioner upon completion of other sale conditions receives the sandal wood logs at Marayoor Forest Department depot, and the acknowledgment of goods at Marayoor Forest Department Depot does not result in termination of movement of goods but results in further movement of goods at the hands of recipient to SEZ. So the final destination i.e. SEZ in the case on hand is the supply point. The actual place of supply by plain interpretation of Section 10(1) is within the SEZ in Madras, State of Tamilnadu, but not in State of Kerala. - Therefore, the contention of respondents 1 and 2 that supply of goods is completed at Marayoor Forest Department and subject sets is an intra state transaction is unsustainable.
Rate of tax / GST - @18% or Zero rated supply - Held that:- Under the scheme of IGST supplies to SEZ unit and SEZ developer are treated at par with physical exports. The exporting units to compete with world market need raw materials without payment of taxes and duties. Either the denial of zero-rated tax benefit by respondents or calling upon the petitioner to pay 18% tax and claim refund is not in line with statutory scheme discussed above. Respondents 1 & 2 by calling upon petitioner to pay 18% IGST are acting contrary to the scheme under IGST. Misuse is one of the gray areas in implementation of zero-rated tax. Respondent No.3 has informed that if the supplier and recipient are situated in different States the transaction is treated IGST transaction. Intra-State movement of goods culminating delivery to the recipient in SEZ comes under IGST. To the same effect is supply of goods or services to a SEZ in any other State in India. The Act provides for safeguards against suppression or evasion of applicable tax.
The subject supply comes as inter-State movement of goods to SEZ outside the State of Kerala. The first and second respondents though have proceeded to conduct e-auction by reference to applicable VAT, the same is understood as applicable taxes i.e., GST/IGST, and the transaction is concluded or completed by the parties with reference to the legal obligations under GST/IGST.
The subject transaction shall be treated as zero-rated tax supply - petitioner is given four weeks from today to comply with the conditions which the petitioner is under obligation to comply with except deposit of 18% tax IGST and communicate to 1st and 2nd respondents with a request to deliver the goods - Petition disposed off.
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Income Tax
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2020 (1) TMI 927
Payment towards trade mark and use of expertise in the field of commerce, finance etc - capital or revenue expenditure - HELD THAT:- On instructions issued by the Department of Revenue, Ministry of Finance vide F.No.390/Misc./116/2017-JC dated 22.08.2019, seeks permission to withdraw this special leave petition along with pending applications therein due to low tax effect.
The special leave petition and pending applications are dismissed as withdrawn, leaving question(s) of law open.
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2020 (1) TMI 920
Deduction u/s.10A - Deduction granted to unit II treating it as a separate eligible unit by the Ld. CIT(Appeals). HELD THAT:- It is absolutely clear that there were existence of two units i.e. Unit 1 is for creating products for higher education industry and Unit 2 is for creating products for banking and finance industry.
Unit 1 and Unit 2 are basically two different and distinct units of the assessee. There is neither expansion nor splitting one unit into another. The Ld. DR was unable to bring on record any material/document in support of the Revenue substantiating that both units are one and the same. DR relied on the observation of the Assessing Officer that Master Service Agreement was not furnished but how that agreement could have helped the revenue additionally was not substantiated by the Ld. DR because of the fact that as on record in the order of the Ld. CIT(Appeals) at Para 5.3.2 and Para 5.3.3, it is mentioned by the First Appellate Authority that various documents/returns such as separate custom bonded warehouse licenses, separate annual reports filed with STPI, separate monthly reports submitted to Superintendent of Customs for Unit I and Unit II further confirm that Unit II is separate and independent from Unit I. These facts were not disputed by the Ld. DR before us.
Thus we are of the considered view that Unit II of the assessee company is absolutely a new and separate unit and independent from Unit I. Therefore, the Ld. CIT(Appeals) was justified in holding that the assessee is eligible to claim of deduction u/s.10A of the Act on the profits of Unit II separate from deduction u/s.10A of the Act on profits of Unit I. Thus, we do not find any infirmity with the findings of the Ld. CIT(Appeals) and relief provided to the assessee by the Ld. CIT(Appeals) is hereby sustained.
Computation of deduction u/s 10A - as per CIT-A exemption u/s.10A of the Act should be computed after excluding communication expenses, insurance and travel expenses from the total turnover - HELD THAT:- As relying on HCL TECHNOLOGIES LTD. [2018 (5) TMI 357 - SUPREME COURT] CIT(Appeals) was correct in directing the Assessing Officer to calculate deduction u/s.10A of the Act after reducing the expenses which are reduced from export turnover, from total turnover as well. Thus, relief provided to the assessee by the Ld. CIT(Appeals) is hereby sustained. Thus, ground No.2 raised in appeal by the Revenue is dismissed.
Interest income eligible for deduction u/s.10A of the Act when the facts of the case are that interest was earned on bank deposits - HELD THAT:- As decided in M/S MOTOROLA INDIA ELECTRONICS PVT LTD [2014 (1) TMI 1235 - KARNATAKA HIGH COURT] while directing the Assessing Officer to allow deduction u/s.10A of the Act on interest income of ₹ 42,86,469/-. The Ld. DR could not bring any contrary decision of any Higher Forum in support of the Revenue nor could bring any relevant documents/materials opposing the already established facts in favour of the assessee. Therefore, we do not find any infirmity with the findings of the Ld. CIT(Appeals) which is thereby upheld. Thus, ground No.3 raised in appeal by the Revenue is dismissed.
Foreign exchange gain as eligible for deduction u/s.10A - HELD THAT:- Hon‟ble Madras High Court in the case of CIT Vs. Pentasoft Technologies Ltd. [2010 (7) TMI 75 - MADRAS HIGH COURT] held that “ the exchange value based on upward or downward of the Rupee value is not in the hands of the assessee. In other words, the assessee does not determine the exchange value of the Indian Rupee. It has to be remembered but for the fact that the assessee is an export house, there was no question of earning any foreign exchange. Therefore, when the fluctuation in foreign exchange rate was solely relatable to the export business of the assessee and the higher Rupee value was earned by virtue of such exports carried out by the assessee, there is no reason why the benefit of section 10(A) should not be allowed to the assessee - Decided against revenue
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2020 (1) TMI 919
Assessment as individual or AOP - whether trust was assessable as an individual? - HELD THAT:- As relying on SHARDABEN BHAGUBHAI MAFATLAL PUBLIC CHARITABLE TRUST [2000 (9) TMI 45 - BOMBAY HIGH COURT] wherein the trust was treated as individual, therefore, the Assessing Officer is directed to tax the assessee by treating individual instead of AOP. - Appeal of the assessee is allowed.
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2020 (1) TMI 918
Assessment u/s 153C - non recording of satisfaction by AO - HELD THAT:- Satisfaction note of the learned Assessing Officer, having analysed it in the light of the submissions made by the assessee, Ld. CIT(A), as a matter of fact, found that the learned Assessing Officer mentioned that during the course of search at the premises of various persons of the Raj Durbar group, various papers were found and seized, no search was conducted against the assessee company.
Further, there is no mention of the contents or details of any document as to how certain documents mentioned therein “belong to” or “related to”, the assessee company; that the assessment order also does not give support to the said recitals inasmuch as there is no reference of any seized material “belonging to” or even “relating to” the assessee company leave aside any incriminating material relevant to assessment under section 153C of the Act/153A of the Act; and that in the light of the judgement of the Hon’ble High Court of Delhi in the case of PepsiCo India ( [2014 (8) TMI 898 - DELHI HIGH COURT] Pepsi Foods [2014 (8) TMI 425 - DELHI HIGH COURT] the satisfaction recorded by the learned Assessing Officer is grossly deficient and it does not fulfil the legal requirements to assume the jurisdiction under section 153C of the Act.
No illegality or irregularity committed by the Ld. CIT(A) in holding that for the assessment year 2009-10 also the Assessing Officer should have recorded satisfaction and after issuing notice under section 153C of the Act should have framed the assessment, and the procedural lapse in this matter goes to the root of the matter and vitiates the proceedings. - Decided against revenue
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2020 (1) TMI 917
Disallowance u/s 14A read with Rule 8D - HELD THAT:- As decided in own case [2019 (10) TMI 185 - ITAT PUNE] only those investments are to be considered while computing average value of investments, which yielded exempt income during the year. Thus we concur with the contentions of assessee. The issue is restored back to the file of Assessing Officer for recalculation of disallowance u/s. 14A r.w.r. 8D after excluding those investments on which the assessee has not earned any exempt income during the period relevant to the assessment year under appeal.
