TMI Tax Updates - e-Newsletter
November 28, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Levy of penalty - mens rea in evasion of tax - It is well settled that by merely using the expression “mens rea”, it would not amount to concluding that there was a willful attempt on the part of the dealer to evade the payment of tax. The concerned authority or the First Appellate Authority, is required to record the reasons in writing as to how and in what manner mens rea was established. - HC
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GST:
Cancellation of GST registration of petitioner - non payment of taxes - financial constraints and covid-19 pandemic and on account of bonafide reasons - The explanation offered by the petitioner in not making GST payment and delay in filing returns and preferring an appeal deserves to be accepted and by adopting a justice oriented approach, it is deemed just and appropriate to set aside the impugned orders and the 2nd respondent is directed to restore the GST registration of the petitioner, subject to payment of all dues by the petitioner. - HC
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GST:
Exemption from GST - sub-contractor - educational institutions or not - pre and post Examination services being provided - since in the present case the main contractor to whom the applicant is to provide services as sub-contractor is not an educational institution, though the services are allegedly being provided to the Educational Boards and Universities by the main contractor, the exemption contained in the impugned notification is not available to the applicant. - AAAR
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GST:
Exemption from GST - Government entity or not - pure services or not - Medical insurance premium taken to provide health Insurance to the employees, pensioners and their family members - from 18-11-2021, in view of the amendment mentioned, omitting the word ‘Government authority’, the services provided to the applicant are not eligible for exemption under Sl.No 3 of Notification no 12/2017 - AAAR
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Income Tax:
Capital gain - transfer - revaluation of assets - partnership firm - retirement of one partner and reconstitution of firm with new partners - applicability of Section 45(4) - the assets so revalued and the credit into the capital accounts of the respective partners can be said to be “transfer” and which fall in the category of “OTHERWISE” and therefore, the provision of Section 45(4) inserted by Finance Act, 1987 w.e.f. 01.04.1988 shall be applicable. - SC
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Income Tax:
Deduction u/s 80IA - first time claimed in the revised return - Amendment vide Finance Act, 2020 - this issue was never an issue pointed out to the assessee at any earlier point of time and it appears that the issue had been taken up for consideration when the case was heard and orders were reserved by the learned Tribunal. In any event, such point could not have been put against the assessee when the same was never the case of the revenue before the Tribunal. - HC
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Income Tax:
Revision u/s 263 - As could be seen from the substantial questions of law suggested by the revenue, the revenue has not raised any question on the said finding of the Tribunal which goes to show that the revenue had reconciled with the reasoning given by the learned Tribunal in that record. Therefore, a piecemeal challenge to the order passed by the learned Tribunal on one of the grounds on which relief was granted to the assessee is not maintainable. - HC
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Income Tax:
Reopening of assessment against company as struck off by the ROC from its register of companies - Later the name was restored - the conduct of the Petitioner in persisting with the present petition even after the Company has been restored and also his action in opposing the appeal before the NCLT for restoration evidences that the petitioner is abusing the process of law to obstruct the assessment proceedings. - Petition dismissed with cost - HC
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Income Tax:
Validity of Faceless assessment - Jurisdiction - complexity of the legal issues involved - maintainability of the that writ petition on the ground of territorial jurisdiction since the PAN AO, was located outside Delhi - the aforesaid questions of law requires to be settled and decided by way of an authoritative pronouncement by a larger bench of this Court. - HC
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Income Tax:
Penalty proceedings u/s 271D - contravention of provisions of section 269SS - the AO initiated penalty proceedings u/s 271(1)(c) and there is no satisfaction recorded for initiation of proceedings u/s 271D nor given any finding that there is any contravention of provisions of section 269SS of the Act. - AT
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Income Tax:
Addition u/s 68 - Unexplained cash credit - share capital and share premium - The assessee consistently escaping from appearing before the ld. AO and the appellate authority plausible explanation to explain the source of alleged sum of share capital and security premium. If the assessee is unable to explain the alleged cash credit and consistent escaped, the provisions of section 68 are attracted. - AT
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Customs:
Recovery of demand when appeal has been restored and pending - Since the Appeal of petitioner has been restored to the CESTAT, no recovery in excess of 7.5% of the duty in dispute can be made by respondents. - The order to appropriate the refunds of petitioner against the demand imposed by Order-in-Original is set aside - HC
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Customs:
Mis-declared/un-declared imported goods - Evidently, no panchnama was drawn by Revenue for retrieval of data or documents from the CPU/mobile of the appellant - The seizure is bad under the provisions of Section 110 of the Act. It is found that the show cause notice is vague as it does not specify the particular clause of Section 111, under which the goods are liable for confiscation. Further, in the facts and circumstances, the imposition of penalty under Section 112 and 114 AA is bad. - AT
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Customs:
Finalization of provisional assessment - Re-export of goods - Where there is incompatibility between departmental proceedings to enforce contract and parallel proceedings for finalization of provisional assessment under Section 18 of the Customs Act, the statutory action must prevail. This is to say that the proceedings for finalization of provisional assessment must go ahead. The assessee’s duty liability will depend upon the result of these proceedings. - AT
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IBC:
Initiation of CIRP - Financial Creditor - time limitation - The mere fact that Corporate Debtor did not appear or filed any objection, was not relevant for consideration of question of limitation by the Adjudicating Authority. - the Adjudicating Authority was obliged to consider the question of limitation of the application under Section 7 filed by the Financial Creditor and without adverting to the said issue application ought not have been admitted. - AT
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IBC:
Initiation of CIRP - existence of dispute supported by evidences - The dispute which has been raised is a genuine dispute which required further investigation, cannot be subject to a Section 9 Proceeding. It is always open for the Appellant to seek his remedy in law for recovery of dues, if any, in accordance with law but for such disputed issues, Section 9 Proceeding cannot be invoked at the instance of Operational Creditor. - AT
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IBC:
Initiation of CIRP - time limitation - there is no support to the submission from the Section 10A that the prohibition from initiation of CIRP was limited for six months or one year and after expiry of that period an application can be filed for period covered by Section 10A also. The use of the expression in the proviso that no application shall ever be filed is clearly clarificatory of legislative intendment as contained in Section 10A. - AT
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Service Tax:
SVLDRS - Since the petitioner has already made payment of the amount in respect of which, he had claimed the benefit under the SVLDRS scheme much prior to submitting Form SVLDRS-1, the petitioner would be entitled to avail the benefit under the SVLDRS Scheme and rejection of the same by the respondents by issuing the impugned communication is clearly arbitrary, illegal and contrary to law - HC
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Service Tax:
Rejection of refund of Service tax - service tax paid wrongly at the time of purchase of the said shops/ flats, to the exchequer through service provider - service was exempt during the relevant period - the word “building” used is wide enough cover the shop and flats purchased by the appellant. That being so benefit of exemption under the said entry cannot be denied to the appellant on this ground. - AT
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Service Tax:
CENVAT Credit of service tax paid - legal services - Nexus with output services - Works Contract Service - in the facts of the present case, appellant could not have rendered the output service of hotel, mandap keeper without construction of the cafe and banquet hall. - Credit allowed - AT
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Central Excise:
CENVAT Credit - capital goods - Since in the present case, the capital goods purchased by the respondent/assessee had never been used for manufacturing exempted goods by it, the learned Tribunal rightly came to the conclusion that the respondent/assessee was entitled to avail “CENVAT Credit” on the goods in question - HC
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VAT:
Claim of reduced the levy of Central Sales Tax @ 1% for the financial year 2010-11 onwards) after the Capital Investment of Plant and Machinery, having exceeded R. 25 Crores - It is trite that if the law provides that a particular procedure has to be followed while deciding an issue or a lis before the authorities then the procedure should be followed according to the law established and not otherwise - Claim allowed - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2022 (11) TMI 1187
Non-grant of transitional credit - Section 140 of the Central Goods and Services Tax Act, 2017 and the Assam Goods and Services Tax Act, 2017 - HELD THAT:- Reliance placed in the case of UNION OF INDIA ANR. VERSUS FILCO TRADE CENTRE PVT. LTD. ANR. [ 2022 (7) TMI 1232 - SC ORDER ] where it was held that Goods and Service Tax Network (GSTN) is directed to open common portal for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022. In terms of the Circular No. 180/12/2022-GST dated 09.09.2022, the time period for availing transitional credit through Tran- Tran-2 has been extended up to 30.11.2022. The writ petition is disposed of to enable the petitioner to take the benefit of the order.
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2022 (11) TMI 1182
Exemption from GST - educational institutions or not - pre and post Examination services being provided to the Educational Boards and Universities (including Open Universities) - services provided on sub-contract basis - Sl.No. 66(b) of the Notification No. 12/2017-Central Tax (Rate), dt. 28-06-2017 - HELD THAT:- The applicant sought ruling about whether the exemption is available to them in case of the services provided on sub contract basis i.e. the applicant provides pre and post examination services to the main contractor who in turn provides the said services to the Educational Boards and Universities (including Open Universities). However, since in the present case the main contractor to whom the applicant is to provide services as sub-contractor is not an educational institution, though the services are allegedly being provided to the Educational Boards and Universities by the main contractor, the exemption contained in the impugned notification is not available to the applicant. When exemption contained in a notification is to be claimed, an applicant is to satisfy the conditions prescribed therein. The wordings of any notification have to be strictly read to allow or deny any exemption. The applicant, M/s Magnetic Infotech Private Ltd., as a sub contractor, is not eligible to claim exemption as available under Notification No. 12/2017-(R), dt. 28.6.2017.
