TMI Tax Updates - e-Newsletter
October 9, 2019

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs Insolvency & Bankruptcy Service Tax Central Excise Indian Laws

Highlights / Catch Notes

• Income Tax:

  Assessment of interest income on FCNR-B deposits - joint FCNR(B) Bank account with the assessee’s non-resident - the PCIT is justified in giving direction to the AO to verify, re-quantify and tax the interest amounts accrued which were wrongly not taxed in the earlier assessment order after giving appropriate opportunity of being heard.
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• Income Tax:

  Levy of penalty u/s.271E - repayment of the loan in cash - the completion of assessment proceedings is not a condition precedent for initiation of penalty proceedings u/s. 269T.
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• Income Tax:

  Accrual of income - Addition towards interest on bank fixed deposits on the basis of TDS statements 26AS - given that the transaction has been reflected in Form 26AS, the onus is on the assessee to demonstrate that such transaction doesn’t represent real income in its hands - additions confirmed.
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• Income Tax:

  Levy of penalty u/s 271AAA - Addition u/s 69A post search - assessee’s argument that the assessee’s explanation has not been found to be false and, therefore, penalty is not sustainable is not acceptable.
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• Customs:

  Valuation - inclusion of 'demurrage' and 'dispatch' money - Sub-Rule (2) of Rule 10 of the Customs Valuation Rules, held as to be bad and hence declared ultra vires the Constitution/provision of Section 14 of the Customs Act, 1962, struck down.
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• IBC:

  Initiation of CIRP - applicability of time limitation - recovery of dues - The date of coming into force of the IBC Code does not and cannot form a trigger point of limitation for applications filed under the Code. Equally, since “applications” are petitions which are filed under the Code, it is Article 137 of the Limitation Act which will apply to such applications.
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• Service Tax:

  Challenge to the Show Cause Notice (SCN) - Maintainability of writ petition - earlier Single member bench of HC allowing the petition, quashed the SCN - The writ ought not to have been entertained when the respondent-writ petitioner had participated in the assessment proceedings. - Decision reversed.
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Articles

• Bombay High Court question claim of the State that it is business friendly.
• Summary of the changes made vide Notification issued on 30.09.2019
• How to get maximum Deposit Insurance (DICGC) Cover on deposits (over ₹ 1 lac) from a single Bank

Notifications

• GST - States

• S.O. 372 - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department notification No. S.O. 52, dated the 07th March, 2019.

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• S.O. 371 - 25/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Notifies that the following activities or transactions undertaken by the State Governments Service by way of grant of liquor licence, against consideration in the form of licence fee or application fee.

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• S.O. 370 - 24/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department notification No. 07/2019-State Tax (Rate), dated the 29th March, 2019.

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• S.O. 369 - 23/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department notification No. 4/2018-State Tax (Rate), dated the 25th January, 2018.

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• S.O. 368 - 22/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department notification No. 13/2017-State Tax (Rate), dated the 29th June, 2017.

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• S.O. 367 - 21/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department Notification No. 12/2017-State Tax (Rate), dated the 29th June, 2017.

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• S.O. 366 - 20/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department Notification No. 11/2017-State Tax (Rate), dated the 29th June, 2017.

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• S.O. 365 - 19/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Exempt supply of goods for specified project under FAO.

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• S.O. 364 - 18/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department notification No. 02/2019-State Tax (Rate), dated the 07th March, 2019.

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• S.O. 363 - 17/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department notification No. 26/2018-State Tax (Rate), dated the 31st December, 2018.

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• S.O. 362 - 16/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department Notification No. 03/2017-State Tax (Rate), dated the 29th June, 2017.

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• S.O. 361 - 15/2019-State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department Notification No. 02/2017-State Tax (Rate), dated the 29th June, 2017.

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• S.O. 360 - 14/2019- State Tax (Rate) - dated 30-9-2019 - Bihar SGST
  Amendments in the Notification of the Commercial Taxes Department Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017.

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• S.O. 359 - dated 27-9-2019 - Bihar SGST
  Appoints the 24th day of September, 2019, as the date on which the provisions of rules 10, 11, 12 and 26 of the Bihar Goods and Services Tax (Fourth Amendment) Rules, 2019 [notification No. S.O. 321, dated the 03rd July, 2019.

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• 16/2019-State Tax (Rate) - dated 3-10-2019 - Delhi SGST
  Seeks to amend Notification No. 3/2017-State Tax (Rate), dated the 30th June, 2017

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• 12/2019-State Tax (Rate) - dated 3-10-2019 - Delhi SGST
  Amendment in Notification No. 1/2017-State Tax (Rate), dated the 30th June, 2017

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• 38/1/2017-Fin(R&C)(25/2019-Rate) - dated 1-10-2019 - Goa SGST
  notifies that the following activities or transactions undertaken by the Government - Service by way of grant of alcoholic liquor licence, against consideration in the form of licence fee or application fee.

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• 38/1/2017-Fin(R&C)(24/2019-Rate) - dated 1-10-2019 - Goa SGST
  Amendments in the Government Notification of India, in the Ministry of Finance (Department of Revenue), No. 38/1/2017-Fin(R&C)(7/2019-Rate) dated 29th March, 2019.

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• 38/1/2017-Fin(R&C)(23/2019-Rate) - dated 1-10-2019 - Goa SGST
  Amendments in the Government notification No. 38/1/2017--Fin(R&C)(4/2018-Rate) dated 24th January, 2018.

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• 38/1/2017-Fin(R&C)(22/2019-Rate) - dated 1-10-2019 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(13/2017-Rate) dated the 30th June, 2017.

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• 38/1/2017-Fin(R&C)(21/2019-Rate) - dated 1-10-2019 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C) (12/2017-Rate) dated 30th June 2017.

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• 38/1/2017-Fin(R&C)(20/2019-Rate) - dated 1-10-2019 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(11/2017-Rate) dated 30th June, 2017.

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• 38/1/2017-Fin(R&C)(19/2019-Rate) - dated 1-10-2019 - Goa SGST
  Exempt supply of goods for specified project under FAO.

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• 38/1/2017-Fin(R&C)(18/2019-Rate) - dated 1-10-2019 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(2/2019-Rate)/2527 dated 8th March, 2019.

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• 38/1/2017-Fin(R&C)(17/2019-Rate) - dated 1-10-2019 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(26/2018-Rate) dated 31st December 2018.

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• 38/1/2017-Fin(R&C)(16/2019-Rate) - dated 1-10-2019 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(3/2017-Rate) dated 30th June, 2017.

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• 38/1/2017-Fin(R&C)(15/2019-Rate) - dated 1-10-2019 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(2/2017-Rate), dated 30th June, 2017.

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• 38/1/2017-Fin(R&C)(14/2019-Rate) - dated 1-10-2019 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(1/2017-Rate) dated 30th June, 2017.

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• 38/1/2017-Fin(R&C)(112) - dated 1-10-2019 - Goa SGST
  Appoints the 24th day of September, 2019, as the date on which the provisions of rules 10, 11, 12 and 26 of the Goa Goods and Services Tax (Fourth Amendment) Rules, 2019 [notification No. 38/1/2017 Fin (R&C) (105)/3058, dated 3rd July, 2019.

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• 38/1/2017-Fin(R&C)(111) - dated 1-10-2019 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(97), dated 8th March, 2019.

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• 43/2019-State Tax - dated 30-9-2019 - Gujarat SGST
  Amendments in the Government Notification, Finance Department No. No. (GHN-25)GST-2019/S.10(1)(5)TH dated the 7th March, 2019 Notification No.14/2019-State Tax - non-eligibility for aerated water under composition

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• 25/2019-State Tax (Rate) - dated 30-9-2019 - Gujarat SGST
  Activities of giving liquor licence by State Government as public authority is under section 7(2) under GGST.

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• 24/2019-State Tax (Rate) - dated 30-9-2019 - Gujarat SGST
  Amendments in the Government Notification, Finance Department No.(GHN-31)GST-2019/S.9(4)(1)-TH dated the 30th March, 2019, Notification No.7/2019-State Tax (Rate). - To notify certain services to be taxed under RCM under section 9(4) of GGST Act for real estate sector.

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• 20/2019-State Tax (Rate) - dated 30-9-2019 - Gujarat SGST
  Amendments in the in the Government Notification, Finance Department No.(GHN-32 )GST-2017/S.9(1)(2)-TH dated the 30th June, 2017, Notification No.11/2017- State Tax (Rate).

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• 19/2019-State Tax (Rate) - dated 30-9-2019 - Gujarat SGST
  To exempt supply of goods from FAO for specified projects.

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• 18/2019-State Tax (Rate) - dated 30-9-2019 - Gujarat SGST
  Amendments in the Government Notification, Finance Department No.(GHN-22)GST-2019/S.11(1)(42)-TH dated the 7th March, 2019, Notification No.02/2019-State Tax (Rate).

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• 17/2019-State Tax (Rate) - dated 30-9-2019 - Gujarat SGST
  Amendments in the Government Notification, Finance Department No. (GHN-129)GST-2018/S.11(1)(37)-TH dated the 31st December, 2018, Notification No.26/2018-State Tax (Rate).

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• 15/2019-State Tax (Rate) - dated 30-9-2019 - Gujarat SGST
  Amendments in the Government Notification, Finance Department No.(GHN-36)GST-2017/S.11(1)(1)-TH dated the 30th June, 2017, Notification No.2/2017-State Tax (Rate).

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• 43/2019-State Tax - dated 1-10-2019 - Maharashtra SGST
  Seeks to amend notification No 14/2019- State Tax dated 7.3.2019 so as to exclude manufacturers of aerated waters from the purview of composition scheme.

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• 42/2019-State Tax - dated 1-10-2019 - Maharashtra SGST
  Seeks to bring rules 10, 11, 12 and 26 of the MGST (Fourth Amendment) Rules, 2019 in to force.