Assessee has stated at the Bar that if amount of disallowance u/s. 14A after recomputation is reduced below suo-moto disallowance made, the assessee would not claim refund/adjustment of excess suo-moto disallowance already made. Thus, ground No. 1 raised in the appeal by the assessee is allowed for statistical purpose.
Denial of claim of weighted deduction u/s 35(2AB) - HELD THAT:- As decided in own case [2019 (10) TMI 185 - ITAT PUNE] AO is to look into and allow the expenditure incurred on in-house R&D facility as weighted deduction under section 35(2AB) - no merit in the orders of authorities below in restricting weighted deduction claimed under section 35(2AB) on the ground that DSIR had not approved the said expenditure. It may be pointed out herein itself that reasons for not approving expenditure have also not been made available to the assessee. Consequently, the same cannot be basis for curtailing deduction claimed under section 35(2AB) - Appeal of assessee is allowed
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2020 (1) TMI 916
Unexplained advance - unexplained cash deposited in bank - unexplained investment in shares - CIT-A deleted the addition - burden of proof - case of the assessee was reopened by the AO on the basis of information received from the Investigation Wing of the Income-tax Department - HELD THAT:- CIT(A) has relied on the statement of persons before the Investigation Wing but the assessee has not produced any evidences before the ld. CIT(A) or before the Assessing Officer to corroborate those statements that the assessee company was engaged in providing only accommodation entries. The assessee-company has not provided any affidavits from the beneficiary companies to support its claim of being engaged in providing accommodation entries. The primary onus under section 68 of the Act is on the assessee to discharge and explain the nature and source of the entries in books of account.
Estimating the income at the rate of 1% presuming that the assessee was engaged in providing only accommodation entries against commission by the Ld. CIT(A) is not justified. We feel it appropriate to restore this issue to the ld. CIT(A) for deciding afresh after verification of documentary evidence, if any, which shall be produced by the assessee to substantiate its claim that it has rotated money of the beneficiaries and provided accommodation entries to the beneficiaries against certain commission only. The assessee should produce those beneficiaries before the Assessing Officer in support of its claim of having engaged only in providing accommodation entries to the beneficiaries. It is needless to mention that both the parties, i.e., the assessee and Assessing Officer shall be provided adequate opportunity of being heard. - Decided in favour of revenue for statistical purposes.
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2020 (1) TMI 926
Addition of Sub License Fee Expenses - allowable revenue expenditure - Tribunal upholding the order of the CIT(A) for deleting addition - HELD THAT:- Tribunal has relied upon the decision of the Delhi High Court in the case of CIT vs. J K Synthetic Ltd [2008 (12) TMI 21 - DELHI HIGH COURT] wherein the Delhi High Court has taken the view that no under the agreement the assessee has obtained a technical assistance and acquired some technical information which was a knowhow related to process of manufacture, then it is not a transfer of the ownership of the knowhow and to be treated as revenue expenditure.
We are in complete agreement with the finding recorded by the Tribunal as regards the proposed question No.2[C] is concerned.
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2020 (1) TMI 925
Exemption u/s. 10AA - total income to be computed as per the provisions of section 29 to 43D after allowing all eligible deductions whether or claimed suo-moto by the assessee or not? - ITAT is right in upholding the decision of Ld. CIT(A) in deleting the disallowance made by the Assessing Officer - HELD THAT:- Tribunal concurred with the finding recorded by the CIT (A) that the assessee firm had not charged any interest and remuneration in accordance with the partnership deed and, in such circumstances, the assessee firm cannot be compelled to charge interest or remuneration, more particularly, when the partnership deed does not prescribe for the same. The Tribunal concurred with the finding recorded by the CIT (A) that the disallowance made by the AO on account of non provision of interest and remuneration could not have been disallowed under Section 10AA(9) of the Act. The issue stands squarely covered by the decision of this Court in the case of Principal Commissioner of Income Tax vs. Alidhara Taxspin Engineers & Anr. [2017 (5) TMI 1684 - GUJARAT HIGH COURT]
Applying the dictum as laid in Alidhara Taxspin Engineers (supra), we are in complete agreement with the findings recorded by the Tribunal in the impugned order - Decided against revenue.
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2020 (1) TMI 915
Disallowance u/s 35D - Disallowance in respect of Public Issue expenses - HELD THAT:- The assessee has considered the fact that the issue is covered against the assessee. As, the learned AR for the assessee has conceded for the disallowance, therefore, we do not find any reason to probe it further. Accordingly, we confirm the disallowance made by the authorities below. Hence, the grounds of appeal of the assessee are dismissed.
Admission of the additional ground of appeal - HELD THAT:- It is a fact on records that all the informations related to the issue raised by the assessee in the additional grounds of appeal are available in the order of the authorities below. As such, there is no need to make any reference to any additional document -The issue raised by the assessee in the additional ground of appeal is legal in nature which can be admitted at any stage during the proceedings. In this regard, we find support and guidance from the judgment of the Hon’ble Supreme Court in the case of NTPC Ltd Vs.CIT [1996 (12) TMI 7 - SUPREME COURT]. Thus we admit the additional ground of appeal raised by the assessee and proceed to adjudicate the same.
Rejection of books of accounts - AO adopting GP @40% of the turnover in place of 37% as worked out by the appellant - HELD THAT:- Reasons basing on which the AO for rejected the books of accounts are not sufficient enough and cogent to disregard the books of accounts. Books of accounts of the assessee are not liable to be rejected as per the provisions of section 145 of the Act. Accordingly, we conclude that once the books of accounts of the assessee are not liable to be rejected then its book profit should be accepted in the given facts and circumstances. Accordingly, in the backdrop of the aforesaid discussion and precedent, we set aside the order of the learned CIT (A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.
Disallowance of depreciation claim - addition on the basis of statement recorded during the survey proceeding u/s. 133A - HELD THAT:- As decided in own case [2020 (1) TMI 838 - ITAT AHMEDABAD] only on the basis of statement recorded during the survey proceeding u/s. 133A cannot be basis of addition. - Decided in favour of assessee.
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2020 (1) TMI 914
Assessment u/s 153A - proof of incriminating materials found during search - whether the assessment in dispute can be considered as unabated in the given facts and circumstances? - HELD THAT:- The answer stands in favor of the assessee. It is because the time permitted under the statute for selecting the case under scrutiny was up to 30 September 2012 but there was no notice issued for the scrutiny assessment. In this regard we find support and guidance from the order in the case of Krishna Kumar Singhania Vs. DCIT [2018 (1) TMI 131 - ITAT KOLKATA] wherein unless there was no any incriminating material found during the course of search relatable to concluded year 2009-10, the statute does not confer any power on the Assessing Officer to disturb the findings given thereon and income determined thereon, as finality had already been reached thereon, and such proceeding was not pending on the date of search to get itself abated.
Whether assessment could be framed u/s 153A of the Act in respect of concluded proceeding without the existence of any incriminating materials found during the course of the search? - In respect of abated assessments, fresh assessments are to be framed by the AO u/s 153A of the Act which would have a bearing on the determination of the total income by considering all the aspects, wherein the existence of incriminating materials do not have any relevance. However, in respect of unabated assessments, the legislature has conferred powers on the ld. AO to follow the assessments already concluded unless incriminating materials are found in the course of the search.
That for the reasons stated above and on the basis of various judicial pronouncements, we hold that the disallowances made for the Assessment years which were unabated/concluded assessments as on date of search cannot be made in the search assessments in the absence of any incriminating material found in the course of search and accordingly directed to AO to delete the addition. - Decided against revenue.