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2022 (11) TMI 1186
Cancellation of the Registration Certificate of petitioner - failure to file Goods and Services Tax monthly returns for a continuous period of six months - Section 29 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- In view of the fact that this Court has been consistently following the directions issued in the case of TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. [ 2022 (2) TMI 933 - MADRAS HIGH COURT] and the Revenue/Department has also accepted the said view as evident from the fact that no appeal has been filed in any of the matters, this Court intends to follow the above order of this Court. This Court feels that the benefit extended by this Court in the earlier orders referred to above in Suguna Cutpiece Centre's case cited supra, may be extended to the Petitioner - Petition disposed off.
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2022 (11) TMI 1185
Levy of penalty - mens rea in evasion of tax - alleged ground of contravention of Section 129(1)(a) of the Central Goods and Services Tax Act, 2017 read with West Bengal Goods and Services Tax Act, 2017 - HELD THAT:- The goods which were to be supplied to the said Public Sector Undertaking was of very huge in size and, therefore, the appellants had raised multiple e-weigh bills and loaded the goods into three trucks. One of the three trucks had already reached the consignee which was not disputed by the Revenue. The other two trucks could not reach the destination within the validity of the e-weigh bills i.e. 23.08.2021. The vehicle along with the goods were intercepted by the authorities on 25.08.2021. The appellants had explained that there is absolutely no mens rea on their part and there was no intention to evade payment of tax. Nevertheless, the Adjudicating Authority had imposed full tax and penalty upon the appellants and aggrieved by such order, the appellant had filed the appeal before the First Appellate Authority. It is well settled that by merely using the expression mens rea , it would not amount to concluding that there was a willful attempt on the part of the dealer to evade the payment of tax. The concerned authority or the First Appellate Authority, is required to record the reasons in writing as to how and in what manner mens rea was established. Since this is lacking in the order passed by the Appellate Authority dated 6.4.2022, the matter should be remanded back to the Appellate Authority for fresh consideration to decide this short issue as to whether there is any mens rea on the part of the appellants to evade payment of duty. Appeal allowed by way of remand.
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2022 (11) TMI 1184
Cancellation of GST registration of petitioner - delay on the part of the petitioner for non payment of dues, non filing of returns, were condonable or not - Section 107 of the CGST Act - HELD THAT:- As rightly contended by the learned counsel for the petitioner, though the 1st respondent Appellate Authority does not have any power to condone the delay in preferring an appeal under Section 107 of the CGST Act, in a given case, it is open for this Court to condone the delay by exercising its powers under Article 226 of the Constitution of India. In the instant case, it is the specific assertion of the petitioner that due to financial constraints and covid-19 pandemic and on account of bonafide reasons, unavoidable circumstances and sufficient cause, it was not possible for him to not only file the GST returns and make payment within the stipulated time, but also could not prefer the appeal within the prescribed period. The explanation offered by the petitioner in not making GST payment and delay in filing returns and preferring an appeal deserves to be accepted and by adopting a justice oriented approach, it is deemed just and appropriate to set aside the impugned orders and the 2 nd respondent is directed to restore the GST registration of the petitioner, subject to payment of all dues by the petitioner. Petition allowed.
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2022 (11) TMI 1181
Exemption from GST - Government entity or not - pure services or not - Medical insurance premium taken to provide health Insurance to the employees, pensioners and their family members - Vehicle insurance Policy taken to provide Insurance to the vehicles owned by the Board - eligibility for exemption as mentioned in Entry No. 3 of the Notification Number 12/2017 - Central Tax (Rate), dt 28th June, 2017. HELD THAT:- The words Governmental Authority and Government Entity have been omitted vide Notification no: 16/2021 Dt: 18.11.2021 w.e.f 01-01-2022 - Since Hyderabad Metropolitan water supply and sewerage board is a board set up by act of state legislature to carry out any function entrusted to a Municipality under article 243 W, it is a Governmental authority as per the definition. The insurance services for employees and employees family members received by the applicant is not in direct and proximate relation to water supply and sewerage related function entrusted under Article 243W, hence the supply received by the applicant does not fall under Sl.No 3 of Central tax (rate) notification no 12/2017 and are not exempted - The board also receives insurance services to vehicles which are used for transportation of water and sewerage management, since these vehicles are essential for performing the functions as entrusted in 243W of the constitution. The applicant is eligible for exemption under entry mentioned above. All other vehicles which are not used for performing the functions as entrusted in 243W of the constitution shall be taxable. Thus, from 18-11-2021, in view of the amendment mentioned, omitting the word Government authority , the services provided to the applicant are not eligible for exemption under Sl.No 3 of Notification no 12/2017 dated 28-06-2017.
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2022 (11) TMI 1183
Levy of GST upon the sale consideration for purchase of developed land upon the petitioners who happen to be purchasers of the said land from Bhopal Development Authority - HELD THAT:- In view of the Court circular dated 03.08.2022 issued by Government of India, Ministry of Finance, Department of Revenue issued by the Government of India, Ministry of Finance, Department of Revenue, it would be appropriate that the Bhopal Development Authority applies its mind again on the question as to whether GST deserves to be levied in given facts and circumstances or not. This petition is disposed of with direction to the Bhopal Development Authority to reconsider the question of levy of GST on the sale of developed plots to the petitioners in the light of aforesaid circular dated 03.08.2022 issued by Government of India, Ministry of Finance, Department of Revenue.
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Income Tax
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2022 (11) TMI 1180
Capital gain - transfer - revaluation of assets - partnership firm - retirement of one partner and reconstitution of firm with new partners - applicability of Section 45(4) of the Income Tax Act as introduced by the Finance Act, 1987 - HELD THAT:- The assets of the partnership firm were revalued to increase the value by an amount of Rs. 17.34 crores on 01.01.1993 (relevant to A.Y. 1993-1994) and the revalued amount was credited to the accounts of the partners in their profit-sharing ratio and the credit of the assets revaluation amount to the capital accounts of the partners can be said to be in effect distribution of the assets valued at Rs. 17.34 crores to the partners and that during the years, some new partners came to be inducted by introduction of small amounts of capital ranging between Rs. 2.5 to 4.5 lakhs and the said newly inducted partners had huge credits to their capital accounts immediately after joining the partnership, which amount was available to the partners for withdrawal and in fact some of the partners withdrew the amount credited in their capital accounts. Therefore, the assets so revalued and the credit into the capital accounts of the respective partners can be said to be transfer and which fall in the category of OTHERWISE and therefore, the provision of Section 45(4) inserted by Finance Act, 1987 w.e.f. 01.04.1988 shall be applicable. For the purpose of interpretation of newly inserted Section 45(4), the decision of this Court in the case of Hind Construction Ltd.[ 1971 (9) TMI 16 - SUPREME COURT] shall not be applicable and/or the same shall not be of any assistance to the assessee. As such, we are in complete agreement with the view taken by the Bombay High Court in the case of A.N. Naik Associates and Ors.[ 2003 (7) TMI 46 - BOMBAY HIGH COURT ] - We affirm the view taken by the Bombay High Court in the above decision. The impugned judgment and order passed by the High Court and that of the ITAT are unsustainable and the same deserves to be quashed and set aside and are accordingly quashed and set aside. The order passed by the AO is hereby restored.
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2022 (11) TMI 1174
Deduction u/s. 80P(2)(a)(i) and 80P(2)(d) - Failure to file its returns for the impugned assessment years before the prescribed due date u/s.139(1) of the Act as on 31.08.2018 and 31.08.2019 assessment year wise, respectively - HELD THAT:- No merit in Revenue s arguments seeking to invoke section 139(1) Explanation-2 (c) of the Act. A perusal thereof makes it clear that it is in the nature of residuary clause dealing with any other assessee whereas this taxpayer is found to be covered u/s. 139(1) Explanation-2(a)(ii) thereof as applicable in case of a person [other than company] whose accounts are required to be audited under this Act or under any other law for the time being in force since it is liable to be audited under the state cooperative law. Faced with the situation, reverse both the lower authorities action applying section 80AC of the Act in assessee s cases in principle and restore this sole substantive grievance back to the Assessing Officer for his afresh adjudication as per law on merits.
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2022 (11) TMI 1173
Exemption u/s 11 - non-furnishing of audit report in Form 10B through electronic mode - whether willful or intentional delay on the part of assessee? - HELD THAT:- CBDT s Circular No. 2/2020 stated that CIT(A) has power for condoning belated application in filing Form No. 10B wherever the assessee was prevented by reasonable cause for filing of such applications within the stipulated time. In the present case before us, the delay is due to bonafide mistake on the part of the assessee which could be condoned as there is a strong reason on the part of assessee. Since the assessee is neither negligent nor willful defaulter in filing Form No. 10B within stipulated time prescribed under law and it was happened due to bonafide mistake on the part of the assessee. Hence, we reverse the orders of lower authorities, condone the delay in filing Form No. 10B and direct the AO to accept the audit report in form No. 10B. Appeal of the assessee is allowed.
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2022 (11) TMI 1172
Deduction u/s 80P - Exemption of interest income received from other cooperative society u/s 80P(2)(d) - AO was of the opinion that the interest income so received is not eligible for exemption u/s 80P(2)(a)(i), as the said income was received from non-members of the society - HELD THAT:- Reasoning of the Assessing Officer as well as the ld. CIT(A) was overruled by the Co-ordinate Bench of this Tribunal in the case of The Ugar Sugar Works Kamgar Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO [ 2021 (11) TMI 1117 - ITAT PANAJI] in favour of the appellant society. Thus interest income is eligible for deduction u/s 80P(2)(d) - we direct AO to allow the same. Hence, the ground of appeal no.1 stands allowed. Additions u/s 40(a)(ia) and section 36(1) - HELD THAT:- As inflated profits on account of such disallowances, would also qualify for deduction u/s 80P(2)(a)(i) - Hence, direct the AO to allow the above disallowances which form part of the business income of the appellant society for exemption u/s 80P. Accordingly, ground of appeal nos.2 and 3 stands allowed.