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• 43/2019-State Tax - dated 30-9-2019 - West Bengal SGST
  Seeks to amend notification No 380-FT dated 7.3.2019 regarding composition levy

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• 42/2019-State Tax - dated 30-9-2019 - West Bengal SGST
  Seeks to bring rules 10, 11, 12 and 26 of the WBGST (Fourth Amendment) Rules, 2019

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• 15/2019-State Tax (Rate) - dated 30-9-2019 - West Bengal SGST
  Seeks to amend notification No 1126-F.T. dated 28.6.2017 regarding exempted goods

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• 14/2019-State Tax (Rate) - dated 30-9-2019 - West Bengal SGST
  Seeks to amend Notification No. 1125-F.T. [1/2017-State Tax (Rate)] dated 28/06/2017

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News

• CCI receives first green channel combination

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• Revenue Secretary inaugurates National e-Assessment Centre of IT Department

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• FM to inaugurate National e-Assessment Centre of Income Tax Department Today

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Case Laws:

• GST

• 2019 (10) TMI 274
  Classification of Supply - composite supply - principal supply - rate of GST - supply of desktops consisting of CPU, monitor, Keyboard and mouse or any combination of input/output unit - whether the CPU along with the Monitor or other input /output units supplied by the applicant is a single supply of Desktop Computer classifiable under CTH 8471 50 or is a Composite Supply as defined under Section 2(30) of the CGST /TNGST Act 2017, the Principal supply being the CPU classifiable under CTH 8471 and the applicable rate of GST on such supply? HELD THAT:- In terms of explanation (iii) and (iv) contained in the notification no. 1/2017-C.T.(Rate), dated 28.06.2017, Tariff item , sub-heading , heading and Chapter shall mean respectively a tariff item, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification - the Automatic Data Processor machine with Input/ Output Units are listed under CTH 8471 while monitors capable of directly connecting to and designed for use with ADP is specified under CTH 8528. Section Note 4 to Section XVI indicates that where a machine consists of individual components, intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. In the instant case in the tax invoice submitted by the applicant the product description is given as Desktop Computer which in common parlance and technical sense known as a system unit which is otherwise known as a central processing unit along with its connected peripheral units of input output devices. In this case the processing unit gives essential character to the product in question. Hence, the desktop consisting of CPU, monitor, Keyboard and mouse supplied by the applicant is a single supply classified under CTH 8471. The applicable rate of tax for CTH 8471 is 9%-CGST under SI.No. 360 of Schedule-Ill of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 9% -SGST under SI.No. 360 of Schedule-Ill of Notification No.II (2)/CTR/532(d-14)/2017 vide G.O. (Ms) No. 72 dated 29.06.2017 as amended.

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• 2019 (10) TMI 273
  Maintainability of application - matter already pending before other authority - Classification of goods - Chewing Tobacco - applicability of N/N. 01 / 2017 -Compensation Cess-(Rate) - HELD THAT:- From the comments furnished by the Commissioner GST Central Excise, Trichy, it is seen that the proceedings in respect of the applicant on the very issue raised by him before this authority has been initiated and an offence case booked vide O.R. No. 17/2018-19(DPU-GST) dated 09.01.2019. We find that the application is filed on 06.02.2019 i.e after the proceedings initiated under the provisions of the GST Act. As per the first proviso to Section 98(2) of CGST/TNGST Act 2017 the authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act. In the case at hand, it is established that the issue raised by the applicant is pending before the Jurisdictional authority at the time of filing of this application - Therefore, the same cannot be admitted and is to be rejected without going into the merits of the issue.

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• 2019 (10) TMI 272
  Permission for withdrawal of application - export of services - intermediary services - HELD THAT:- The application filed by the Applicant for Advance Ruling is disposed of as withdrawn.

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• 2019 (10) TMI 271
  Permission for withdrawal of application - Classification of goods - Dried Coconut (Shelled Peeled) - HELD THAT:- The application filed by the Applicant for Advance Ruling is disposed as withdrawn.

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• 2019 (10) TMI 270
  Release of seized goods alongwith the vehicle - section 130 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- By way of ad-interim relief, the respondents are directed to release the vehicle along with the goods contained therein subject to the petitioner filing an undertaking that in case if, ultimately, it does not succeed in the proceedings, it shall deposit the balance amount payable, as may be computed by the respondent authorities, which shall be without prejudice to the right of the petitioner to challenge any adverse order that may be passed. Issue Notice, returnable on 23.10.2019.

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• 2019 (10) TMI 269
  Release of seized vehicle alongwith the goods - goods are perishable in nature - section 130 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The respondent No.2 is directed to forthwith release the vehicle together with the goods contained therein, subject to the petitioner filing an undertaking to the effect that if he ultimately fails in the petition, he will pay the amount as computed by the respondents under the impugned notice dated 21.9.2019 issued under section 130 of the Central Goods and Services Tax Act, 2017. Stand over to 17th October, 2019.

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• 2019 (10) TMI 268
  Release of goods alongwith the truck - section 130 of the CGST Act - HELD THAT:- By way of interim relief, the respondents are directed to release the Truck No. MH18BG6450 along with the goods, upon the petitioner depositing a sum of ₹ 1,50,000/with the concerned authority subject to the ultimate outcome of the petition. Issue Rule, returnable on 17.10.2019.

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• 2019 (10) TMI 267
  Validity of assessment order - it was contended that the proceedings of the assessments were initiated beyond the period of limitation stipulated under Section 25(1) of the Kerala Value Added Tax Act, 2003 - HELD THAT:- We are of the opinion that a remand of the writ petition to the Single Judge for adjudication on the question as to whether the impugned assessments are hit by Section 25(1) of the KVAT Act, would suffice to meet the ends of justice. The writ petition is restored on to the files of this court - appeal allowed.

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• Income Tax

• 2019 (10) TMI 266
  Monetary limit - low tax effect - HELD THAT:- As noticed by this Court that a letter has been sent from the Dy. Director of the Income Tax (SCC) on 10.12.2018 citing that the above cases do not fall within the ambit of Circular No.3/2018 of CBDT. Hence all the matters were listed again today i.e. 01.10.2019 for clarification and direction. Having regard to Letter dated 10.12.2018 we are of the view that the order dictated in the open Court on 25.09.2019 in the above matters shall not be given effect to. Though Mr. Arijit Prasad, learned senior counsel appearing for the Department and Mr. Ajay Vohra, learned senior counsel appearing for some of the assessees, have submitted that the above matters are squarely covered under the latest Circular dated 08.08.2019 in view of the tax effect, however, we deem it appropriate to list all the above matters for further hearing on merits.

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• 2019 (10) TMI 265
  Non-releasing of the refund - mismatch in TDS - HELD THAT:- Direction to refund the claim of the petitioner manually and release the same subject to withholding of the amount of mismatch. Writ Petition is disposed of with the following directions - AO shall process the refund claim of the petitioner manually for the assessment years 2007-08 to 2013- 14 and release the refund as found due with statutory interest after withholding the said sum of ₹ 49,30,180/-. This exercise shall be completed within two weeks from today. We keep the larger question of withholding of the refund by one unit of the Income Tax Department for the TDS mismatch across the country open. In the present case, however, the said order was passed on the basis of facts and circumstances pointed out to us and we therefore, see no reason to recall/modify the order. Before closing, it is recorded that no part of the refund can be withheld in relation to the income tax demands, which are either quashed by appellate authority or tribunal or stayed.

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• 2019 (10) TMI 264
  Grant stay on recovery - as seeked Revenue should not adopt any coercive proceedings till the disposal of the appeal by CIT(A) - HELD THAT:- Once it is held that an appeal under the Act is maintainable from the impugned order dated 14th March, 2010 passed by the Assessing Officer, then all incidence of an appeal would equally apply in the case of the Petitioner. It is also not disputed that once the Petitioner has filed an appeal before the CIT(A), it is open to the Petitioner to make appropriate application before the Authorities under Section 220 (6) of the Act, for stay of the demand till the final disposal of the appeal before the CIT(A). It would, therefore, be open to the Petitioner to take such measures as are available under the Act to obtain an appropriate order, seeking a stay of the recovery of the demand confirmed by an order dated 14th March, 2019. Looking at the huge demand and the attitude of the Revenue in curtailing the normal period of 30 days available to party to make a payment, it would be appropriate that till the disposal of the Petitioner s application under Section 220(6) of the Act and if the order on such application is adverse to the Petitioner, then for a period of two weeks thereafter, no coercive proceedings will be adopted by the Revenue. This, of course, subject to the Petitioner filing the necessary application within a period of two weeks from today. In the above view, we are not inclined to grant direction (a) as sought by the Petitioner. Addl. Solicitor General states that the CIT(A) would endeavor to dispose of the appeal as expeditiously as possible and preferably within a period of six months from today.

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• 2019 (10) TMI 263
  Refusal of refund of excess paid as income tax - HELD THAT:- What the Petitioner seeks to convey, as urged by the Petitioner, is that if the amount is refunded, they have no objection for adjustment of ₹ 82 Crores. Second, the sentence does not convey that any time in future the amount can be adjusted without notice depriving the Petitioner of opportunity to point out changed circumstances if any. By bare perusal of the letter, we are of the opinion that both the submissions of the Petitioner are correct. The Respondents have relied on the above-underlined sentence. However, the Respondents have noted only the first part regarding the adjustment of refund of 82 crores. It does not acknowledge the subsequent part of the sentence regarding the release of the due balance. Request for return of long overdue refunds is reiterated in the subsequent sentence. That the Petitioner earlier did not object does not mean that the Respondents can make this sentence as a foundation to deviate from the mandate of prior notice under Section 245 of the Act all time to come. Almost one and a half years had passed, and there were subsequent events that could be pointed out. Since no prior notice was issued to the Petitioner before adjusting the refund, there was a breach of the requirement under section 245. The letter dated 19 February 2018 cannot be made the basis of deviating from the mandate under section 245. The sequitur is that the impugned communication adjusting the amount must be quashed and set aside. So also the notice dated 31 July 2019 under Section 245is set aside with liberty to the Deputy Commissioner of Income Tax to issue a fresh notice under Section 245 of the Act.