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2020 (1) TMI 924
Exemption u/s 54F - assessee’s claim was rejected as the AO noting that the land on which the assessee had claimed to build the residential house was in the name of his mother - Tribunal denied benefit u/s 54F as like Commissioner (Appeals) and held that the benefit u/s 54F is only available to an assessee if the newly purchased / constructed residential house is owned / held in the name of the assessee - HELD THAT:- Commissioner (Appeals) followed the decision of Nagpur Bench of this Court in the case of Prakash vs. Income-Tax Officer and others [2008 (9) TMI 234 - BOMBAY HIGH COURT] wherein the Assessee purchased the property in the name of adopted son and not on his own name, he was denied the benefit. While laying down this proposition the Court took a review of the law laid down by other High Courts and followed the decision of the Apex Court in the case of CIT v. Podar Cement P. Ltd. [1997 (5) TMI 2 - SUPREME COURT] . The Division Bench distinguished the view taken by the Andhra Pradesh High Court in the case of Mir Gulam Ali Khan (Late) v. CIT [ [1984 (12) TMI 9 - ANDHRA PRADESH HIGH COURT]
It is the contention of Petitioner that the Delhi High Court in the case of Commissioner of Income-Tax v. Ravinder Kumar Arora [2011 (9) TMI 343 - DELHI HIGH COURT] and in the case of Commissioner of Income-Tax v. Kamal Wahal [2013 (1) TMI 401 - DELHI HIGH COURT] has given liberal interpretation to the term ‘purchased’ occurring in the section 54F. We note that the Delhi High Court in the case of Ravinder Arora [2011 (9) TMI 343 - DELHI HIGH COURT] had relied upon the decision of Andhra Pradesh High Court in the case of Late Mir Gulam Khan [1984 (12) TMI 9 - ANDHRA PRADESH HIGH COURT] which has already been distinguished by this Court in the case of Prakash Vs. Income Tax Officer [2008 (9) TMI 234 - BOMBAY HIGH COURT] . In view of this law laid down by this Court, substantial questions of law as framed do not arise. - Decided against assessee.
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2020 (1) TMI 923
Reopening of assessment u/s 147 - change of opinion - Section 43A applicability - HELD THAT:- In the reasons there is reference to the Section 43A of the Act and the claim of the Petitioner is based on the same. In our prima facie reading of the reasons the fact of the operations have come to standstill and the properties were disposed of and the claim of depreciation being incorrect, is a matter of narration. Thereafter narrating so, the foundation of the reasons, prima facie, indicate that foundation is the allegation that the Petitioner has not paid the liability.
This prima facie opinion of ours is borne out by the order passed by the AO disposing of the objections. The Petitioner had not referred to the so called other two grounds for reopening. AO has not stated that the two grounds for reopening have gone unanswered. It is the contention of the learned counsel for the Respondent that it is not necessary. But at the prima facie stage, we note the way parties have understood and acted on the Reason, which would be otherwise in normal course of conduct.
Change of opinion - As regards application of Section 43A and the second explanation thereto, a query was raised by the Assessing Officer vide notice under Section 142(1) wherein the Assessing Officer stated that on perusal of depreciation charge was seen during the year and the information was called for. This information was supplied by the Petitioner by communication dated 22 November 2017 wherein note on the business activities was given. The factum of ICICI bank giving loan for purchase of rigs was mentioned. The query regarding depreciation charge was answered by Petitioner by giving the necessary details. The notice under Section 142(1) dated 30 November 2017 called upon the Petitioner to show cause as to why the claim of depreciation should not be disallowed.
There was a debate at the bar whether the response of the Petitioner giving the explanation dated 25 November 2017 could be considered as a response to the show cause notice. According to the learned counsel for the Respondent the notice calling upon the Petitioner to show cause was dated 30 November 2017 and the letter dated 25 November 2017 could not be considered as a response. This letter was inwarded on 4 December 2017 and the notice dated 30 November 2017 called upon the Petitioner to submit reply by 5 December 2017. This response of the Petitioner was with the Assessing Officer prior to the dates stipulated. Therefore, prima facie, a specific query was raised by the Assessing Officer, and material was produced in response to the specific query by the Petitioner.
When AO consciously considered the claim for deduction which evident from the questions raised during the regular assessment proceedings, it would be evidence of the fact that the Assessing Officer had occasion to apply his mind and had taken a view. In such circumstances re-opening would be a mere change of opinion, which is not permitted. - Decided in favour of assessee.
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2020 (1) TMI 913
Computation of capital gains - value of consideration for the purpose of computation - HELD THAT:- Value of the assets taken over by the company should be considered as the full value of consideration for the purpose of computation of capital gains under the Act. In this case, the full value of consideration is ₹ 2,70,69,200/-. This is also, the cost of acquisition of assets. As the cost of acquisition and the full value of consideration received on sale are the same figure, no capital gains has accrued or was received by the assessee. Thus, the addition under the head capital gains is hereby deleted.
Correct head of income - capital gain or Income from other sources - AO valuing the shares received by the assessee from M/s. J.S. Tradex Pvt. Ltd. under Rule 11UA r.w.s. 56(2)(vii)(c) - HELD THAT:- When the assessee has been allotted certain shares as consideration for property transfer, then the question of value of those shares by invoking Section 56(2)(vii)(c) of the Act, does not arise. When a value is fixed for a share allotted, it reflects the market value of the asset transferred. It is not the case of the Assessing Officer that the assessee has not valued the assets while transferring the same to the company. What is to be considered is that this exchange/barter is on a particular date. When the exchange was on 27/03/2012 and when the shares were allotted on 27/03/2012, the Assessing Officer seeks to value the already allotted shares on 31/03/2012 i.e., after allotment of 40,000 equity shares at a premium of ₹ 400/- per share which gave the company premium of ₹ 1,56,00,000/-. This is not permissible. Such method of computation is not laid down under any provision of the Act. Thus, the same is not in accordance with law.
In view of the above discussion, we delete, both the addition made under the head "Capital Gain" as well as under the head "income from other sources" on the issue of transfer.
Addition u/s 14A r.w.r. 8D - HELD THAT:- set aside to the file of the Assessing Officer for fresh adjudication, in accordance with law. The Assessing Officer shall apply the judgment of the Special Bench of the ITAT in the case ACIT v. Vireet Investments (P) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] and take into account only those investments which are dividend yielding with respect to disallowance u/s 14A r.w.r. 8D. In the result, Ground No. 3 is allowed for statistical purposes.
Suppression of closing stock being gold - HELD THAT:- Disallowance deleted as the total closing stock of gold which was transferred is ₹ 1.99 Crores and this addition, is miniscule and not supported with cogent evidence.
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2020 (1) TMI 922
Benefit of the exemption u/s 10(23C)(VI) - competent authority of the Central Board of Direct Taxes, New Delhi for securing the said benefit - Seeking direction to the 1st respondent to consider application submitted by the petitioner, seeking exemption and restraining the 3rd respondent in initiating all further coercive proceedings against the petitioner society for non-submission of Income Tax returns, till orders are passed by the 1st respondent in Ext.P12 application - HELD THAT:- After hearing both sides and taking note of the pleadings and documents on record and without getting into the merits of the controversy in any manner, it is ordered that the 1st respondent competent authority of the Central Board of Direct Taxes, New Delhi will take up the plea made by the petitioner in Ext.P12 application dated 30-10-2019 and after affording reasonable opportunity of being heard to the petitioner through his authorised representative or counsel, if any, will render a considered decision thereon without much delay preferably within a period of 4-5 months from the date of production of the certified copy of the judgment.
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2020 (1) TMI 912
TP Adjustment - AMP expenses addition - international transaction - HELD THAT:- In Maruti Suzuki India Ltd. X [2015 (12) TMI 634 - DELHI HIGH COURT] held that “there being no international transaction on AMP spend with an ascertainable price, neither substantive nor machinery provision of Chapter X were applicable to the transfer pricing adjustment exercise.
In Bausch & Lomb Eyecare (India) (P.) Ltd. [2015 (12) TMI 1332 - DELHI HIGH COURT] held that “where existence of an international transaction involving AMP expense with an ascertainable price is unable to be shown to exist, even if such price is Nil, Chapter X provisions cannot be invoked to undertake a TP adjustment exercise.
In Whirlpool of India Ltd. [2015 (12) TMI 1188 - DELHI HIGH COURT] held that “where revenue has been unable to demonstrate by some tangible material that there is an international transaction involving AMP expenses between Indian subsidiary and foreign parent, revenue cannot proceed to determine ALP of AMP expenses by inferring existence of an international transaction based on bright line test.
In Honda Siel Power Products Ltd. [2015 (12) TMI 1333 - DELHI HIGH COURT] held that “when assessee is carrying on business as independent enterprise and is incurring AMP expenses for its own benefit and not at the behest of AE, hence benefit of creation of marketing intangibles for foreign AE on account of AMP expenses can at best said to be incidental”.
In view of the principles laid down the in the above decisions, the AMP spend is not an international transaction in the absence of an arrangement between the taxpayer and the AE. In the instant case there cannot be said to be any international transaction between the appellant and the AE for incurring the AMP expenditure.
