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TMI Tax Updates - e-Newsletter October 22, 2020 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Central Excise CST, VAT & Sales Tax Indian Laws Highlights / Catch Notes GST: Classification of supply - supply of goods or supply of service - the transaction of printing of content provided by the customer, on Poly Vinyl Chloride (PVC) banners and supply of such printed trade advertisement material - the charges for the supply of the trade advertisement is based on the sqft of the product supplied. This evidences that what is supplied by the Appellant is in the nature of goods and not a service. - AAAR Visit to Get Source GST: Classification of supply - Pure Supply of goods or a Pure Supply of Services - Composite Supply - The principal supply however is a supply of service as it is the operation, management and maintenance of the street lighting system which is the essence of the ESCO contract. The LED lights and other equipment like smart feeder panels are goods used for the rendering the service. Therefore, we disagree with the lower Authority's ruling that the principal supply is a supply of goods. - AAAR Visit to Get Source GST: Maintainability of appeal - The ROM rejection order does not merge with the original advance ruling order. The original advance ruling stands without any corrections. The appeal should have been filed by the Appellant against the advance ruling order dated 21-09-2019 within the period of 30 days from the date of communication of the said order. - Appeal against ROM is not maintainable in as much as the impugned order is not an appealable order under Section 100 of the CGST Act, 2017 - AAAR Visit to Get Source GST: Supply of liquor in the restaurant - exempt supply or not - As per Section 9(1) of CGST/TNGST Act, the supply of alcoholic liquor for human consumption, is a non-taxable supply. Hence, supply of alcoholic liquor for human consumption by a restaurant will not be taxable under CGST/TNGST Act. - AAR Visit to Get Source GST: Supply or not - supply of educational aids to students such as school bags, footwear, geometry box, wooden colour pencils, crayons, woollen sweater to government and government aided schools - supply of Rain Coats, Ankle Boots and Socks to students without consideration to Government/Government Aided schools located in Hilly areas - eligibility to avail input tax credit - the supply of educational kit as above is a 'Supply' - The same is taxable but exempt - AAR Visit to Get Source Income Tax: Penalty u/s. 271(1)(c) and 271AAB - Defective notice - The argument of the department that the provisions of section 292B of the Act will cure the defect, if any, in the show cause notice cannot be accepted because the non-mentioning of the charge against the assessee in the show cause notice cannot be considered as a mistake, omission or defect, which is in substance and effect in conformity with or according to the intent and purpose of this Act. - AT Visit to Get Source Income Tax: Status of the partnership firm treated as AOP - partnership deed is executed on an inadequate stamp paper - Department is accepting all the genuineness of existence of the partnership firm and only for this technical aspect of deed executed in the lessor denomination stamp paper has framed the assessment treating the assessee as AOP. Revenue Authorities may call upon the assessee in due course for rectification of this technical defect. In the totality of facts and circumstances and on examination of this issue as afore-stated, we are of the considered view that the assessee is duly constituted partnership firm. - AT Visit to Get Source Income Tax: Rectification of mistake u/s 254 - failure to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment and under such circumstances the Tribunal has no jurisdiction under section 254(2) to pass the second order. - AT Visit to Get Source Income Tax: Estimation of income - Bogus purchases - The doubt, if any, is only with regard to the source of purchases. In such circumstances, the entire purchases cannot disallowed. As rightly observed by Commissioner (Appeals), only the profit element embedded in such purchases can be considered for disallowance. - disallowance @ 12.5% of the alleged non–genuine purchases is fair and reasonable - AT Visit to Get Source Customs: Restriction on import of - peas (pisum sativum) including yellow peas, green peas, dun peas and kaspa peas - non-release or withholding of the imported goods of the petitioner any further would not be just and proper. At least the grounds given in the order dated 01.10.2020, which order itself was passed in a highly improper manner, do not justify that the goods should be withheld or denied release notwithstanding the order-in-original and compliance thereto. - HC Visit to Get Source Customs: prohibition on export of all varieties of onions with immediate effect - In continuation of our order dated 25.09.2020, export of onions in respect of the shipping bills which were presented and generated prior to 22:28:11 hours on 14.09.2020 shall be allowed subject to the clarification given by the Central Board of Indirect Taxes and Customs in its communication dated 18.09.2020 - HC Visit to Get Source Central Excise: Levy of Penalty - disallowance of CENVAT Credit - Only for the reason that VAL instead of contesting the show cause notice went for settlement before the Settlement Commission, no adverse inference can be drawn against the appellant BALCO - The benefit of N/N. 214/86-CE was available to BALCO i.e. they could have received calcined alumina from VAL without payment of duty, as prescribed. Further, the extended period of limitation is not warranted in the facts and circumstances, there being no suppression of facts or attempt to evade duty, etc. - AT Visit to Get Source VAT: Levy of penalty - ITC wrongly availed - As such, if the respondent was of the view that the claim of ITC has been wrongly made, the only option available is to reverse such an ITC instead of bringing them under the purview of Section 7(1)(a) of the TNVAT Act. As such, the levy of tax under Section 7(1)(b) and the consequential penalty imposed, cannot be sustained. - HC Visit to Get Source Articles HAPHAZARD NOTICE BOARD DIFFICULT TO FIND DATES OF HEARING- need lot of improvement. Some suggestions. CONSUMER COMMISSIONS MSME Ministry introduces Artificial Intelligence (AI) and Machine Learning (ML) Notifications GST - States 89/GST-2 - dated 20-10-2020 - Haryana SGST Notification to notify a special procedure for taxpayers for issuance of e-Invoices in the period 01.10.2020-31.10.2020 under the HGST Act, 2017 87/GST-2 - dated 20-10-2020 - Haryana SGST Amendment of notification No.18/GST-2, dated 31.03.2020 to extend the date of implementation of the Dynamic QR Code for B2C invoices till 01.12.2020 under the HGST Act, 2017 86/GST-2 - dated 20-10-2020 - Haryana SGST Amendment of notification No.17/GST-2, dated 31.03.2020 under the HGST Act, 2017 F. 12(46)FD/Tax/2017-III·250 - dated 20-10-2020 - Rajasthan SGST Notification to make filing of annual return under section 44 (1) of RGST Act for financial year 2019-20 optional for small taxpayers whose aggregate turnover is less than ₹ 2 Crores and who have not filed the said return before the due date F. 12(46)FD/Tax/2017-III·249 - dated 20-10-2020 - Rajasthan SGST Notification to prescribe the due date for furnishing FORM GSTR-1 for the quarters October, 2020 to December, 2020 and January, 2021 to March, 2021 for registered persons having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year F.1-11(91-TAX/GST/2020(Part-VI) - dated 14-10-2020 - Tripura SGST Seeks to provide conditional waiver of late fees for the period from July, 2017 to July, 2020 F.1-11(91-TAX/GST/2020(Part-II) - dated 14-10-2020 - Tripura SGST Seeks to bring into force the provisions of Section 10 of the TSGST (2nd Amendment) Act, 2020 (Tripura Act No.01 of 2020) w.e.f. 01.09.2020 844-F.T. - dated 15-10-2020 - West Bengal SGST Seeks to notify a special procedure for taxpayers for issuance of e-Invoices in the period 01.10.2020 - 31.10.2020 843-F.T. - dated 15-10-2020 - West Bengal SGST West Bengal Goods and Services Tax (Eleventh Amendment) Rules, 2020. Circulars / Instructions / Orders Income Tax - F No. 187/3/2020-ITA-I - dated 19-10-2020 Order under section 119 of the Income-tax Act, 1961 for exercising power of survey u/s 133A of the Income-tax Act, 1961 and in pursuance of The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 Regarding Income Tax - F. No. 275/29/2020-IT(B) - dated 16-10-2020 Order under section 119 of the Income-tax Act, 1961 for exercising power of intrusive or coercive action for recovery of tax demand by Assessing Officers or Tax Recovery Officers Income Tax - F No. 187/3/2020-ITA-I - dated 18-9-2020 Order under section 119 of the Income-tax Act, 1961 News Cabinet approves MoU between ICAI, India and CPA, Papua New Guinea Income Tax Department carries out searches in Bihar IFSCA prescribes regulatory framework for REITs and InvITs in IFSC Cabinet approves Mutual Recognition Agreement between ICAI, India and MICPA, Malaysia Cabinet approves Productivity Linked Bonus and non-Productivity Linked Bonus for 2019-2020 Case Laws: GST 2020 (10) TMI 856 Classification of supply - supply of goods or supply of service - the transaction of printing of content provided by the customer, on Poly Vinyl Chloride (PVC) banners and supply of such printed trade advertisement material - classification of such trade advertisement material if the transaction is supply of goods? - applicable rate of CGST on the supply of such trade advertisement material - CBIC Circular No. 11/11/2017-GST dated 20.10.2017 - challenge to AAR decision. HELD THAT:- The activity of printing the content provided by the customer is what transforms the PVC material from being just a blank PVC material into a trade advertisement. It is this finished product (i.e. either in the form of a Billboard, banner, free-standing display unit, etc) which is supplied by the Appellant. Without the printing activity, the process of making the trade advertisement is incomplete. Therefore, printing is an activity which is integral to the emergence of the trade advertisement. The printing activity undertaken by the Appellant is for the purpose of bringing into existence the trade advertisement which is used by the customer for advertising their products/services. What the customer requires is either a billboard or banner or display unit which advertises his product or service. The requirement of the customer is met by the Appellant through the activity of digital printing on PVC material. We have also seen a few invoices raised by the Appellant on his customers - the charges for the supply of the trade advertisement is based on the sqft of the product supplied. This evidences that what is supplied by the Appellant is in the nature of goods and not a service. The trade advertisements made by the Appellant are classifiable under sub-heading 4911 10 under the category of trade advertising material, commercial catalogues and the like. They will fall under the description goods under Heading 4911 given in entry Sl.No 132 of Schedule II of Notification No 01/2017 CT (R) dated 28.06.2017 - decision of AAR set aside. 2020 (10) TMI 855 Classification of supply - Pure Supply of goods or a Pure Supply of Services - Composite Supply of goods and services being a works contract or not - street lighting activity under the Energy Performance Contract dated 05.12.2016 - rate of tax - benefit of exemption under entry 3 or 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended - time of supply of services - Whether KEONICS is liable to tax only once the energy saved is certified by the energy auditor? Whether amount credited in joint ESCROW account can be termed as 'receipt' especially because the said amount is not under control of KEONICS until the conditions are met? - challenge to AAR decision. Whether the activity undertaken by the Appellant for the Thane Municipal Corporation amounts to a supply of goods or a supply or service or is it a composite supply involving both goods and service? - HELD THAT:- A supply of goods does take place as part of the contractual terms although it is not during the during the course of the contract. The supply of goods takes place when the contract come to an end and therefore forms part and parcel of the contract. Thus, the supply under the ESCO contract is a composite supply involving both a supply of service as well as a supply of goods. The principal supply however is a supply of service as it is the operation, management and maintenance of the street lighting system which is the essence of the ESCO contract. The LED lights and other equipment like smart feeder panels are goods used for the rendering the service. Therefore, we disagree with the lower Authority's ruling that the principal supply is a supply of goods. Rate of tax applicable on the supply of service by the Appellant - HELD THAT:- In this case, there is no doubt on the fact that the supply is made to a local authority (Thane Municipal Corporation) and the service supplied i.e the operation and maintenance of street lighting is in relation to a function entrusted to the Municipality under Article 243W of the Constitution. However, the ESCO contract involves the supply of goods albeit at the time of termination of the contract. Therefore, the first condition of it being a pure service is not fulfilled. A pure service must necessarily not involve a supply of goods - the Appellant is not eligible for the benefit of exemption as a pure service under entry No 3 of Notification No 12/2017 CT (R). Benefit of exemption under entry No 3A to the exemption Notf No 12/2017 CT (R) - HELD THAT:- The entry 3A of the exemption Notification is unambiguous in laying down the condition that the value of the supply of goods should not exceed 25% of the total value of the supply. The burden of proving the eligibility to the exemption is on the Appellant to show that his case comes within the parameters of the exemption notification - this onus has not been adequately discharged by the Appellant. Therefore, the Appellants are not eligible for the benefit of exemption under entry 3A of the Notf No 12/2017 CT (R) as amended by Notf No 02/2018 CT (R). Applicable rate of tax in respect of the supply of service to TMC - HELD THAT:- The scope of the work under the ESCO contract is undertaken in three phases. Phase I involves the preparatory work for installation of Smart Feeder Panels and LED light fixtures. Phase II involves the implementation of energy efficient lighting fixtures, brackets and junction box, underground cables and flexible cables. In Phase III the operation and maintenance of the street lighting system will be monitored upto the end of the contract period. As observed earlier, there is a significant usage of goods and materials for the provision of the service as per the contract - the service of street lighting is classifiable under Heading 999112. This heading is chargeable to tax at the rate of 9% CGST and 9% SGST which is specified under entry Sl.No 29 of Notification No 11/2017 CT (R) dated 28-06-2017. Time of supply - HELD THAT:- The supply in this case is a composite supply involving the supply of both goods and services with the supply of service being the predominant supply, the provisions of Section 13 of the CGST Act relating to time of supply of services will apply. Thye decision of AAR set aside. 