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• 2019 (10) TMI 262
  TDS u/s 195 - Payment for services received by the respondent outside India - Permanent Establishment (PE) in India - Indo-China DTAA - HELD THAT:- Application of DTAA which results in no income arising for the service providers in India is a concluded issue. Therefore, the occasion to examine Section 195 of the Act in these facts would not arise. No occasion to deduct tax at source would arise in the absence of any income in the hands of the service providers outside India in view of Section 195 of the Act. Even otherwise a retrospective amendment cannot cast an obligation to deduct tax when not in force at the relevant time i.e. when payment was made. This Court in Commissioner of Income Tax V/s. M/s. NGC Networks (India) Pvt. Ltd. [ 2018 (5) TMI 1148 - BOMBAY HIGH COURT] has held that a party cannot be called upon to perform an impossible act i.e. to comply with the provision which was not in force at the relevant time. Admittedly, the Explanation if applicable is introduced later by a retrospective amendment. Thus, there could be no obligation to deduct tax at source when the payments have been made to the service providers abroad in the absence of a specific provision at the time when the payments were made. - Decided against revenue

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• 2019 (10) TMI 261
  Reopening of assessment u/s 147 - notice issued only in the name of the dead person - HELD THAT:- This Court finds that such notice is not sustainable. As perusal of the impugned notice in this case would show that it was not simply issued in the name of the dead person alone and on the other hand, it proceeds to indicate that the same was issued in the name of V.Maruthachalam, represented by legal heirs and by showing three persons, including the petitioner, as the legal heirs. Therefore, the notice issued u/s 148 in this case cannot be construed as if it was issued only in the name of the dead person. As rightly pointed out by respondent, the petitioner can file return and seek for reasons for reopening and in that event it is the duty of the respondent to give reasons so as to enable the petitioner to file his objection to the reopening proceedings. Needless to say that once such objections are filed, a speaking order is to be passed by the respondent as observed in GKN Drive Shaft's [ 2002 (11) TMI 7 - SUPREME COURT] . When such course of action is yet to take place, do not think that the petitioner is entitled to maintain the writ petition by challenging the notice issued u/s 148 at the very initial stage. Writ petition is disposed of, by granting liberty to the petitioner to follow the procedures laid down after issuance of Section 148 notice as explained/clarified in GKN Drive Shaft's case. Accordingly, the petitioner shall file the return, as required in the impugned notice within a period of 15 days from the date of receipt of a copy of this order and ask for the reasons for reopening.

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• 2019 (10) TMI 260
  Penalty u/s 271(1)(c) - claiming an expenditure u/s 37 that was not incurred to earn the income in the relevant previous year - HELD THAT:- In the case of Commissioner of Income Tax Vs. Reliance Petroproducts Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] the Supreme Court observes that a mere making of claim, which is not sustainable in law, by itself, will not amount to furnish inaccurate particulars regarding the income. Therefore, mere making of a claim which is disallowed in quantum proceedings, cannot by itself be a ground to impose penalty under Section 271(1)(c) of the Act. The fact that the respondent assessee was following the above method since 1990-1991 till the subject Assessment Year and there was no dispute in respect thereof save for the Assessment Year 2006-07 and the subject assessment year. This fact itself would militate against imposition of any penalty upon the respondent on the ground of furnishing inaccurate particulars of income. The Tribunal correctly set aside the order passed by the Commissioner of Income Tax (Appeals) and directed the Assessing Officer to delete the penalty - Decided in favour of assessee.

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• 2019 (10) TMI 259
  Bogus LTCG - Addition u/s 68 - HELD THAT:- Assessee was under a duty to discharge the primary onus that lay upon him that the amounts, reflected a genuine transaction and were borrowed from existing parties which was creditworthy. The materials on record show that of these three ingredients that atleast in regard to two ingredients assessee could not produce sufficient materials to convince the revenue authorities. No question of law therefore arises. As regards the plea advanced by the assessee regarding the HUF owned property, it is noticeable that the family settlement was in respect to the property owned by the assessee s father which was allegedly ancestral. Upon entering into the family settlement and the division of the property, a share which fell to the assessee became his individual one having regard to the judgment in Commissioner of Wealth Tax Vs. Chander Sen [ 1986 (7) TMI 7 - SUPREME COURT] . Therefore, the inference drawn by the lower appellate authorities cannot be said to be per se illegal. No interference is called for.

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• 2019 (10) TMI 258
  TP Adjustment - comparable selection - Whether Alphageo (India) Ltd. is not a comparable to the assessee s Research Technical Services business? - HELD THAT:- TPO had adopted the functional test. On the basis of the above text, the respondent was right in making a grievance that same test should have been applied to M/s. Alphageo to determine its comparability. M/s. Alphageo is in the business of oil exploration and production of oil. It carries out research activity in seismic data. The respondent does research and chemical analysis for agro chemicals. On the face of it the functions of two entities is different. This being the position, if the Tribunal held that M/s. Alphageo was not comparable, it is a possible view, on analysis of the evidence. No substantial question of law and thus they are not entertained. Computation of Capital gain on relinquishment of its rights in the property - AO added a sum to the sale consideration being the deposit the respondent had made with State Industries Promotion Corporation of Tamil Nadu (SIPCOT) at the time of obtaining the lease and now returned to it - HELD THAT:- Tribunal has held that the refundable deposit of ₹ 1,86,46,800/- made by the respondent with SIPCOT, Tamil Nadu is allowable towards cost of acquisition of lease hold rights of the property in Tamil Nadu, which is now sold. The Assessing Officer as well as the Commissioner of Income Tax (Appeals) included this amount as a part of sale consideration while computing capital gains. The Tribunal held that if it is considered as sale consideration then, the respondent assessee was entitled to it as a cost of acquisition for the purpose of computing capital gains. Thus, the entire exercise would be Revenue neutral. In these facts, there is no error in the view taken by the Tribunal. No substantial question of law.

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• 2019 (10) TMI 257
  Deemed grant of registration u/sec 12A - non-consideration of the application for registration u/sec. 12A within the time fixed u/sec. 12AA(2) - application for grant of registration u/sec. 12A is pending with the authorities, however, every year exemption u/sec. 11 was granted to the assessee u/sec. 143(3) - HELD THAT:- For the assessment year under consideration, the assessee has filed a return of income whereas the CPC, Bangalore processed the return u/sec. 143(1) and considered the entire gross receipts as income liable for tax on the ground that registration number of the Trust was not mentioned in the return form. We find that once the assessee is enjoying the benefit of section 11 by the Department, the subsequent years without scrutiny, it cannot simply reject on the ground that registration number of the Trust is not mentioned. The CPC Bangalore ought to have referred the matter to the Assessing Officer for examination of the entire issue. Without that, the CPC Bangalore added the entire gross receipts as income liable for tax. As in the case of Society for the Promotion of Education Adventure Sport Conservation of Environment [ 2008 (4) TMI 700 - ALLAHABAD HIGH COURT] has held that non-consideration of the application for registration u/sec. 12A within the time fixed u/sec. 12AA(2) would be a deemed grant of registration. - Decided against revenue.

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• 2019 (10) TMI 256
  Revision u/s 263 - deduction towards Provision for bad and doubtful debts - whether requisite specific enquiry has been conducted by the AO on the area where the Pr. Commissioner of Income Tax passed order u/s 263? - HELD THAT:- In the first part of computation at 7.5% of total income, the assessee computed the base amount at ₹ 23.11 Crore. In computation of the base amount, the assessee did not reduce the amount of depreciation of ₹ 1,34,12,388/-, which was rightly detected by the ld. CIT. It goes without saying that the deduction at 7.5% is on the total income, which obviously cannot be computed by ignoring the amount of depreciation. In other words, the assessee computed the amount at 7.5% of total income without reducing the amount of depreciation, which CIT rightly took note of. To this extent, the assessment order is found to be erroneous and prejudicial to the interest of the Revenue. When we view both the parts of the deduction u/s.36(1)(viia) of the Act in totality, it transpires that even though the assessment order was erroneous in accepting the computation at 7.5% of the income without reducing the amount of depreciation, but on entirety, the assessment order on this issue cannot be construed as prejudicial to the interest of the Revenue because the total amount of deduction u/s 36(1)(viia) is only ₹ 3.29 Crore, which is well much short of the correct qualifying amount at more than ₹ 21 Crore. That being the position, the assessment order albeit erroneous and prejudicial to the interest of the Revenue at the first part of calculation of qualifying amount at 7.5% on total income, but ceases to be prejudicial to the interest of the revenue on the overall question of granting deduction u/s 36(1)(viia) of the Act because the total amount of deduction, even after correcting the first part of the qualifying amount, remains at the same level at which it was claimed and allowed at ₹ 3,29,84,041/-. We, therefore, refuse to accept the validity of the exercise of revisionary power on this issue. Provision for NPA interest - HELD THAT:- We find that the action of the ld. CIT is lacking on this score as well. Firstly, the Assessing Officer conducted enquiry in this regard as is evident from the correspondence between the assessee and the AO, whose copies have been placed before the Tribunal. It is not as if the Assessing Officer did not enquire the issue of NPA interest. To this extent, the finding recorded by the ld. CIT is not correct. Legal position on the taxability of NPA interest, which has been dealt with by the Hon‟ble Bombay High Court in Commissioner of Income Tax Vs. CIT vs. Deogiri Nagari Sahakari Bank Ltd, [ 2015 (1) TMI 1218 - BOMBAY HIGH COURT] holding that NPA interest should be charged to tax on receipt basis only. As the amount of NPA interest recovered by the assessee during the year was credited to P L account at ₹ 1.71 crore and odd, no infirmity can be found in the view canvassed by the assessee as accepted by the AO on this issue. As the amount of ₹ 1.86 Crore of NPA interest accrued but not realized, the same was not rightly credited to the P L account. We, therefore, hold that the CIT was not justified in treating the assessment order erroneous and prejudicial to the interest of the Revenue on this score as well. Commissioner of Income Tax could not have assumed revisionary jurisdiction u/s.263 of the Act as per law. - Decided in favour of assessee.