Further, we find that on a TNMM basis, the appellant’s margin after including these costs is higher than comparables and hence, no adjustment on AMP expenses can be made when the primary international transactions have been accepted by the TPO to be at arm’s length. We delete the transfer pricing adjustment made by the AO - Decided in favour of assessee.
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2020 (1) TMI 911
Penalty u/s 271(1)(c) - addition towards salary income made by the Assessing officer during the course of proceedings u/s 153A r/w 143(3) - Undisclosed salary income received from M/s Ganpati Royal Residency by not accepting the explanation of assessee that such salary income was inadvertently left to be included at the time of filing the return - HELD THAT:- Penal provisions must be strictly construed and only on satisfaction of conditions specified therein, the penalty can be levied. In the instant case, the assessee has not been found to be recipient of salary income during the course of search. The assessee is an individual deriving salary and interest income and not required to maintain books of accounts. There is nothing on record that any documents/material/information was found during the course of search which remotely indicate that the assessee is recipient of salary income. It is only during the course of proceedings u/s 153A that the AO noticed that the assessee is in receipt of salary income and which has not been disclosed by the assessee in his return and the same was accordingly brought to tax.
The dispute is not that the salary income was not offered to tax by assessee in his return of income which is an admitted position but the question is whether such salary income has been found during the course of search and the answer to that in not in affirmative. In the present case, we therefore find that none of the conditions specified in explanation 5A to section 271(1)(c) is satisfied in the instant case and therefore, levy of penalty is hereby directed to be deleted. - Decided in favour of assessee.
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2020 (1) TMI 921
Condonation of delay in filing return - reasonable cause of delay - genuine hardship - disagreement of the promoters and investors creating deadlock in the adoption of audited accounts of the petitioner - HELD THAT:- Order passed by Central Board of Direct Taxes, it is evident that the Prl. Chief Commissioner of Income Tax, Additional Chief Commissioner of Income Tax as well as Assessing Officer, had recommended that the delay in filing the return be condoned.
Order rejecting condonation of delay is cryptic and while deciding the application filed by the petitioner under Section 119(2)(b) of the Act, the claim of the petitioner has been dealt with on merits. It is also pertinent to mention that the circular dated 09.06.2015 does not apply in cases of Central Board of Direct Taxes. However, by placing reliance on the aforesaid decision, the claim of the petitioner for condonation of delay has been held to be not admissible and has been rejected.
In the considered opinion of this Court and in the fact situation of the case as well as bearing in mind the well settled legal proposition that the expression ‘genuine hardship’ should receive liberal consideration, the instant case was a fit case for condonation of delay. In view of the preceding analysis, the impugned order dated 16.01.2018 passed by the Central Government is hereby quashed and delay in filing the return of income for the assessment year 2014-15 is condoned.
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2020 (1) TMI 910
Reopening of assessment u/s 147 - unexplained cash credit under section 68 - HELD THAT:- AO has received information on the basis of the same reopening was done. Even now before us, the learned Counsel for the assessee only made submissions that the AO cannot reopened the assessment on the above given reasons because the only dispute is regarding share premium received at the rate of ₹ 90 per share but he could not point out how the reasons recorded are not as per the provisions of section 147. For this limited aspect, the assessee has made argument. Hence, we find no infirmity in the reopening made by AO and confirmed by CI T(A). Hence, this reopening is upheld and this issue of assessee’s CO is dismissed.
Addition u/s 68 - CIT(A) had elaborately dealt with the entire issue by due appreciation of the various documentary evidences submitted in respect of investor companies duly proving the three necessary ingredients of Section 68 viz. identity of the investors, creditworthiness of the investors and genuineness of the transactions. None of these documentary evidences were controverted by the AO by proceeding to make further enquiry in this regard. None of these facts were even denied by the AO or any deficiencies were found thereon by the AO and we also take note of the fact that all the investors, who had invested monies in the assessee company, have filed bank statements proving credit worthiness.
CIT(A) had placed reliance on the coordinate bench decision of this Tribunal in the case of ACIT vs. Gagandeep Infrastructure Pvt. Ltd. [2014 (11) TMI 479 - ITAT MUMBAI] wherein it was held that the amendment to Section 56(2)(viib) and proviso to Section 68 of the Act are only prospective in nature and applicable only from A.Y.2013-14 onwards and not earlier. We find that this judgment has been subsequently approved by the Hon’ble Jurisdictional High Court. We find that the Ld. DR vehemently relied upon the decision of Hon’ble Delhi High Court in the case of Navodaya Castles (P) Ltd. [2014 (8) TMI 905 - DELHI HIGH COURT] . We hold that the decision of Hon’ble Jurisdictional High Court would bind this Tribunal. Hence, we do not deem it fit to interfere in the said order of the CIT(A). - Decided against revenue
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2020 (1) TMI 909
Unexplained credit u/s 68 - brokers had not appeared in response to the summons sent by AO - HELD THAT:- Assessee has demonstrated from the records that all the requisite details were submitted to the Assessing Officer to prove the genuineness of the transactions entered into by the assessee in commodity trading activity.
In our view, merely because the brokers had not appeared in response to the summons sent by the Assessing Officer that itself cannot be the sole ground to reject the entire evidence produced by the assessee. The assessee not only furnished the names and addresses of the brokers and the other concerned parties but also the other details like their PAN numbers, bank account details and even the trading license, telephone bills and other evidences as detailed above. The assessee has also produced the details of the commodity transactions carried out by the assessee alongwith purchase and sales invoices.
Under the circumstances, the action of the lower authorities in assessing the income u/s 68 of the Act cannot be held to be justified
Set off of loss from one head against income from another - Set off of losses against deemed income u/s 68 - As per the section 71(1) of the Income Tax Act, losses, from one head can be set off against the income from another head of income. This controversy has been settled by the CBDT Circular No. 11 of 2019 dated 19.6.2019, wherein it has been provided that even if the said income is treated as an income assessed u/s 68 of the Act, still the assessee is entitled to set off of the said income against the business loss - There is no merit in the action of the lower authorities in making the impugned additions and not allowing the set off of income from commodity transactions as business losses of the assessee. Accordingly, the impugned order of the CIT(A) is set aside and the additions made by the lower authorities is ordered to be deleted. - Decided in favour of assessee.
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2020 (1) TMI 908
Deduction u/s. 80IA(4) - initial assessment year - income of eligible business in the year under consideration without adjusting the losses/depreciation of earlier years brought forward notional losses since the assessee has chosen the assessment year 2012-13 as the initial assessment year - HELD THAT:- CBDT Circular No. 1 of 2016 (F.No. 200/31/2015-ITA-I) dated 15-02- 2016 explained that to claim deduction u/s. 80IA, the assessee has option to choose the initial year from which it intends to claim deduction for 10 consecutive years out of period of 15 yea₹ 15 years is the outer limit and the same is beginning from the year in which the undertaking or enterprise develop and begin to operate any infrastructure activity etc. As already adjudicated such issue in favour of the assessee in M/S. JIVRAJ TEA & INDUSTRIES LTD. VERSUS THE ACIT, CENTRAL CIRCLE-2, SURAT. [2014 (1) TMI 234 - ITAT AHMEDABAD]
Assessee is entitled to claim deduction u/s. 80IA for 10 consecutive assessment years beginning from the year in respect of which it has exercised such option subject to fulfillment of condition prescribed in the section. Further, it is clear before the decision of Hon’ble Madras High Court in the case of CIT vs. G.R.T. Jeweler India Pvt. Ltd. [2016 (3) TMI 1071 - MADRAS HIGH COURT] as referred in the decision of ld. CIT(A) after referring Board’s circular held that losses/unabsorbed depreciation pertaining to wind mill which were set off in the earlier assessment years against other business income of the assessee, cannot be notionally brought forward and again set off against the income of eligible business of the year which was chosen as initial assessment year for claim of depreciation u/s. 80IA - Decided in favour of assessee.
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Customs
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2020 (1) TMI 905
Levy of penalty u/s 112(a) of the Customs Act - Penalty on CEO for abetment - misdeclaration of transaction value as well as retail sales price (RSP) of confectionary items - HELD THAT:- The issue of jurisdiction of Customs Act and its application to the appellant is primarily challenged in the present appeal, besides the legality of the Order of the Commissioner. Though the issue appears to be small it has wide ramifications. No Municipal law can ever be extended beyond the territorial boundaries of a country including its continental self and exclusive economic zone, whether or not there is express provision in the Act or statute to stretch the same beyond the country’s territory since the same would amount to encroachment upon the territorial authority of other State. It is therefore, defined in the Statute of the country that the said Act has its application within the territorial limits of the country.