2020 (10) TMI 854 Maintainability of appeal - Rectification of Mistake - Classification of services - Licensing services for Right to use minerals including its exploration and evaluation or not - royalty paid in respect of Mining Lease - Classified under the heading 9973 attracting GST or not? - statutory contributions made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) as per MMDR Act, 1957 - Supply or not - Doctrine of Merger. HELD THAT:- Even in cases where a rectification of mistake application is admitted and a mistake apparent on record is corrected, the original order is not set aside. The original order remains on record and only the mistakes are corrected therein. The principle of doctrine of merger will not apply in such cases. Any appeal can be made only against the original order which will be read together with the correction made in the rectification order. In this case, the rectification application was not admitted as there was no error apparent on record and hence, the original order stands without any changes. The ROM rejection order does not merge with the original advance ruling order. The original advance ruling stands without any corrections. The appeal should have been filed by the Appellant against the advance ruling order dated 21-09-2019 within the period of 30 days from the date of communication of the said order. In the instant appeal, the Appellant is aggrieved by the entire ruling pronounced by the lower Authority - This Appellate Authority being a creature of the statue is empowered to condone a delay of only a period of 30 days after the expiry of the initial time period for filing appeal. We are not empowered to condone any delay beyond what the statute permits us. Appeal against ROM is not maintainable in as much as the impugned order is not an appealable order under Section 100 of the CGST Act, 2017 - the ROM rejection order dated 23-03-2020 does not merge with the original advance ruling dated 21-09-2019. 2020 (10) TMI 853 Classification of goods - rate of tax - supply of Soft Beverages (Aerated Water) and Tobacco (Smokes) when these items are supplied independently and not as composite supply in the restaurant - rate of GST if these items alone are supplied and not along with food as Composite supply to the guest - supply of liquor - exempt supply or not - proportionate reversal of ITC as per Rule 42 of CGST rules 2017 - reversal of ITC on free supply of food. What is the rate of tax applicable on the supply of Soft Beverages (Aerated Water) and Tobacco (Smokes) when these items are supplied independently and not as composite supply in the restaurant? In other words what is the rate of GST if these items alone are supplied and not along with food as Composite supply to the guest? - HELD THAT:- In the instant case, the hotel being a 5 star hotel has a declared tariff of above seven thousand and the restaurant in question has license to serve alcohol (relevant for the notification before amendment. From the above notification and amendments, it is seen that supply of soft beverages/aerated water, whether in person or room service, by the restaurant located in the premises of the hotel is taxable to GST at the rate of 18%. In the instant case, supply of tobacco products by the restaurant is not a composite supply but involves supply of two individual supplies of goods (tobacco products) and supply of services of serving by the restaurant. Such a supply is a mixed supply - In the instant case, the applicable rate of tax for cigarettes classifiable as CTH 2402 is 14% CGST and 14% SGST as per Sl.no 14 of Schedule IV of Notification No. 1/2017-C.T. (Rate) dated 28.06.2017 and Notification No. II (2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended. Apart from this GST Compensation Cess is applicable at specified rates for different kinds of cigarette product as per Notification No.1/2017-Compensation Cess (Rate) DT 28.6.2017 as amended. Hence, in the case of the mixed supply of cigarettes by the restaurant, in person or room service, the applicable rate is the rate applicable to supply of cigarettes which 14% CGST and 14% SGST as per Sl.no 14 of Schedule IV of Notification No. 1/2017-C.T.(Rate) dated 28.06.2017 and Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended and the applicable GST Compensation Cess is applicable at specified rates for different kinds of cigarette product as per Notification No.1/2017-Compensation Cess (Rate) dt 28.6.2017 as amended. Whether supply of liquor is deemed to be the exempt supply under GST Act as per Section 2 (47) of CGST Act for the purpose of proportionate reversal of ITC as per Rule 42 of CGST rules 2017? - HELD THAT:- As per Section 9(1) of CGST/TNGST Act, the supply of alcoholic liquor for human consumption, is a non-taxable supply. Hence, supply of alcoholic liquor for human consumption by a restaurant will not be taxable under CGST/TNGST Act. It is obligatory on the part of employer to supply free food to the employees. Whether such free supply of food is liable to reverse ITC on inputs as per Rule 42 of CGST Rules 2017? - HELD THAT:- In the case at hand, the applicant provides food through a separate canteen to their employees, who are related persons as a part of the employment contract, i.e., in the course or furtherance of business. Therefore, as per Para 2 to Schedule I of the CGST/TNGST Act, supply of free food to the employees is a supply of service under the Act. Supply of food in a specified place, such as canteen as in the present case is a supply of service with SAC 996333 as given in the Annexure to Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 which provides the Scheme of Classification of services - Therefore, supply of food in the specified canteen by the applicant to their employees without consideration is supply under GST and taxable on the value of such supply as determined by Rule 28 of CGST Rules, 2017 - rate applicable is GST @ of 18%. 2020 (10) TMI 852 Supply or not - supply of educational aids to students such as school bags, footwear, geometry box, wooden colour pencils, crayons, woollen sweater to government and government aided schools - supply of Rain Coats, Ankle Boots and Socks to students without consideration to Government/Government Aided schools located in Hilly areas - eligibility to avail input tax credit - exemption from payment of GST in respect of services received from printers engaged by them for printing of text books - levy of GST on Penalty and Liquidated damages levied by them on suppliers due to violation of the contract terms for supply - rate of GST. Whether the supply of educational aids to students such as school bags, footwear, geometry box, wooden colour pencils, crayons, woollen sweater to government and government aided schools based on the State Government educational policy for which the consideration is paid to Tami Nadu Text Book and Educational Services Corporation by the State Government by means of a budgetary allocation constitutes a supply? - HELD THAT:- In the instant case, the applicant is a society registered under Societies Registration Act, 1860 and hence is a 'person' as per Section 2(84) of CGST/TNGST Act - In the instant case, the applicant was formed as a society by the State government for procuring and supplying textbooks and other items. The applicant is supplying the kits for a consideration which includes cost of the goods plus various administrative charges which is claimed by the applicant. Therefore, the supply of educational aids such as school bags, footwear, geometry box, wooden colour pencils, crayons, woollen sweater by the applicant to the State government for a consideration is a 'supply of goods' in the course of its business as per Section 7 of the Act - the supply of educational kit as above is a 'Supply' and the same is squarely covered as supply of goods specified under Sl.No. 150 of Notification no. 2/2017-C.T. (Rate) dated 28.06.2017 as amended by Notification No.35/2017-C.T. (Rate) dated 13th October 2017 and hence is an exempted supply. As such a supply is exempt. Whether Tamil Nadu Text Book and Educational Services Corporation is entitled to avail of corresponding input tax Credit on the procurement made? - HELD THAT:- As it is seen that the supply of 'Educational Kit' is fully exempted, the applicant is not eligible to the Credit of Input Tax paid on the procurement of such goods. Whether the supply of Rain Coats, Ankle Boots and Socks to students without consideration to Government/Government Aided schools located in Hilly areas is a supply - If the answer to the above is in the affirmative then is Tamil Nadu Text Book and Educational Services Corporation is entitled to discharge its tax liability on such outward supplies at Cost +10% and avail of corresponding Input Tat Credit on the procurement made - HELD THAT:- As per Order No. 204 dated 15.11.2016, it is ordered that based on the announcement of the Chief Minister during the allocation of grants for the year 2016-2017, decision to supply raincoat, boots and socks with expected expenses of ₹ 8 Crores stands announced, accordingly, sanction has been accorded to meet the expenses from the funds already available with the applicant and no separate sanction is accorded. It is evident that separate grant is not allocated but the funds of the applicant have been ordered to be used for the supply. It is seen from the balance sheet of the applicant that all their income comes from the reimbursement from the State Government with any balances let over after expenses of procurement of the various goods as directed by the government. As seen from the Order No. 204 dated 15.11.2016 for supply of these goods, the Government has directed to use the funds already granted and lying unspent with the applicant. Thus, it is to be construed that the grant for the procurement was already given and part of the previous grants left unspent with the applicant. The entry at Sl.No. 150 of the Notification no. 2/2017 -C.T.(Rate) dated 28.06.2017 as amended exempts supply of goods to Government by a Government entity, the consideration of which is in the form of grants. From the Order of the Chief Secretary furnished by the applicant [G.O. No. 204 dated 15.11.2016], it is evident that these supplies have been considered and sanction for these expenses accorded to be used from the funds of the applicant. Therefore, these supplies also are exempt vide the said entry - In as much as the supply of these goods to the Government are held to be exempted, the valuation to be adopted for taxation purposes do not arise and therefore not dealt with. Also, the applicant will not be eligible to avail any input tax paid on these procurements as credit, since the procurement is exclusively towards the exempt supply. Whether Tamil Nadu Text Book and Educational Services Corporation is eligible for exemption from payment of GST in respect of services it receive from printers engaged by them for printing of text books? - HELD THAT:- The ruling can be sought in relation to the supply of goods or services or both undertaken or proposed to be undertaken by the applicant - this question relates to receipt of service and not supply of service by the applicant, therefore the said question is not taken up for consideration for the reason that it is not covered under the purview of this Authority. Whether the Tamil Nadu Text Book and Educational Services Corporation is required to pay GST on Penalty and Liquidated damages levied by them on suppliers due to violation of the contract terms for supply and if so the rate at which such GST is payable? - HELD THAT:- In this case, the applicant has sought a ruling on a supply to be received by the applicant. However, as per Section 95 (a) of CGST/TNGST Act, the ruling can be sought in relation to the supply of goods or services or both undertaken or proposed to be undertaken by the applicant and not received by the applicant. Therefore, the said question is not taken up for consideration for the reason that it is not covered under the purview of this Authority. 2020 (10) TMI 851 Direction to the Respondents to allow/extend the time limit for submitting Forms GSTR-9 and 9C for the Financial Year 2018-19 upto 31st December, 2020 without any adverse consequences to the assessees. HELD THAT:- Stand over to 27th October, 2020. High on board. 2020 (10) TMI 850 Vires of Section 140(1) of Central Goods and Services Tax Act, 2017 - Input Tax Credit - Reverse Charge Mechanism pursuant to Notification No. 15/2017-ST dated 13.04.2017 - HELD THAT:-The instant matter does not fall within the subject matter assigned to this Bench. Therefore, let the matter be listed before the appropriate Division Bench, as per the present distribution of roster. 2020 (10) TMI 849 Refund of Input Tax Credit availed on the license fee - rejection of refund on the ground that neither exported any goods/services nor their supplies fall under the category of inverted tax structure - HELD THAT:- The appellant is having a retail outlet of M/s Indian Oil Corporation for supply of Oil and Lubricant etc., and filed their refund claim under Section 54(3) (ii) of the CGST Act, 2017 in respect of unutilized Input Tax Credit of ₹ 88,850/- for the month of March-2018 accumulated on account of Inverted Tax Structure. Further, Appellant has also stated that due to lack of proper knowledge of rules and regulation they ignorantly ticked the last column Any Other Category instead of refund on account of ITC accumulated on account of Inverted Tax Structure under Section 54 (3) (ii) of the CGST Act, 2017. Section 54(3) of the CGST Act provides that refund of any unutilized ITC may be claimed where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies). Further, Section 2(59) of the CGST Act defines inputs as any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business. Thus, inputs do not include services or capital goods. The Licence Fee paid by the appellant to M/s Indian Oil Corporation does not fall under the definition of inputs as provided under Section 2(59) of CGST Act, 2017. Further, also Licence Fee is not an input for the outward supply of lubricants, Distil water and PUC (pollution under certificate). Therefore, the refund claim filed by the appellant in the instant case does not fall under the category of refund on account of Input Tax Credit accumulated on account of inverted duty structure as provided under Section 54(3) of CGST Act, 2017. Thus the appellant is not entitled to refund. Refund not allowed - appeal dismissed - decided against appellant. 