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• 2019 (10) TMI 255
  Addition on the basis of loan receipts/cheques found during the course of search, in seriatim - HELD THAT:- It is found as an admitted position that cheques amounting to ₹ 1.08 crore issued by M/s Karda Constructions were found at the assessee s premises. The assessee failed to corelate such cheques with the recorded loan transactions. Considering the fact that the assessee himself admitted during the course of search that he was engaged in the business of making cash loans on receipt of security by cheques, it has to be held that such cheques found at the premises of the assessee were representing security for the loans advanced, which were not recorded in the books of account of the assessee. The assessee has raised an additional ground similar to the one taken in his appeal for the A.Y. 2010-11 seeking the benefit of telescoping. DR did not raise any serious objection to the admission of this additional ground, which is hereby admitted for disposal on merits. We have disposed of the appeal of the assessee for the A.Y. 2010-11 by firstly sustaining the addition of ₹ 2.00 crore and then allowing the benefit of telescoping to the extent of available undisclosed income already taxed. We hold that the addition on this count is warranted and also benefit of telescoping should be given. While giving the benefit of telescoping for the preceding year, we did not allow the benefit of ₹ 22,06,750/- because the same was unrecovered at the time of advancing loan of ₹ 2.00 crore which was subject matter of addition for the preceding year. In view of the fact that ₹ 22,06,750/- was suo moto offered by the assessee as his undisclosed income along with certain other income, the benefit of such a portion, which has not been allowed for the preceding year, is now available to be adjusted against the income for the current year. Thus, the extent of the benefit of telescoping for the year would be ₹ 22,06,750/- as against the addition of ₹ 1.08 crore. We, therefore, sustain the addition of ₹ 85,93,250/- (₹ 1.08 crore minus ₹ 22,06,750). Addition is of ₹ 10.00 lakh on account of cheques found as having been issued by Mr. Manohar B.Sadhwani and another addition is of ₹ 5.00 lakh on the basis of cheques issued by Mr. Baldeva and found from the assessee s premises. The AO made addition totaling ₹ 15.00 lakh on the basis of such cheques found, which was countenanced in the first appeal. AR fairly conceded before the Tribunal that he had no explanation in respect of these two amounts. We, therefore, sustain the additions of ₹ 10.00 lakh and ₹ 5.00 lakh. Addition on account of unrecorded loans given/cheques found to have been issued by Mr. Pradip D. Kalani - HELD THAT:- Argument of the AR on this score that the addition to the extent of ₹ 5.00 lakh should be deleted as the equivalent amount of income was offered by Mr. Pradip D. Kalani as his income. What is material for our purpose is the taxability of the amount of income earned by the assessee and not disclosed the same for tax purposes. As it is the assessee who gave loan of ₹ 5.00 lakh to Mr. Pradip D Kalani out of his undisclosed income, the same has to be taxed in his hands. It is trite that income should be taxed in the hands of the right person as has been held in ITO vs. Ch. Atchaiah [ 1995 (12) TMI 1 - SUPREME COURT] We, therefore, hold that such an amount of ₹ 5.00 lakh should be subjected to tax in the hands of the assessee. However, it is made clear that Sh. Pradip K Kalani is entitled to take recourse to the legal remedies available to him for ensuring that he is not wrongfully charged to tax. To sum up, we uphold the action of the authorities below in making the addition of ₹ 41.00 lakh in the hands of assessee as there was sufficient evidence to the effect that the assessee advanced cash loan to Sh. Pradip D Kalani out of his undisclosed income.

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• 2019 (10) TMI 254
  Exemption u/s 80G - Period of limitation for CIT to grant registration - CIT has either to grant approval or reject approval within a period of six months from the end of the month in which such application was made - HELD THAT:- At the material time, the period of six months was to be reckoned from the date on which the application was made. In case the order refusing or granting approval is not passed within a period of six months, then the moot question arises as to whether the passing of order belatedly would be considered as valid. AR fairly submitted that even if the issue on merits is now decided against the assessee, still the registration would be saved by virtue of the order passed by the Tribunal on the limitation issue, which attained finality. We are convinced with the submission advanced on behalf of the assessee that even if the issue on merits is to be decided against the assessee, but the same cannot come into play unless the initial hurdle of limitation is crossed. Once the Tribunal has held that the certificate u/s. 80G(5) was deemed to have been granted on the expiry of period of six months from the date on which application was filed coupled with period of delay of 19 days attributable to the assessee, naturally the assessee gets entitled to registration u/s.80G without considering the merits as discussed by the CIT in his order passed beyond the stipulated period. We, therefore, hold that the order passed by the Tribunal granting deemed registration u/s. 80G(5) sans merits, still holds the field. - Decided in favour of assessee.

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• 2019 (10) TMI 253
  Deemed dividend u/s 2(22)(e) - monies were advanced by M/s DEPL wherein assessee holds 20% of shareholding in DEPL to the assessee on a periodical basis for the purpose of procurement of lands by assessee for and on behalf of M/s DEPL in the capacity of an aggregator - HELD THAT:- What is to be seen is the substance of the transaction in the light of business acumen of the parties involved thereon, capacity to act as aggregator to procure lands for and on behalf of M/s DEPL. It is not in dispute that the said MOU dated 2.5.2006 had been duly notarized on 2.5.2006 itself by a competent person. In case if the revenue had any doubt regarding the veracity of the said document, then nothing prevented the revenue from examining the said Advocate Notary by either issuing notice u/s 133(6) of the Act or by issuing summons u/s 131 of the Act. Hence without carrying out necessary examination in the manner known to law, the document placed on record by the assessee cannot be summarily brushed aside. 5.2. We also find that the ld AO had categorically given a finding that from the books of accounts of M/s DEPL and the assessee , it is clear that the transactions between the assessee and M/s DEPL were frequent by way of frequent advancing of monies to assessee and frequent repayments made by the assessee to M/s DEPL. This finding clearly goes in favour of the assessee as the subject mentioned transaction is only in the nature of current account transaction carried out by the assessee. From the perusal of the ledger account of assessee as appearing in the books of M/s DEPL for the period 1.4.2007 to 31.3.2008, we find that there was a opening credit balance of ₹ 20,25,000/- lying to the credit of the assessee in the books of M/s DEPL. Against such credit, the monies were paid to the assessee by M/s DEPL on a periodical basis. This itself goes to prove the existence of account being operated on a current account basis and not loan or advance so as to fall within the ambit of provisions of section 2(22)(e) We direct the ld AO to delete the addition made towards deemed dividend u/s 2(22)(e) of the Act in the facts and circumstances of the instant case.- Decided in favour of assessee

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• 2019 (10) TMI 252
  Non collection of TCS from the mining companies - ignorance of statutory provisions requiring TCS collection - HELD THAT:- Our attention has been invited to the assessee s categorical explanation in the lower proceedings that the state government had not issued any instructions regarding TCS collection in case of receipts coming from mining companies. We find merit in learned departmental representative s argument in principle. There is hardly any dispute that legislature has prescribed TCS collection u/s. 206(1C) @ 2% regarding mining and quarry lincence or lease etc., at the time of receipt of the specified sums. We therefore observe that the mere fact that the state government had not issued any instructions to the field authorities regarding compliance of the impugned statutory provision does not carry any merit since ignorance of law by either the government or its agency is exercising various statutory functions cannot be accepted as a justifiable reason. We therefore concur with the Revenue s argument supporting the Assessing Officer as well as CIT(A) s action raising the impugned demands in assessee s case since he had not collected TCS from the mining companies. Benefit of sec. 206C(6A) first proviso inserted by the Finance Act, 2012 with effect from 01.07.2012 - The legislature had instituted the aforesaid proviso in the Act vide Finance Act, 2012 with effect from 01.07.2012 in sec. 201(1) of the Act to be applicable in case of TDS deductor at the time of his assessment u/s. 40(a)(ia) vide second proviso inserted by the Finance Act, 2012 with effect from 01.04.2013. And also that various recent judicial precedents in Ansal Landmark Township [ 2015 (9) TMI 79 - DELHI HIGH COURT] and PCIT vs. Perfect Circle India Pvt. Ltd. [ 2019 (1) TMI 1532 - BOMBAY HIGH COURT] and tribunal s coordinate bench s orders hold that the aforesaid proviso carries retrospective effect being curative in nature. We observe that the very line of reasoning also deserves to be adopted qua application of sec. 206A (first proviso) as well inserted by the Finance Act, 2012 with effect from 01.07.2012 to this effect as applicable in case of TCS collection than TDS deduction. We therefore decline the Revenue s instant technical argument that the foregoing proviso to sec. 206C(6A) does not carry any retrospective operation and leave it open for the Assessing Officer to verify all necessary facts about the assessee s payers to have been assessed qua the very income under the provision of the Act. The assessee is directed to place on record all necessary documents in consequential proceedings within three effective opportunities of hearing to assessee. Assessee's appeal allowed for statistical purposes.

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• 2019 (10) TMI 251
  Penalty u/s 271(1)(c) - disallowance of expenditure claimed as revenue expenditure which was held to be capital expenditure by the AO - debatable issue - HELD THAT:- The genuineness of expenses incurred has not been doubted per se. What is the subject matter of controversy is the nature of expenditure that is whether the expenditure incurred would acquire the character of capital expenditure or a revenue expenditure. CIT(A) has demonstrated in its order that the issue is sufficiently debatable and there is sufficient room for entertaining a different view. Conclusion drawn in the quantum proceedings would not automatically apply to the penalty proceedings which are distinct in character. The assessee is entitled to demonstrate its bonafide towards claim of expenditure in penalty proceedings. It is trite that every disallowance of claim cannot lead to as an automatic consequence in the form of penalty. The confirmation of addition/disallowance in quantum proceedings is not conclusive on standalone basis. In the absence of any malafide in the action of the assessee, we see no reason to interfere with the order of the CIT(A). In the instant case, in our view, the CIT(A) has correctly applied law and deleted the penalty. We totally concur with the view expressed by the CIT(A). The Revenue could not demonstrate the lack of bonafide in the action of the assessee. The assessee with reference to several judicial precedents has demonstrated before us that the issue as to whether expenditure in question is capital or revenue is highly debatable.- Decided against revenue

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• 2019 (10) TMI 250
  Levy of penalty u/s 271(1)(c) - defective notice - as alleged notice issued before levy of the penalty is bad in law and is vague and did not provide as to under which limb of Section 271(1)(c) penalty proceedings have been initiated - HELD THAT:- A.O. issued show cause notice for levy of penalty in which A.O. has mentioned both the limbs of section 271(1)(c) of the Act that assessee has concealed the particulars of income or furnished inaccurate particulars of such income. The issue of the notice is bad in law as it did not specify under which limb of Section 271(1)(c) of the I.T. Act, penalty proceedings have been initiated whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The issue is, therefore, covered by Judgment of Hon ble Karnataka High Court in the case of CIT vs. M/s. SSAs Emerald Meadows [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] and confirmed by the Hon ble Supreme Court [ 2016 (8) TMI 1145 - SC ORDER] Further, the Hon ble Delhi High court in the case of Pr. CIT vs. M/s. Sahara India Life Insurance Company Ltd. [ 2019 (8) TMI 409 - DELHI HIGH COURT] also decided the same issue in favour of the assessee.