The principle that whether violation of an act has an adverse effect to the State’s interest, the same violation is to be dealt by the State itself and the violator is to be penalised irrespective of his/her nationality or place of residence. It is in this prospective, the jurisdiction of sovereign State is to be understood though the general understanding of jurisdiction is based on the nationality of the perpetrator since nationals of a State remained under the sovereignty and owe their allegiance to it even though they are free to travel and reside outside its territory. It is in this contest that Foreign Exchange Regulation Act 1973 prescribing application of it to all citizens of India residing outside India and to branches, agencies situated outside India is to be understood and also application of section 4 of IP.
In the instant case appellants have subjected themselves to the jurisdiction of Customs Act upon notice sent to them under Section 108 of the said Act which would have otherwise ensured through extradiction process Appellant Prerna Singh had also confessed during regarding of her statement as CEO of her company that appellant Seville Products Ltd. used to raise two invoices for same import having law value and high value recorded in those invoices which were despatched through a computer of third party named Prakesh Menon for presentation of the invoices having lower value before the Customs for payment of customs duty and clearance and that the commercial invoice against which payment was received was not shown to the customs. Meaning of word abetment is “to help someone in wrong doing’ - In the instant case such wrong doing had its effect in the Mumbai Customs jurisdiction and appellants had aided the importer in such wrong doing. Therefore, penalty under Section 112 was rightly involved.
Further Appellant Prerna had never rescinded from her statement and in view of Section 56 of the Indian Evidence Act, such admission needs no further proof to hold appellants guilty of violation of the Section 112(a) of Customs Act - Penalty upheld - appeal dismissed.
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2020 (1) TMI 907
Writ of Habeas Corpus - Release of detained petitioner - detention sought on the ground that the detention of petitioner in custody is illegal and the same is violative of Article 14, 21 and 22 of the Constitution of India - smuggling - HELD THAT:- In view of the serious allegations levelled against the petitioner about his involvement in the multi crore scam of the smuggling of gold in which the petitioner has actively participated, we are not inclined to exercise our discretion in favour of the petitioner for issuance of Writ of Habeas Corpus. The petitioner has efficacious remedy of filing the Bail Application and seeking regular bail before the competent court.
Even if the remand order is illegal, which is passed mechanically in a cavalier fashion, still the remedy of the Writ of Habeas Corpus cannot be said to be an efficacious remedy, but in terms of the Hon’ble Supreme Court filing of Bail Application in such circumstances is appropriate remedy.
The petitioner is entitled to avail appropriate remedy as available in law for seeking bail as per the advice - petition dismissed.
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2020 (1) TMI 906
Vires of Policy Circular Nos.6 and 35 - denial of benefit of the DEPB or Duty Drawback - HELD THAT:- There is no merit in the present intra Court Appeals filed by the Revenue and the view of the learned Single Judge deserves to be upheld - We are of the opinion that the Circulars like Circular No.74/1999-Cus dated 05.11.1999 as well as the Circular No.31/2000-Cus dated 20.04.2000 could not have restricted or denied the benefit of Drawback or DEPB if such manufacturing was done by 100% EOU Units and then exports were made by such 100% EOUs.
The denial of benefit to the Assessee under the guise of a clarification for which, no power was bestowed on the Central Board. More so, if such Circulars come in direct conflict with clear statutory provisions of law or Import Export Policy having statutory character.
Appeal dismissed.
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Corporate Laws
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2020 (1) TMI 904
Attachment of property of petitioner company - separate legal entity of corporation or a company - doctrine of the piercing of corporate veil - HELD THAT:- It is not in dispute that property/cars belonging to M/s OIS Advanced Technology Pvt. Ltd. and registered in the name of company M/s CIS Advanced Technology Pvt. Ltd., being a corporate entity, does not in any manner mean that it is distinct than that of Sanjay Bhandari, who is absconding accused.
While passing impugned order, learned Trial Court has given two reasons; firstly, majority shareholding belongs to Sanjay Bhandari; secondly, it is a private limited company and the word ‘belonging to’ under Section 83 Cr.P.C. is of widest amplitude. Even if the fact that the cars should not have been attached is excluded, then the shareholding of the company would have to be attached and in that scenario, the company would by itself become dysfunctional because 90 percent of the shareholding in the company would have been attached. Apart from that, there is also an established doctrine of lifting the corporate veil - The further fact that Corporate Entity was used to perpetuate the illegal activities of the absconding accused person is also a factor to be borne in mind. Under Section 84 Cr.P.C., the objection has to be filed by any person other than the proclaimed person.
Considering the share holding in the company of M/s. OIS Advanced Technology Pvt. Ltd., the Trial Court found no merit in the plea of the petitioner that the company is a distinct corporate entity, separate from the individual and the property whereof cannot be attached. That being the situation, learned Court below was not inclined to set aside the order/ recall the order of attachment of properties of the company M/s OIS Advanced Technology Pvt. Ltd.
Petition dismissed - decided against petitioner.
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Insolvency & Bankruptcy
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2020 (1) TMI 903
Jurisdiction - allegation that NCLAT had exceeded its jurisdiction in directing matching of liquidation value in the resolution plan - HELD THAT:- MSL in the appeal have sought to sustain the resolution plan but their prayer in the interlocutory application is refund of the amount remitted coupled with the plea of withdrawal of resolution plan. However, their main case in the appeal is that final decision on resolution plan should be left to the commercial wisdom of the Committee of Creditors and there is no requirement that resolution plan should match the maximized asset value of the corporate debtors.
No provision in the Code or Regulations has been brought to our notice under which the bid of any Resolution Applicant has to match liquidation value arrived at in the manner provided in Clause 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - the object behind prescribing such valuation process is to assist the CoC to take decision on a resolution plan properly. Once, a resolution plan is approved by the CoC, the statutory mandate on the Adjudicating Authority under Section 31(1) of the Code is to ascertain that a resolution plan meets the requirement of sub-sections (2) and (4) of Section 30 thereof.
Certain allegations were made by the MSL over failure on the part of the Resolution Professional in taking possession of the assets of the corporate debtor and subsequently in their failure in handing over the same to MSL. These issues are factual - The order of the Adjudicating Authority passed on 21st January 2019 is affirmed - appeal allowed.
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2020 (1) TMI 902
Maintainability of application - initiation of CIRP - Respondent Corporate Debtor failed to make repayment of debt - existence of debt and dispute or not - Whether the Respondent has brought to the notice of the petitioner the existence of a dispute preceding the receipt of the notice on 27.02.2018? - HELD THAT:- In the instant case it cannot be said that a debt, at least as far as the outstanding dues towards the cost of DSTBs is concerned, is not due and payable in law or in fact. The Respondent cannot shy away from payment of this amount. Therefore, the contention of the Respondent that there was a pre-existing dispute cannot be accepted.
The Respondent having defaulted in payment of the operational debt the Corporate Insolvency Resolution Process is triggered and the petition under section 9 of the Code is maintainable - The issue accordingly answered in the negative. In view of the finding the petition under section 9 deserves to be admitted.
Petition admitted - moratorium declared.
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2020 (1) TMI 901
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of debt - existence of debt and dispute or not - HELD THAT:- The corporate debtor has not put on record any document evidencing that corporate guarantee agreement was not executed between the corporate debtor and the applicant. The corporate debtor has tried to challenge the genuinely of the corporate guarantee agreement but the same is a lame excuse. It seems that corporate debtor anticipating the triggering of I & B Code against it, had filed a suit challenging the authority of executant of corporate guarantee agreement and endeavored to defeat the claim of the applicant - The application is complete as per the requirements of section 7 of the code. Further the default occurred on 07.04.2018, hence the debt is not time-barred and the application is filed within the period of limitation.
The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The present application is complete and perusing the documents on records it goes beyond doubt that the Applicant is entitled to claim its dues, from the Corporate Debtor, who is liable to pay, being the guarantor of the principal borrower. The default in payment of the financial debt is established beyond doubt.
The present application is admitted - moratorium declared.
