TMI Tax Updates - e-Newsletter
January 5, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Reopening of assessment - limitation of four years - Unlike section 153, Section 149 has no statutory exception to exclude the time during which the Court stayed the proceedings.
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Income Tax:
LTCG - Entitlement for benefit u/s 54F - If one has invested the amount received on sale of capital asset either in purchasing a residential house or in construction of a residential house, even though the transactions are not complete in all respects, the assessee would be entitled for exemption.
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Income Tax:
When it is not in dispute that the assessee company has derived the signage income from the tenants from the space owned by the assessee company and not from the outsiders as it allowed tenants to use the space at the atrium/ different floors for putting signage, the signage income has to be treated as ‘income from house property’
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Income Tax:
Penalty levied u/s 271C - Failure to deduct TDS u/s 192 on reimbursement of Leave Fare Concession (LFC) claim, to the extent of foreign leg of travel of 12 employees of the assessee bank - There was reasonable cause in terms of section 273B for not deducting tax by the assessee Bank - No penalty.
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Income Tax:
Penalty u/s 271D - receipt of cash loans exceeding ₹ 20,000/- in contravention of section 269SS from the company by the director - the said amount has also been re-deposited as evidenced by the bank statements - No penalty.
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Customs:
Amendment in Para 2.54 (d)(v)(iv) of Handbook of Procedures, 2015-2020
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Customs:
CHA - once proceedings under Regulation 22 is initiated which is normally done after the completion of investigations in a case, the proceedings under Regulation 21 go redundant. The entitlement to do the business of CHA is to be tested in a proceedings under Regulation 22 of CHALR, 2014. And Regulation 21 cannot be used as a tool to prevent the CHA from doing business.
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DGFT:
Rationalization of procedures in handling redemption requests under Advance/EPCG Authorizations
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VAT:
Validity of assessment order - Bogus C-forms - Put explicitly, if a document is suspected, the source of suspicion is of no consequence, even a whisper of doubt may cast a cloud on the genuineness of an instrument. - It is the originator of the instrument that should dispel the clouds of suspicion.
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2019 (1) TMI 139
Profiteering - four models of Motor Car - benefit of reduction in the rate of tax not passed - contravention of Section 171 of the CGST Act, 2017 - Held that:- First of all it is observed that the rate of tax was 15.63% in the pre-GST era which was increased to 29% in the post-GST era - It is evident that before discount base prices of all the products had remained the same. These facts have also not been disputed by the representative of the Applicant No. 1. Hence the provisions of Section 171 of the CGST Act 2017 are not attracted.
It is clear that the Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the Applicant - application dismissed.
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2019 (1) TMI 140
Detention of goods with vehicle - misclassification in tax rate - Held that:- The learned Division Bench of this Court in Renji Lal Damodaran Vs. State Tax Officer [2018 (8) TMI 1145 - KERALA HIGH COURT] has dealt with an identical issue - the respondent authorities is directed to release the petitioner's goods and vehicle on his "furnishing Bank Guarantee for tax and penalty found due and a bond for the value of goods in the form as prescribed under Rule 140(1) of the CGST Rules - petition disposed off.
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Income Tax
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2019 (1) TMI 152
TPA - determination of arms length price(ALP) u/s 92C - commission chargeable by the assessee from its AE on international transaction entered into u/s 92B with its associated enterprises (AE) - Held that:- Tribunal for AY 2012-13 in assessee’s own case has computed ALP of its international transaction with its same AE namely PSPL , Singapore of providing corporate guarantee on loans availed by its AE wherein ALP of commission on said corporate guarantee was determined at 0.5%. The tribunal while passing aforesaid orders dated 06.06.2018 for AY 2012-13 followed its decision for AY 2009-10.
One us namely Judicial Member was member of the division bench of the tribunal who passed the aforesaid orders for AY 2012-13 . No reasons to deviate from aforesaid orders of the tribunal for AY 2009-10 and 2012-13 taking a consistent view and following the rules of consistency as laid down by Hon’ble Supreme Court in the case of Radhasoami Satsang v. CIT [1991 (11) TMI 2 - SUPREME COURT] we determine ALP of corporate guarantee commission @0.5% on international transaction of providing corporate guarantee by the assessee to its AE namely PSPL, Singapore for availing loans - decided partly in favour of assessee
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2019 (1) TMI 151
Revision u/s 263 - Income from sale of land - busniss income or capital receipt - In the opinion of the CIT, A.O. had not carried out enquiry related to treatment of the sale price of the said land - Held that:- We are unable to accept this contention that assessing officer had raised a specific query as to why the assessee has treated sale consideration as exempt. The Ld. CIT has also not dealt with the contention that the assessee wanted to establish a water park. Under these facts, we deem it proper to modify the direction of the Ld. CIT and direct the A.O. to make enquiry, whether the assessee had made any efforts to establish a water park on the land in question. Further, the A.O. would also consider contention of the assessee that there was a typographical error in the accounts of the assessee. Assessee's appeal allowed for statistical purposes
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2019 (1) TMI 150
Undisclosed long term capital gain - as contended by assessee the alleged land was an agricultural land not falling under the category of capital assets as provided u/s 2(14) - as there was no column in the income tax return she bonafidely declared the transaction under the head capital and claimed deduction u/s 54B - Held that:- It is clearly emanating from the records that the agriculture land is located 27 Km away from the municipal limit of city Amarawati and issituated in a village having population of 2294 persons and this fact has been certified by the Tehsildar of Shivangaon vide letter dated 6.3.2017. Therefore it is not disputed that the alleged agricultural land do not fall under the head capital gain assets as provided in Section 2(14) of the Act and therefore the capital gain arised in the sale of said agricultural land is not liable to tax. - decided against revenue.