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• 2019 (10) TMI 249
  Disallowance made under section 14A r.w.r. 8D for determining the book profit u/s 115JB - HELD THAT:- None of the judgments deals with the determination of income under the provisions of section 115JB of the Act. Therefore, we find that there is no precedent available to resolve the controversy on hand. However, we are also conscious to the fact that the above judgment was rendered in connection with the income determined under normal computation of income but to our mind the same principles can also be applied to the case on hand. It is because, the provisions of section 115JB of the Act require to make the disallowance of the expenditure related to any income to which section 10 applies other than section 10(38) of the Act. Accordingly, we hold that the expenses incurred in connection with the exempted income cannot exceed the amount of such exempted income under the provisions of section 115JB of the Act. Accordingly, we limit the disallowance to the extent of rupees 43,150.00 under the clause (f) to section 115 JB of the Act. Hence the ground of appeal of the assessee is partly allowed.

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• 2019 (10) TMI 248
  Unaccounted investment in stock - addition based on statement recorded in survey u/s 133A - Addition of stock difference in the surplus stock as determined at the time of survey and determined by the appellant while furnishing the return of income - HELD THAT:- During the course of survey statement recorded u/s 133A of the Act would not be a strong piece of evidence. In case the assessee is in a position to reconcile the discrepancy with positive material, in that event, the A.O. should give relief to the assessee. In the present case, the Ld. Counsel for the assessee has taken us through the various pages of paper book to support his contention that the stock is duly reconciled. We find that the A.O. has taken into account sales but the purchases of udad which was not recorded in the books and subsequently recorded after drawing a fresh trading account, no specific defect in such reconciliation is pointed out by the A.O. Under these facts, we are of the view that the A.O. is not justified in making the addition. Therefore, the A.O. is directed to delete this addition. Unaccounted cash - HELD THAT:- We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The fact that the assessee has reflected cash balance as on 15.1.2005 at ₹ 11,965/- is not controverted by the revenue by placing any contrary material, therefore, the addition made is not justified. We therefore, direct the A.O. to delete this addition. Addition of HUF income - Addition on the hands of assessee - HELD THAT:- As perused the materials available on record and gone through the orders of the authorities below. The contention of the assessee is that the document relates to a separate entity who has filed its return of income since 2004-05. The fact that HUF namely M/s. Ramlal Birdichand Vani HUF was assessed to tax is to be verified at the end of the Assessing officer. Therefore, this issue is set aside to the file of the A.O. to decide it afresh. The ground of the assessee s appeal is allowed for statistical purposes. Addition in respect of the advances made to Shri Kamlesh Vani and others as made in the written submissions - contention of the assessee is that there was a peak investment which is lower - HELD THAT:- No addition is called for. This fact requires verification and reconsideration by the A.O. We therefore, considering the fact that before the A.O., the assessee had not made such argument, we set aside this ground to the file of the A.O. to decide it afresh after considering the submissions of the assessee. The assessee s appeal is allowed for statistical purposes. Addition in respect of the different in stock - only explanation regarding difference in stock is that the assessee was carrying out business in the individual as well as proprietorship capacity - HELD THAT:- It is true that revenue cannot direct the assessee how he should carry out his business but where the assessee tries to create a colourable device such act is not permissible under the law. In the present case, the assessee has claimed that he was running business in proprietary and individual capacity. Therefore, the stock related to proprietary and individual capacity was available at the premises. We are unable to accept this contention of the assessee as the assessee has not disclosed in his accounts related to earlier years that he was carrying out business under the proprietary and individual capacity. The ignorance of law cannot be an excuse to avoid tax liability. Therefore, we do not see any reason to interfere in the finding of the Ld. CIT(A). This ground of the assessee s appeal is dismissed. Difference in the cash - HELD THAT:- As perused the materials available on record and gone through the orders of the authorities below. We find that the assessee has reconciled difference by placing bank statement and cash book. There is no contrary material brought by the revenue to rebut this. Therefore, we direct the A.O. to delete this addition. This ground of the assessee s appeal is allowed.

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• 2019 (10) TMI 247
  Revision u/s 263 - Assessment of interest income on FCNR-B deposits - joint FCNR(B) Bank account with the assessee s non-resident - HELD THAT:- AO cannot remain passive in the face of a claim, which calls for further enquiry to know the genuineness of it. In other words, he must carry out investigation where the facts of the case so require and also decide the matter judiciously on the basis of materials collected by him as also those produced by the assessee before him. AO was statutorily required to make the assessment u/s 143(3) after scrutiny and not in a summary manner as contemplated by Sub-section (1) of Section 143. AO is therefore, required to act fairly while accepting or rejecting the claim of the assessee in cases of scrutiny assessments. AO should protect the interests of the revenue and to see that no one dodged the revenue and escaped without paying the legitimate tax. AO is not expected to put blinkers on his eyes and mechanically accept what the assessee claims before him. It is his duty to ascertain the truth of the facts stated and the genuineness of the claims made in the return. The order passed by the AO becomes erroneous when an enquiry has not been made before accepting the genuineness of the claim which resulted in loss of revenue. In the present case. there was a joint FCNR(B) Bank account with the assessee s non-resident daughter with State Bank of India, NRI Branch. The parties concerned with the Bank Account had not changed it as per notification by Reserve Bank of India in FEMA 5/2000-RB dated 03/05/2000 Being so, resident in India cannot have FCNR(B) bank accounts jointly with non-resident which was relaxed by the Reserve Bank of India vide notification RBI/201M2/174, A.P(DIR series) Circular No.13 dated 15.09.2011 which was not retrospectively applicable to assessments relating to F.Y. prior to 2011-12. Hence, in our opinion, the PCIT is justified in giving direction to the Assessing Officer to verify, re-quantify and tax the interest amounts accrued which were wrongly not taxed in the earlier assessment order after giving appropriate opportunity of being heard. However, the Assessing Officer shall determine in whose hands the interest income is to be assessed and decide the same independently without being influenced by the directions of PCIT. Thus, the grounds of appeals of the assessee are dismissed.

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• 2019 (10) TMI 246
  Levy penalty u/s 271(1)(c) - quantum protective addition being the commission income from sale of DEPB licenses - HELD THAT:- In the instant case there has been a shift in the estimation of commission rate. The assessee has claimed that @ 0.10% to 0.025%. AO estimated the commission @ 3.5% of the transaction value. In appeal, the CIT(A) reduced it to 2% for all type of transactions. In further appeal the Tribunal reduced it to 1% for all type of bogus transactions entered into by the assessee. As evident from the above, there was no certainty in the rate to be applied while estimating the commission on bogus transactions entered into by the assessee. In view of the above background facts, we set aside the order of the CIT(A). As the above matter has been decided by us on merits of the case, we are not adverting to the technicalities raised by the assessee in this appeal.

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• 2019 (10) TMI 245
  Revision u/s 263 - suo-moto disallowance u/s 14A r.w. Rule 8D being expenses attributable to earning of exempt income after applying the Rule 8D - HELD THAT:- As the stand of assessee during the assessment as well as in revision proceeding that no exempt income is earned by the assessee. We have perused the Balance-sheet and Profit Loss Account of the assessee wherein in Schedule-14 (other income) forming part of Balance-sheet shows Nil income. In Schedule-6 (investments), in Column-B assessee has shown investment in units of mutual fund (growth scheme) and the income of such investment is not exempted. Thus, as per the decision of Hon ble Delhi High Court in Cheminvest Investment Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] , Redington (India) Ltd. [ 2017 (1) TMI 318 - MADRAS HIGH COURT] that when there is no exempt income in the relevant period, there cannot be disallowance of expenditure under section 14A. Accordingly, the assessment order under section 143(3) is not erroneous. The Assessing Officer has adopted a possible view for not making any disallowance under section 14A. Though, there is no discussion about the acceptance of contention of the assessee in its reply dated 11.02.2013, filed during the assessment proceeding. We are of the considered view that the order passed by Assessing Officer was not erroneous and thus the twin condition as laid down by Hon ble Apex Court in Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] the recourse of section 263 cannot be invoked against the assessment order. Therefore, the assessee succeeds on legal ground. Since, the assessee succeeded on legal ground, therefore, adjudication on other contentions and issues raised by assessee have become academic.

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• 2019 (10) TMI 244
  D emand u/s 201(1)/(1A) for non-deduction of taxes on IUC - period of limitation - TDS u/s 194J - HELD THAT:- As decided in own case [ 2018 (3) TMI 1758 - ITAT MUMBAI] the time limit for initiation of proceedings u/s 201(1) in the hands of the present assessee for the assessment years under consideration has expired long back prior to insertion of sec. 201(3) by Finance Act No.2 of 2009. Proceedings have become time barred prior to 01-04-2007 and hence no fresh proceedings could be commenced for the impugned years by virtue of the proviso to sec. 201(3) of the Act. - Decided in favour of assessee.

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• 2019 (10) TMI 243
  Penalty u/s 271(1)(c) - unexplained cash credit - HELD THAT:- Matter was first called for hearing on 02.08.2012 by the Tribunal and thereafter was listed for hearing numerous times till today. The assessee has taken adjournment on one pretext or the other which reflects indolent attitude of the assessee. The matter concerns AY 1994-95 and the appeal was filed in the Tribunal in 2012 more than six years have lapsed before the Tribunal. We also see that the records before the Tribunal are only partly complete. It is also noticed that the assessee has dodged the notices in the assessment proceedings as well, which impeded requisite inquiry. In view of the indifferent behavior, we proceed to dispose of the appeal on the basis of submissions made by the assessee before the CIT(A). Nothing substantive to rebut the allegation of cash deposits of ₹ 1,90,000/- in aggregate as an explained. The CIT(A) has also observed that assessee has failed to explain the source of cash deposit. Nothing has been brought on record before the Tribunal to rebut the aforesaid findings of the CIT(A). We thus see no reason to interfere with the order of the CIT(A) confirming the penalty of the aforesaid amount. - Decided against assessee.

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• 2019 (10) TMI 242
  Claim for exemption u/s 10(26) - Claim supported and substantiated by the assessee on the basis of proposal forwarded by the Andaman Nicobar Island administration to the Government of India for providing such exemption to the tribes of Andaman Nicobar Island - HELD THAT:- In reply to a query raised by the bench, the learned counsel for the assessee has submitted that the proposal sent by the Andaman Nicobar Island administration to the Government of India for providing exemption u/s 10(26) to the tribes of Andaman Nicobar Island is still pending with the Government of India. It is thus clear that the exemption available u/s 10(26) is still not extended by the competent authority to the tribes of Andaman Nicobar Island so far and the claim of the assessee for exemption u/s 10(26), therefore, cannot be allowed. We therefore, uphold the impugned order passed by the Ld. CIT(A) confirming the disallowance made by the AO for exemption u/s 10(26) of the Act and dismiss this appeal of the assessee.