2020 (10) TMI 848 Principles of Natural Justice - Refund of accumulated ITC - export of goods/services without payment of tax - rejection on the ground that the appellant has submitted their refund claim on portal but no relevant documents has been provided physically thus refund claim found inadmissible in terms of Para 7 of Circular No.79/53/2018-GST dated 31.12.2018 issued by the CBIC - case of appellant is that neither Deficiency memo was served, nor opportunity of hearing was provided to appellant - HELD THAT:- The appellant has mainly contested in their appeal memo that adjudicating authority had not issued any deficiency memo in Form RFD-03 and show cause notice in the Form of RFD-08. Also, no opportunity of being heard has been given - As per sub rule (3) of Rule 90 of the CGST Rules, 2017- Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in FORM GST RFD-03 through the common portal electronically, requiring him to file a fresh refund application after rectification of such deficiencies. The adjudicating authority while rejecting the refund claims of the appellant neither given any show cause notice in the FORM RFD-08 nor issued any deficiency memo in the FORM RFD-03 to the appellant and also not granted any opportunity of personal hearing. I also find that non-passing of speaking order indeed amount to denial of natural justice. Show Cause Notice should have been issued and at least speaking order should have been passed by giving proper opportunity of personal hearing to the appellant and detailing factors leading to rejection of refund claim. Such order is not sustainable in the eyes of law and accordingly set aside. The appellant is directed to submit all relevant documents to the adjudicating authority and the claims will be processed as per the provisions and procedure as per prescribed under CSGT Act, 2017 and CCST Rules - Matter on remand. 2020 (10) TMI 847 Demand of Tax and Penalty - whether the Driver of the vehicle in movement was having the valid document at the time of interception or otherwise? HELD THAT:- As per Rule 138A- (1) The person in-charge of a conveyance shall carry- (a) the invoice or bill of supply or delivery challan, as the case may be; and (b) a copy of e-way bill in physical form or the e-way bill number in electronic form or mapped to a Radio Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the Commissioner. In the instant case,the E-way Bill No.731103481404 was generated on 14.11.2019 by M/s Pratap and Sons, A264, Madri Industrial Area, Udaipur-313003 was meant for delivery to M/s Shri Nath Steel, Near Annapurna Nagar, Opp. Bheru Ji Mandir, Jaitaran Pali. Instead, the impugned goods were intercepted in front of the factory premises of the appellant i.e. M/s Mahesh Iron and Steel Re-rolling Mills, RIICO Industrial Area, Beawar Road, Ajmer (Raj) which is completely off route and also without any valid/legal documents and thus violated the provisions of CGST Act and Rules, 2017. The driver of the goods stated that goods were to be off loaded after contacting at mobile No.9782703374. I do not agree with the contention of the appellant that there was subsequent transit sale. I find that if there was subsequent transit sale in movement of goods to Beawar, Ajmer as all parties must have entered into an agreement for transit sale' and execution must be according to agreement. Moreover, a subsequent invoice/E way Bill should have been generated in favour of the appellant for transit sale before interception. But in the instant case there is neither agreement between appellant and other suppliers of goods nor any subsequent invoice/E way Bill are generated before interception. Therefore, it is clearly an afterthought and also in the eyes of law it is not subsequent 'transit sale'. The case laws relied upon by the appellant in their support is squarely not applicable in the instant case. It is absolute clear that the impugned goods in question were not accompanied with any valid documents during the course of interception and the contention of the appellant is an afterthought and not acceptable at this stage - Appeal dismissed. Income Tax 2020 (10) TMI 846 Rectification of mistake u/s 154 - petitioner has prayed for deletion of the interest charged under Section 234A as well as for giving credit of prepaid tax to the tune of ₹ 1,17,54,723/- instead of ₹ 1,10,79,251/- - petitioner states that the respondent has grossly erred in not passing the order on rectification application within the time limit prescribed under Section 154(8) - HELD THAT:- Keeping in view the limited prayer, the present writ petition is disposed of with a direction to the respondent to decide the petitioner s rectification applications dated 15th January, 2020, 05th September, 2020 and 07th September, 2020, in accordance with law, by way of a reasoned order within four weeks after giving an opportunity of hearing to the petitioner. 2020 (10) TMI 845 Reopening of assessment u/s 147 - assessment was reopened after a period of four years on the ground that income chargeable to tax has escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment for the concerned - Tribunal held that on going through the orders passed by the AO and the CIT(A) and the materials, which was placed before the Tribunal, AO has reopened the assessment based on the materials, which were already available on record and it is a mere change of opinion - HELD THAT:- Revenue seeks to re-argue the factual position, which is impermissible in an appeal under Section 260A of the Act, where, we are required to decide only Substantial Questions of Law, which arises for consideration. The power conferred on this Court under Section 260 A of the Act is not to act as a third Appellate Court over the orders passed by the Tribunal. We find from the grounds raised before us that there is nothing brought on record by the Revenue to show that the order passed by the Tribunal was factually incorrect or for that matter, the order passed by the CIT(A). No substantial question of law. 2020 (10) TMI 844 Condonation of delay - ITAT refusing to condone the delay of 317 days, without considering the restoration application filed by the Appellant before CIT(A) was duly acknowledged by CIT(A) - HELD THAT:- We are convinced that the assessee had filed an application before the CIT(A) on 24.07.2018 for recalling the order, dismissing the appeals for default and the date seal is sufficient proof of filing such application. It appears that this record was not placed before the Tribunal when it passed the impugned order. That apart, this Court has always been lenient, more particularly, to the Revenue when appeals are filed with inordinate delay. The reason being this Court is required to take a decision on a Substantial Questions of Law and it would be inequitable to reject the appeal on the ground of delay and also bearing in mind the legal principle that none benefits by lodging an appeal belatedly. The exception to this rule would be, where the delay is on account of mala fide reasons or for certain other collateral purposes. If such is the case, even a delay of one day can be rejected. We find the explanation offered by the assessee to be convincing and acceptable and therefore, the impugned order passed by the Tribunal warrants interference. Appeals filed by the assessee are allowed and the Substantial Questions of Law are answered in favour of the assessee. The order passed by the Tribunal is set aside. Consequently, the common order passed by the CIT(A) [ 2020 (2) TMI 1349 - ITAT CHENNAI] is set aside and the appeals are restored on the file of the CIT(A) to be heard and decided on merits, after affording an opportunity of hearing to the appellant/assessee. 2020 (10) TMI 843 Refund of interest u/s 244A - PCIT directing the petitioner to pay entire tax demand pertaining to the disallowance made on account of other provisions and provisions of contingencies pending the disposal of the appeal - HELD THAT:- Petitioner has no objection if the amount directed to be deposited by the Principal Commissioner of Income Tax-06 is adjusted against the aforesaid refund of interest pending disposal of the appeal filed by the petitioner and the balance amount is paid within reasonable time. This Court is also of the view that the prayer made by the petitioner is fair and reasonable. Accordingly, respondents are directed to adjust the demand raised vide impugned order dated 10th August, 2020 against the refund of interest u/s 244A for assessment year 2008-2009 and pay the balance amount to the petitioner within eight weeks. 2020 (10) TMI 842 Revision u/s 263 - differences between actual sale consideration paid and market value fixed by the Registering Authority - proposal of the PCIT to invoke Section 56(2)(vii) - HELD THAT:- Commissioner has not dealt with the aspects with regard to the argument that 'transfer' within the meaning of Section 2(47)(v) had taken place as there has been part performance of the Contract of Sale. Commissioner interfered with the Assessment Order and directed the AO to assess differential amount of ₹ 24,00,000/-. On appeal before the Tribunal, the Tribunal in our considered view took a correct decision by examining the factual aspects in its entirety and also noted the legal position as to the effect of guideline value fixed by the Government. The settled legal position is that the guideline value has been fixed by the Government for the purpose of computing the Stamp Duty payable on an instrument and the guideline value would not reflect the market value of the property. In support thereof, several decision has been referred. As pointed out, the Tribunal has rightly noted the legal position and considering the entire facts found that the additions made by the PCIT and the order passed under Section 263 of the Act is unsustainable. - Decided in favour of assessee. 2020 (10) TMI 841 TP Adjustment - comparability of Sasken Communication Technologies Ltd with that of assessee - HELD THAT:- This comparable cannot be compared with a contract service provider like assessee and accordingly direct Ld. AO/TPO to exclude this company from finalist. Indexation for computing capital gains on slump sale - Rectification of mistake - Tribunal inadvertently mentioned section 55 instead of section 50 B - HELD THAT:- AO to compute the quantum of capital gains in accordance with law as slum sale. Ld. AO is directed to decide the cost of the undertaking for the purpose of computing capital gains that is arisen on transfer of asset as a going concern and is directed to value as per section 50 B of the act. Ld. AO is also directed to decide the depreciation on the block of assets and capital gain has to be computed in accordance with section 40-50 and section 50 B of the act. Accordingly we allow this ground raised by assessee. Addition u/s 40(a)(ia) for non-deduction of TDS - HELD THAT:- Primarily, this issue is against assesee in case of CIT Vs. Samsung Electronics Ltd. [ 2009 (9) TMI 526 - KARNATAKA HIGH COURT] . However, Ld.AR submitted that TDS has been deducted on payment made to Software Productivity Research Asia Pacific PTE Ltd. Details of the TDS deducted is furnished by assessee in Form 15CB. We therefore directed Ld.AO to verify the same. If claim of assessee is found to be correct, no disallowance should be made to the extend, TDS is deducted. Accordingly this ground raised by assessee stands allowed for statistical purposes. 2020 (10) TMI 840 Penalty u/s. 271(1)(c) and 271AAB - Defective notice - HELD THAT:- In the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present cases cannot be sustained and the same is directed to be cancelled. The above discussion will equally apply to imposition of penalty u/s.271AAB for AY 2015-16 because in terms of section 271AAAB(3) of the Act, provisions of Sec.274 of the Act are applicable to imposition of penalty u/s.271AAB of the Act also. The argument of the department that the provisions of section 292B of the Act will cure the defect, if any, in the show cause notice cannot be accepted because the non-mentioning of the charge against the assessee in the show cause notice cannot be considered as a mistake, omission or defect, which is in substance and effect in conformity with or according to the intent and purpose of this Act. We therefore hold that the CIT(Appeals) was not right in rejecting the plea of assessee in this regard. We are, therefore, of the view that the penalty imposed in all these assessment years are liable to be cancelled. - Decided in favour of assessee. 2020 (10) TMI 839 Correct head of income - Income from sale and purchase of land - chargeable to tax under the head capital gain instead of business income - HELD THAT:- Tribunal in the own case of the assessee [ 2016 (10) TMI 1319 - ITAT AHMEDABAD] has decided the issue in favor of the assessee involving identical facts and circumstances and after considering the order of the Tribunal [ 2013 (4) TMI 950 - ITAT AHMEDABAD] pertaining to the Assessment Year 2006-07 where the activity of purchase and sale of lands was held as business income. Unexplained unsecured loan u/s 68 - CIT- A deleted the addition - HELD THAT:- Assessee has justified the conditions applicable with respect to cash credit u/s 68 i.e. identity, creditworthiness of the parties and the genuineness of the transactions of the loan taken from the parties as discussed above during the appellate proceedings. The necessary details furnished by the assessee in support of his claim were also forwarded to the AO for his comment. CIT(A) has given a clear finding that there was no adverse remark of the AO in the remand report with respect to the impugned unsecured loan. Therefore, CIT(A) has deleted the addition made by the AO. At the time of hearing the Learned DR has not brought anything on record contrary to the finding of the Learned CIT(A). Accordingly, we are not inclined to interfere in the order of CIT(A). Hence, the ground of appeal of the Revenue is dismissed. 