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2019 (1) TMI 149
Penalty u/s 271(1)(c) - wrong Claim of exemption u/s. 10B - reopening of assessment - bonafide mistake - Held that:- It is not disputed that the deduction was withdrawn by an amendment in law w.e.f. 1.4.2008. Under these facts, more particularly that assessee has been allowed deduction in earlier years, we find force into the contention of the assessee that due to bonafide mistake, claim was made. Therefore, respectfully following the judgement of the Hon'ble apex court rendered in the case of Price Waterhouse Coopers Pvt. Ltd. Vs. CIT (2012 (9) TMI 775 - SUPREME COURT), we direct the A.O. to delete this penalty. - decided in favour of assessee.
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2019 (1) TMI 148
Deduction under section 80IAB - development income earned as accrued on account of agreement entered into between assessee company and its co-developer, M/s. DLF Assets Private Limited (DAPL) - claim of the assessee is based upon the approval granted to the assessee by the Board of Approvals of Special Economic Zone (SEZ) to the co-developer agreement with the aforesaid DAPL - as per AO assessee not admissible qua the profit derived from SEZ project at Gurgaon as the assessee had merely sold the bare shell building to the co-developer, M/s. DAPL, which is not an authorized operation under the Special Economic Zone Act, 2005 and the Special Economic Zone Rules, 2006 - Held that:- Following the decision rendered by the coordinate Bench of the Tribunal in assessee’s own case for AY 2008-09 and in view of the fact that the year under assessment is third year of claiming deduction, it is proved on file that assessee company is a developer under the SEZ Act and the SEZ is duly notified and all the profits derived by the assessee company from the business of development operation and maintenance of SEZ. Consequently, on the basis of approval given by the Board of Approvals for the transfer of bare shell to the co-developer as per agreement, the profit arising to the assessee from the aforesaid authorized transactions is eligible for deduction u/s 80IAB of the Act. So, we find no illegality or perversity in the findings returned by ld. CIT (A) - decided against the Revenue.
Treatment to signage income received by the assessee company from tenants - ‘income from other sources’ or ‘income from house property’- disallowance of deduction u/s 24(a) - Held that:- Tribunal in case of Manpreet Singh vs. ITO – (2015 (2) TMI 159 - ITAT DELHI) wherein it was held that, “the income earned by the assessee for renting of terrace for installation of mobile antenna was taxable as ‘income from house property’ and as such deduction u/s 24(a) @ 30% of the annual value was allowable.”
When it is not in dispute that the assessee company has derived the signage income from the tenants from the space owned by the assessee company and not from the outsiders as it allowed tenants to use the space at the atrium/ different floors for putting signage, the signage income has to be treated as ‘income from house property’ and as such is eligible for deduction u/s 24(a) of the Act @ 30% of such income. So, finding no illegality or perversity in the findings returned by ld. CIT (A) on this issue, this ground is determined against the Revenue.
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2019 (1) TMI 147
Stay against the outstanding demand - Revision u/s 263 - whether the amount in question on account of option money is revenue in nature or capital in nature? - Held that:- According to the Assessee, the agreement in question between the assessee and M/s. CUIH is dated 07.08.2001 and have been examined by the A.O. in earlier years and no adverse view have been taken against the assessee. In preceding A.Ys. 2013-2014 and 2014-2015 though the contention of assessee have been accepted by the A.O. but the Ld. Pr. CIT has reopened the assessments under section 263 of the I.T. Act against which, appeals of the assessee are pending before the Tribunal on 14.01.2019.
It is a case where assessee has declared income of ₹ 54,51,114/- in the return of income but due to the above addition, assessment have been framed against the assessee in a sum of ₹ 247.39 crores. The balance of convenience also lies in favour of assessee and in case, entire demand is recovered against the assessee, the purpose of the filing of the appeal would be frustrated. The interest of Revenue is also protected because the assessee has already paid substantial demand to the Revenue against the outstanding demand. The appeal of assessee is pending for disposal and appeals of assessee for another years on the same issue are also pending for disposal - we stay the entire outstanding demand for a period of six months or disposal of the appeal whichever may expires earlier, subject to the condition that assessee shall not seek unnecessary adjournment in the matter.
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2019 (1) TMI 146
Penalty u/s 271(1)(c) - defective notice - proof of concealment of income - Held that:- A perusal of the assessment order clearly shows that there is allegation that the assessee has willfully concealed particular of income. In fact, the disallowance clearly is one in respect of the amount of ₹ 2,35,56,441/-, which is the claim of expenditure incurred, but it has been moved to work in progress and it has been allowed as expenditure in the immediately succeeding year. The genuineness of the expenses have not been questioned nor disputed.
The second issue is in regard to current liabilities in the balance sheet in respect of which the TDS has not been deducted, but TDS deducted in the succeeding year and the payment has been done. Therefore, we cannot say ‘concealment of income' on this TDS.