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2022 (11) TMI 1171
Validity of assessment u/s 153C - HELD THAT:- We find that the A.O. in the instant case has failed to demonstrate that seized document belongs to the assessee company and no seized documents were found as a result of search and have bearing on the determination of total income of the assessee company. Therefore, we find that the above imperative three jurisdictional conditions for issuance of notice under section 153C of the Act are not satisfied. We rely on the Judgment in the case of Sinhgad Technical Education Society[ 2017 (8) TMI 1298 - SUPREME COURT] wherein as held that the nexus between issue of notice under section 153C and the incriminating material found as a result of search must exist. Since in the instant case no incriminating material was found and seized during the course of search which belonging to the assessee company, the Judgment of Sinhgad Technical Education Society (supra), is squarely applicable to the facts of the present case. Further, the Hon ble Jurisdictional Delhi High Court also in the case of CIT vs., Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] . - Decided against revenue.
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2022 (11) TMI 1170
Penalty proceedings u/s 271D - contravention of provisions of section 269SS - recording of satisfaction for penalty proceedings - HELD THAT:- We find considerable force in the contention of the assessee that the penalty order passed u/s 271D of the Act is void ab initio and bad in law as there was no satisfaction recorded by the AO as to the contravention of provisions of section 269SS while framing the assessment order under section 143(3) - On perusal of the assessment order the AO initiated penalty proceedings u/s 271(1)(c) and there is no satisfaction recorded for initiation of proceedings u/s 271D nor given any finding that there is any contravention of provisions of section 269SS of the Act. Following the decision of the Hon ble Supreme Court and various Tribunals held that in the absence of recording of satisfaction in the assessment order for initiation of penalty proceedings under section 271D/271E of the Act, the penalty order is bad in law. Respectfully following the decision of the Hon ble Supreme Court in the case of CIT Vs. Jai Laxmi Rice Mills [ 2015 (11) TMI 1453 - SUPREME COURT] we hold that the penalty order passed under section 271D of the Act is bad in law and accordingly the same is quashed. Ground No. 1 of the grounds of appeal of the assessee is allowed.
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2022 (11) TMI 1169
Addition on account of sundry creditors - CIT(A) noted in his order that the AO himself has admitted in the remand report that there were 05 parties whose names and amounts were same in the two lists submitted by the assessee and the total amount of creditors is also not disputed by the AO - HELD THAT:- Since the Ld. CIT(A) has deleted the addition after calling the remand report from the A.O. which fact has not been disputed by the D.R, we find no fallacy in the findings of the CIT(A). We, therefore, confirm the order of the Ld. CIT(A) on this issue. Accordingly, ground of appeal no.1 of Revenue is dismissed. TDS u/s 194C - addition on account of freight expenses - HELD THAT:- We find that in the instant issue the A.O. had failed to point out where the TDS was not deducted by the A.O. and also not treated the freight expenses in question as bogus. Therefore, we find force in the submissions for the Assessee. CIT(A) after calling the remand report from the A.O deleted the addition. From the careful perusal of the order of the CIT(A), we have noticed that he had deleted the addition after examining the remand report submitted by the AO - CIT(A) noted that the A.O. could not come up with even a single case where TDS was to be deducted as per law and there is no allegation of freight expenses in question were bogus. CIT(A) deleted the impugned addition - In absence of any contrary material brought to our notice by the D.R, we find no fallacy in the findings of the CIT(A). We, therefore, confirm the order of the Ld. CIT(A) on this issue. Ground of appeal no.2 of Revenue is accordingly dismissed. Addition on account of loading and unloading expenses - assessee had not deducted the TDS on account of loading and unloading expenses - HELD THAT:- We find that the Ld. CIT(A) had only restricted the addition to the extent TDS which was deductible and deleted the balance addition out of the total addition made by the A.O. Since the order of the CIT(A) on this issue is in accordance with the provisions of Income Tax Act, we find no infirmity in the order of the CIT(A) and we, therefore, confirm his order and dismiss the ground of appeal of the Revenue.
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2022 (11) TMI 1178
Validity of order of ITAT deciding the issue raised first time without proper notice to assessee - Deduction u/s 80IA - deduction was not claimed in the original return but was claimed in the revised return - whether the assessee was required to electronically upload the audit report in Form 10CCB before the due date prescribed under the Act? - HELD THAT:- As pointed out earlier the Tribunal has rightly taken note of the settled legal position and held that if the defect be procedural it can be cured at a subsequent stage namely at the stage of filing the revised return or even during the course of assessment proceedings. If that was the finding of the learned Tribunal the natural consequence that has to flow is to allow the appeal of the assessee. However, assessee s appeal has been dismissed on the ground that the audit report has not been filed within the time prescribed under the statute. Tribunal though noted that such prescription of time limit was pursuant to an amendment it failed to take note of the fact as to whether such a amendment would apply to the assessment year under consideration namely A.Y. 2014-15. The amendment to the Act was brought about by the Finance Act 2020 (No. 12 of 2020) dated 27.3.2020. In Section 35 of the Finance Act the amendment brought out to Section 80IA of the Act in sub Section (7) has been mentioned. It has to be noted that Finance Act, 2020 came into force on 1.4.2020. If that be so, Tribunal without examining as to whether such an amendment could apply to the assessee s case had directed to the assessing officer to verify such a matter. Advocate appearing for the appellant submitted that such an issue was never raised by the revenue at any earlier point of time. As could be seen from the materials available on record the assessing officer has not taken such a view, obviously he could not have done so because the assessment order was passed on 29th December, 2016, much earlier to the amendment. The CIT(A) also could not have taken note of the amendment because the order passed by the CIT(A) is dated 28th February, 2019. Therefore, if an issue is to be raised by the learned Tribunal suo-motu for the first time then the assessee is entitled to notice of such an issue being raised and should have afforded an opportunity to the assessee to put forth their submission. We find that such procedure was not adopted by the Tribunal. In any event, the learned Tribunal in paragraph 18 of its order having rightly noted the legal position ought to have granted relief to the assessee. Failure to do so, would result in order passed by the learned Tribunal liable to be set aside. Tribunal though noted the correct legal position has taken note of the subsequent amendment in the Act requiring the audit report to be filed in prescribed manner within the prescribed time. As mentioned by us above, this issue was never an issue pointed out to the assessee at any earlier point of time and it appears that the issue had been taken up for consideration when the case was heard and orders were reserved by the learned Tribunal. In any event, such point could not have been put against the assessee when the same was never the case of the revenue before the Tribunal. The appeal filed by the assessee is to be allowed. The order passed by the learned Tribunal as well as order passed by the CIT(A) are set aside and also the order passed by the assessing officer dated 29.12.2016 in so far as it disallows the deduction claimed under Section 80IA of the Act are set aside and there will be a direction to the assessing officer to allow the said deduction claimed by the assessee under Section 80IA of the Act. Decided in favour of the assessee.
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2022 (11) TMI 1177
Revision u/s 263 - PCIT may have information from the assessment file or through other sources - correctness of the exercise of power under section 263 - contention advanced before us by the revenue is that the assessee could not establish the genuineness of the transactions to prove that it had not indulged in any dubious share transactions meant to account for undisclosed income under the garb of long term capital against (LTCG) to claim exemption under Section 10 (38) - HELD THAT:- In the cases on hand there is nothing on record to show that such an exercise was done by the PCIT. Tribunal after noting several decisions on the subject rendered by the Coordinate Benches of the Tribunal had allowed the assessee s appeal and set aside the order passed by the PCIT under Section 263 - Tribunal has proceeded to examine the merits of the matter and granted relief. It is the submission that so far as the merit of the cases are concerned similar issue was tested by this Court in the case of Principal Commissioner of Income Tax Vs. Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT ] Though such may be the issue, as pointed out earlier the learned Tribunal had granted relief to the assessee on two grounds the first of which being that the exercise of power under Section 263 of the Act was not in accordance with law. As could be seen from the substantial questions of law suggested by the revenue, the revenue has not raised any question on the said finding of the Tribunal which goes to show that the revenue had reconciled with the reasoning given by the learned Tribunal in that record. Therefore, a piecemeal challenge to the order passed by the learned Tribunal on one of the grounds on which relief was granted to the assessee is not maintainable. In more or less identical circumstances in the case of Principal Commissioner of Income Tax, Durgapur Vs. M/s. Sinforte Pvt. Ltd. [ 2022 (1) TMI 1297 - CALCUTTA HIGH COURT] the court had dismissed the appeal filed by the revenue on the ground that the PCIT in order to exercise jurisdiction under section 263 of the Act exercised jurisdiction at the instance of the assessing officer which is against the provisions of the law. This decision supports the case of the respondent assessee. Hence, for the above reasons, we are of the view that the order passed by the learned tribunal on the first ground, namely with regard to the correctness of the exercise of power under section 263 of the Act has to be affirmed and, accordingly, the appeal filed by the revenue is dismissed.
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2022 (11) TMI 1168
Unexplained investment u/s 69 - Advance receipt against sale of land - Transfer yet to be registered - Addition made on the basis incriminating documents - Dumb Document - Saudha Chithi found and seized during the course of search and seizure action - unaccounted land transactions - CIT(A) deleted the additions - HELD THAT:- We see no reasons to take any other view of the matter than the view so taken by the Division Bench of this Tribunal in in the case of Shri Pravinchandra Dahyabhai Umriger [ 2022 (5) TMI 1479 - ITAT SURAT] as held sauda chithi is a dumb document as far as the assessee is concerned. Hence, the additions cannot be made on the basis of such dumb documents. As the issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench(supra) and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings of the Coordinate Bench (supra). We find no reason to interfere in the said order of the Coordinate Bench, therefore, respectfully following the binding judgment of the Coordinate Bench, we dismiss the appeal of the Revenue.