2020 (10) TMI 838 Deduction u/s 10A - CIT(A) submitted that the provisions of Section 10A of the Act does not require the assessee to be situated within the area of Software Technology Park - Whether the assessee should be registered with the Software Technology Park scheme and it should commence manufacturing producing computer software on or after 1stApril 1994 which has been duly fulfilled? - HELD THAT:- It is transpired that it is not necessary for the assessee to be situated within the area of Software Technology Park. As such unit/undertaking located within the jurisdiction of the designated officer of Software Technology Park can be registered on standalone basis. Delhi Tribunal in the case of Xerox India Ltd. [ 2009 (10) TMI 71 - ITAT DELHI-B ] has taken a view that the registration with Software Technology Park is sufficient compliance for claiming the deduction under Section 10A of the Act. Moving forward it is pertinent to mention that Revenue itself has allowed deduction under Section 10A of the Act to the assessee for first time in the A.Y. 2004-05. In subsequent assessment years, the assessee by following the same claimed deduction under Section 10A and Revenue has not disputed the same. However, in the year under consideration the AO disallowed the deduction only after Learned Commissioner set aside the Assessment Order u/s 263 of the Act. Hence, it is transpired that the Revenue was convinced to the fact that assessee is eligible for deduction under Section 10A. Ground of appeal of the Revenue is dismissed. 2020 (10) TMI 837 Penalty u/s 271(1)(c) - Defective notice - non specification of charge - assessment u/s 153A - HELD THAT:- Notices are bad in Law as it did not specify under which limb of Section 271(1)(c) of the I.T. Act the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. Since the issue of notice itself is bad in Law, therefore, it vitiate the entire penalty proceedings and as such, the penalty proceedings are liable to be quashed. In view of the above discussion, we set aside the Orders of the authorities below and quash the penalty proceedings and delete the penalties in all the appeals - SEE M/S SSA S EMERALD MEADOWS [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] AND M/S MANJUNATHA COTTON AND GINNING FACTORY OTHS., M/S. V.S. LAD SONS, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] - Decided in favour of assessee. 2020 (10) TMI 836 Status of the partnership firm treated as AOP - partnership deed is executed on an inadequate stamp paper - whether no such condition is no where spelt out in provisions of section 184 or 185 of the Income Tax Act, 1961? - AO disallowing entire partner's salary for the reason that it is treated as AOP and assessed as AOP - HELD THAT:- Procedural laws merely prescribing the manner in which such rights and responsibilities may be exercised, in this case the stamp paper on which the partnership deed has been executed cannot alter the status already determined substantively. The decision of the Hon‟ble Supreme Court referred by the Ld. CIT(Appeals) BIHARI LAL JAISWAL AND OTHERS [ 1995 (11) TMI 2 - SUPREME COURT] in respect there to, we also agree that while deciding an issue under the Income Tax Act, other legislations allied laws has to be considered. But in this case of the assessee, substantively nothing has been brought against the assessee by the Revenue Authorities. As assessee firm is already registered under the Assistant Registrar of Firm, Pune, Maharashtra, PAN has also been allotted as firm and even in the assessment order, the status of the firm is mentioned as that of the partnership firm. Department is accepting all the genuineness of existence of the partnership firm and only for this technical aspect of deed executed in the lessor denomination stamp paper has framed the assessment treating the assessee as AOP. Revenue Authorities may call upon the assessee in due course for rectification of this technical defect. In the totality of facts and circumstances and on examination of this issue as afore-stated, we are of the considered view that the assessee is duly constituted partnership firm. Hence, we set aside the order of the Ld. CIT(Appeals) on this issue and direct the Assessing Officer to provide appeal effect accordingly. Thus, Ground Nos.1 and 2 raised in the appeal are allowed. Disallowance u/s 40(a)(ia) - TDS on architect fees and labour charges deducted on the same but was not paid till 31.03.2012 - assessee‟s Counsel stated that the said amount had not been deposited in the Government‟s account - scope of amended provisions of Section 40(a)(ia) - HELD THAT:- One final opportunity should be provided to the assessee for proper verification of facts whether TDS were deducted or whether the same were deposited in the Government account and also for the fact that the Ld. DR did not raise any objection, we restore this matter to the file of the AO for verification as directed above and adjudicating the matter while complying with the principles of natural justice. Thus, Ground No.3 raised in appeal by the assessee is allowed for statistical purposes. Enhancement of income - additional sales declared and admitted by the assessee or not? - Amount received in cash which was not recorded in the books of account to the assessee firm - HELD THAT:- It is clear that if in the additional income offered for taxation, the said amount of ₹ 3,76,000/- is not found to be included then that would be taxed separately. But on the other hand, if the contention of the Ld.AR is found correct then already the said amount has faced taxation. The Assessing Officer shall verify accordingly. This issue is therefore restored to the file of the Assessing Officer for verification and adjudication while complying with the principles of natural justice as directed hereinabove. Thus, Ground raised in appeal by the assessee are allowed for statistical purposes. 2020 (10) TMI 835 Disallowance u/s 14A - addition by passing order u/s 154 - addition in respect of the administrative expenses incurred for earning of tax exempt income which include dividend income earned from investment in wholly subsidiary company and Agriculture Income - assessee did not make suo motu disallowance of expenditure in respect of the aforesaid tax exempt income earned by the assessee - Whether there were sufficient funds available with the assessee company for the purposes of making the investment ? - as per assessee investments made were old investment and that the same were out of the own surplus funds of the assessee - HELD THAT:- AO has applied Rule 8D(2)(iii) directly without considering the submissions of the assessee that the assessee has not incurred any expenditure in this respect and that all the investment were strategic investments for business purposes of the assessee. As per the provisions of section 14A of the I.T. Act, before proceeding to calculate disallowance under Rule 8D(2)(iii), the Assessing Officer was supposed to consider the submissions of the assessee and examine the accounts of the assessee and was required to record his findings / reasoning that he is not satisfied with the plea / submissions of the assessee. However, no such exercise has been done by the AO in this case. It is to be noted that out of the total dividend income of ₹ 7,45,55,286/-, an amount of ₹ 7,45,49,286/- has been earned by the assessee from old investments in wholly owned subsidiary company M/s Saraswati Sugar Mills Ltd. The remaining of only ₹ 6,000/- has been earned from other company M/s Reliance Industries Ltd. However, the fact is also on the file that the assessee has maintained / managed not only old strategic investments for business purpose in wholly owned subsidiary / sister concern but also made old investments in other companies. Considering the submissions of the assessee that not much effort has been made by the assessee to manage the old investments and further considering that the major chunk of the dividend amount was earned from strategic investments made in the subsidiaries, in our view, a lump sum disallowance of ₹ 5 lacs will be reasonable on account of administrative expenses incurred for management of old investments. The disallowance made on account of administrative expenses is accordingly restricted to ₹ 5 lacs only. - Decided partly in favour of assessee. 2020 (10) TMI 834 Under valuation of stock of work in progress in the form of semi finished goods and unpacked finished goods - valuation of opening inventory of work in progress - Addition by reducing the value of opening work in progress - HELD THAT:- As DR could not point out any infirmity in the order of the coordinate bench for immediately preceding year where the corresponding addition has been deleted, we respectfully following the decision of the coordinate bench [ 2019 (4) TMI 1382 - ITAT DELHI] allow ground number 1 of the appeal of the assessee and direct the learned assessing officer to delete the addition on account of adjustment of reduction in the value of opening work in progress for this year. Disallowance of the interest expenditure - AO computed the interest that should have been received by the assessee applying the rate of 12.25% - HELD THAT:- As decided in own case [ 2019 (4) TMI 1382 - ITAT DELHI] non-or lower interest-bearing advances given to subsidiary or sister concern are less than interest free funds in form of share capital and reserves and surplus available with assessee, interest disallowance u/s 36 (1) (iii) of The Act cannot be made. Hence, in view of above facts, we reverse finding of lower authorities in disallowing interest expenditure. Addition to the job charges recovered at a lesser rate from sister concern M/s Dharampal Premchand Ltd then prevailing market rate - HELD THAT:- As decided in own case [ 2019 (4) TMI 1382 - ITAT DELHI] addition of higher rate of job charges is on hypothetical basis and against concept of real income. Further, it is not open to assessing officer to sit in armchair of assessee and to make business decisions on arbitrary basis. Further, there is no provision in Income tax The Act, 1961 that warrants such adjustment and as such, action of assessing officer in increasing rate of job work charged from sister concern M/s. Dharampal Premchand Ltd. is not sustainable under law. Decided against revenue. Disallowance u/s 14A - assessee has received dividend during the year which is claimed as exempt u/s 10 (34) - assessee itself made voluntary disallowance of ₹ 915,256/ in the computation of total income u/s 14A - HELD THAT:- As departmental representative could not show that what is the satisfaction recorded by the learned assessing officer about the correctness or otherwise of the disallowance offered by the assessee on its own, therefore, respectfully following the decision of the coordinate bench in assessee s own case for immediately preceding year, we direct the learned assessing officer to delete the disallowance u/s 14 A of the income tax act applying the provisions of rule 8D. Loss on sale of commodities - Addition holding the same is speculative transaction and hence the loss is a speculative loss - HELD THAT:- The assessee has given the details of the transaction entered into by the assessee. Contract notes issued by all brokers were submitted before us. All of them are registered with a stock exchange. They have also shown the forward market commission membership numbers, on their bills/contract notes their permanent account number is also submitted. The contract note shows order number, trade number, trade time, quantity, rate , value, and total of the brokerage charges. It also shows in which commodity assessee has transacted. Therefore, before us assessee has submitted a detail of the commodity transaction with time and date stamp transactions. DRP has held that such details are not available. These details are now available with us but we are not aware whether the complete details were available with the assessing officer or not. We set aside this issue to the file of the learned assessing officer with a direction to verify the bills whether they contain the time and date stamp or not. If, they are found to be in order, and if they are covered by the decision quoted before us, the learned assessing officer is directed to decide this issue afresh in light of our observation as above. Disallowance of deduction u/s 80 IB/IC - Addition by applying the provisions of Section 80 IA (8) in respect of the transfer of Kathha and Supari from Noida Division II the eligible industrial undertaking on which deduction is allowable - HELD THAT:- As decided in own case [ 2019 (4) TMI 1382 - ITAT DELHI] addition was partly upheld by the coordinate bench based on the order of the learned CIT A with respect to the profit margin of the goods which are not processed and sent to eligible unit directly. The learned departmental representative could not show us any reason to either increase the above rate neither AR demonstrated that the addition confirmed by coordinate bench in this year is unjustified, therefore, respectfully following the order of the coordinate bench in assessee s own case for that year, we also direct the learned assessing officer to recompute the deduction following the order of the coordinate bench for that year. Disallowance of deduction u/s 80 IB/80 IC by applying the provisions of Section 80 IA (8) in respect of transfer from silver foil division - HELD THAT:- In assessee s own case for immediately preceding year at most processing cost of silver is service that has been transferred by noneligible unit to eligible unit, which should have been done at market rate. At present assessee has considered process cost on actual cost basis and has loaded on price of silver - we direct assessing officer to adopt a margin of 2% over process cost of processed silver transferred from non-eligible unit to eligible unit and to sustain disallowance of deduction to that extent only. - we direct the learned assessing officer to recompute the eligible profit following the order of the coordinate bench in earlier years with similar directions. Allocation on account of interest to the eligible unit - reducing the deduction claimed by the assessee by the above sum applying the provisions of Section 80 IA (8) read with Section 80 IB (13) and 80 IC (7) - HELD THAT:- AO has merely applied mathematical formula without looking at the nature of interest expenditure which have not been allocated to the eligible unit. He has merely stated that total interest expenditure should have been allocated to the various manufacturing units whether they relate to the eligible unit or not. Such is not the mandate of the law to determine the profit eligible which is derived from manufacturing activity for deduction u/s 80 IB/80 IC of the act. The claim of the assessee is that this allocation of interest which assessee is using for last several years which has been accepted by the coordinate bench also in assessment year 2004 05. This argument of the assessee has not been controverted by the learned departmental representative. In view of this, we hold that the eligible profit of the industrial undertaking