In respect of addition of ₹ 27,832/-, it is noticed that the assessee has shown it in its capital account and the assessee has also categorically pointed out in his reply that the mistake was caused on account of the Accountant. Even considering the fact, the assessee has such a large turnover it would be difficult even to assume that the assessee would attempt to conceal or avoid payment of tax on interest income as ₹ 27,832/-. Also the explanation given by the assessee has not been found to be false nor has the explanation be disputed.
As relying on RELIANCE PETROPRODUCTS PVT. LTD.[2010 (3) TMI 80 - SUPREME COURT] and ASHOK PAI VERSUS COMMISSIONER OF INCOME-TAX [2007 (5) TMI 199 - SUPREME COURT] it cannot be said that there is concealment of income or furnishing of inaccurate particulars of income, which can give cause for levy of penalty u/s.271(1)(c) - decided in favour of assessee
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2019 (1) TMI 145
Penalty levied u/s 271C - demand u/s 201(1) - non-deduction of tax u/s 192 on reimbursement of Leave Fare Concession (LFC) claim, to the extent of foreign leg of travel of 12 employees of the assessee bank - Held that:- The assessee bank has undertaken reasonable steps in terms of verifying the assessee’s claim towards their LFC claims and is aware of employees travelling to foreign countries as part of their travel itinerary but at the same time, there is an error of judgment on part of the assessee bank in understanding and applying the provisions of section 10(5). Therefore, we are unable to accept the Revenue’s contention that the assessee bank has not deducted the tax intentionally, fully knowing that the LFC is applicable for travel in India only and no foreign travel is allowable as it is a case of error of judgment and no malafide can be assumed on part of the bank.
Nothing has been brought on record which in any ways suggest connivance on part of the assessee bank or forged claims submitted by the employees and which has been discovered by the Revenue during the course of its examination. As fairly submitted by the assessee bank, while calculating the estimated tax liability of its employees, it always consider LFC claim as exempt under section 10(5) and the same position, being followed and accepted consistently in the past years, was followed in the current financial year as well. However, for the first time, after the survey by the tax department, this issue arose for consideration and after the judgment of the Tribunal, the matter got clarified and the assessee bank has duly complied and deposited the outstanding demand along with interest and has taken corrective steps in subsequent years as well.
There was reasonable cause in terms of section 273B of the Act for not deducting tax by the assessee Bank. In the result, the penalty so levied under section 271C is hereby directed to be deleted. - Decided in favour of assessee.
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2019 (1) TMI 144
Penalty u/s 271D - receipt of cash loans exceeding ₹ 20,000/- in contravention of section 269SS from the company by the director - assessee was not able to prove that the cash withdrawals made by her as director from the company were utilized for the purpose of business of the company - Held that:- CIT(A) observed that, the said amount has also been re-deposited as evidenced by the bank statements. There is no transfer of money from Company's account to the Appellant's account - Therefore CIT(A) deleted the addition .
As we noticed that the CIT(A) has deleted the quantum by virtue of order relevant to the A.Y. 2006-07, therefore, the penalty has been order to be deleted. - Decided in favour of assessee.
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2019 (1) TMI 160
Charitable activities - denial of exemption u/s 11 - payments made on account of advertisement to prohibited persons - default u/s section 13(1)(c) and 13(2)(c) - Held that:- Clause (c) of sub-section 2 of Section 13 of the Act can be invoked, if any amount is paid by way of salary, allowance or otherwise to any person referred to in sub-section 3 out of resources of the Trust for services rendered to the Trust and the amount so paid is in excess of what may be reasonably paid for such services.
Thus, essential requirement for invoking the said provision is that the amount paid was in excess of what may be reasonably paid for the services. In the present case, the CIT(A) and the Tribunal have elaborately examined the accounts of the assessee, the payments made to the SBC, the payments made to other agencies for similar work, comparative rates of payments and came to the conclusion that no excess payment was made to the related person. Essentially, this is a pure question of fact. Two authorities concurrently held in favour of the assessee.
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2019 (1) TMI 159
Charitable activities - renewal of approval u/s 80G denied - trust is carrying on charitable activities for running a home for Orphans and Widows without producing a certificate issued by the Orphanages and other Charitable Homes (Supervision and Control) Act, 1960 - Held that:- There was no material to show that the trust was not carrying on charitable activity and the renewal application was rejected on the ground that the registration has not been obtained on the Provisions of The Orphanages and Other Charitable Homes (Supervision and Control) Act, 1960.
Merely because registration was not obtained into the Act will hipsofacto resulting in conclusion that assessee is not continuing charitable activity. Therefore, we find no error in the order passed by the Tribunal. The appeal filed by the Revenue is dismissed
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2019 (1) TMI 158
Denial of exemption u/s 54 - construction was not completed within a period of three years - Held that:- In the instant case, the investment is made in a new property. The construction was not completed within a period of three years as narrated in Section 54 of the Act. The delay was not because of the assessee, but beyond his control, since the construction was put up by the builder. He has invested the amount of ₹ 2,26,82,097. Therefore, the Tribunal rightly held that the said investment is made towards construction of the property. Therefore, it requires to be exempted.
Under these circumstances, we do not find any error in arriving at such a conclusion. Therefore, we are of the view that the said substantial question of law would not arise for consideration in this appeal.