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2022 (11) TMI 1167
Addition u/s 40A(3) - assessee firm had made cash purchase exceeding permissible limit - CIT-A deleted the addition - HELD THAT:- CIT(A) has categorically mentioned that the cash book, purchase register and all individual invoices where cash transaction had taken place have been thoroughly checked and it is found that not a single such transaction actually exceeded the threshold limit of Rs.20,000/-. In view of the aforesaid factual finding given by the CIT(A) there is no violation of the provisions of section 40A(3) of the Act, we do not find any reason to interfere with the order of the CIT(A) and the same is upheld. - Decided against revenue.
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2022 (11) TMI 1176
Reopening of assessment against company as struck off by the ROC from its register of companies - Later the name was restored - Section 248 of the Companies Act, 2013 - Respondent has filed its counter affidavit for restoration of the name of the Company in the register of companies, maintained by the ROC Delhi - HELD THAT:- The petitioner herein is the promoter and director of the Company and he has filed the present petition in his individual capacity -The Petitioner admits the Company stands restored by the order dated 25 th September, 2019, passed by the NCLT. The defaulting Company has neither challenged the impugned Notice dated 28th March, 2019, nor the order dated 25th September, 2019, passed by the NCLT, which has therefore, attained finality in law. In our view, in these facts alone, the Petitioner herein has no locus standi to maintain the proceedings and even in alternative the present petition has become infructuous. Impugned notice was issued at a point in time, when the Company was struck off from the ROC, the subsequent order passed by the NCLT restoring the Company, will not have the effect of curing the defect issuance of notice to the non-existent entity - Section 252(3) of the Companies Act, 2013 expressly states that the Tribunal s order directing restoration of a company will have the effect of placing the company in the same position as if the name of the company has not been struck off from the register of companies. In other words, with the restoration order passed by the NCLT, even on the date of the issuance of the impugned notice, the Company is deemed to be in existence. Section 250 of Companies Act of 2013 is a new provision and it declares that even where a Company is dissolved in consequence to it being struck off under Section 248, it shall be deemed to continue to be in existence for the purpose of discharging its liabilities. The said section recognizes the continuing liability of a struck off company, which is in addition to Section 248(7) of the Companies Act, 2013, In the present proceedings, the Company has admittedly been restored and as it has been observed above that statutorily upon restoration, the Company under Section 252(3) of the Companies Act, 2013, is deemed to not have been struck off from the register of companies at all. Accordingly, the impugned notice dated 28th March, 2019, is valid and not non-est on the grounds urged in the present petition. Decision as distinguishable in Shrikishen Dhoot Others [ 1964 (11) TMI 38 - HIGH COURT OF ANDHRA PRADESH] has held that a suit is not maintainable against a company which was struck off from the register of companies. However, the Court in the said case has clarified that the existing liability of any director or member prior to the dissolution of the company will continue in spite of the dissolution. Also Sharvan Kumar Swarup [ 1994 (9) TMI 2 - SUPREME COURT] and Mrs. Suseela Sadanandan [ 1964 (10) TMI 6 - SUPREME COURT] Company was initially struck off by the Ministry of Corporate Affairs due to its default in filing its statutory return with the ROC and the Company was, therefore, struck off due to its own defaults. The NCLT upon realizing that the detriment caused to the interest of the Income Tax department due to the striking off, restored the Company to enable the Department to recover its dues. However, the conduct of the Petitioner in persisting with the present petition even after the Company has been restored and also his action in opposing the appeal before the NCLT for restoration evidences that the petitioner is abusing the process of law to obstruct the assessment proceedings. The resort to present petition by the Petitioner herein is therefore, not bona fide and is being done to avoid legal processes. We, accordingly, dismiss the present petition with costs.
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2022 (11) TMI 1175
Validity of Faceless assessment - maintainability of the that writ petition on the ground of territorial jurisdiction since the PAN AO, was located outside Delhi - Penalty proceedings u/s 271AAC (1) - HELD THAT:- View expressed by a co-ordinate bench of this Court in RKKR foundation [ 2021 (5) TMI 496 - DELHI HIGH COURT] has not taken into account the entire conspectus of the legal position in assignment proceedings with reference to the hierarchy of appellate authorities under the Act, 1961 and that the matter requires a deeper consideration. We are also of the view that applying the doctrine of forum non-conveniens as laid down by a Full bench of this Court in Sterling Agro [ 2012 (6) TMI 76 - DELHI HIGH COURT - LB] this Court can refuse to entertain the writ petitions where the jurisdictional assessing officer i.e. JAO is based outside the NCT of Delhi. It would be appropriate to refer this matter to a larger bench for a conclusive view as this issue will arise repeatedly in many cases. Keeping in view the complexity of the legal issues involved and since we have doubted the correctness of the view expressed by a coordinate bench of this Court in RKKR Foundation [ 2021 (5) TMI 770 - DELHI HIGH COURT] wherein this Court had decided to exercise its jurisdiction in a similar matter where the jurisdictional assessing officer was located outside the NCT of Delhi, we are of the considered view that the aforesaid questions of law requires to be settled and decided by way of an authoritative pronouncement by a larger bench of this Court.
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2022 (11) TMI 1166
Addition u/s 68 - Unexplained cash credit - assessee has failed to produce the alleged shareholders before the ld. AO for identity, creditworthiness and genuineness of the transaction - HELD THAT:- The assessee was asked to explain the cash credit received by it during the year. Assessee has failed to file necessary details to explain alleged cash credit and also unable to provide identity and creditworthiness of the cash creditors as well as genuineness of the transaction as per the provisions of law. The assessee has miserably failed to explain the source of alleged cash credit if the assessee has sufficient details to explain the alleged sum it could have certainly filed those details before the authorities below. The assessee consistently escaping from appearing before the ld. AO and the appellate authority plausible explanation to explain the source of alleged sum of share capital and security premium. If the assessee is unable to explain the alleged cash credit and consistent escaped, the provisions of section 68 are attracted. Thus, it is held that the assessee has routed its unaccounted income in the books of account in the form of share capital and security premium by arranging bogus share capital and share premium through accommodation entry provider. Therefore, we find no infirmity in the finding of the CIT(A) confirming the addition made u/s. 68 of the Act and the same is confirmed. Thus, instant grounds of appeal raised by the assessee are dismissed. Addition as undisclosed commission income from the share capital and share premium raised during the year - We after perusing the material available on record and findings of the authority below in respect of addition made by the AO on account of undisclosed commission income and same has been confirmed by the ld. CIT(A) in its order. We are of the considered view that since the assessee could not demonstrate any irregularity in the order passed by the AO at the time of hearing before the ld. CIT(A) and even before us also and the assessee completely failed to substantiate its claim before the authorities below, therefore, we find no infirmity in the findings of the CIT(A) on this issue and thus this ground of appeal is dismissed. The other grounds raised by the assessee are general and consequential in nature therefore need not required to be adjudicated.
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2022 (11) TMI 1165
Estimation of income - Bogus purchases - HELD THAT:- Since, the issue is squarely covered by the judgment of Pankaj K. Chaudhary [ 2021 (10) TMI 653 - ITAT SURAT ] wherein Tribunal has sustained the addition @ 6% of bogus purchases. Revenue submitted before us that u/s 37 the entire bogus purchases should be disallowed as the bogus purchase would not for the purpose of the business and therefore the 100% addition made by Assessing Officer may be sustained. DR relied on the judgment of Co-ordinate Bench of ITAT, Mumbai in the case of Urmila Co. Ltd. [ 2013 (11) TMI 477 - ITAT MUMBAI ] However, we note that the judgment cited by Ld. DR is on different footing and does not applicable to the facts of the assessee s case under consideration. Therefore, respectfully following the binding precedent of the Co-ordinate Bench of ITAT, Surat in the case of Pankaj K. Chaudhary [ 2021 (10) TMI 653 - ITAT SURAT ] we partly allow the appeal of the Revenue.