should not have been reduced by the assessing officer by the unallocated interest expenditure which are not at all related directly or indirectly to the operations of those unit thereby should not result into reduction of the profit eligible for deduction u/s 80 IB/80 IC of the act. Accordingly ground of the appeal of assessee is allowed. Disallowance of deduction u/s 80 IB/80 IC on account of corporate adjustment in cost of services allocated to the eligible industrial undertaking by head office invoking the provisions of Section 80 IA (8) - HELD THAT:- DR could not point out any reason to deviate from the decision of the coordinate bench in assessee s own case for earlier years. He also could not point out any change in the facts and circumstances of the case of that the loading of the mark up on allocated cost of the goods or services is justified or any other reasons. He could not also show that this is not a mere allocation of the third-party cost to the eligible and non-eligible units and there is no value addition is involved therein. Therefore respectfully following the decision of the coordinate bench, the ground number 10 of the appeal of the assessee is allowed and the learned assessing officer is directed to delete the disallowance of deduction u/s 80 IB/80 IC on account of purported adjustment in cost of services allocated to eligible industrial undertaking. Disallowance of deduction u/s 80 IB/80 IC on allocation of depreciation on fixed assets installed at head office and manufacturing units to eligible units - HELD THAT:- As in assessee s own case for earlier years, we direct the learned assessing officer to delete the disallowance on account of allocation of depreciation. Calculation of deduction u/s 80 IB/80 IC by applying the provisions of Section 80 IA (8) for use of brand Rajnigandha - HELD THAT:- In the present case it is apparent that brand is owned by the assessee company and no royalties paid by the assessee to any outsider or third party. The learned assessing officer has made the addition/reduce the deduction of the assessee u/s 80 I B/80 IC by comparing the brand Rajanigandha with the brand Tulsi Mix . DR could not show us any deviation in the facts or any brand royalty paid by the assessee with respect to the products manufactured in eligible unit. In view of this, respectfully following the decision of the coordinate bench, we direct the learned assessing officer to delete the disallowance of deduction claimed by the assessee. Disallowance of deduction u/s 80 IB/80 IC in respect of royalty paid to such a concern Dharampal Premchand Ltd on the basis of the provisions of Section 80 IA (10) - HELD THAT:- As decided in own case [ 2019 (4) TMI 1382 - ITAT DELHI] it may be appreciated that rate approved by Regional Director is maximum rate and there could we no ground or basis for treating same for any adjustment in terms of provisions of section 80IA(10) r.w.s 80IB(13) and 80IC(7) of The Act. It is relevant to note that same rate of royalty @1% is being paid by both eligible as well as non-eligible units and as such, impugned adjustment is on arbitrary and mechanical basis - order of ld CIT(A) deleting adjustment of deduction u/s 80IB/IC on account of notional royalty in respect of Tulsi Brand in excess of 1% being payable by eligible units to M/s. Dharampal Satyapal Sons P. Ltd. Deserves to be upheld as same rate was applied and accepted even by AO in respect of non-eligible units. Accordingly, ground number 5 of appeal of learned assessing officer is dismissed. Ad hoc disallowance is on purchase of sandalwood oil - AO held that this was a camouflaged device of bogus sale of product at a very high rate and the proceeds were returned back to the assessee company - HELD THAT:- Respectfully following the decision of the coordinate bench in assessee s own case, we direct the learned assessing officer to delete the disallowance of deduction claimed u/s 80 IC. Transfer pricing adjustment in respect of benchmarking of interest received on foreign currency loan - HELD THAT:- The assessee company has given a foreign currency loan to that company in Switzerland. The assessee has provided such loan out of its noninterest- bearing own funds and not out of the interest-bearing borrowed funds. The learned assessing officer as in previous year held that interest rate of 12.6% based on SBI +300 BSP should be at arm s-length level of interest that needs to be charged for the loan advanced by the assessee. However there is no change in the facts compared to earlier year the loan was given to its associated enterprise in Switzerland at the interest rate of 3% per annum. Currency of loan is a foreign currency. The assessee has benchmark the interest rate considering LIBOR. The coordinate bench in earlier year considered the agreement of the loan, the rate of interest, the currency in which the loan is to be repaid and thereafter relying on the decision of JYOTI CNC AUTOMATION PVT LTD. [ 2018 (8) TMI 757 - GUJARAT HIGH COURT] deleted the above addition. Therefore respectfully following the decision of the coordinate bench in assessee s own case for earlier year, we direct the learned transfer pricing officer/learned AO to delete the addition on account of the arm s-length price of the interest income from its associated enterprise in Switzerland. Ground of the appeal is allowed. 2020 (10) TMI 833 Rectification of mistake u/s 254 - certain mistakes apparent on record have occurred in the common order in [ 2019 (8) TMI 1225 - ITAT CHANDIGARH] - escaped attention of the Tribunal - Reference has been made to certain additional facts and evidences stating that the Tribunal has erred in not taking note of these additional facts and evidences - HELD THAT:- DR could not point out any mistake in the impugned order which can be said to be a mistake apparent from record. In fact, the Department through these applications seeks the review of the order by way of pleading additional facts which is not permissible in a rectification application u/s 254(2) of the Income Tax Act, 1961. This Tribunal does not have any power to review its own order. Power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent; mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. Even failure by the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment and under such circumstances the Tribunal has no jurisdiction under section 254(2) to pass the second order. In this case the Ld. DR has failed to point out what fact or even any argument coming from record, the Tribunal has failed to consider in the order dated 12.7.2019. - Decided against revenue. 2020 (10) TMI 832 Estimation of income - Unexplained expenditure u/s 69C - addition made on the basis of information received from the Sales Tax Department, Maharashtra that the assessee obtained accommodation entries from M/s Vardhman Traders, a Hawala dealer - HELD THAT:- In the present case, the assessee has shown gross profit of 12.06% in the assessment year under consideration and 16.81% in the preceding assessment year. The facts and the issues involved in the present case are identical to the facts and the issues involved in the case of M/s Abhijeet Plastic India Pvt. Ltd. [ 2020 (8) TMI 62 - ITAT MUMBAI] and the coordinate Bench has directed the AO to make addition to the extent of shortfall to make the gross profit to 15%. We set aside the impugned order passed by the CIT (A) and direct the AO to determine the GP of the assessee @ 16.81%, which is the GP of the assessee in previous assessment year holding that the expected GP cannot be less than the GP achieved in the previous assessment year. 2020 (10) TMI 831 Estimation of income - Bogus purchases - only reason for which AO doubted the genuineness of transaction was, the assessee could not produce the concerned parties - CIT-A estimated the suppressed profit at 12.5% of the alleged non genuine purchases - HELD THAT:- Inability to produce the parties could be for various factors, including, their non cooperation with the assessee. But, that by itself cannot be a reason to disallow the entire purchase by treating them as non genuine. Assessee has furnished all documentary evidences including stock statement showing the consumption of material at site which were also submitted to bank from where the assessee is availing cash credit facility. The aforesaid fact clearly proves that the assessee, indeed, had purchased the goods and the goods have entered its stock and were utilized/consumed in the work. The doubt, if any, is only with regard to the source of purchases. In such circumstances, the entire purchases cannot disallowed. As rightly observed by Commissioner (Appeals), only the profit element embedded in such purchases can be considered for disallowance. Considering the nature of business carried on by the assessee, in our considered opinion, disallowance @ 12.5% of the alleged non genuine purchases is fair and reasonable. Hence, needs to be upheld. - Revenue appeal dismissed. Customs 2020 (10) TMI 830 Validity of Notification dated 29.03.2019 - the notification was amending the import policy in respect of peas (pisum sativum) including yellow peas, green peas, dun peas and kaspa peas having Exim code 0713 1000 - goods were put into restricted category via the said notification - Rajasthan High Court by order dated 20.07.2019 issued notice and stayed the operation and effect of the aforesaid notification and trade notice qua the petitioner. HELD THAT:- The jurisdiction conferred on the Principal Commissioner of Customs or Commissioner of Customs under sub-section (2) of section 129 D is revisional and not review; it is a suo-motu revisional jurisdiction which is exercised by either of the above two officers for the purpose of satisfying himself as to the legality or propriety of any decision or order of an adjudicating authority subordinate to him - The time limit for passing an order under sub-section (2) of section 129D is three months which is provided in sub-section (3) though the said period can be extended by another thirty days by the Central Board of Indirect Taxes and Customs. Sub-section (4) clarifies that if pursuant to an order passed under sub-section (2), the adjudicating authority or any officer of customs authorized in this behalf by the Principal Commissioner of Customs or Commissioner of Customs makes an application to the Commissioner (Appeals) within the time specified, such application shall be heard by the Commissioner (Appeals) as if it were an appeal made against the decision or order of the adjudicating authority and the provisions relating to appeals shall be applicable to such application. The suo-motu revisional power under sub-section (2) of section 129 D is within a very narrow compass; to ensure that the subordinate authorities are kept within the bounds of their authority to make them act according to law; according to the procedure established by law; and according to well defined principles of justice; thus conforming to the requirement of legality or propriety - Also, consequent upon exercise of power under sub-section (2) of section 129 D, the application filed before the Commissioner (Appeals) would be treated as if it is an appeal against the decision or order of the adjudicating authority and all provisions regarding appeal shall apply to such an application. The first ground given to justify as to why the order-in-original is not legal and proper is non-issuance of show cause notice - HELD THAT:- Section 124 of the Customs Act deals with issuance of show cause notice before confiscation of goods etc. It says that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice in writing containing the grounds for the proposed action, and thereafter giving him an opportunity of making a representation in writing within reasonable time. However, the first proviso is relevant and it says that the show cause notice and the representation may at the request of the person concerned be oral. Therefore, under section 124 of the Customs Act at the request of the owner or person concerned, the show cause notice and the representation in writing may be waived and thus may be oral - In the instant case, petitioner made a request not to issue show cause notice but to give him personal hearing. This was accepted by the adjudicating authority which power admittedly he has under the first proviso to section 124 and he has given reasons for the same i.e., long pendency and perishable nature of the consignments. Non-addressal of the issue of suspension of import export code of the petitioner - HELD THAT:- The adjudicating authority could not have taken up and examined such order of suspension. Besides, from a perusal of the order of suspension dated 16.12.2019 it is evident that the said order has barred the petitioner from conducting any further import and export meaning thereby that it is prospective and in no way impacted the import made prior to that date which was the subject matter of adjudication in the order-in-original. The third ground given by the Commissioner which is that the adjudication order ordered redemption of the goods on the basis of the assumption that the goods should be released against redemption fine without considering other issues, such as, suspension of import export code, restrictive nature of import, etc. - HELD THAT:- This ground can be examined together with the fourth and the sixth grounds given by the Commissioner. As per the fourth ground , the adjudicating authority did not give reasons as to why absolute confiscation or re-export was not considered as an option and as per the sixth ground , enquiry was not conducted for ascertaining the market price and margin of profit for imposition of redemption fine and penalty. When the goods were not cleared, those were allowed to be warehoused under section 49 of the Customs Act and the goods remained warehoused for about nine months. Considering the long pendency of the consignment besides its perishable nature and the fact that the consignments were rotting in the open yard of the Mumbai Port Trust facing the fury of the monsoons, the adjudication was taken up on priority. Adjudicating authority noted that the imports were made in contravention of the notification dated 29.03.2019 and trade notice dated 16.04.2019. Thus, the goods became prohibited, liable for confiscation - the adjudicating authority calculated the margin of profit @ Re.1 per kg as suggested by the assessing officer and on that basis worked out the redemption fine in terms of the second proviso to sub-section (1) of section 125 - the adjudicating authority had the power to give option to the owner or person concerned to pay fine in lieu of confiscation which power he exercised and the quantum of fine was determined after considering various aspects including the margin of profit suggested by the assessing officer. The final ground given by the Commissioner is that the adjudicating authority did not discuss why he chose to rely upon the certificate of the accredited laboratory rather than referring the matter to the designated government agency - HELD THAT:- The ground itself indicates that the laboratory from which the related report was obtained and which was considered is a laboratory which is accredited to the customs department. Accredited means giving official authorization or recognition. Therefore, no fault can be found in the adjudicating authority placing reliance on such report. Besides, no technical or any other fault in such report has been pointed out by the Commissioner. We cannot say that the order-in-original is unlawful or inappropriate or unjust or that the adjudicating authority acted beyond the bounds of his authority. However, since application has been filed which will now be decided by the Commissioner (Appeals) as an appeal, we only limit our examination to the justification or otherwise of not releasing the goods of the petitioner on the strength of the order dated 01.10.2020. - Petitioner has complied with the terms and conditions of the order-in-original and made the necessary payments. Out of charge has been issued. Because of warehousing of the goods under section 49 of the Customs Act, petitioner is required to pay a substantial amount to the customs authority. In the above context and after thorough consideration of all aspects of the matter, we are of the view that non-release or withholding of the imported goods of the petitioner any further would not be just and proper. At least the grounds given in the order dated 01.10.2020, which order itself was passed in a highly improper manner, do not justify that the goods should be withheld or denied release notwithstanding the order-in-original and compliance thereto. The respondents are directed more particularly respondent Nos.4 to 7 to forthwith release the goods of the petitioner - petition allowed. 