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• 2019 (10) TMI 241
  Disallowance u/s 40(a)(ia) - short deduction of TDS on foreign payments - Instead of 20% as opined by the ld. AO, assessee effected the TDS at 4.22% on the payment - HELD THAT:- In the case of S.K. Tekriwal [ 2012 (12) TMI 873 - CALCUTTA HIGH COURT ] Hon ble High Court held that in the case of shortfall in deduction due to any difference of opinion as to the taxability of any item or nature of payments falling under various TDS provisions, the proper course for the revenue is to declare the assessee as an assessee in default u/s 201 of the Act but no disallowance can be made by invoking the provisions of Section 40(a)(ia) of the Act. In these circumstances, while respectfully following the said decision, we hold that it is not open for the revenue to disallow any amount u/s 40(a)(ia) of the Act and the addition is directed to be deleted. - Decided in favour of assessee.

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• 2019 (10) TMI 240
  Condonation of delay - Delay of 477 days - sufficient cause of delay - charge on C.A. for not filing the appeal before the Tribunal - HELD THAT:- It is not in dispute that assessee received the impugned order dated 28.11.2016 on 15.12.2016. The Ld. CIT(A) passed the ex- parte Order in the absence of Counsel for Assessee and allowed the appeal of assessee partly. These facts, therefore, clearly show that Shri Trilok Bansal, C.A. did not appear before the Ld. CIT(A) for prosecuting the appeal. Therefore, there was no reason for assessee to believe the same Counsel for filing of the appeal before the Tribunal. The entire facts have been manipulated and fabricated by assessee to put blame on Shri Trilok Bansal, C.A. for not filing the appeal before the Tribunal. It may be noted here that assessee has deposited the Tribunal fees for filing of the appeal only on 02.06.2018 as per the challan filed on record, which would show that assessee never acted bonafidely to take steps to file appeal within the period of limitation before the Tribunal. Assessee failed to explain that delay in filing the appeal was due to sufficient cause. No reason to condone the delay in filing the appeal before the Tribunal. The appeal of assessee is accordingly dismissed being time barred.

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• 2019 (10) TMI 239
  Computation of long term capital gains - A.O. disregarding the L.M.V. of the transferred property as on 01.04.1981 claimed by the appellant - partial disallowance with respect to exemption u/s 54 - CIT (A) directed the AO to refer the valuation of property to the DVO for ascertaining correct fair market value as on 1.4.1981 - Whether rates of the registered valuer could not be rejected by the Assessing Officer without having referred the matter to the DVO? - HELD THAT:- Hon ble Bombay High Court in the case of C.I.T. vs. Raman Kumar Suri [ 2012 (12) TMI 421 - BOMBAY HIGH COURT] had held that the valuation done by the registered valuer is with regard to a specific property and the same takes into account its various advantages and disadvantages, all of which would influence the valuation of property. The Hon ble Bombay High Court went on to hold that the valuation done by an empanelled registered valuer of the Income Tax Department would certainly take precedence over other indicators. no option but to accept the assessee s contention that the Assessing Officer was not right in discarding the report of the registered valuer without having made a reference to the DVO and, therefore, the rate adopted by the Assessing Officer for the purpose of computation of fair market value cannot be upheld. Accordingly, we set aside the order of the Ld. CIT (A) and direct the Assessing Officer to re-compute the fair market value of the land as on 1.4.1981 by taking into account the rate as adopted by the registered valuer. - Decided in favour of assessee.

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• 2019 (10) TMI 238
  Levy of penalty u/s.271E - repayment of the loan in cash - reasonable cause in the violation of provisions of Section 269T - whether explanation offered by the assessee in response to show cause notice is reasonable or not? - HELD THAT:- The explanation of the assessee is that it was forced to repay the loan in cash on account of business expediency to meet the working capital limits of one the business concern in which he is interested; cannot be considered to be valid explanation for repayment of loan in cash. The fact that assessee accepted loan in cash and repaid the loan in cash goes to prove that there is active collusion with the lender in evading the taxes. In the absence of survey proceedings conducted in the premises of Shri. A. Kannan, this transaction would not have come to light. Valid explanation for acceptance of loan in cash, cannot a valid reason for repayment of loan in cash. Reliance placed by the Authorised Representative on the decision of Co-ordinate Bench in assessee s own case for deletion of penalty for violation of provisions of Section 269SS of the Act does not hold good. Similarly, the ratio decision in the case of Manohar Lal Thakral [ 2011 (1) TMI 538 - PUNJAB AND HARYANA HIGH COURT] cannot be accepted having regard to the cogent reading of provisions of Section 269T and 275A of the Act. It is clear that the completion of assessment proceedings is not a condition precedent for initiation of penalty proceedings u/s.269T. Thus, we do not find any reason to interfere with the orders of the lower authorities. Hence, we confirm levy of penalty u/s.271E - Decided against assessee.

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• 2019 (10) TMI 237
  Accrual of income - Addition towards interest on bank fixed deposits - contention of the assessee that due to premature encashment of FDRs, the assessee has received lower interest income as against the interest so reflected in Form No. 26AS - DR submitted that during the course of assessment as well as appellate proceedings, the assessee has failed to produce any evidence to prove that the FDRs were encashed prematurely - HELD THAT:- We agree that mere reflection of certain transaction in Form 26AS is not determinative of holding such transaction as taxable transaction in the hands of the assessee. However, given that the transaction has been reflected in Form 26AS, the onus is on the assessee to demonstrate that such transaction doesn t represent real income in its hands. In the instant case, we find that the assessee has failed to adduce any evidence in support of its contention that it has received lower interest income than what has been reflected in Form 26AS. Further, nothing has been brought on record to suggest that the Form 26AS has been subsequently modified/amended to reflect the actual interest payment to the assessee. In the result, the ground so taken is dismissed. Disallowance of ESI/EPF contributions u/s 36(1)(va) - HELD THAT:- As contributions were deposited before the due date of filing of the return of income u/s 139(1), in view of a series of decisions of the Hon ble Jurisdictional High Court in favour of the assessee and further Hon ble Supreme Court in case of PCIT vs. Rajasthan State Beverages Corporation Ltd. [ 2017 (7) TMI 1087 - SC ORDER] has dismissed the SLP filed by the Department this issue is decided in favour of the assessee and against the Revenue. Hence, disallowances/additions made by the AO on account of employees contribution to PF ESI are deleted. - Decided in favour of assessee.

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• 2019 (10) TMI 236
  Levy of penalty u/s 271AAA - Addition u/s 69A post search - unexplained money, expenditures and investment - HELD THAT:- From the penalty order, we find that the assessee has not filed any Explanation before the A.O. except requesting the A.O. to keep the proceedings in abeyance till the assessee s appeal before the ITAT is disposed of. The AO, however, concluded the proceedings by observing that the assessee has not submitted any explanation to the show cause notice dated 14.3.2012 issued u/s 271AAA r.w.s. 274 . The assessee has not filed any explanation even before the CIT(A), except for the cash book for the period 1/4/2007 to 31/3/2008 submitting that the opening balance of ₹ 13,37,026.75 as the source for the cash found. We find that the CIT(A) has clearly brought out that the sources for cash found and the investment are not explained by the assessee. Therefore, assessee s argument that the assessee s explanation has not been found to be false and, therefore, penalty is not sustainable is not acceptable. We also find that the assessee has not fulfilled the conditions under Sub-Section (2) of Sec.271AAA of the Act to be out of the ambit of sub-section(1) of sec.271AAA of the Act. Therefore, penalty u/s 271AAA of the Act can be levied as the undisclosed income found during the course of search has not been substantiated by the assessee and it is also not proved that taxes have been paid thereon. Addition has also been confirmed by ITAT. Therefore, we cannot agree with the contentions of the Ld. Counsel for the assessee that the penalty u/s 271AAA of the Act is not attracted because the explanation of the assessee has not been proved to be wrong. We reject the assessee s grounds and the penalty u/s 271AAA is upheld.

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• 2019 (10) TMI 235
  Claim u/s 80IC - return was not filed u/s 139(1) - belated return of income was filed u/s 139(4) - HELD THAT:- Considering the peculiar facts and circumstances of the case and position of law as canvassed by the parties before the Bench, we hold that the claim of the assessee could not be ousted on the fact that the return was filed within the extended period of sub section(4) of Section 139. Accordingly, we hold that the assessee deserves to succeed in principle. See M/S SYMBIOSIS PHARMACEUTICALS P. LTD. VERSUS THE DCIT, CIRCLE, YAMUNA NAGAR [ 2017 (11) TMI 1361 - ITAT CHANDIGARH] - Decided in favour of the assessee.

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• 2019 (10) TMI 234
  Assessment u/s 153A - proof of incriminating material found in the course of the search proceedings - THAT:- We find, that as observed by the CIT(A), the said preceding years were distinguishable on facts. As observed by the CIT(A), in the said preceding years as no assessment was pending on the date of search, therefore, the A.O had confined himself to the additions which could be made only on the basis of the incriminating material found in the course of the search proceedings. As the assessment for the year under consideration i.e A.Y 2011-12 was pending on the date of search. therefore, the A.O unlike the preceding years was also vested with the jurisdiction to make the disallowance of the aforesaid bank charges as per the normal assessment provisions envisaged under Sec.143(3). Accordingly, finding no infirmity in the observations of the lower authorities, we uphold the disallowance of the bank charges of ₹ 1,206/- made by the A.O. The Ground of appeal No .1 is dismissed. Unexplained investment u/s 69B - HELD THAT:- We are of a strong conviction that neither the assessee had been able to substantially prove that the aforesaid seized papers found from his residential premises did not belong to him, nor the A.O had been able to dislodge the claim of the assessee that the said seized papers which nowhere made any mention of his name or the name of any of his family members, did not belong to either of them. The matter requires to be revisited by the A.O for making necessary verifications. Accordingly, in terms of our aforesaid observations, we restore the matter pertaining to the addition towards alleged unexplained investment in the shares of various companies by the assessee, to the file of the A.O for readjudication. A.O in the course of the set aside proceedings shall afford a reasonable opportunity of being heard to the assessee, who shall remain at a liberty to substantiate his aforesaid claim by placing on record fresh documentary evidence. The order of the CIT(A) is set aside in terms of our aforesaid observations. The Ground of appeal No. 2 is allowed for statistical purposes.