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2022 (11) TMI 1164
Unexplained expenditure - HELD THAT:- Revenue has not brought on record any material to show that there is any change in the facts or in nature of transactions in the impugned assessment year. The Commissioner of Income Tax (Appeals) in the impugned order has deleted the addition following its own order for assessment year 2011-12 - The CIT(A) has categorically mentioned that the facts are identical in both assessment years. Following the order of Co-ordinate Bench in assessee s own case, ground No. 1 to 3 of appeal by the Revenue are dismissed. Claim of ESOP expenses - Allowable revenue expenses u/s 37(1) - HELD THAT:- The Delhi Bench placing reliance on Biocon Ltd. [ 2013 (8) TMI 629 - ITAT BANGALORE] held that the discount under ESOP is allowable deduction u/s 37(1) of the Act. The CIT(A) in the impugned order deleted the addition following the order of CIT(A) in the case of M/s. Indiabulls Financial Services ltd (now merged with the assessee Co.) for the A.Y. 2011-12. The CIT(A) categorically observed that there is no change in the facts. The Revenue has not been able to rebut the above observations of the First Appellate Authority. We find no reason to interfere with the finding of the CIT(A) on this issue. Accordingly, ground No. 4 and 5 of the appeal are dismissed. Deduction of education cess - HELD THAT:- We find that the Co-ordinate Bench has held that the Explanation 3 inserted by the Finance Act 2022 is effective retrospectively from 1st April 2005, hence, the assessee is not entitled for deduction of education cess. In light of above and the statement made by AR of the assessee, the Revenue succeeds on ground No. 6 of the appeal. Ground of appeal as emanate from the additions made in the assessment order passed under section 143(3) read with section 153A - claim of ESOP expenses - HELD THAT:- A perusal of the assessment orderassed under section 143(3) read with section 153A of the Act, reveals that there is no discussion in respect of ESOP expenses. However, while computing total income, the AO has taken total income as determined in the assessment order passed u/s 143(3) - AR has pointed that in assessment order passed u/s 143(3) of the Act, the AO had made addition, the assessee carried the issue in appeal before CIT(A). The CIT(A) decided the issue in favour of assessee. Department has accepted the some as no further appeal was filed by the Department on this issue. We find that CIT(A) in the impugned order has granted relief to the assessee on the ground that the issue of ESOP expenditures stands concluded in proceedings arising out of original assessment order. The Department has not furnished any contrary material. Since, the issue does not emanate from assessment proceedings u/s 143(3) read with section 153 of the Act, ground No. 5 and 6 of appeal are liable to be rejected
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2022 (11) TMI 1179
Chargeability of TDS on non-convertible debentures and FDR below - HELD THAT:- As gone through the judgment and orders passed by the Tribunal as well as the High Court, we are of the opinion that no error has been committed by the Tribunal and/or the High Court on the chargeability of TDS amount on non-convertible debentures and fixed deposit of the value less than Rs.5,000/-. Both, the Tribunal as well as the High Court have concurrently found that on non-convertible debentures and fixed deposit of the value less than Rs.5,000/-, there shall not be any TDS leviable. We are in complete agreement with the view taken by the Tribunal as well as the High Court. Once, there is no liability to deduct TDS on non-convertible debentures and fixed deposit of the value less than Rs. 5,000/-, there is no question of charging any interest. At the same time the issue whether the levy of the interest was time barred considering Section 201(1) / 201(1)(a) has not been dealt with and considered in High Court, we keep the question of law on the aforesaid open.
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2022 (11) TMI 1139
TP Adjustment - comparable selection - HELD THAT:- We direct the TPO to exclude (i) Infosys BPO Limited, (ii) SPI Technologies India Private Limited, and (iii) Eclerx Services Limited from the list of comparables and recompute the ALP of the international transaction. Informed Technologies India Limited and Crystal Voxx Limited - As we find that the Tribunal in assessee's group case in the case of EIT Services Private Limited v. DCIT [ 2022 (8) TMI 1309 - ITAT BANGALORE] had restored the matter to the TPO to examine whether the above two companies can be considered as comparable company. Thus we direct the AO/TPO to examine afresh whether the above two companies, namely, Informed Technologies India Limited and Crystal Voxx Limited can be included as comparable companies. Ace BPO Services Private Limited - Restore the comparability of Ace BPO Services Private Limited to the files of the TPO. Disallowance of ESOP expenses u/s. 37 - employees of the assessee was eligible to participate in share based compensation scheme of the ultimate holding company, whereby the shares of the ultimate holding company are granted to the employees of the assessee on satisfying certain conditions - HELD THAT:- In assessee's group case, namely, EIT Services India Pvt. Ltd. v. DCIT [ 2022 (8) TMI 1309 - ITAT BANGALORE] had held that the ESOP expenditure is to be allowed as a deduction u/s. 37 of the I.T. Act. The Tribunal had followed the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Biocon Limited [ 2020 (11) TMI 779 - KARNATAKA HIGH COURT] TDS u/s 195 - The assessee has raised grounds with regard to the issue that the assessee is not liable for TDS u/s. 195 of the I.T. Act - We are of the view that these grounds need not be adjudicated, since, on perusal of the final assessment, it is clear that the disallowance of ESOP expenses has made under the provisions of section 37 of the I.T. Act (though there was some discussion in the draft assessment order with reference to disallowance u/s. 40(a)(i). Payment towards leave encashment - HELD THAT:- In the light of the decision of the Hon'ble Supreme Court in the case of Exide Industries [ 2020 (4) TMI 792 - SUPREME COURT] assessee will not be entitled to claim deduction on leave encashment on the basis of the provision. Taking into consideration the circumstances under which the assessee did not claim a sum being leave encashment actually being paid during the previous year relevant to Assessment Year 2016-2017 we are of the view that the assessee should be allowed leave encashment actually paid as per provisions of section 43B(f) of the Act. We remit the issue to the AO to verify the claim of the assessee and allow deduction to the assessee as per law after affording assessee opportunity of being heard.
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2022 (11) TMI 1163
Genuine business expenditure - allowability of referral fees paid to doctors and nursing home by the appellant company - AO was of the opinion that the payment of referral fees to doctors and nursing home would amount to violation of the provisions of Medical Council (Professional Conducts, Etiquettes and Ethics) Regulation Act, 2002 - HELD THAT:- Issue squarely hit by the Explanation 1 to section 37 of the Act. We find that an identical issue was dealt in the case of Apex Laboratories (P.) Ltd. vs. DCIT, [ 2022 (2) TMI 1114 - SUPREME COURT] wherein, the Hon ble Apex Court held that gifting freebies, and payment of referral fees etc. is clearly prohibited by law and cannot be allowed as deduction u/s 37(1) of the Act. We are of the considered opinion that referral fees paid to doctors and nursing home cannot be allowed as deduction while computing the business income of an assessee. Accordingly, we confirm the orders of the lower authorities. Thus, we do not find any merit in the ground of appeal filed by the appellant-assessee.
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2022 (11) TMI 1162
Unexplained investment in purchase of agriculture land u/s 69C - value determined by stamps authority - addition on the basis of difference in actual purchase price and valuation made by stamps authority - HELD THAT:- There is no evidence or basis available to the lower authorities for making this addition. On a careful reading of section 69C, we observe that the said section empowers the assessing authority to make addition where unexplained expenditure is found but then the unexplained expenditure has to be real and not notional. Had there been any evidence in the possession of revenue authorities which could establish that the assessee has actually expended a sum on purchase of the property, the authorities would have been within power to treat the difference as income of assessee but this is not so in present case. The authorities do not have any evidence whatsoever by which it can be said that the assessee has expended a sum on purchase of the impugned property. From the decision of Bharat Sanchar Nigam Limited [ 2022 (7) TMI 1350 - SUPREME COURT] that the value determined by stamps authority is merely for collection of stamps duty. Also find merit in the submission of Ld. AR that the realising the absence of provision, the Parliament has introduced newer section 56(2)(x) but that section does not support revenue s case for AY 2013-14. With this discussion, we do not hesitate in concluding that the revenue authorities are not justified in making addition u/s 69C in this case. Ground raised by assessee is allowed.
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Customs
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2022 (11) TMI 1160
Confiscation of goods - Levy of penalty - Mis-declared/un-declared imported goods - goods which were declared as Adhesive Tapes but on examination, the goods appeared to be PTFE Tapes - wilful suppression of actual import value with intent to evade duty and as such - recovery of duty under Section 28 of the Act by invoking the extended period of limitation. HELD THAT:- Admittedly, it is a case of town seizure. The goods found or available in the open market are presumed to be duty paid unless otherwise proved by the Department. Admittedly, in the facts of the instant case, Revenue have not brought any material on record that the goods seized from the shop/godown premises of the appellant, were not duty paid. Admittedly, the appellant have neither placed purchase orders with the foreign suppliers nor have made any payment to such foreign suppliers. Admittedly, the appellant have procured the goods from the importer(s) located in India after such importers brought the goods to the open market post out of charge granted by the Customs Department. All the suppliers, whose bills the appellants have produced in support of the goods lying in his godown, have confirmed supply of goods against those invoices, although there are minor distortion in the statements. In view of the documentary evidence, oral evidence have got less weight and documentary evidence being more reliable cannot be ignored. As the appellant admittedly is not the importer, as defined under the provisions of the Customs Act, the impugned order confiscating the goods and demanding duty is bad in law and on facts. The impugned order is also bad for violation of the provisions of Section 138 B of the Act, which requires that the Adjudicating Authority is required to examine and offer for cross examination of the witnesses of the Revenue, which have not been done by the court below. There is no evidence that this appellant has financed the imports made by other importers/traders - the show cause notice is vague, as valuation of the goods has been done by the Revenue without any relied upon documents (copy of any retrieved documents from mobile /CPU of the appellant). Evidently, no panchnama was drawn by Revenue for retrieval of data or documents from the CPU/mobile of the appellant - reliance placed by Revenue on the statement of Mr. Vivek Kumar Bansal, Proprietor of M/s. Dee Vee Posters is bad on facts as the statements are self-contradictory. The seizure is bad under the provisions of Section 110 of the Act. It is found that the show cause notice is vague as it does not specify the particular clause of Section 111, under which the goods are liable for confiscation. Further, in the facts and circumstances, the imposition of penalty under Section 112 and 114 AA is bad. Appeal allowed.