2020 (10) TMI 829 Prohibition on export of all varieties of onions with immediate effect - Validity of N/N. 31/2015-20 dated 14.09.2020 issued by Director General of Foreign Trade, Department of Commerce, Ministry of Commerce and Industry, Government of India - basic grievance of the Petitioners are that their bills for export of onions were prior to issuance of notification dated 14th September, 2020 whereby export of onions has been prohibited; yet those are not being permitted to be exported. HELD THAT:- A conjoint reading of sections 50 and 51 of the Customs Act would prima facie indicate that a great deal of sanctity is attached to a shipping bill and a bill of export, shipping bill in the present case. While presenting a shipping bill the exporter has to disclose all the relevant information pertaining to the export and has to make a declaration as to the truthfulness of the contents of the shipping bill - In exercise of the powers conferred by section 157 (general power to make regulations) read with section 50 of the Customs Act, the Central Board of Indirect Taxes and Customs have made a set of regulations called the Shipping Bill (Electronic Integrated Declaration and Paperless Processing) Regulations, 2019 (2019 Regulations). Authorized person has been defined to mean an exporter or a person authorized by him under regulation 2(b). Electronic integrated declaration has been defined under regulation 2(c) to mean particulars relating to the export goods that are entered in the Indian Customs Electronic Data Interchange System. Under regulation 2(d), ICEGATE has been defined to mean the customs automated system of Central Board of Indirect Taxes and Customs. Shipping bill has been defined under regulation 2(g) to mean an electronic integrated declaration accepted and assigned a unique number by the Indian Customs Electronic Data Interchange System, and includes its electronic records or print outs. Thus, filing and generation of shipping bill is not an empty formality. It has a definite meaning assigned to it under the 2019 Regulations. It sets in motion the process of exportation of goods. The 2019 Regulations only reinforces the sanctity attached to a shipping bill under section 50 of the Customs Act - we may also usefully refer to internal communication of the Central Board of Indirect Taxes and Customs dated 18.09.2020 whereby clarification has been issued on date of shipment / dispatch in respect of exports having regard to the provisions contained in paragraph 9.12(B) of handbook of procedure. It says that wherever procedural / policy provisions have been modified to the disadvantage of the exporters, the same shall not be applicable to consignments already handed over to the customs for examination and subsequent exports upto public notice / notification date. It has been clarified by the Central Board of Indirect Taxes and Customs that this provision would remain applicable wherever the conditions are met. In continuation of our order dated 25.09.2020, export of onions in respect of the shipping bills which were presented and generated prior to 22:28:11 hours on 14.09.2020 shall be allowed subject to the clarification given by the Central Board of Indirect Taxes and Customs in its communication dated 18.09.2020 - List this matter in the first week of December, 2020 for fixing a date of hearing. Corporate Laws 2020 (10) TMI 828 Condonation of delay in filing appeal - time limitation - Appellant states that there was delay beyond 90 days because of the age factor of the Appellants and that the Appellants are senior citizens and distance from Guwahati to Delhi - HELD THAT:- Under Section 421 of the Companies Act, the period of Appeal is 45 days and we can entertain the Appeal after expiry of the said period but within a further period not exceeding 45 days. In the present matter, the Appeal was filed on 20th July, 2020. There was lockdown from 23rd March, 2020. But then, it can be seen that before that itself, more than 90 days period had been consumed. By end of February 2020, 98 days appear to have been consumed. The Appeal is time-barred and the Appeal is dismissed. 2020 (10) TMI 827 Transfer of land and machinery of 1st Respondent Company - Section 241 of Companies Act, 2013 - HELD THAT:- The waiver, extension, relaxation of conditions precedent to the Asset Transfer Agreement are at the instance of the purchaser i.e, Respondent No.2 herein and in case the purchaser agrees for the said waiver, the Agreement may be carried forward by the parties concerned. The Petitioners herein have not been able to establish in all their pleadings and oral arguments as to how their interest have been prejudiced with the said three transactions relating to transfer of land as mentioned in the prayer Clause (2) of their petition. The petitioners also have not been able to establish as to how the said transactions constitute an act of oppression as against them and what tangible loss was caused to the Company with the said transactions especially when they themselves had been party to the decision of Respondent No.1 Company in relation to the EGM held on 16.04.2016. In order for the petition under Section 241 of the Companies Act 2013 (previously under Section 397/298) to succeed against the majority shareholders, the Petitioners have to bring on record material, tangible and real damage to their proprietary interests due to misdeeds complained of and committed by majority shareholders/Management. The said non-extension of Long Stop Date has not been found to be so severe so as to warrant grant of reliefs as prayed by the Petitioners. Accordingly, we are of the considered view that the Petitioners have not been able to make out case of oppression and mismanagement fit for grant of the said reliefs i.e, against item Nos. 5.1 (a) to (d) herein above. The request for investigation of Respondent Nos 1 2 Companies as mentioned against item No. 5.1 (e) is also not acceded to as the Petitioners have failed to bring on record any material evidence in support of their demand for such a relief. In view of the above discussion, the said petition filed under Section 241 and u/s 213 of the Companies Act, 2013 deserves to be dismissed. Petition dismissed. 2020 (10) TMI 826 Pledge of property - existence of two subsisting status quo orders on the properties of the Company which is restricting the Company to pledge its properties to raise funds from Banks and other Financial Institutions - threat from the lenders to surge the interest rate and take coercive legal steps if the dues of corporate lenders are not cleared. HELD THAT:- CLB missed a most basic principle of Section 397, namely, that mere unfairness does not constitute oppression. When the petitioners were given the right to subscribe to the 'rights issue' along with all others in the same proportion, no prejudice, whatsoever, could have been caused to them. It is not in dispute even by the petitioners that the need for more funds was an admitted position - In fact, no unfair prejudice has been caused to the petitioners. The CLB failed to take note of all these vital aspects and relied on irrelevant materials. Apart from these, it is pointed out that the company having turned the corner and doing well, it would be fair exercise of discretion by this Court not to interfere with the High Court judgment. The impugned judgment of the High Court is fair to both sides and safeguards the interest of the directors and shareholders; hence there is no valid ground to interfere under Article 136 of the Constitution of India. It is true that there is status-quo order passed by the CLB as well as Civil Court with regard to the assets of the Company. Therefore, 1st Applicant Company cannot sell any of its assets to discharge the debt due to the lenders. The only way to discharge the debt of the Creditors is to raise additional capital by issuing shares to the existing shareholders and for which purpose the order dated 07.12.2006 passed by the CLB directing the company to maintain status-quo with regard to shareholding pattern, is to be relaxed by permitting the 1st Applicant Company to go for rights issue according to the provisions of Section 62 of the Companies Act, 2013 - We are making it very clear that relaxation of order dated 07.12.2006 is for the limited purpose of raising additional capital by issuing additional shares for discharging the debt due to the creditors and after completing the process, the order passed by the erstwhile CLB as regards to the status-quo of shareholding pattern will continue. However, the persons acquiring shares in pursuance of Rights Issue cannot exercise additional voting rights to the extent of shares accrued in the Rights Issue until further orders or till disposal of the main petition, whichever is earlier. Application disposed off. Insolvency & Bankruptcy 2020 (10) TMI 825 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Debt or not - Civil Suit for specific performance - non-allotment of 39100 sq. ft. built-up area of land or not - default in terms of Section 3(12) of the I B Code, 2016 - HELD THAT:- Under Section 5(8)(f) of I B Code, any amount raised from allottee under a real estate project shall be deemed to be an amount having the 'commercial effect of borrowing' and thus, would be covered under the definition of 'Financial Creditor' as defined under Section 5(7) of the Code. It is thus, clear that the Appellant can claim a Financial debt as an 'allottee' only when the amount raised from it as an 'allottee' is used for a real estate project. In the facts and circumstances, the Appellant is neither an 'allottee' nor has any amount 'being raised' or 'raised' from it, that may be construed as to have the effect of borrowing - Appellant's Application as a Financial Creditor is not maintainable, and no amount has been paid by the Appellant to the Respondent. There is no financial debt in favour of the Appellant. It is pertinent to mention that Appellant's pleading is that the amounts have been paid by the Appellant to the Respondent and the consent decree itself is the debt for which Section 7 Application has been filed. Default or not - HELD THAT:- The Financial Creditor filed a suit before Delhi High Court in 1992 and on the direction of the Hon'ble High Court the Corporate Debtor returned principal amount, i.e. Rs two crores to the Financial Creditor in January 1995 and to compensate interest-free security of Rs two crores for five years,given the terms of the settlement, the Applicant and Corporate Debtor entered into an agreement dated 10th April 1996, whereby the Applicant/Appellant was allotted 34000 sq. ft. area of built-up area. It was also agreed upon that in case the project is delayed; the Applicant would get an additional 5100 sq. ft area of built-up area. The 'debt' as alleged by the Financial Creditor is not a 'financial debt' as defined under sub Clause (8) of Section 5 I B Code, 2016, because no sum has been raised from an allottee under the Real Estate Project. The Financial Creditor and its associates have not paid any money towards the allotment of built-up area. Given the terms of settlement Financial Creditor and its associates entitled to 34000 sq. ft. In other words, nothing is paid in terms of money to the Financial Creditor and its associates in the light of the consent decree and settlement terms . The Corporate Debtor has not raised any money from the Financial Creditor in terms of the explanation provided to sub-clause (8) of Section 5 of I B Code, 2016. Thus, it is clear that the alleged debt is not a financial debt in terms of Sec 5(8)of the Code - Thus it cannot be said that there is any default by the Respondent under the Code, as the time for performance has not arrived yet and therefore in terms of various decisions of Hon ble Supreme Court it is clear that even if the consent decree is a debt , even then there is no Default by the Respondent in terms of the Code. Appeal dismissed - decided against appellant. 