Accumulated balance upto retirement eligible for exemption u/s 10(12) - Held that:- In the instant case, The assessee retired on 1-4-2002. As on that date, the amount accumulated in the Provident Fund was ₹ 37,93,888/-. He did not withdraw the same. He sought to withdraw it on 11-4-2011. The accumulated balance as on that date was ₹ 82,00,783/- which constituted the interest on the amount of ₹ 37,93,588/- as on 1-4-2018 on wards.
By relying on the provisions of Section 10(12) the Tribunal held that so far as to the extent of the amount as on the date of retirement is concerned, the assessee is eligible for exemption. Therefore, law has been rightly applied by the Tribunal - we do not find the same constitutes any substantial question of law. What is relied by the Assessing Officer is only the amount as was available on the date of retirement as on 1-4-2002. It is the amount on that date that was held to be eligible for exemption and not the accumulated amount.
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2019 (1) TMI 157
Disallowance of interest on the advance given to the subsidiary company - Held that:- For the assessment year 1999-2000, the Division Bench has held in favour of the assessee stating that Revenue does not dispute the fact that the advancing of funds by the assessee into the sister concern was in terms of the BIFR's order. That being the case, no useful purpose would be served by again directing a remand on the merits of the claim of the assessee - decided against revenue
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2019 (1) TMI 143
Addition on account of the cost of the project overruled - according to the revenue, is nothing but to claim excessive WIP and the assessee had made it a colourable device to increase the WIP of the project by routing of advance without any substance - interest free advances given to the assesseeb y 2 persons - CIT(A) had deleted the additions by holding that AO had not brought any evidence to substantiate that the value of shares at ₹ 14.25 crores was ‘under value’ and also found force in the transactions between the two creditors and the assessee for allowing to allot 80,00 Sqft. ready saleable area in lieu of advance of ₹ 3 crores.
Held that:- CIT(A) while deciding this ground had only taken into consideration that assessee had given right to construct an area of 80,000 Sqft, but has not considered at all the ‘investment agreement’, where the assessee had allowed to allot premises of 80,000 Sqft ready saleable area for occupation on the ‘ownership basis’. Therefore, in this manner, the Ld. CIT(A) has not considered the documents and the facts in right perspective and deleted the additions.
As in the case of Kapurchand Shrimal Vrs. CIT [1981 (8) TMI 2 - SUPREME COURT] has held that the duty of the Tribunal does not end with making a declaration that the assessments are illegal and it is duty bound to issue further directions. The appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh unless forbidden from doing so by the statute and the statute does not say that such a direction cannot be issued by the appellate authority in a case of this nature.
Therefore, we remit the matter back to the file of AO with a direction to carry further ‘investigation/verification’, if so required, and to remove the doubts /suspicion if any, and to pass afresh order - Appeal filed by the revenue is partly allowed for statistical purposes.
Disallowance of Legal & Professional Charges - allowable business expenditure - Held that:- After verification with the actual bills received and on verification, it was noted that the purpose mentioned by the assessee tabulated earlier was not fully true. CIT(A) after verifying had also given instances which are based on factual findings and for reference, the bill of M/s Mulla & Mulla & Crigie & Caroe dated 31.12.2010 mentions that it is in respect of advising in respect of proposed agreements between Sigtia Constructions Pvt. Ltd. and Lalita Vinod Sigtia and Nikhil Sigtia and Sudhakar Shetty / Sahana Constructions Pvt. Ltd. The bill was in respect of general advising from time to time. Similarly the bill dated 31.12.2010 of Parekh & Co., Delhi was in respect of conferences of the Advocates with Advocates of Mulla and Mulla for finalizing the Share Purchase Agreement and the Investment Agreement. Similar was the purpose in the bills of ₹ 24,50,000/- of Pravin Parekh dated 7.01.2011. As specifically pointed out that the other bills was in respect of various Writ Petitions. By appreciating the factual aspects contained in the present case, we are also of the view that the sale of shares and management by the promoters of the assessee company cannot be termed as business of the company. - Decided against assessee.
Addition under the head prior period expenses - Held that:- CIT(A) after appreciating the facts had correctly noticed that the expenses claimed were not raised in the return of income and moreover no details were available. No new facts have been brought on record in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, there are no reasons for us to interfere into or deviate from the findings so recorded by the Ld.CIT(A). - Decided against assessee.
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2019 (1) TMI 142
Exemption u/s 11 denied - Income applied by the assessee outside India - assessee has incurred an amount on international meet and no prior approval of the board has been taken, which is in violation of section 11(1)(c) - Held that:- Assessee has not incurred these expenditure outside India but incurred in India in Indian rupees. This fact has not been controverted either by the learned assessing officer or by the learned departmental representative before us. The provisions of section 11 (1)(c) (ii) applies only if such income is applied to such purposes outside India, without the approval of the central board of direct taxes.