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PMLA
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2020 (1) TMI 900
Money Laundering - Provisional attachment of properties - properties mortgaged with the Banks have been acquired out of tainted money - proceeds of crime - HELD THAT:- The bonafide as well as due diligence in sanctioning the loans by the appellants to M/s. CCL have not been doubted by the respondent no.1 at any point of time. It could not be explained by the respondent no.1 as to how the properties in question are acquired out of proceeds of crime.
In terms with the statutory safeguards incorporated in the Act, any party aggrieved by the confirmation of the Provisional Attachment Order by the Adjudicating Authority may challenge such confirmation in an appeal to this Tribunal under Section 26 of the Act and then before the Hon’ble High Court under Section 42 of the Act against the order of this Tribunal. Accordingly, under the legislative and statutory scheme of the Act, unless a party has exhausted its remedies in appeal right up to the Hon’ble High Court, an order confirming the attachment cannot be said to have attained finality - Therefore, this Tribunal is fully equipped and possesses the requisite jurisdiction in terms with the Act as the court of first appeal, to adjudicate upon the pleas of the Appellant and determine the bonafides and legitimacy of its claims as well as the legality of the Provisional Attachment Order.
The impugned order confirming the provisional attachment order is passed without application of mind and without understanding the law, it is liable to be quashed with regards to mortgaged properties in question - there is no nexus whatsoever between the alleged offence and the Appellant Banks as institutions who are the mortgagee of the properties in question which were purchased from the bank’s money and mortgage of the same with them. Thus, no case of money laundering is made out against Appellant Banks who had sanctioned the amounts which are untainted and pure money.
The Provisional Attachment Order passed by the Adjudicating Authority, PMLA, confirming the Provisional Attachment Order is liable to be quashed and set aside - Appeal allowed.
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Service Tax
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2020 (1) TMI 898
CENVAT Credit - exempt services - agency commission - trading activity - Services covered by Rule 6(5) of CCR, 2004 - services rendered in Jammu & Kashmir - recovery u/r 14 of the Cenvat Credit Rules, 2004 read with Rule 6(3A) of the Cenvat Credit Rules, 2004 and Section 73(1) of the Finance Act, 1994.
CENVAT Credit on agency commission - HELD THAT:- In respect of the same appellant for a different period it has been held by this Bench that they are not entitled to cenvat credit on the agency commission because the commissions has been paid for procuring orders and not in relation to rendering the service - the appellant is not entitled to cenvat credit on the agency commission paid for procuring order either for selling the goods or for procuring orders for AMC.
Trading activity being an exempted service only post 01.04.2011 - HELD THAT:- T his issue has been settled by the Hon’ble High Court of Madras in the case of M/S. RUCHIKA GLOBAL INTERLINKS VERSUS THE CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, SOUTH REGIONAL BENCH CHENNAI AND THE COMMISSIONER OF SERVICE TAX, CHENNAI [2017 (6) TMI 635 - MADRAS HIGH COURT] and M/S. FL SMIDTH PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE [2014 (12) TMI 699 - MADRAS HIGH COURT] that either before 01.04.2011 or after this state trading activity is an exempted service. The amendment made with effect from 01.04.2011 specifying trading activity as an exempted service will not make a difference - Credit cannot be allowed.
Services covered by Rule 6(5) of CCR, 2004 - HELD THAT:- These are eligible for cenvat credit notwithstanding Rule 6(1) and Rule 6(2) of the CCR, 2004 as the rule position stood during the relevant period. If any of the services in question were covered by Rule 6(5), theappellant is entitled to the full amount of cenvat credit even if the services were partly used for rendering exempted services also - this is also a matter which is fit to be remanded to the original authority for verification - matter on remand.
Services rendered in Jammu & Kashmir - HELD THAT:- The relevant period in this case is prior to 1-4-2011 when the definition of ‘exempted service’ under Rule 2(e) of CENVAT Credit Rules, 2004 included any service on which no service tax could be levied under the provisions of Chapter V of the Finance Act, 1994. Since no service tax could be levied on any service rendered in Jammu and Kashmir under this Act, it squarely falls under the definition of ‘exempted service’. When there is a statutory definition which is clear and unambiguous, it must be applied regardless of the consequences - the services rendered by the appellant in J&K are exempted services and must be treated as such while computing the ineligible/reversible CENVAT credit under Rule 6 (3) of CCR, 2004.
The appeal is disposed of by way of remand to the original authority with a direction to re-determine the amount of cenvat credit to be reversed, interest and imposition of penalty if any, after following principles of natural justice.
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2020 (1) TMI 899
Levy of service tax - construction works - grant of reimbursement of service tax - petitioner would contend that he has already paid service tax on the works contract executed by him and that therefore, as per the norms he is eligible to get reimbursement of the service tax paid - HELD THAT:- It is ordered in the interest of justice that the 2nd respondent will take up the matters raised in Ext.P8 for consideration and after affording reasonable opportunity of being heard to the petitioner, will render a considered decision thereon on the matters raised therein, without much delay, preferably within a period of 6 to 8 weeks, from the date of production of a certified copy of this judgment.
Petition disposed off.
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2020 (1) TMI 897
Non-speaking order - demand of service tax - suppressed/ concealed taxable value - Steamer Agent - Manpower Recruitment Agency - principles of natural justice - HELD THAT:- The entire discussions do not even refer to the service provider and service recipient, the contract between the two and any of the issues raised by the appellants in their defences submissions. The order is just quoting the provisions of the law and clarifications issued by the Board from time to time. It does not discuss in any way the applicability of the same to the present set of facts - We are constrained to observe that the impugned order running into 31 pages is a non speaking order bereft of any reasoning, which is heart and soul of any order determining the rights of party.
The matter remanded back to adjudicating authority to consider the submissions made by the Appellant and decide the issue by way of speaking order after analyzing the facts and law on the subject - appeal allowed by way of remand.
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Central Excise
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2020 (1) TMI 895
Cenvat credit on the Special Additional Duty (SAD) - SAD paid by them by debiting under Target Plus scheme as per notification No.32/2005-CUS dt.08.04.2005 - HELD THAT:- The jurisdictional High Court of Andhra Pradesh has, with respect to the very specific scheme, viz., Target Plus scheme in the case of COMMISSIONER OF CUS. & C. EX., HYDERABAD-IV VERSUS RCC SALES (P) LTD. [2012 (10) TMI 452 - ANDHRA PRADESH HIGH COURT], held that Cenvat credit is available in respect of the SAD debited in Target Plus scheme.
Credit allowed - appeal dismissed - decided against Revenue.
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2020 (1) TMI 896
Special Audit - Section 14AA of the Central Excise Act, 1944 - allegation of over-utilisation of credit of duty by the assessee in the relevant period - HELD THAT:- The order dated December 06, 2016, passed in the earlier round of writ petition, cannot be construed to mean that the learned Single Judge directed the Commissioner, Central Excise, Kolkata – II to pass the reasoned order, though such Commissioner may have had no authority to pass an order for special audit under Section 14AA of the Central Excise Act, 1944 at the relevant point of time. The Revenue admits that at the time of passing the order dated June 06, 2017, the power to pass an order for Special Audit under Section 14AA of the Central Excise Act, 1944 was taken away from the Commissioner, Central Excise, Kolkata –II and the said power was vested with the Commissioner, Audit – I, Central Excise, Kolkata. It is elementary that a mandamus does not command any obligation to be performed neither authorises any authority to exercise power de hors the statute.
When the learned Single Judge had remanded the matter to “the Commissioner” for fresh consideration, such exercise should have been carried out by such Commissioner who at that point of time was vested with such power under Section 14AA of the Central Excise Act, 1944.
It is true that the assessee did not raise any issue as to the jurisdiction at the time of hearing before of the Commissioner, Central Excise, Kolkata – II. In the present writ petition also, the lack of jurisdiction of the said Commissioner has neither been specifically pleaded nor argued at the time of hearing. But at the same time it must be noticed that at the relevant point of time the said Commissioner was divested of the power under Section 14AA of the Central Excise Act, 1944. The order passed by the said Commissioner was without authority
The relevant audit Commissioner, empowered under Section 14AA of the Central Excise Act, 1944, after promulgation of the Central Goods and Services Tax Act, 2017, is directed to pass a reasoned order after giving due opportunity of hearing to the assessee - Appeal allowed.