2020 (10) TMI 824 Maintainability of application - initiation of CIRP - Corporate Debtor had committed default in repayment and thereby the loan was recalled by issuing of Section 13(2) notice under the SARFAESI Act 2002 on 20th November 2017 by classifying the account of the Corporate Debtor as NPA - existence of debt and dispute or not - time limitation - HELD THAT:- Admittedly, the Corporate Debtor has issued the letter dated 11.11.2016. It is a letter addressed to the CEO and Managing Director of ARCIL, in reply to the letter dated 19.9.2016 issued by the ARCIL to the Corporate Debtor. A reading of the letter reveals that it was issued by the Corporate Debtor without any prejudice. The subject matter of this letter is related to a proposal for settlement and acceptance of the proposal for the settlement. As per the letter, the Corporate Debtor along with the Group Companies proposed terms of settlement for the acceptance of the Financial Creditor. The Uniworth Group agreed to settle the entire debt amount for an amount of ₹ 75,00,00,000/- and tendered an amount of ₹ 11,25,00,000/-. The Ld. Sr. Counsel for the Corporate Debtor further would submit that ₹ 38,85,00,000/-also paid thereafter and balance payable is ₹ 23, 90, 00,000/- and showed its readiness to pay the balance in compliance of the part of the obligation on the side of the Financial Creditor 50% of the agreed amount the Financial Creditor shall release the charge of assets of the Corporate Debtor acquired by the Financial Creditor and since the charge was not released as per the understanding the balance payable as per the settlement has not been paid. According to him, suppressing the said payment towards the debt payable as agreed the Financial Creditor filed this application and, therefore, this application is liable to be dismissed. One another objection raised on the side of the Corporate Debtor is that O.A. No. 162/2014 filed by the ARCIL has been decreed on 06.02.2019 during the pendency of the present proceedings and Review Petition challenging the said decree has been filed before the DRT, Nagpur and it is pending for consideration. Therefore, recourse to be taken by the Financial Creditor would be to execute the decree got in favour of the Financial Creditor and without having such recourse, filing this application amounts to recovery of the decreed amount which does not come within the objectives of the Code and thus liable to be dismissed. Thus, the claim of the Financial Creditor being found time barred, it can be held that the debt even if it is due, is not payable in law. Accordingly this application is liable to be dismissed - application dismissed. 2020 (10) TMI 823 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - whether the claim of the financial creditor is barred by law of limitation? - HELD THAT:- The default had admittedly occurred on 31.08.2012 and the present application has been filed on 26.10.2018, prima facie, this application is barred by limitation since it has been filed beyond limitation period. A look at the statement of accounts related to the account of the Corporate Debtor indicates that the above said deposit was not part payment towards the loan amount liable to be paid by the Corporate Debtor but was deposited by the Allahabad Bank. Accordingly, the submission on the side of the Financial Creditor that fresh period of limitation would start from 18.03.2016 is found devoid of any merit - No other argument was advanced on either side. Though the application filed is complete as per section 7(5) of the Code, the claim being found barred by law of limitation this application is liable to be dismissed. Application dismissed. 2020 (10) TMI 822 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - pre-existing dispute or not - time limitation - HELD THAT:- The time begins to run in this case for filing this application was on 21st July, 2009 and nothing in this case to hold that the period of 3 years starting from the said date can be extended to 29.06.2018 as attempted to establish on the side of the Operational Creditor - thus, the application filed on 29.06.2018 is hopelessly barred by limitation. Pre-existing dispute or not - HELD THAT:- The Corporate Debtor has raised dispute regarding the non compliance of terms in the work orders and the Ld. Additional District Judge had been given the liberty to the Corporate Debtor to raise the dispute again if the Operational Creditor preferred a fresh claim before the Micro, Small Medium Enterprise Facilitation Council. The dismissal of the award of Facilitation Council was mainly for the reason of non consideration of dispute raised by the CD before the Facilitation Council. So the said order evidenced that the preexisting dispute between the OC and the CD is still pending. That being so the CD has successfully established existence of dispute before the date of issuance of demand notice. Accordingly it can be rightly concluded that the Operational Creditor has failed in establishing that the debt as claimed by the Operational Creditor is due and payable under any law and that the claim preferred by the Operational Creditor was within the period of limitation. Moreover, the Corporate Debtor here in the instant case established existence of disputes. Accordingly, this application is liable to be dismissed. Application dismissed. 2020 (10) TMI 821 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- This Adjudicating Authority has to satisfy itself with the facts of the case and especially the fact that a clear case is made out for the initiation of CIRP under this provision and then exercise its discretion as to the fitness of a case for triggering the same. In this exercise, the Adjudicating Authority has to tread carefully to keep a balance between the Financial Creditor to whom monies are owed, and on the other hand, the Corporate Debtor and his business, and that its value should be maximised or at least not diminish to the detriment of all stake holders, including the financial creditor. It is also well settled that the provisions of the Code cannot be invoked for recovery of outstanding amount but can be invoked to initiate CIRP for justified reasons as per the Code - the Petitioner's recovery exercise had begun and is continuing when it has chosen to come prematurely before this Tribunal, although the Agreement itself provides other options for recovering its dues, such as by sale of the assets taken as security from the Respondent/Corporate Debtor. It is clear that the Petitioner intends to use this process for recovery alone, without making out a case for initiation of CIRP, which is not permissible. Since the Financial Creditor and the Corporate Debtor were seriously engaged in a settlement exercise, a more proactive approach would help, such as approaching the higher Authorities or Committees set up under the Banking Regulation (Amendment) Act, 2017, by the RBI to seek advice on the resolution of stressed assets, or taking recourse to the options available under the Agreement for recovery, by appropriating the assets held as security. Instead of exercising these options for recovery of its debt, the Financial Creditor has opted to hastily come to this Authority seeking initiation of CIRP against an otherwise solvent company. The Petition is therefore premature. Petition is disposed of with the directions that the Petitioner/Financial Creditor and the Respondent/Corporate Debtor should continue their settlement efforts, allowing reasonable time to the Corporate Debtor to organise funds from the proceeds of sold/ready for sale houses/plots, failing which it may pursue recovery of its debt through the mechanism mentioned and mutually agreed to in the Agreement dated 19.05.2016. PMLA 2020 (10) TMI 820 Release of Provisional Attachment of properties/funds - relief prayed proceeds on the premise that the petitioner was a young boy and a student of Purdue University, Indiana, United States of America and, was in no manner connected with the commission of the scheduled offence or in possession of proceeds of crime and therefore, the attachment of his properties was illegal - HELD THAT:- In terms of the directions passed by this Court vide order 17.08.2020, the Adjudicating Authority, under the provisions of Prevention of Money Laundering Act, 2002, has finally adjudicated the provisional attachment orders No.02/2020 dated 18.02.2020 and 06/2020 dated 30.06.2020, vide their orders dated 21.09.2020 and 25.09.2020, respectively - It is an admitted position that the said orders dated 21.09.2020 and 25.09.2020 respectively, rendered by the Adjudicating Authority are appealable orders, in terms of the mandate of the provision Section 26 of PMLA Act. The order dated 22.07.2020 impugned in the present appeal has been admittedly rendered otiose - Appeal allowed. Central Excise 2020 (10) TMI 819 Imposition of the oil cess and National Calamity Contingent Duty (NCCD), education cess (EC), secondary and higher secondary education cess (SHE) - condensate which emerges out during the process of processing of the natural gas in the appellant‟s natural gas processing plant - it was held by CESTAT that the oil cess is not leviable on the condensate and under OIDA. HELD THAT:- The Civil Appeal is dismissed on the ground of low tax effect. 2020 (10) TMI 818 Levy of Penalty - disallowance of CENVAT Credit - supplementary invoice raised by job worker - suppression of facts or not - revenue neutrality - extended period of limitation - HELD THAT:- Admittedly the transaction between BALCO and VAL is duly documented and properly recorded in the books of accounts of both the companies. Further, the method of valuation adopted for clearance of calcined alumina from VAL to BALCO was under a business like formula based on the price of aluminium at LME. Further, from the facts on record, we find that there is no incentive for VAL to suppress the clearance value or pay lower tax. Whatever duty was payable as per the invoice, the same was to be paid by BALCO to VAL. Secondly, it has been demonstrated from the appeal paper book, being the extract of cenvat credit, that VAL alone had sufficient credit balance in their cenvat account exceeding ₹ 1 crore, whereas the duty payable was in few lakhs only and thus the cumulative credit balance in cenvat register of VAL was increasing from month to month. Further, it is evident from record that the parties suo motu changed the basis of valuation to the tender price of NALCO for calcined alumina (under International Competitive Bidding). Revenue Neutrality - HELD THAT:- The situation is wholly revenue neutral as BALCO is clearing their finished product on payment of duty, and whatever duty is charged by VAL is available to BALCO as cenvat credit. Suppression of facts or not - penalty - extended period of limitation - HELD THAT:- Upon enquiry and investigation by Revenue, disputing the method of valuation of calcined alumina by VAL, on being so advised agreed to the valuation as suggested by Revenue and suo motu deposited the differential duty alongwith interest much prior to issue of show cause notice. VAL also bonafide issued supplementary invoice to BALCO in December, 2009. Thus, we find that the issue is wholly interpretational in nature, and there is no element of fraud, suppression or intention to evade payment of duty. Reliance placed by Revenue on the show cause notice of VAL is erroneous and misconceived. We further find that the allegation by Revenue are bald and unsubstantiated. Only for the reason that VAL instead of contesting the show cause notice went for settlement before the Settlement Commission, no adverse inference can be drawn against the appellant BALCO - The benefit of N/N. 214/86-CE was available to BALCO i.e. they could have received calcined alumina from VAL without payment of duty, as prescribed. Further, the extended period of limitation is not warranted in the facts and circumstances, there being no suppression of facts or attempt to evade duty, etc. Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2020 (10) TMI 817 Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT:- The petitioner is entitled to the inclusion of High Speed Diesel Oil as a commodity in the registration certificate. Let this exercise be carried out within a period of four (4) weeks from date of uploading of this order. The request of the petitioner for issuance of C Forms is allowed as a consequence thereof. Issue decided in the case of M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [ 2019 (2) TMI 1850 - MADRAS HIGH COURT] where it was held that benefit is allowed. Petition allowed. 2020 (10) TMI 816 Scope of Section 7(1)(a) of the Tamil Nadu Value Added Tax Act - allegation that the petitioners had claimed ITC while effecting local sales of food and drinks, they would fall under Section 7(1)(a) - whether the Department was right in bringing the petitioners, which are Hotels, of non-star category, under the purview of Section 7(1)(a) of the Tamil Nadu Value Added Tax Act, on the ground that they have claimed the Input Tax Credit (ITC). HELD THAT:- Perusal of the Act clearly reveals that while Section 7(1)(a) applies to Star Hotels, Section 7(1)(b) would be made applicable for the Hotels, which are not under the Star Category . The distinction is very clear on a bare reading of the section itself. As such, the very basis on which the petitioner has been brought under the purview of Section 7(1)(a), is contrary to the provision. As rightly pointed out by the learned counsel for the petitioner, even assuming that the petitioner had wrongly claimed ITC, the only option available to the Department would be to reverse the ITC as provided under Section 27(2) of the TNVAT Act. Such a submission is correct and proper. As such, if the respondent was of the view that the claim of ITC has been wrongly made, the only option available is to reverse such an ITC instead of bringing them under the purview of Section 7(1)(a) of the TNVAT Act. As such, the levy of tax under Section 7(1)(b) and the consequential penalty imposed, cannot be sustained. However, if the respondent is granted an opportunity to rework the issue by taking into consideration the observations made in this order, the ends of justice could be secured. Matter are remanded back to the respondent for fresh consideration after giving due opportunity of personal hearing to the petitioner, as expeditiously as possible - petition allowed by way of remand. Indian Laws 2020 (10) TMI 815 Validity of order passed by Lower Court, which has been stayed by the Hon ble High Court, Bombay - HELD THAT:- We must remind the Magistrates all over the country that in our pyramidical structure under the Constitution of India, the Supreme Court is at the Apex, and the High Courts, though not subordinate administratively, are certainly subordinate judicially. We expect that the Magistrates all over the country will follow our order in letter and spirit. Whatever stay has been granted by any court including the High Court automatically expires within a period of six months, and unless extension is granted for good reason, within the next six months, the trial Court is, on the expiry of the first period of six months, to set a date for the trial and go ahead with the same. The order dated 04.12.2019 is set aside with a direction to the learned Additional Chief Judicial Magistrate, Pune to set down the case for hearing immediately - application disposed off.
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H: Validity Of Order passed u/s 73 - cryptic order - The High Court found...