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2022 (11) TMI 1159
Finalization of provisional assessment - Re-export of goods - non-declaration of packing materials for components/ parts of wind mill/ SOC containers with a view to evade customs duty - Denial of benefit of Exemption Notification No. 104/94-Cus. dated 16.03.1994 - HELD THAT:- It is seen from the language of the Notification that it pertains to exemption to durable containers from payment of customs duty when imported into India if importer execute a bond and re-export of containers is done within the prescribed period or extended period - once the imported goods have been allowed export by the department, demand of custom duty denying benefit of notification No. 104/94 on export goods is not correct in spite of the fact that they have re-exported after the stipulated period of 6 months. Therefore where the goods are already re-exported benefits of said Notification should be granted. However, the facts of export of the very same goods, which were imported by the appellant have to be established and identity of the imported and re-exported goods is required to be examined by the lower authorities, therefore matter needs to be reconsidered, we set aside the impugned order and remand the matter to the assessing authority for examining the appellant s claim in this regards. The assessments are provisional and the same have to be finalized in accordance with the provisions of the Customs Act and there can be no demand of duty without finalization of the assessments as held in Hon ble Gujarat High Court s judgment in the case of ESSAR STEEL LTD. VERSUS UNION OF INDIA [ 2001 (2) TMI 149 - HIGH COURT OF GUJARAT AT AHMEDABAD ]. Where there is incompatibility between departmental proceedings to enforce contract and parallel proceedings for finalization of provisional assessment under Section 18 of the Customs Act, the statutory action must prevail. This is to say that the proceedings for finalization of provisional assessment must go ahead. The assessee s duty liability will depend upon the result of these proceedings. This appeal is allowed by way of remand directing the assessing authority to finalize the provisional assessment of the relevant Bills of Entry and then proceed to recover the duty of customs, if found due.
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2022 (11) TMI 1161
Recovery of demand when appeal has been restored and pending - appropriation / adjustment of refund with demand - Doctrine of merger - recovery of excess duty - Section 129E of the Customs Act - HELD THAT:- The proceedings in the said Appeal No.C/85678/15 were the subject matter in dispute in Writ Petition No.475 of 2020 which was decided on 9th November 2022 - Since the Appeal No.C/85678/15 of petitioner has been restored to the CESTAT, no recovery in excess of 7.5% of the duty in dispute can be made by respondents. The three impugned orders dated 17th February 2021 and the two orders dated 31st December 2021 insofar as they appropriate the refunds of petitioner against the demand imposed by Order-in-Original dated 28th November 2014 is set aside - respondents are directed to refund Rs.67,64,925/- and Rs.60,58,966/-, together with applicable interest, within eight weeks from the date of uploading of the order. Petition disposed off.
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Corporate Laws
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2022 (11) TMI 1158
Seeking suspension of Look Out Circular (LOC), if any, issued against the petitioner - Permission to travel Abu Dhabi, Bahrain, Riyadh and London for his consultancy work related to his business - allegation of siphoning of huge amount - investigation under the Black Money (Undisclosed Foreign income and assets) and Imposition of Tax Act, 2015 at initial stage - HELD THAT:- The issuance of an LOC is in nature of an administrative action and the scope of judicial review is limited. While reviewing administrative action it was held Courts do not substitute the wisdom of the authorities as if it is sitting in appeal. The Hon ble Supreme Court in the case of RAM JETHMALANI VERSUS UNION OF INDIA [ 2011 (7) TMI 844 - SUPREME COURT ] had taken judicial notice of the fact thousands of crores of Indian rupees are stashed away abroad in foreign bank accounts posing a serious threat to the financial health and economy of the country. Considering the fact the investigation is at initial/crucial stage and the petitioner allegedly is evading queries and has promised to give replies only on 09.12.2022 and millions have been transferred by him to foreign accounts per investigation till date, hence the discretion needs to be exercised cautiously moreso when the petitioner s son has not returned to India for the last two years and is not co-operating. Thus, considering the allegations of siphoning off huge amounts and the investigation under the Black Money (Undisclosed Foreign income and assets) and Imposition of Tax Act, 2015 being at initial stage I am not inclined to suspend the LOC at this stage. Petition dismissed.
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2022 (11) TMI 1157
Oppression and Mismanagement - Validity of purported Development Agreement cum General Power of Attorney entered into between the 1st Respondent Company /Emaar Hills Township Private Limited and Emaar MGF Land Ltd. - right of assignment proper accounting for all the monies realized by sale of properties in the Township Project, either directly or through the said Emaar MGF Land Ltd. or any other entry - grant of order of injunction restraining the 2nd and 3rd Respondents from acting / conducting the affairs of the 1st respondent company and directing them to hand over the assets and records of the 1st Respondent Company including disclosing the details of all assets/properties/monetary transactions and accounts to the petitioner - directing an independent enquiry / investigation into the affairs of the 1st Respondent Company, by appointing an Independent Auditor - whether 1st Respondent is a member of the Proforma Respondent No.2, as defined under Section 2 (55) of the Companies Act, 2013, or not - plea of the Appellants that only a Member can prefer and maintain a Petition under Section 241-242 of the Companies Act, 2013. HELD THAT:- It is to be pointed out that Section 244 of the Companies Act, 2013, prescribes the Qualification of Members, who shall have a Right to Apply, as per Section 241 of the Act, 2013, in respect of a Petition for an Oppression or Mismanagement - An Ex-facie evidence pertaining to the Shares, can be (a) the Share Certificate or (b) Even the Register of Members. However, in the absence of a Share Certificate or an Entry in the Register of Members, also if an Individual can prove that certain / particular Shares were allotted to him, for the purpose of this provision, is to be treated as a Member of a Company. A Shareholder can establish the Allotment of Shares, through Statutory Returns and the documents maintained by the Company. Strictly speaking, in a given case, if it is exhibited that although the concerned Persons name is not contained / shown in the Register of Members, but it / he, had been treated as a Member, by the Company, the Tribunal, is to exercise, its Unfettered Equity Jurisdiction and cannot avoid the Petition, by falling back upon the Technicalities, in the considered opinion of this Tribunal. Notwithstanding the fact, an emphatic contention is advanced on the side of the Appellants in both Appeals that there is no iota of evidence to exhibit in the instant case, that the Assets and Liabilities of APIIC were apportioned physically to the 1st Respondent/TSIIC/Petitioner, yet this Tribunal, is of the considered view that in terms of the ingredients of Section 53 of the Andhra Pradesh Reorganisation Act, 2014, every Government Asset Viz. located in the State of Telangana shall by an Operation of Law will become the Assets of the State of Telangana. In the present case, the Minutes of the Meeting of the Board of Directors of the Appellant/Company that took place on 16.06.2016, in which, the Managing Director of the 1st Respondent/TSIIC/Petitioner, based on the invitation of the Appellant/Company - It cannot be brushed aside, that the List of Shareholders as on 31.03.2019, forming part of the Appellant/Company focuses the 1st Respondent/TSIIC/Petitioner, as a Shareholder of the Appellant/Company holding 2,50,32,202 Shares. Even the note, appended to the Accounts of the Company for the year ended 31.03.2019, clearly mentions that the 1st Respondent/TSIIC/Petitioner took over the activities of APIIC, relating to the State of Telangana. These would clinchingly, unerringly and without any simmering doubt, establish that the 1st Respondent/TSIIC/Petitioner was recognised as the Shareholder of the Appellant / Emaar Hills Township Pvt. Ltd. / Company. This Tribunal on a careful consideration of the respective contentions advanced on either side, keeping in mind that by an Operation of Law that the 1st Respondent/TSIIC/Petitioner has become the Shareholder of the Appellant/Company and considering the facts and circumstances of the instant case (especially, according to the 13th Respondent / RoC, Telangana, Hyderabad, an inquiry under Section 206 of the Companies Act, 2013, is under progress and consideration by the Government of India, Ministry of Corporate Affairs against the 1st Respondent/TSIIC/Petitioner/Company and as well as against the Appellant/M/s. Emaar Hills Township Pvt. Ltd/Company in Comp. App. (AT) (CH) No. 84 of 2022, this Tribunal comes to a consequent cock sure conclusion that the main CP/36/2021, filed by the 1st Respondent/TSIIC/Petitioner, before the Tribunal (National Company Law Tribunal, Hyderabad Bench-II, Hyderabad), is exfacie maintainable in Law. Appeal disposed off.
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Insolvency & Bankruptcy
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2022 (11) TMI 1156
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - application rejected on the ground of time limitation - HELD THAT:- The reply affidavit filed by the Respondent wherein letter dated 04.04.2018 (Annexure-B at page 69 of the Reply) issued by the Respondent, it has been categorically stated that at that point of time it was constrained to issue an email communication to you dated 22.01.2012 asking to increase your man power strength and for completing the various job works as required by you to be completed within a specified period of time and further disputed that there is an unpaid amount of Rs. 1,98,95,546/- as reflected in the 78 number of invoices attached with the impugned notice as dealt with herein, all the alleged bills as raised by you started from 02.11.2010 ending 10.12.2012 and the payments as received by you were lastly on 11.02.2013 and so the alleged bills as raised by you were strictly barred by the laws of limitation and thus you are not entitled to any payment as allegedly claimed by the Appellant - the Appellant in his rejoinder stated that the Appellant as per the agreed terms, completed their works and the Respondent was constrained to engage third party contractor for execution of the balance work which was otherwise within the scope of work of the Appellant. There is dispute between the parties prior to filing Section 9 application regarding work in question and also invoices raised by the Appellant between 02.11.2010 to 10.12.2012 - there are no merit in the instant Appeal, the impugned order dated 19.01.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Guwahati Bench, Guwahati) in the petition is hereby affirmed - appeal dismissed.