In the present case, as no income, except what has been confirmed by the learned Commissioner of income tax appeals, is applied by the assessee outside India but in India. Therefore, those provisions do not apply to the assessee. In view of this we do not find any infirmity in the order of the learned Commissioner of income tax appeals in deleting the above addition. It is further to be noted that the learned Commissioner of income tax appeals in his order has upheld the amount of money spent by the assessee of INR 6 68300/– outside India towards hotel and other expenditure. - decided against revenue
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2019 (1) TMI 156
Reopening of assessment - limitation of four years - exception to exclude the time during which the Court stayed the proceedings - time limit for completion of the assessment, reassessment, and recomputation - Held that:- The notice u/s 148 may be issued at any time for assessing, or reassessing, or recomputing. If that notice is issued based on any finding or direction, or order by any authority in any proceeding under this Act, it may be based on a Court’s order in any proceeding under any other law. That exception apart under Section 150, I find no other. In other words, Section 149 does not control this provision if the proceedings have judicial or quasijudicial backing.
In fact, the Department’s defence, filed as its counsel’s statement, too admits that Section 149 has no statutory exception to exclude the time during which the Court stayed the proceedings. It places on the record that “there is no statutory support for such a claim unlike that available under Section 153, which specifically provides for the exclusion of the period during which the assessment proceeding is stayed by order of injunction of any court.” Then it adds, “the present claim is, therefore, made on the basis of equitable consideration.” I am afraid once a statute governs a field of activity, then equity has no role to play; equity yields to a statute.
Under these circumstances, hold that the proceedings the Department initiated against the petitioner could not be sustained. - decided in favour of assessee
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2019 (1) TMI 155
MAT computation - amount withdrawn from the revaluation reserve account for adjusting the depreciation should be allowed as deduction while computing the book profits - Held that:- The first appellate authority and the Tribunal found that there is no ground to decline such exemption to the assessee, merely for the fact that the same was not shown in the profit. The deduction which is permissible under the Act could not have been disallowed. We affirm the concurrent findings of the first appellate authority and the Tribunal on Question No.3 and it stands answered in favour of the assessee and against the Revenue.
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2019 (1) TMI 141
TDS u/s 194A - non deduction of TDS on the payment of interest to STPI - demand U/s 201(1)/201(1A) - Held that:- STPI is a society established and registered under the Societies Registration Act, 1860 by the Ministry of Electronics & Information Technology, Government of India on 05/6/1991.
As per the notification scheme U/s 194A(3)(iii)(f) of the Act if any society is registered under the Societies Registration Act 1860 and financed wholly by the Government then as per the notification No. SO3489 dated 22/10/1970, the deduction of tax at source is not required so far as the interest paid to such society. Since this status of STPI being notified U/s 194A(3)(iii)(f) of the Act has not been verified by the authorities below, therefore, we set aside this issue to the record of the Assessing Officer for verification and adjudication of this issue whether the STPI is a society falling under the category as notified U/s 194A(3)(iii)(f) of the Act as claimed by the assessee. - Appeal of the assessee is allowed for statistical purposes only
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2019 (1) TMI 154
Capital gain for sale of property acquired under the will - cost of acquisition of asset calculated on the basis of the cost of acquisition by previous owner - Computation of indexed cost of acquisition on transfer of capital asset- Held that:- In the case on hand, the assessee acquired the property through the will, which was probated on October 30, 2006. The will was executed by the husband of the assessee, who died on February 22, 2006. The husband of the assessee had acquired the property prior to April 1, 1981, as such, the assessee had opted April 1, 1981 for arriving at the cost of acquisition. This issue is answered by this court in the case of CIT v. Smt. Daisy Devaiah [2014 (11) TMI 944 - KARNATAKA HIGH COURT] stating though in the definition of 'indexed cost of acquisition', the word used are, "in which the asset was held by the assessee" a harmonious reading of Sections 48 and 49 makes it clear that, for the purpose of 'Indexed Cost of Acquisition', it has to be understood as the first year in which the previous owner held the said property - Otherwise, if the date of inheritance is taken into consideration, then the cost of acquisition of the asset on that date corresponding to the market value is to be taken into consideration - Otherwise, take the cost of acquisition on the day the previous owner acquired it and apply the "Indexed Cost of Acquisition" and then calculate the capital gains and the tax payable. - decided in favour of assessee.
Entitlement for benefit u/s 54F - possession of the flats is not taken by the assessee within the period of three years and as such, the assessee is not entitled for the benefit under section 54F - Held that:- If one has invested the amount received on sale of capital asset either in purchasing a residential house or in construction of a residential house, even though the transactions are not complete in all respects, the assessee would be entitled to the benefit under section 54F of the Act. See Sambandam Udaykumar case[2012 (3) TMI 80 - KARNATAKA HIGH COURT] - decided in favour of assessee.
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2019 (1) TMI 153
Penalty imposed u/s 158-BFA(2) - deposits undisclosed by the Assessee from the villagers of Rasipuram as income of the Assessee - disclosures made by assessee on condition that penalty and prosecution should not be initiated - Tribunal delted the addition same as CIT-A - that:- Tribunal held that the order passed by the CIT(A) was right, since the additions were offered on condition that penalty and prosecution should not be initiated and the offer was made to avoid protracted litigation as a matter of good gesture to keep up the Assessee among the people of his own village. Further, the Tribunal noted that there was no assessed material found, as a result of search to the fact that the deposits were undisclosed by the Assessee and this was assessed only on the basis of disclosure made by the Assessee. Furthermore, the Tribunal noted that it is not on the basis of any evidence and investigation conducted by the Department and it was not unearthed by the act of the Department. Therefore, the Tribunal held that there was no justification to interfere with the order passed by the CIT(A).