H: Validity Of Order passed u/s 73 - Denial of ITC with respect to the su...

F: PAYMENT TO CINE OR TV ARTISTS. LIABILITY UNDER RCM

H: Demand of late fee u/s 47(1) of the CGST / SGST Act - delay in filing ...

H: Transitional credit - Unutilized amount of Advanced VAT paid - The cou...

H: Validity of Reassessment notices issued unsigned - maintainability of ...

H: Unexplained cash credit u/s 68 - The Court highlighted that transactio...

H: LTCG - Receipt of additional amount towards TDR - treatment to receipt...

H: Validity of Assessment order u/s 147 r.w.s. 144B - Procedural Irregula...

C: Extension of due date for filing of Form No. 10A/10AB under the Income...

H: Condonation of delay - substantial delay of 166 days before ITAT - The...

H: Income deemed to accrue or arise in India - Attribution of Profit to p...

H: Condonation of delay - Delay in filling of an appeal before ITAT - The...

H: LTCG - Determination of Fair Market Value (FMV) - The Assessing Office...

N: Export of 2,000 MT of White Onion under Code 0703 10 19

F: Sec 16(4) Reversal of ITC when 3B is filed belatedly

C: Ease of Doing Business: Text on Contract Note with respect to Fit and ...

H: Rejection of application for registration u/s 12AA(1)(ac)(iii) r.w.s 8...

H: Estimation of income - bogus purchases - The Tribunal recognized the a...

H: Penalty u/s 270A - allegation of misreporting as per section 270A(9) -...

A: REFUND OF ITC ON EXPORT OF GOODS WITHOUT PAYMENT OF TAX – RULE 89(4) O...

A: FILING APPEAL AS PER THE DIRECTIONS OF HIGH COURT

A: Understand the Contrasts between Government and Public Limited Companies

A: PIL challenging provisions of 101st Constitutional Amendment Act relat...

N: Exemption from specified income U/s 10(46) – ‘Kerala Autorickshaw Work...

C: Unauthorised foreign exchange transactions

A: Excess or Short Payment of Customs Duty on Import of goods into India

A: AVAILABILITY OF GOOD FAITH CLAUSE IN SECTION 157 OF THE GST ACT TO THE...

A: Understanding the Scope of Accounting.

A: GST not payable on amount recovered from permanent employees for cante...