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• 2019 (10) TMI 233
  Release of goods seized - goods, which have been seized are custom paid goods duly cleared by the Custom authorities - As an interim measure, it is directed that the goods of the petitioner may be released after proper verification and identification of the goods to the satisfaction of the authority concerned within next ten days without demanding any security - HELD THAT:- SLP dismissed.

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• 2019 (10) TMI 232
  Reopening u/s 147 - Notice u/s 148 - assessee is a builder - Applicability of Section 50C on sale of Stock in trade - statement in survey partner never admitted that the flats were sold at a price higher than what was reflected in the document OR did not admit to any cash payment not recorded in the documents - attempt on the part of the Assessing Officer to make the addition with the aid of the statement of the partner of the assessee and reference to the correct stamp valuation, is simply invalid - HELD THAT:- SLP dismissed.

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• 2019 (10) TMI 231
  Reopening of assessment - petitioner's claim for expenses in respect of Colour Idea Store as a part of its advertisement and sales promotion expenses - validity of reasons to believe - HELD THAT:- Special Leave Petition is dismissed on the ground of low tax effect.

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• 2019 (10) TMI 230
  Bad debts written off for non-rural branches claimed under clause (vii) of Section 36(1) - whether claim has to be allowed only in excess of the provision made for rural branches under clause (viia) of Section 36(1)? - HELD THAT:- No merit in the review petitions and the same are accordingly dismissed.

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• 2019 (10) TMI 229
  Claim of certain expenses taken into account to claim statutory disallowance u/s 40(a) (ia) - HELD THAT:- The said issue is covered in the Judgment of this Court in Commissioner of Income Tax, Central-III v. HCL Technologies Ltd. [ 2018 (5) TMI 357 - SUPREME COURT] Mr. Dhruv Agarwal, learned senior counsel appearing for the petitioner-Department, has also fairly submitted that the monetary implication involved in this special leave petition is only ₹ 44,00,000/- (Rupees Forty Four Lakhs). SLP dismissed.

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• 2019 (10) TMI 228
  Exemption u/s 10(23EA) - charitable activities - claim not made by the assessee during the filing of return of income but as an alternative at the appellate stage before the CIT(A) - assessee's claim was based on pure interpretation of statute - no prohibition in law which would prevent the assessee Trust which qualifies for benefits under Section 11 to 13 from claiming exemption under Section 10 (23EA) of the Act - HELD THAT:- SLP dismissed.

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• 2019 (10) TMI 211
  TP Adjustment - Arm s Length Price (ALP) in respect of an international transaction entered into between the Assessee and its Associated Enterprise (AE) under the provisions of Sec.92 - limited prayer of the Assessee in this appeal is for granting adjustment on account of capacity utilization of the Assessee and that of the comparable companies - HELD THAT:- As decided in own case [ 2017 (1) TMI 1687 - ITAT BANGALORE] Tribunal has given a detailed guidelines as to how to make or grant capacity utilization adjustment. Hence, we feel it proper that this matter also should go back to the file of the AO/TPO for granting capacity utilization adjustment as per the guidelines given by the Tribunal in the case of DCIT Vs Class India Pvt.Ltd. [ 2015 (8) TMI 1490 - ITAT DELHI] . It is ordered accordingly.

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• 2019 (10) TMI 210
  Bogus purchases - AO has added entire such purchases in assessee s income - HELD THAT:- AR has relied on the decision of the Hon ble Bombay High Court in the case of Pr.CIT Vs M/s Mohommad Haji Adam Co. [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] wherein it was held that the addition in respect of bogus purchases should be restricted to difference between the gross profit shown by the assessee in respect of bogus purchases vis a vis normal purchases. Meaning thereby the addition should be confined to gross profit shown on the bogus purchases which is found to be lower than the gross profit on normal purchases We direct the A.O. to recompute the addition in respect of bogus purchases in terms of the proposition laid down by the Hon ble Bombay High Court as stated above. We direct accordingly.

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• Benami Property

• 2019 (10) TMI 218
  Whether not the claim in the suit, insofar as of declaration, is barred by the Prohibition of Benami Property Transactions Act, 1988? HELD THAT:- From the tenor of the plaint it appears that when the plaintiff claims to be doing everything, he would certainly know whether his wife was an income tax assessee or not and as to how the property was dealt with in the income tax returns of the plaintiff and the defendant. It also needs adjudication, whether without saying the property is being held benami by an individual in the income tax returns, a plea of benami can be entertained - Though the senior counsel for the plaintiff has also contended that the defendant, on the basis of the plaintiff also being a 50% owner of the property, be at least restrained from dealing with the property but till there is a proper plaint before this Court and till the plaintiff takes a categorical stand with respect to benami, it is not deemed appropriate to entertain the suit. The senior counsel for the plaintiff, under instructions, gives up the relief claimed of declaration and confines the suit to that for prohibitory and mandatory injunction only - Subject to the aforesaid, the suit is entertained.

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• Customs

• 2019 (10) TMI 227
  Maintainability of appeal - non-compliance with the requirement of mandatory deposit - section 129 (e) of the Customs Act, 1962 - eligibility benefits u/s 114 (1) and 114 (iii) of the Customs Act, 1962 - HELD THAT:- The appellant is certainly not an officer and no benefit can be granted based upon the order passed by the Tribunal. As the mandatory requirement of per-deposit as provided u/s 129 (e) has not been fulfilled, the Tribunal iss justified in dismissing the appeal - appeal dismissed.

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• 2019 (10) TMI 226
  Valuation - inclusion of 'demurrage' and 'dispatch' money as a part of assessable value.- whether part of freight or not - Validity of Explanation to Sub-rule (2) of Rule 10 of the Customs Valuation (Determination of Price Imported Goods) Rules, 2007 - vires of of Section 14 of the Customs Act, 1962 HELD THAT:- It is well-settled principle of the statute that while interpreting a statute, one has to go by the scope and object of the principal Act. Under the principal Act, while amending it on 10th October, 2007, proviso has included the costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the Rules. The demurrage has not been included as a part of cost envisaged by the legislation. Further, it is a kind of penalty. Therefore, it could not have been envisaged by the legislation to be included in the definition of Section 14 of the Act. In view of the clarifications by way of judgments of the Hon'ble Supreme Court, more particularly in the cases of WIPRO LTD. VERSUS ASSISTANT COLLECTOR OF CUSTOMS OTHERS [ 2015 (4) TMI 643 - SUPREME COURT] , it is made clear that demurrage cannot be included for the purpose of valuation under the Customs Act, 1962. Thus, the contentions raised by the petitioner that the relevant provisions in the Principal Act is silent about the demurrage; thus, it was beyond the legislative power to include it in the Rules is accepted and thus the explanation to Sub-Rule (2) of Rule 10 of the Customs Valuation (Determination of Value of Imported Goods)Rules, 2007 is held to be bad and hence declared ultra vires the Constitution/provision of Section 14 of the Customs Act, 1962, and hence the same is struck down.

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• 2019 (10) TMI 225
  Abatement of appeal - Continuance of proceedings after death or adjudication as an insolvent of a party to the appeal or application - HELD THAT:- In the present case the appellant has expired on 24.10.2007. Till date no application for continuation of proceeding has been filed by or on behalf of the successor in interest or legal representative of appellants, hence the appeal abates in terms of the Rule 22. Appeal abated.

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• Insolvency & Bankruptcy

• 2019 (10) TMI 224
  Initiation of CIRP - applicability of time limitation - section 7 of I B Code - HELD THAT:- An application under Section 7 of the Code does not purport to be an application to enforce any mortgage liability. It is an application made by a financial creditor stating that a default, as defined under the Code, has been made, which default amounts to ₹ 1,00,000/- or more which then triggers the application of the Code on settled principles that have been laid down by several judgments of this Court. Article 141 of the Constitution of India mandates that our judgments are followed in letter and spirit. The date of coming into force of the IBC Code does not and cannot form a trigger point of limitation for applications filed under the Code. Equally, since applications are petitions which are filed under the Code, it is Article 137 of the Limitation Act which will apply to such applications. The matter to be determined afresh - appeal allowed by way of remand.

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• 2019 (10) TMI 216
  Maintainability of application - time limitation - initiation of CIRP - it is alleged that the petition is barred by limitation as alleged date of default is of 30.06.2009 and present proceedings are filed on 05.07.2018 - HELD THAT:- In the case on hand, admittedly, the default occurred on 30th June, 2009 (as per Part IV, Column 2 at Page 5 of the Petition). Therefore, if the period of limitation is computed from the date of default mentioned in the Petition, this Petition which is filed on 11th July, 2018, is barred by limitation. But the special feature in this case is within the period of limitation, the Petitioner Bank filed OA No. 334 of 2015 before the DRT No. 2, at Ahmedabad on 21.04.2015. When already the bank filed OA No. 334 of 2015 before the DRT within the period of limitation, whether the petition filed before this tribunal under Section 7 of the Code on 11.07.2018 shall be treated as a Petition within limitation or not? - HELD THAT:- Before Insolvency Code coming into force, the remedy of winding up was available to the Petitioner Bank under Sections 433 and 434 of the Companies Act, 1956, but, no such remedy was availed by the Petitioner. It is only after the Insolvency and Bankruptcy Code came into force, the Petitioner Bank issued a notice dated 10th April 2012 and filed this Petition. There is no bar in filing application under section 7 of the Code when DRT/SARFAESI proceedings are pending, as decided in catena of cases. Hence the period consumed in DRT/SARFAESI cannot be a ground for exemption of the limitation period. Since the Limitation Act is applicable to applications filed under sections 7 and 9 of the Code from the inception of the Code, Article 137 of the Limitation Act gets attracted. The right to sue, therefore, accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the Limitation Act, save and except in those cases where, in the facts of the case Section 5 of the Limitation Act may be applied to condone the delay in filing such application. The period of limitation would commence three years preceding the date of filing the petition. The petition was filed on (sic) 11.07.2018 and acknowledgement, if any, within the meaning of section 18 of the Limitation Act, 1963 has to be shown before (sic) 11.07.2015. The petitioner has failed to show any iota of evidence to prove acknowledgement of debt and default. There are no ground to admit the petition as no acknowledgement before 11.07.2015 has been placed on record to extend the period of limitation beyond three year - petition dismissed.