The entire dispute revolves on the factual matrix, which was considered by the CIT(A) and decided in favour of the Assessee and once again re-appreciated by the Tribunal and concluded in favour of the Assessee and in this appeal, we are not expected to re-appreciate the factual position for arriving at a different conclusion. Thus, no substantial question of law arises.
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Customs
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2019 (1) TMI 136
Export of prohibited item - non-basmati rice - rule 11 of the Export (Quality Control and Inspection) Act, 1963 - restriction under Serial No.45AA of Notification No.55(RE-2008)/2004-2009, amended by Notification dated 17.8.2010 bearing No.57/2009-2014 issued by DGFT - confiscation and penalty - Held that:- The appeal is admitted on substantial questions of law arise for consideration.
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2019 (1) TMI 135
Validity of Proceedings initiated against CHA under Regulation 21 of CHALR, 2014 - it is alleged that the petitioners are in the know of the fraud committed by the Importer - prohibition on CHA to work in Tuticorin Customs Commissionerate with immediate effect under Regulation 21 of the CHALR, 2004, allegedly on the same issue that is pending adjudication before the CESTAT - Held that:- A cursory reading of regulations 13 and 21 indicates that the prohibition contemplated under Regulation 21 is aimed at separating the CHA from access to offices and sections connected to the offence to prevent unwanted influence or sabotage. This order is normally passed immediately after the commission of any offence. In other words, Regulation 21 will outlive its purpose once substantive investigations in the offence case is over.
The consequences of wrong doing for a CHA licensee is in the suspension and revoking of the license of the CHA under Regulation 22. And also, once proceedings under Regulation 22 is initiated which is normally done after the completion of investigations in a case, the proceedings under Regulation 21 go redundant. The entitlement to do the business of CHA is to be tested in a proceedings under Regulation 22 of CHALR, 2014. And Regulation 21 cannot be used as a tool to prevent the CHA from doing business.
Petition allowed - decided in favor of petitioner-CHA.
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2019 (1) TMI 134
Principles of natural justice - order passed u/s 15 of the Foreign Trade (Development & Regulation) Act, 1992 - submissions raised and the case law relied upon by the petitioner in support of its case have not been considered - non-speaking order - Held that:- It is evident that the submissions of the petitioner made in support of its case have not been considered while disposing of the Appeal. Thus, leading to a flaw in the decision making process - impugned order set aside - petitioner's appeal to the Additional Director General of Foreign Trade, Respondent No.3 is restored to his file for disposal in accordance with law after following the principles of natural justice.
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Insolvency & Bankruptcy
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2019 (1) TMI 138
Corporate Insolvency Resolution Process - debt due and payable - Held that:- It is not the case of the Appellant that there is no debt payable in law or in fact. Whatever grounds have been taken relate to legality of order of rejection dated 22nd December, 2017 by the ‘State Bank of India’ relating to restructuring plan which cannot be decided in the application under Section 7 of the ‘I&B Code’ as the Adjudicating Authority is not authorized/competent to determine the legality of the order of rejection of restructuring plan dated 22nd December, 2017. Whether the refusal to disburse the committed loan amounts led to complete failure of the ‘Corporate Debtor’s expansion plan also cannot be taken into consideration to hold that there is no debt due and payable.
In the present case, as we find no case made out by the Appellant to interfere with the impugned order, the appeal is dismissed.
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2019 (1) TMI 137
Corporate Insolvency Resolution Process - bonafide dispute - Held that:- There is a bona fide dispute exists in the case, as per ratio decided in Mobilox Innovations (P.) Ltd. case (2017 (9) TMI 1270 - SUPREME COURT OF INDIA) followed by other cases in this regard. It is settled position of law that whenever there is a bona fide dispute raised by the Respondent, the Adjudicating Authority cannot entertain the application filed under the provisions of Section 9 of IBC. Therefore, the Company Petition is not maintainable, and thus it is liable to be rejected.
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PMLA
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2019 (1) TMI 133
Offence under PMLA - Provisional Attachment Order - Held that:- It is an admitted fact that Appellant is not made a Party either in the Provisional Attachment Order under Section 5(1) nor in the O.C. filed before the Adjudicating Authority under Section 5(5) of PMLA, 2002. There is no denial on the part of the respondent regarding the execution of registered deed of agreement to sale executed on 22.03.2013.
It is prima facie felt that the Appellant should have been made a party to the proceedings before the Adjudicating Authority in the interest of justice and complete adjudication of the case appellant should have been given proper opportunity being heard as provided under the provisions of PMLA, 2002.
Order confirming the attachment to the extent of the property in question is set aside. The matter is remanded back to the Adjudicating Authority. The Appellant shall file the necessary reply before the Adjudicating Authority within twenty days, not beyond thirty days, from the date of this Order, with an advance copy of the said reply to be served on ED. The Adjudicating Authority, thereafter, shall decide the reply of the appellant within 150 days from the date of receipt of such reply, in accordance with law, after giving due opportunity to both the parties.
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Central Excise
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2019 (1) TMI 129
Permission to withdraw this petition with liberty to apply for correction of mathematical error - Held that:- Permission sought for is granted - SLP dismissed as withdrawn.