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2022 (11) TMI 1155
Seeking to exclude the period from 25.01.2022 till 22.06.2022 (147 Days) in computing the Period of Limitation - seeking direction from the Adjudicating Authority, (National Company Law Tribunal, Kochi Bench, Kerala), to add the personal properties of the Petitioners / Appellants, into the Liquidation Estate of the Corporate Debtor - sufficient cause for delay or not. HELD THAT:- This Tribunal, pertinently points out that the Legislature, has enacted Section 14 of the Limitation Act, 1963, to exempt a particular / certain period, covered by a Bonafide Litigious Activity. Inherently, there is an element of Mistake, in the invocation of Section 14 of the Limitation Act, 1963. As a matter of fact, in extending the benefit of the ingredients of Section 14 of the Limitation Act, 1963, to a Party / Litigant, the Tribunal, is to see whether the conduct will satisfy the test of prosecuting a Given Proceeding in a Good faith and Due diligence. In short, if a Good faith is established, Section 14 of the Limitation Act, 1963, can be pressed into service, in the considered opinion of this Tribunal. It is significantly pointed out by this Tribunal that the period of Limitation for filing a Suit / Appeal, is fixed by Law / Statute / Code and ordinarily, it cannot be deemed to be excluded or extended, automatically or as a matter of routine. The Petitioners / Appellants have indulged in Bonafide Litigious Activity, in preferring the petition, before the Hon ble High Court of Kerala, this Tribunal, by construing the ingredients of Section 14 of the Limitation Act 1963, in a liberal manner and by applying Equity, permits the exclusion of period from ₹ 25.01.2022 till 22.06.2022 (147 days), in computing the Period of Limitation - application disposed off.
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2022 (11) TMI 1154
Application for appellant for considering it as homebuyer - whether the claim filed by the Appellant in Form-CA should be accepted in the CIRP of the Corporate Debtor? - HELD THAT:- As admitted by the Appellant that he advanced a loan of Rs. two crores to the Corporate Debtor, which was disbursed through four demand drafts of Rs. 50 lakhs each between 6.11.2018 and 24.10.2019. When this unsecured loan was defaulted in repayment by the Corporate Debtor, the Appellant filed a section 7 application CP (IB) No. 73/ND/2019, which was disposed of as another section 7 application was admitted on 29.11.2019 against the Corporate Debtor - the second MoU, which is claimed to have been executed between the Appellant and the Corporate Debtor on 23.11.2019 is an unregistered document by which the Appellant was ostensibly allotted seven flats bearing nos. 703 (1370 sq. foot super built up area), 1002 (1445 sq. foot super built up area), 1503 (1370 sq. foot super built up area), 1606 (1370 sq. foot super built up area), 1702 (1445 sq. foot super built up area), 1802 (1445 sq. foot super built up area) and 1802 (1445 sq. foot super built up area), all located in Block D with allotment letters dated 23.11.2019 in all the cases in lieu of the amount pending for repayment by him. The two points are very clear viz. that the entire project with immovable and movable assets, including structures built thereon with entire current, future receivables and current assets from the project were all mortgaged to Canara Bank and such flats would not have been allotted to any person without an NOC from Canara Bank. Also, the Appellant, who claims to be an allottee and desires the benefit of filing his claim as homebuyer in Form-CA, is not an original allottee, but has received the seven flats as in lieu of its due amount of Rs. 3.03 crores from the Corporate Debtor vide a settlement MoU dated 23.11.2019. In the light of very grave doubt that exists regarding the allotment of seven flats to the Appellant, which in the absence of any NOC from Canara Bank could not have been made, we do not think that the RP committed any error in asking the Appellant to file its claim in Form-C instead of Form-CA, as an unsecured creditor, a decision which was affirmed by the Adjudicating Authority vide the Impugned Order dated 8.6.2022 - appeal dismissed.
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2022 (11) TMI 1153
Initiation of CIRP - Financial Creditor - time limitation - application filed within three years from the demand notice or not - HELD THAT:- From the notice dated 19.05.2016, 06.06.2016 and 12.09.2016 the application is not within three years. There being no details or explanation in application filed under Section 7, Part IV or Part V to indicate that how the application is filed within time, it was incumbent upon the Adjudicating Authority to examine the question whether the application under Section 7 is within limitation or not. The mere fact that Corporate Debtor did not appear or filed any objection, was not relevant for consideration of question of limitation by the Adjudicating Authority. The submission which has now been advanced before us in this Appeal by learned counsel for Respondent is that Applicant is entitled for benefit of Section 5 and Section 14 of the Limitation Act for coming to the conclusion that application is not barred by time - the Adjudicating Authority was obliged to consider the question of limitation of the application under Section 7 filed by the Financial Creditor and without adverting to the said issue application ought not have been admitted. Insofar as submission of learned counsel for the Appellant that application under Section 7 having been filed for recovery of additional interest ought not have been entertained. In view of the fact that matter is being sent back to the Adjudicating Authority for considering the question of limitation, the above submission of the Appellant may also be considered by the Adjudicating Authority - one opportunity be also provided to the Appellant/Corporate Debtor to file a reply to Section 7 application. Appeal is allowed.
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2022 (11) TMI 1152
Initiation of CIRP - existence of dispute supported by evidences - Corporate Debtor failed to make repayment of its dues - Operational Creditors - applicability of section 9 of IBC for recovery of dues - entitlement to receive ten percent commission by virtue of contract between the parties - HELD THAT:- The Demand Notice dated 12.10.2020 which was issued under Section 8 of the Code claiming amount of 1,26,50,000/- was based on the Memorandum of Understanding dated 1st June, 2018 entitling the Appellant to claim commission of ten percent on sale of goods to the end client M/s. Shapoorji and Pallonji Co. Ltd. The notice given under Section 8 captures the agreement and all the contents thereof. The notice was replied by the Corporate Debtor giving a notice of dispute on 04.11.2020. Under the scheme of Code, when Notice of Dispute has been issued and dispute raised is supported by any evidence and is not a moonshine defence, the Adjudicating Authority is not to entertain Section 9 Application and reject the Section 9 Application. The Notice of Dispute clearly held that no material was sold to M/s. Shapporji and Pallonji Co. Ltd. The dispute which has been raised is a genuine dispute which required further investigation, cannot be subject to a Section 9 Proceeding. It is always open for the Appellant to seek his remedy in law for recovery of dues, if any, in accordance with law but for such disputed issues, Section 9 Proceeding cannot be invoked at the instance of Operational Creditor. Appeal dismissed.
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2022 (11) TMI 1151
Maintainability of petition - initiation of CIRP - time limitation - Adjudicating Authority choose not to issue notice on the application and dismissed the application holding it to be barred under Section 10A of IBC - HELD THAT:- A perusal of the materials brought on the record indicates that there was settlement agreement dated 24.07.2020 between the parties. It is submitted that in the settlement there was table prescribed for payment and the part IV gives the details of payments. The default which is referred to in Part IV were default also of the period subsequent to prohibited period i.e. of March 2021 and October, 2021. A complete reading of the Part IV indicates that claim in the application was both for the period which was covered under the prohibition under Section 10A as well as the period which was beyond the said period. The period of six months or such further period not extending one year from such date as referred to in Section 10A was period during which the protection was to be extended by the statute from initiation of CIRP under Section 7, 9 10 - there is no support to the submission from the Section 10A that the prohibition from initiation of CIRP was limited for six months or one year and after expiry of that period an application can be filed for period covered by Section 10A also. The use of the expression in the proviso that no application shall ever be filed is clearly clarificatory of legislative intendment as contained in Section 10A. For the default which was committed during the period covered under the Section 10A no application could ever be filed. However, for any default which is committed prior to or subsequent to prohibited period, an application can be filed under Section 7,9,10 - since in the application which was filed by the appellant the period was also default for the period subsequent to prohibited period. Ends of justice be served in giving liberty to the appellant to file a fresh application after giving notice under Section 8. Appeal disposed off.
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PMLA
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2022 (11) TMI 1149
Seeking grant of Default bail - misappropriation of money - whether, after filling of a complaint and when the further investigation is still pending, the petitioner is entitled to default bail under Section 167(2) of the CrPC - HELD THAT:- Section 173 of the CrPC does not prescribe piecemeal investigation and filing of incomplete charge sheet before the court. Section 173(8) CrPC prescribes that even after filing of charge sheet further investigation can be done. In that case, if the investigating officer gathers additional evidence, he can produce it after filing of the charge sheet. The law does not permit the State to expand the maximum period stipulated under Section 167(2) CrPC by filing supplementary charge sheet. This Court has the reason to hold that the incomplete complaint (charge sheet in CrPC parlance) filed against the petitioner is against the law stipulated by Section 173 CrPC because law does not permit piecemeal investigation. Therefore, this Court holds that the petitioner is entitled to bail under Section 167(2) of the CrPC because investigation of the case is not yet complete. The petitioner Sri Subhra Jyoti Bharali is allowed to go on bail of Rs.1,000,00/- with a surety of like amount to the satisfaction of the learned Special Judge, Assam, Kamrup(M), Guwahati subject to the conditions imposed - application allowed.
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2022 (11) TMI 1150
Grant of bail - Smuggling - Gold - diversion of 54 Kgs of primary gold which was imported by the appellant through the canalizing Agency-Metals Minerals Trading Corporation (MMTC) - predicate or scheduled offence - HELD THAT:- It appears that the appellant was admitted to regular bail in connection with the aforesaid offences punishable under the provisions of Customs Act vide order dated 28.08.2018. Upon registration of the proceedings by the Enforcement Directorate on 03.02.2021, the appellant came to be arrested in said PMLA case on 28.11.2021 and has since then been in custody - The fact of the matter is that for an offence where the maximum sentence could be punishable with imprisonment for seven years, the appellant has undergone custody for about a year. It further appears that the investigation is still pending and the matter is not ripe for trial on merits before the appropriate Court. The appellant shall be produced before the concerned Court within three days and the concerned Court shall release the appellant on bail subject to such conditions as the Court may deem it appropriate to impose - Petition allowed.