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• 2019 (10) TMI 214
  Permission for withdrawal of the company petition - section 12A of IBC, 2016 - HELD THAT:- It is clear from section 12A of the Code that the Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10 on an application filed by the applicant with the approval of 90% voting share of the Committee of Creditors. Thus it is clear if 90% voting share of Committee of Creditors approves application for withdrawal then Adjudicating Authority to allow for withdrawal the application filed under section 7 or section 9 or section 10 of the Code. Present application is filed by RP before this Tribunal for approval of the withdrawal application. It is clear that Regulation 30A of IB (Corporate Insolvency Resolution Process) regulation 2015, are complied - By virtue of provisions of sec 12A, Tribunal is empowered to approve the application for withdrawal. Application allowed.

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• 2019 (10) TMI 209
  Admissibility of application - initiation of CIRP - Corporate Debtor - default in repayment - time limitation - HELD THAT:- Admittedly, I B Code has come into force since 1st December, 2016, therefore, the right to apply accrued to 1st Respondent on 1st December, 2016. Therefore, we hold that the application under Section 7 was not barred by limitation. Whether the claim of the Appellant is barred by the limitation? - If it is barred by limitation then the Corporate Debtor has right to take plea that the debt is not payable? - HELD THAT:- The immovable property of the Corporate Debtor was mortgaged in favour of the Financial Creditor by Deed of Mortgage and a further charge was made on 27th November, 2009 by the Corporate Debtor in favour of IDFC Ltd. . Thereafter by assignment agreement debt payable by Corporate Debtor to IDFC was assigned on 11th September, 2014. The Financial Creditor has right to get immovable property mortgaged and thereafter may transfer the mortgage assets for a valuable consideration for which 12 years of limitation has been prescribed for filing a suit relating to immovable property under Article 61 of Part V of the First Division of the Schedule of Limitation Act. Therefore, we hold that the claim of the 1st Respondent is not barred by limitation. Appeal dismissed.

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• Service Tax

• 2019 (10) TMI 221
  Challenge to the Show Cause Notice (SCN) - Maintainability of writ petition - Single member bench of HC allowing the petition, quashed the SCN - whether the department was justified in issuing the show-cause notice in the extended period of limitation is a mixed question of facts and law? - HELD THAT:- The learned single judge made a mistake by entertaining the writ application. The writ ought not to have been entertained when the respondent-writ petitioner had participated in the assessment proceedings. Secondly, the appellate authority under the service tax law was the appropriate authority to adjudicate upon the above mixed question of facts and law relating to the extended period of limitation and the issue whether the respondent was assessable to service tax or not. Thus, we are minded to refer this dispute to the statutory appellate forum. The tribunal shall hear out the appeal upon notice to the parties and hearing them by a reasoned order, within four months of communication of this order, subject to the respondent complying with the usual formalities in relation to an appeal before the tribunal - impugned order dated 30th June 2016 is set aside.

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• 2019 (10) TMI 219
  CENVAT Credit - input services - Group Medical Insurance Service - Catering services - Transportation of Employees - extended period of limitation - penalties. Group Medical Insurance - HELD THAT:- This Tribunal in the case of BHARAT FRITZ WERNER LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BANGALORE NORTH WEST COMMISSIONERATE [ 2019 (6) TMI 67 - CESTAT BANGALORE] has held that cenvat credit is not permissible under the Group Medical Insurance Service - This Tribunal has relied upon the decision of the Larger Bench in the case of M/S. WIPRO LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE BANGALORE-III. [ 2018 (4) TMI 149 - CESTAT BANGALORE] and then come to the conclusion that the impugned service falls under the exclusion clause as provided in Clause (c) of Rule 2(l). Therefore, by following the ratio of the said decision in the case of Bharat Fritz Werner Ltd., it is held that the appellants are not entitled to cenvat credit of service tax paid on Group Medical Insurance Service - credit not allowed. Catering service - HELD THAT:- Larger Bench decision of the Tribunal in the case of Wipro Ltd. wherein the Tribunal after considering the exclusion clause provided in Clause (c) w.e.f. 01.04.2011 has held that Outdoor Catering Service is not eligible for input service credit post amendment dated 01.04.2011. Therefore, Commissioner has rightly denied the credit on Catering Service - credit not allowed. Transportation of Employees - HELD THAT:- This falls under the definition of input service as it is directly related to the productivity of the employees working with the appellant and this facility is only from the factory to the residence of the employees and back which in my opinion falls in the definition of input service and the exclusion clause is not applicable as far as this service is concerned - Therefore, by relying upon the ratios of the M/S RELIANCE INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, LTU, MUMBAI [ 2016 (8) TMI 123 - CESTAT MUMBAI] , it is held that the appellants are entitled to cenvat credit of service tax on this service. Extended period of limitation - Penalties - HELD THAT:- The issue involved in the present case relates to interpretation of the definition of input service and therefore extended period cannot be invoked and penalties cannot be imposed. Demand for the normal period set aside - the invocation of extended period is not tenable in the present case and also the penalties under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC (1)(c) of Central Excise Act, 1944 is set aside. The matter remanded back to the original authority to re-quantify the demand for the normal period with regard to all the impugned services which the appellant is liable to pay - appeal allowed in part.

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• 2019 (10) TMI 215
  Rent-a-cab service - period from November 2003 to September 2007 - difference between renting and hiring which are interchangeable expressions - applicability of decision of the Hon'ble High Court of Allahabad in ANIL KUMAR AGNIHOTRI VERSUS COMMISSIONER, CENTAL EXCISE KANPUR [ 2018 (1) TMI 171 - ALLAHABAD HIGH COURT] has held that there is no difference between renting and hiring which are interchangeable expressions and that hiring out, irrespective of the conditions attached thereto, sufficed for tax liability to be fastened. HELD THAT:- In the dispute before the Hon'ble High Court of Allahabad, the outsourcing agreement incorporated both fixed charge for the threshold distance and variable charge for usage beyond the threshold and the appellant therein, pleading for exclusion from classification as provider of rent-a-cab service, claimed that the control of the cab did not pass on to the customer as the agreement was for hiring and not renting ; the Hon'ble High Court held that such distinction would not alter the nature of the agreement which was not sought to be decided upon on the basis of the determination of consideration - The facts and circumstances in which the decision of the Hon'ble High Court of Allahabad materially differs from the issues agitated now before us. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2019 (10) TMI 222
  Utilization of accumulated CENVAT / MODVAT credit - Money credit Scheme - nexus/connection with the final product - whether the credit can be availed by the petitioner through an unconnected final product? - Utilization of balance of credit in the absence of N/N. 45/89-CE dated 11.10.1989 - HELD THAT:- This court on consideration of the notification dated 11th October, 1989 had ruled that Cenvat credit could be utilised in any unit of the same manufacturer. It did not lay down any ratio that the two final products could be different. It only said that manufacture could take place in different units of the same manufacture. The respondents should consider the request of the appellants made by the letter dated 18th October, 2016 read with the departmental reply dated 11th November, 2016 in a proper proceeding constituted by the respondents, attended by the appellants and the departmental representatives, hearing them, taking into account various decisions and the observations made, within 4 months of communication of this order. Appeal disposed off.

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• 2019 (10) TMI 217
  Default in making the payment of excise duty on time - bar on utilization of CENVAT Credit - Rule 8(3A) of the Central Excise Rules, 2002 - HELD THAT:- The demand has been confirmed only on account of the default in making the payment of excise duty on time. Further, the appellant subsequently paid the duty by utilizing the CENVAT credit along with interest which is not in dispute. Further, the Rule 8(3A) to the extent requiring payment of duty without utilizing the CENVAT credit during the period of default is held to be unconstitutional by several High Courts. The Hon ble Gujarat High Court in the case of Indsur Global Ltd. held the expression without utilizing the CENVAT credit used in Rule (3A) as ultra vires and unconstitutional. Appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 213
  CENVAT Credit - input invoices for the period 2008-09 to 2011-12 - HELD THAT:- The Appellants, prima facie, produced communications with the Department from time to time indicating that all these documents have been filed with the Department. However, the Adjudicating authority recorded a finding otherwise - To resolve the issue, it is appropriate to remand the matter to the Adjudicating authority with the specific direction to consider the documents that were produced earlier and also the documents that would be produced during the course of de-novo proceedings including the Chartered Accountant s certificate that have been produced to ascertain the admissibility of the CENVAT Credit. Appeal allowed by way of remand.

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• 2019 (10) TMI 212
  CENVAT credit - input services - GTA service - place of removal - HELD THAT:- The Board has clarified in their circular dated 8.6.2018 that when the transaction / sale is on FOR basis, the place of removal would be the buyer s premises. Therefore, it is necessary to determine the place of removal to consider the eligibility of credit of service tax paid on freight charges upto the buyer s premises. For this purpose, it is fit to remand the matter to the adjudicating authority who shall look into the issue of eligibility of credit on GTA service after determining the place of removal - appeal allowed by way of remand.

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• Indian Laws

• 2019 (10) TMI 223
  Dishonor of Cheque - insufficiency of funds - offence punishable under Section 138 of the Negotiable Instruments Act - rebuttal of presumption - HELD THAT:- In the case at hand, accused has been not able to rebut the statutory presumptions under Section 118 and 139 of the Act in favour of the holder of the cheque i.e. complainant and as such, there appears to be no illegality or infirmity in the judgments/order of conviction and sentence passed by the learned Courts below - All the ingredients of S.138 of the Act stand duly proved in the case at hand, as such, this Court finds no occasion to interfere with the judgments/order of conviction and sentence recorded by learned Courts below, as such, same deserve to be upheld. The petition at hand is dismissed being devoid of merit.

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• 2019 (10) TMI 220
  Maintainability of petition - availability of alternate remedy of appeal - Payment of balance One Time Settlement (OTS) amount - grant of 6 months time to pay balance OTS amount from the date of disposal of the writ petition - SARFAESI Act - HELD THAT:- The recovery proceedings is initiated under SARFAESI Act. The SARFAESI Act provides for alternative remedy under Section 17 of the SARFAESI Act. Since, the petitioner has alternate remedy available under the Statue, it may not be appropriate for this Court to entertain the writ petition. But, it is not total bar to entertain the writ petition, when the petitioner makes out extraordinary ground. In the case on hand, no extraordinary ground is made out to entertain the writ petition except saying that if petitioner is granted some time he would make payment. The petitioner has not complied with the terms of one time settlement. Hence, as the petitioner has alternate and efficacious remedy under the SARFAESI Act, the writ petition is not entertained - petition dismissed.

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