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2020 (1) TMI 932
Refund of CENVAT credit - It is brought to the notice of this Court that Ext.P6 petition dated 16/08/2019 filed by the petitioner was filed by the petitioner before the 2nd respondent in the matter of the claim of the petitioner for grant of refund on the basis of the claim entitled for CENVAT credit - HELD THAT:- Without getting into the merits of the controversy in any manner, it is ordered that R7 may treat a copy of Ext.P6 petition as annexed to this petition as if it’s a petition duly filed before him and then after affording reasonable opportunity of being heard to the petitioner, the authorized official or counsel if any will render a considered decision thereon, in accordance with the norms and procedure governing the field and in accordance with law without much delay preferably within a period of 6 weeks from the date of receipt of a certified copy of this order.
Petition disposed off.
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2020 (1) TMI 894
Valuation - inclusion of transportation charges paid for the transportation of the goods from factory to the Customer premises in the assessable value - Rule 5 of Central Excise Valuation Rules, 2000, read with Section 4(1)(a) of the Central Excise Act, 1944 - duplication of demand - demand reduced by the amount confirmed for that period by the earlier period - HELD THAT:- Commissioner has category held in respect of overlap in the demand proposed in this Show Cause Notice and demand confirmed by him in his earlier order. When the First Show Cause Notice was issued on the basis of EA 2000 Audit making certain charges against the appellant, then how can another show cause notice have been issued on the basis of same EA 2000 Audit for the same period which is contrary to the first show cause notice. In the first Show Cause the value is sought to be determined in terms of Section 4(1)(a) read with Rule 4 and 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, whereas in the present show cause notice demand is sought to be made by invoking Rule 8 of the Valuation Rules ibid.
Since Rule 8 of the valuation Rule is applicable only in the case where the goods are captively consumed, which is contrary to the fact that for the earlier period, the demand has been made by invoking the provisions of Section 4(1)(a) read with 5 of Central Excise Valuation (Determination of Price of Excisable Goods), 2000 we are not in position to uphold the demand confirmed in isolation in the present case even for the post period.
Matter remanded back to Commissioner for re-adjudication of the issue for the period April 2013 to September 2013 - appeal allowed by way of remand.
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2020 (1) TMI 893
Valuation - clearance of pipes - inter-connected undertakings - arms length price - applicability of Section 4 (1) (b) of the Central Excise Act, 1944 - HELD THAT:- From a conjoint reading of Section 4 (3) (b) of the Central Excise Act and Section 2 (g) of the MRTP Act, the Revenue is expected to clearly establish the relation as to inter-connection first, for which a little extra enquiry/investigation would be necessary. To establish the above, they have to place on record the complete shareholding pattern, the management pattern, the exercise of control by one over the other, etc., which are not there either in the Show Cause Notice or even in the grounds of the Revenue’s appeal.
So also, Rule 10 (a) would apply only if such clause is specified in the Show Cause Notice under which the alleged relationship fitted. This is also for the reason that if the alleged relationship does not fit in under Clauses (ii), (iii) or (iv), then Section 4 (1) has to be adopted.
There are no reason to interfere with the reasoned findings given by the Adjudicating Authority in the impugned order and the same is therefore upheld - appeal dismissed- decided against Revenue.
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CST, VAT & Sales Tax
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2020 (1) TMI 892
Validity of assessment order - time limitation - notices for audit assessments in relation to such returns were issued, however, no final orders of assessment were passed before the period of limitation prescribed under the Act - HELD THAT:- The provisions contained in Section 27 of the TVAT Act are vastly different from the provisions for self-assessment under Section 29, provisional assessment under Section 30 and most significantly, the audit assessment under Section 31 of the TVAT Act - The special powers can be exercised only in relation to a dealer to whom notice has been issued by the Commissioner under Section 24 of the Act. Section 24 refers to issuance of notice only under sub-section (2) of the Act. Necessarily, therefore, unless and until such notice is issued in terms of sub-section (2) of Section 24 of the TVAT Act, the TVAT authorities cannot invoke the powers under Section 27 of the TVAT Act. Any other view would defeat the very scheme of the said Chapter providing for audit assessment and limitation for completing in such assessment as provided under Section 33 of the Act.
The respondent authorities cannot be allowed to circumvent the limitation provision for completing audit assessment by permitting resort to the powers of summary adjustments under Section 27 which are peculiar in nature and are available only in case where notice under sub-section (2) of Section 24 of the Act has been issued to a dealer.
The impugned orders under Section 27 of the TVAT Act are set aside - petition allowed.
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2020 (1) TMI 891
Non-compliance with the pre-deposit - Whether the Gujarat VAT Tribunal was justified in holding that it cannot travel beyond the direction to pre-deposit 20% of the tax issued by the first appellate authority under sub-section (4) of section 73 of the Gujarat Value Added Tax Act, 2003 on the application made by the appellant for waiver of pre-deposit?
HELD THAT:- On perusal of sub-section (4) of Section 73 of the GVAT Act, it is clear that before filing the appeal against the order of assessment or before the Tribunal challenging the order of appeal, unless the appeal is accompanied by the satisfactory proof of payment of tax in respect of which the appeal has been preferred, no appeal would be entertained by the Appellate Authority.
Proviso to sub-section (4) of Section 73, provides that the Appellate Authority in its discretion, if it thinks fit, for reasons to be recorded in writing, may entertain the appeal, subject to conditions - the aforesaid analysis of Sub-section (4) of Section 73 stipulates that the Appellate Authority has a discretion either to insist for pre-deposit or to direct the appellant to pay lessor amount or smaller amount and the tax payable as per the order under Appeal and/or to furnish security in lieu of payment of tax as the Appellate Authority may thinks fit on the basis of the facts of the case.
It is obvious that the Tribunal could not have stated that it cannot travel beyond the direction passed by the First Appellate Authority with regard to the condition of pre-deposit for entertaining the appeal as per the provision Sub-section (4) of Section 73 of the GVACT Act. Therefore, the question is answered in affirmative in favour of the appellant assessee.
The Tribunal is now required to again consider the aspect whether any case is made out by the appellant herein for the purpose of waiver of the pre-deposit amount or lessor amount towards pre-deposit or not - appeal disposed off.
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2020 (1) TMI 890
100% EOU - Refund of central sales tax - amount deposited under protest - Circular No.13/8/2013-EOU dated 11th April, 2014 - HELD THAT:- The learned counsel appearing for the respondents, has made a statement that the respondents shall dispose of the application of the writ applicants for refund of the amount of ₹ 18,28,199/- within a period of three months from the date of the receipt of the writ of this order.
In view of such statement being made by the learned counsel appearing for the respondents, this writ application is disposed of directing the respondents to dispose of the refund application filed by the writ applicants within a period of three months from the date of the receipt of the writ of this order.
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2020 (1) TMI 889
Renewal of IMFL license - issuance of Tax Clearance Certificate - validity of Section 4-A of the Pondicherry General Sales Tax Act, 1967 - HELD THAT:- The present Writ Petitions were not only premature even when the same was filed, but also, barring the ground of validity of the provisions of Section 4-A of the Act, the same were not even maintainable. The ground of validity of the said provision appears to have been raised as a tangent attack just to maintain the writ petitions. The question, really if any arises, is only of the applicability and interpretation of the provisions of Section 4-A of the Act. The said provision providing for the levy of the Turnover Tax would naturally involve determination of facts and extent of turnover for applying the said provisions.
The present case arises on the application filed by the Assessee for seeking a Tax Clearance Certificate even when the assessment of the year concerned were not finalised by the Assessing Authority. Therefore, taking the figures of turnovers tentatively, a prima facie satisfaction was arrived by the Assessing Authority that since the turnover of some of the products dealt with by the Assessee exceeded the prescribed limit, Section 4-A stood attracted in the case and without that tax liability being cleared by the Assessee to that effect, the Tax Clearance Certificate could not be issued to the Assessee.
The said order does not call for any interference of this court in the extraordinary jurisdiction at this stage. Whether the Assessee was entitled to issuance of the Tax Clearance Certificate or not would naturally depend upon the assessment of the turnover of the Assessee finally by the Assessing Authority in accordance with the provisions of the Act, including the application of Section 4-A of the Act.
Petition disposed off.
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2020 (1) TMI 888
Requirement with the pre-deposit - Validity of assessment order - sub-section (2) of Section 70 of the VAT Act - HELD THAT:- Section 70 of the VAT Act pertains to the revisional powers of the Commissioner. Under sub-section (1) of Section 70 the Commissioner has the power to call for and examine the record of any proceedings under the Act and take it as a revision if he finds that the order is erroneous insofar as it is prejudicial to the interest of the revenue. Under sub-section (2) of Section 70 an aggrieved assessee would likewise urge the Commissioner to exercise his revisional powers against any order passed by person subordinate to the Commissioner.