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2019 (1) TMI 128
Recovery of Central excise duty exemption availed with Interest and penalties - cancellation of Export License - Held that:- The Tribunal itself records that both sides were heard at length. If, that be so, the Tribunal was required to give proper reasons for its ultimate conclusions. The Tribunal's order is rather cryptic, does not bring out the full controversy, the arguments raised by both sides and Tribunal's conclusions on said contentions.
Unreasoned orders leave the appellate Court the onerous task of finding out the facts and law from the sources outside of the judgment impugned before it. Even otherwise, as a final fact finding authority, the Tribunal is expected to examine all contentions of law as well as of facts. High Court in further appeal would entertain only substantial questions of law.
The impugned judgment of the Tribunal is set aside - Appeals of both the appellants before the Tribunal are revived.
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2019 (1) TMI 126
Refund claim - excise duty paid on the excess freight charges - whether the appellant is entitled to refund of excise duty of ₹ 61,045/- paid during the relevant period? - Held that:- It is not in dispute that the pattern of sale adopted by the appellant is ex-factory basis and the freight amount has been reimbursed for transporting the material from factory to the premises of the customer - the cost of freight cannot be added to the assessable value - appeal allowed - decided in favor of appellant.
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2019 (1) TMI 127
Validity of SCN - Levy of duty - scented supari manufactured - petitioner contends that the impugned show cause notice is without jurisdiction, opposed to Central Excise Act and Rules and is totally barred by limitation and is arbitrary - principles of squity - time limitation.
Held that:- The dispute got settled in favor of the Petitioner by Order dated 12.04.1999 in WP No 4266 of 1994 and affirmed in the Order dated 27.04.2010 in Writ Appeal No 1271 of 2000. Consequent to the final orders, two proceedings are initiated in the files of the Department, one regarding the claim filed by the petitioner for refund of the duty paid by them under protest on the final products during the period May, 1994 to March, 1995 and the other being the impugned Show Cause Notice No.34/2010 dated 11.10.2010 for the demand of modvat credit availed during the same time.
There is no dispute that a refund claim accrues on the petitioner as a result of the Order dated 27.04.2010 in Writ Appeal No.1271 of 2000 going in favour of them against the department. And there is also no dispute that the modvat credit taken and utilized for the payment of duty on the final products shall not be allowed as refund - Certain averments were made by the respondents regarding the refund process which is deliberately ignored since the same is not part of relief sought under this Writ Petition. Therefore, consciously no opinion is expressed regarding the proceedings in Show Cause Notice C.No.V/21/18/166/2009 dated 26.05.2010 issued in the refund claim proceedings.
Whether the impugned Show Cause Notice No 34/2010 dated 11.10.2010 is sustainable? - Held that:- In the peculiar circumstances of the case, the question of demanding modvat credit availed is not tenable. It is arbitrary exercise of power. It is not correct to argue that the dispute got settled in favour of the petitioner by virtue of an order of this Court and as a consequence a demand notice gets slapped on them. Such a preposition borders on absurdity. The recourse to Section 5-B of the Central Excise Act, 1944 by the respondents is not correct.
At the material time, while the petitioner had contested the assessment by registering protest, the respondents endorsed the assessment that included the availment of modvat credit. Also the dispute in the pending court cases pertained to the dutiability of the final products and the availing of modvat credit was never in dispute during the pendencies - Therefore the plea on the principle of equity made by the respondents on the bar of limitation is misplaced. The modvat credit was availed during the period May, 1994 to March, 1995. Even the Writ Petition was decided against the Department on 12.04.1999. The Show Cause Notice was issued on 11.10.2010 - the Show Cause Notice is hit by limitation also.
The Show Cause Notice No 34/2010 dated 11.10.2010 is quashed. No opinion is expressed on the proceedings in the refund claim.
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CST, VAT & Sales Tax
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2019 (1) TMI 125
Scope of deferred tax within the meaning of Section 61(2)(d)(iii) of the Haryana Value Added Tax Act, 2003 read with Rule 69 of Haryana Value Added Tax Rules, 2003 - Held that:- Even when the issue is pending in some other cases, it is not necessary to entertain these petitions because of very low tax effect - SLP dismissed.
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2019 (1) TMI 124
Cancellation of petitioner's registration - whether the cancellation was at the petitioner's request or suo motu by the authorities? - Held that:- The Department could not deny that it has in its possession all the details of the petitioner. As the petitioner's counsel could demonstrate, the petitioner must have submitted Form No.I at the time of its seeking registration and that contained all the details. When the authorities had their notice returned with an endorsement that “no such firm”, they could have ensured service of notice by checking the records. For the proceedings they proposed might visit the petitioner with penal consequences - matter remanded for reconsideration - petition allowed by way of remand.
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2019 (1) TMI 123
Validity of assessment order - Bogus C-forms - case of petitioner is that the authorities have violated the principles of natural justice and have denied essential information to the petitioners - lack of power to reassess the petitioners' liability for the year 2014- 2015 - Held that:- As the petitioners alone could vouch for the genuineness of the C-forms, I reckon the petitioners' insistence on the special investigation report serves no purpose. The burden, in fact, squarely lies on the petitioners to prove that the C-forms are genuine.
It is the originator of the instrument that should dispel the clouds of suspicion. In this context, it is held that there is no infraction of principles of natural justice.