Under proviso to sub-section (2) of Section 70, no petition for revision by a dealer or a transporter would be admitted by the Commissioner unless at least 50% of the amount of tax assessed, or the penalty levied as the case may be has been paid by the dealer or the transporter - In the present case, the petitioner has already deposited the entire penalty amount which though not equivalent to 50% of the total amount of tax and penalty, the difference is not considerable.
The Commissioner shall decide the revision petition of the petitioner on merits without insisting on any further pre-deposit - petition disposed off.
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2020 (1) TMI 887
Benefit extended to the petitioner under an agreement of deferral of sales tax liability - manufacture for Parle on job work/contract basis - Department was of the view that the shift from commercial production for its purposes to job work for a third party, constituted a breach of the terms of the deferral - meaning of the expression "for use by him in the manufacture or processing of goods for sale".
Whether this phrase limited/restricted the application of the provision to those goods manufactured and sold by the registered dealer using goods purchased against his certificate of registration or whether it also included those goods manufactured by the dealer using materials supplied by a third party under job work, where the goods finally manufactured were sold by such third party? - HELD THAT:- The Revenue argues that the use of the word "normal" in relation to production means that such production has to be only by the assessee availing the deferral. I do not agree. The term "normal production" has to be read qua the "production capacity" and not qua "the entity" - Thus, a proper understanding of clause 9, in my view, is that production qua installed capacity in the factory should not stand interrupted for a period exceeding six months failing which, the entire tax deferred would become recoverable in one lump sum. Admittedly, in this case production has not stopped at all, but has continued consistently over the tenure of the deferral.
This is a case were the benefit of deferral has itself been availed by the petitioner only for the period till production for Parle commenced. Thereafter there is no question of deferral, since there is no sale by the assessee and thus no liability to tax. The only consequence of the job work undertaken in the present case is that the tenure of deferral has been reduced from six to two years.
Thus, applying the ratio of the judgments of the Full Bench of the Supreme Court in ASSESSING AUTHORITY-CUM-EXCISE AND TAXATION OFFICER, GURGAON AND ANOTHER VERSUS EAST INDIA COTTON MFG. CO. LTD. [1981 (7) TMI 205 - SUPREME COURT], Division Bench in COMMERCIAL TAXES OFFICER, JODHPUR VERSUS VISHNU METALS [2006 (11) TMI 200 - SUPREME COURT] as well as the circular issued by the State setting out the spirit and intendment of the Sales tax deferral Scheme in context, these writ petitions are allowed.
Petition allowed.
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2020 (1) TMI 886
Validity of assessment order - TN VAT Act - taxability of turnover received from the services rendered by the petitioner in regard to digital photography - HELD THAT:- Courts have consistently settled the position that the activity carried in this regard would only amount to a "contract of skill and labour" and not a "contract of sale".
In a recent decision in the case of IMAGIC CREATIVE PVT. LTD. VERSUS COMMISSIONER OF COMMERCIAL TAXES & ORS. [2008 (1) TMI 2 - SUPREME COURT], a Bench of the Supreme Court considered the question of whether charges collected towards service rendered by an advertising agency for evolving of a prototype conceptual design upon which service tax had been collected would also be liable for tax under the Karnataka Value Added Tax Act, 2003 - After considering the nature of services rendered, the Bench concluded that payment of service tax and value added tax are mutually exclusive. Therefore, they should be held to be applicable exclusively having regard to the relevant parameters of the respective levies and bearing in mind the differences envisaged in a composite contact as contradistinguished from an indivisible contract. The former may consist of different elements each providing for, and attracting different levies.
The resounding position of law as on date is thus to the effect that the activity of digital photography as carried on by the petitioner herein, is a service as contemplated under the provisions of the Finance Act, 1994 levying service tax and the petitioner is, already, remitting service tax on the said receipts. In such circumstances, there is no justification to subject the receipts to value added tax both on the reasoning that: (i) the activity in question is a contract for skill and labour and (ii) the levy of service tax and value added tax are mutually exclusive.
Petition allowed.
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Indian Laws
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2020 (1) TMI 885
Allocation of Petitioner either to the Indian Revenue Service (Income Tax), Group ‘A’ [‘IRS (IT)’] or to the Indian Revenue Service (Customs & Central Excise), Group ‘A’ [‘IRS (C&CE)’] - petitioner under the quota for the Physically Handicapped (‘PH’) category - HELD THAT:- The Court finds from the replies given to the Petitioner from time to time under the RTI, that there were indeed unfilled vacancies in the PH quota in both the IRS (IT) and the IRS (C&CE), and that these ought to have been carried forward for at least two years. The second fact that emerges is that the CAT proceeded on the erroneous premise that the Department of Revenue had been granted exemption from the applicability of Section 33 of the PWD Act in terms of the proviso thereto. Although the minutes of the meeting held at the Ministry of Social Justice and Empowerment on 23rd November 2007 noted that “considering the nature of jobs performed in IRS (IT) and IRS (C&CE), these services were not considered suitable for persons with visual disabilities”, the fact remains that there was no notification issued granting exemption to the Ministry of Revenue from the applicability of Section 33 of the PWD Act. At this juncture, it requires to be noted that Section 34 of the Rights of Persons with Disabilities Act, 2016 which has replaced the PWD Act is in pari materia Section 33 of the PWD Act.
The Court would not in the context of failure by the Government to provide reservations for the PH category, be presented with a fait accompli.
The impugned order of the CAT is set aside - Respondents will within a period of eight weeks from the date of receipt of a certified copy of this order, ascertain which posts in the IRS (IT) and IRS (C & CE) earmarked for PH category can be allocated for those with B/LV - petition disposed off.
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2020 (1) TMI 884
Dishonor of Cheque - insufficiency of funds - compounding of offences - petitioner accused guilty of having committed an offence punishable under Section 138 of the Negotiable Instruments Act - HELD THAT:- This Court sees no impediment in accepting the prayer made on behalf of the learned counsel representing the petitioner that in view of the amicable settlement arrived inter se parties, this Court can proceed to compound the offence while exercising power under section 147 of the Negotiable Instruments Act and as per the guidelines framed by the Hon’ble Apex Court in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [2010 (5) TMI 380 - SUPREME COURT]. Hon’ble Apex Court in Damodar S. Prabhu case has categorically held that Court while exercising power under Section 147 of the Act, can proceed to compound the offence even after recording of conviction by the courts below.
Instant matter is ordered to be compounded and judgments passed by learned Courts below are quashed and set-aside - The petitioner-accused is acquitted of the charge framed against him under Section 138 of the Act. The bail bonds of the accused are ordered to be discharged - petition disposed off.
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2020 (1) TMI 883
Dishonor of Cheque - insufficiency of funds - enforceable debt and liability or not - Validity of Verdict of acquittal pronounced by the learned trial court - HELD THAT:- Even though, the, accused, has placed reliance, upon, Ex. Dx, containing echoings, vis-a-vis, Ex.CW1/A becoming lost, hence the banker concerned, becoming requested to not honour the afore exhibit, (i) nonetheless, veracity, of, the, afore echoings, as, borne therein, becomes rather underwhelmed or eroded, vis-a-vis, their vigour, in, the, face, of, the, afore suggestions becoming hence meted, to, the, complainant, during, his, becoming cross-examined, hence, by, the, defence counsel. Since, the, afore statutory presumption, is, hence workable, vis-a-vis, the complainant, and, when also, the, afore statutory presumption, hence, remained un-displaced, by, any cogent rebuttal evidence becoming adduced, by, the, respondent/accused, (ii) besides when no cogent evidence becomes adduced, vis-a-vis, the, complainant, despite, no subsisting legal enforceable debt or liability, erupting, inter se, both, yet, rather Ex.CW1/A becoming issued merely, as, a security, (iii) thereupon, it becomes unflinchingly con-cludable, vis-a-vis, the, issuance of Ex.CW1/A, by, the, accused, in, favour, of, the, complainant, being towards, the, discharge(s) there through, vis-a-vis, the, apposite contractually enforceable debt or other liability, and, appertaining, to, the, expenditure, of, re-treading of tyres, as, conducted, in, the, unit, of, the, complainant.
The instant appeal is allowed, and, the verdict impugned before this Court is set aside.
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