The Ext.P8 is an order against which the petitioners have a statutory remedy, and it is efficacious, too - the writ petitions closed holding that the petitioners, if advised, can approach the appellate authority and raise all pleas as they have done before this Court.
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2019 (1) TMI 130
Principles of natural justice - opportunity of personal hearing to be provided even on non-filing of objections - Validity of revised assessment order - validity of consequential Form-B6 order, dated 29.04.2011 - TNGST Act - Held that:- The Commissioner of Commercial Taxes, pursuant to the recommendations of the Hon'ble Justice Sri Ramanujam Committee, has laid down certain procedures to be followed by the assessing authority before passing final order. That circular is binding on the respondents. It mandates that personal hearing shall be given even such an opportunity is asked or not. But, in contravention of the circular, without providing an opportunity of personal hearing, the respondent has passed the impugned orders.
A Division Bench of this Court in the case of G.V.Cotton Mills (P) Ltd., Rep. by its Managing Director Vs. The Assistant Commissioner (CT), Avarayampalayam Assessment Circle Corporation of Shopping Complex, Coimbatore), [2018 (3) TMI 1617 - MADRAS HIGH COURT] has held that the opportunity of personal hearing cannot be denied, even if the objections not filed.
In this case, admittedly, the petitioner has not submitted his objections. Even then, the second respondent ought to have been provided an opportunity of personal hearing to the petitioner. But, the second respondent, has passed the impugned order, without giving an opportunity of personal hearing. Therefore, the revised assessment order dated 31.08.2010 is liable to be set aside and consequently, the subsequent order dated 29.04.2011 passed by the 2nd respondent is also liable to be aside.
The matter is remanded back to the file of the second respondent for fresh assessment - petition allowed by way of remand.
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Indian Laws
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2019 (1) TMI 132
Condonation of delay in filing appeal - time limitation - Limitation Act - Jurisdiction - power of Tribunal to condone the delay - whether the Tribunal has the power to condone the delay under Section 5 of the Limitation Act, 1963 in respect of the proceedings under Section 19 of the 1993 Act? - maintainability of ex-parte order - Held that:- It is well settled that the Limitation Act, 1963 is procedural law - In Hitendra Vishnu Thakur vs. State of Maharashtra, [1994 (7) TMI 343 - SUPREME COURT OF INDIA], it has been held by the Supreme Court that law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature.
In the present case, the Tribunal dismissed the application for setting aside the exparte order dated 9.8.2017 on the ground that the Tribunal had no jurisdiction to condone the delay under Section 5 of the 1963 Act as the application was filed after the expiry of two months - Similar issue came up before this Court in M/s Oswal Spinning and Weaving Mills Limited and others v. UCO Bank and another [2018 (11) TMI 532 - PUNJAB AND HARYANA HIGH COURT], where this Court has held that the Tribunal had the power to condone the delay under Section 5 of the 1963 Act to the proceedings under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
From the plain reading of Section 24 of the 1993 Act and the judicial pronouncements, the inevitable conclusion is that the provisions of Section 5 of the 1963 Act are applicable to the proceedings/application filed under Section 19 of the 1993 Act before the Tribunal. Once it is so held, the provisions of Section 5 of the 1963 Act are applicable to the application, therefore, the application seeking condonation of delay shall also be maintainable.
The Tribunal has wrongly rejected the condonation of delay application filed by the petitioner for setting aside exparte order holding that the Tribunal had no jurisdiction to condone the delay - Matter restored before tribunal - petition allowed.
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2019 (1) TMI 131
Rejection of candidature - appointments to the post of Presiding Officer of the DRT - main submission of appellant is that the ACC has acted arbitrarily in differing from the view expressed by the Selection Committee, without giving any reasons - Held that:- The Statement of Objects and Reasons of the DRT Bill noted that its purpose was the creation of special tribunals “with special powers of adjudication of such matters and speedy recovery as critical to the successful implementation of the financial sector reforms”. It was noted that the existing procedure for recovery of debts due to banks and financial institutions had blocked a significant portion of their funds in unproductive assets, “the value of which deteriorates of which the passage of time.”
In the present case, no doubt that the two Appellants were recommended by the Selection Committee on 30th March 2016 for appointment as Presiding Officers of the DRT. Their names were thereafter sent for verification to the IB. The IB reports along with the recommendation of the Selection Committee were thereafter placed before the ACC which comprises the Prime Minister of India (who is the Chairman of the ACC) and the Union Minister for Home Affairs in the first instance on 1st February 2017. The ACC on that date did not take a decision as to the appointments of the two Appellants. The ACC called for a fresh IB Report in respect of the two Appellants. Thereafter for the second time on 1st August 2017, the ACC considered the case of the two appellants along, in light of the fresh IB report and decided not to appoint them as Presiding Officers. This was then communicated to each of them by separate Om dated 8th August, 2017.
In the present case, the ACC was the final authority. The fact that the ACC called for a fresh IB report is an indication that it wanted to be doubly sure before acting on the first report of the IB. This could be viewed as an extra check against arbitrariness arising from a subjective assessment of the person preparing the IB report. There was no need for the ACC to disclose why it was asking for a fresh IB report. Much less was there any requirement in law for ACC for the Respondents to inform the Appellants why the ACC asked for a fresh IB report.
Appeal dismissed.
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