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Service Tax
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2022 (11) TMI 1147
Rejection of refund of Service tax - service tax paid wrongly at the time of purchase of the said shops/ flats, to the exchequer through service provider - service was exempt as per the entry 13 (c) of the Notification No 25/2012-ST, which was denied - interpretation of the word building , used in the notification - principles of natural justice - HELD THAT:- In the case of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY ORS. [ 2018 (7) TMI 1826 - SUPREME COURT] , Hon ble Supreme Court has itself rejected the argument advanced to the effect that strict interpretation and literal interpretation are the same. The entry at S No 13 (c) of the Exemption Notification No 25/2012-ST., what has been exempted from payment of the service tax by the said entry is a building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public. Undisputedly the appellant is an entity registered under section 12AA of Income Tax Act, 1961 (43 of 1961), and the premises held by them are meant predominantly for religious use by general public. Thus the appellant are entity who are eligible to claim the benefit of this exemption. revenue also do not dispute this aspect. The only objection which has been raised is to the word building used in the notification whereas appellant are claiming exemption in respect of shop and flats purchased by them from the M/s Yog Reality. In the impugned order and during the course of arguments learned authorized representative has sought to distinguish the decisions of ASHA MURARKA AND ORS. VERSUS THE KOLKATA MUNICIPAL CORPORATION AND ORS. [ 2015 (4) TMI 1349 - CALCUTTA HIGH COURT] and in the case of NOTIFIED AREA COMMITTEE NANGAL TOWNSHIP VERSUS BHAKRA MANAGEMENT BOARD, CHANDIGARH AND ORS. [ 1999 (8) TMI 1016 - SUPREME COURT] from the facts of following case and have argued that as per this decision a flat in a building should be construed as separate unit. A flat is in building. Multi storey buildings are divided into flats or units. Thus, the word building used in entry at Sl No 13 (c) of the Notification No 25/2012-ST is wide enough cover the shop and flats purchased by the appellant in the project being developed by the M/s Yog Reality. That being so benefit of exemption under the said entry cannot be denied to the appellant on this ground. Principles of natural justice - HELD THAT:- Authorized representative has raise the issue of unjust enrichment. However he has failed to specify how the same can be applied in the present case where the claimant is recipient of the services and the consumer of service. Appeal allowed.
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2022 (11) TMI 1148
Benefit under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - It is submitted that on 21.06.2019 itself, the petitioner had admitted and quantified the service tax payable by him of a sum of Rs.50,50,277/- and the same was done prior to 30.06.2019 as per the Scheme - HELD THAT:- The undisputed material on record indicates that on 21.06.2019 i.e., prior to the cut of date 30.06.2019, the petitioner had admitted and quantified the service tax payable by him as Rs.50,50,277/-. Since the petitioner has already made payment of the amount in respect of which, he had claimed the benefit under the SVLDRS scheme much prior to submitting Form SVLDRS-1, the petitioner would be entitled to avail the benefit under the SVLDRS Scheme and rejection of the same by the respondents by issuing the impugned communication is clearly arbitrary, illegal and contrary to law as well as the provisions of the said Scheme and the same deserves to be quashed - since the petitioner would be entitled to waiver of 50% of the sum of Rs.53,88,248/- is Rs.26,94,124/-, the sum of Rs.50,50,277/- which is already admitted/quantified and paid by him would be far in excess of the said 50% is Rs.26,94,124/-. Contention of the respondents that the petitioner would not be entitled to the benefit of the Scheme in view of discrepancy between the admitted/quantified amount and the amount shown in Form SVLDRS-1 cannot be accepted. Petition allowed.
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2022 (11) TMI 1146
CENVAT Credit of service tax paid - legal services - Nexus with output services - Works Contract Service - reverse charge mechanism - suppression of facts or not - demand with interest and also equal amount of penalty under Rule 15(3) of Cenvat Credit Rules read with Section 78 of the Finance Act - extended period of limitation - HELD THAT:- The transaction has been properly recorded in the books of accounts maintained in the normal course of business. The dispute has been raised by the Revenue on the basis of audit note, which is based on the transaction recorded in the books of accounts and vouchers maintained by the appellant. Thus, there is no case of any suppression or contumacious conduct, as the Court below itself has found that cenvat credit in respect of legal services has been rightly taken. Further taking of cenvat credit by the appellant seems to be available in view of the main clause of Rule 2(l) of Cenvat Credit Rule, which provides for taking cenvat credit for any input service used by the provider of output service in relation to rendering of output services - Admittedly, in the facts of the present case, appellant could not have rendered the output service of hotel, mandap keeper without construction of the cafe and banquet hall. Extended period of limitation - HELD THAT:- The appellant has taken cenvat credit following the precedent ruling of this Tribunal and High Court referred. In this view of the matter, the extended period of limitation is not available to Revenue. Appeal allowed - decided in favor of appellant.
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Central Excise
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2022 (11) TMI 1145
CENVAT Credit - capital goods installed by the Respondent for manufacturing of exempted goods - dutiability of the final produce on the date of receipt of capital goods irrespective of whether the exempted goods have been manufactured or not - Business Support Service - time limitation - HELD THAT:- The facts in the present case are not in dispute. Admittedly, the respondent/assessee had initially filed a declaration on 04.08.2006 to avail benefit of Notification No.49-50/2003-CE, dated 10.06.2003, area based exemption for manufacture of goods. However, the respondent/ assessee then filed another declaration on 29.06.2007 to the effect that it had let out the premises on lease to Hindustan Liver Limited for manufacture of intended goods. Time limitation - HELD THAT:- The Show Cause Notice dated 13.07.2010, was issued with regard to the years 2006-2007, 2007-2008 2008-2009. Show cause notice could have been issued within one year from the last date of filing of ST-3 Returns, whereas, the show cause notice had been issued beyond the period of limitation on 13.07.2010. Learned counsel for the appellant/revenue has failed to point out any provision which required the respondent to intimate to the Department that he had availed the CENVAT Credit on the capital goods inputs or the input services, on which, it intended to take credit. It is not a case where the respondent had not maintained the records correctly or had filed incorrect returns. Respondent/assessee was required to disclose only those facts to the appellant/revenue as required under law. Hence, the Adjudicating Authority rightly came to the conclusion that the Show Cause Notice dated 13.07.2010 was barred by limitation. As per Rule 6(4) of the Cenvat Credit Rules, 2004, a manufacturer, who manufactures exempted goods, cannot take the benefit of CENVAT Credit . However, so far as the respondent/assessee is concerned, admittedly, it has not indulged in any manufacturing process - Since in the present case, the capital goods in question had never been used for any manufacturing activity, the learned Tribunal rightly held that the respondent/ assessee was entitled to avail CENVAT Credit on the goods in question. Since in the present case, the capital goods purchased by the respondent/assessee had never been used for manufacturing exempted goods by it, the learned Tribunal rightly came to the conclusion that the respondent/assessee was entitled to avail CENVAT Credit on the goods in question - the manufacturing aspect in relation to the plant and machinery had been taken over by Hindustan Liver Limited and the respondent/assessee had become a service provider and its activity relating to manufacture had ceased. No substantial question of law arises in this case, warranting interference - the appeal is dismissed.
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2022 (11) TMI 1144
Wrongful availment of service tax credit - credit availed against the invoices issued by Input Service Distributor - period May, 2016 to March, 2017 - HELD THAT:- The main reason for initiating the current proceedings against the appellant is the Order-in-Original dated 23.12.2016 in appellants own case for the earlier period i.e. March, 2013 to April, 2015 on the same issue - the said case was challenged by appellant itself in M/S G.P. PETROLEUM LTD. VERSUS CCE ST, RAIGAD [ 2019 (3) TMI 33 - CESTAT MUMBAI] where it was held that The legality or admissibility of credit can only be question to the ISD by its jurisdictional authority. In view of the aforesaid decision of the Tribunal, since the basis of the initiation of the current proceedings by the department for the period in issue itself has gone, the current proceedings can t survive - appeal allowed.
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2022 (11) TMI 1143
Irregular utilization of CENVAT Credit - inputs used in manufacture of capital goods - Joist - MS Channel - MS Joist - TMT Bars - Plate - RS Joist - MS Angles - nexus/pertinence in or in relation to manufacture of the excisable goods - applicability of N/N. 61/2009-CE (NT) dated 07.07.2009 - period March 2008, July 2008 and January 2009 - HELD THAT:- Clause (i) of Rule 2(a)(A) is parimateria with clause (3) of the table annexed to Rule 57Q. Similarly, clause (iii) of Rule 2(a)(A) is parimateria with clause (5) of the table annexed to Rule 57Q. In the case of Rajasthan Spinning Weaving Mills Ltd. [ 2010 (7) TMI 12 - SUPREME COURT ], the Hon ble Supreme Court considered the question whether the steel plates and channels used in the fabrication of chimney for DG set would fall within the purview of Sl. No. 5 of the table annexed to Rule 57Q. The Hon ble Supreme Court observed that the DG set fell under Heading No. 85.02, Chapter 85, of First Schedule to the Central Excise Tariff Act and ipso facto got covered under Sl. No. 3 of the table ibid. The Hon ble Supreme Court further noted that the chimney attached to the DG set was undisputedly covered by Sl. No. 5 of the table ibid. On this basis, it was held that the chimney was an integral part of the DG set and, therefore, MS channels, plates, etc., used in its fabrication were to be treated as accessories in terms of Sl. No. 5 of the table ibid. This judgement was rendered by applying the user test . The facts of the present case are perfectly analogous to those of Rajasthan Spinning Weaving Mills Ltd. It is not in dispute that MS angles, plates, etc., were used to fabricate structural support for machinery which was used for manufacturing excisable goods. It is, again, not in dispute that the machinery is squarely covered by clause (i) of Rule 2(a)(A) of the CENVAT Credit Rules, 2004. The immediate question is whether the structural support for the machinery could be treated as capital goods . Indeed, it should be construed to be an integral part of the machinery and hence to be covered by clause (i) ibid. If that be so, as held by the Hon ble Supreme Court in the aforesaid case, the plates, angles, etc., used for fabricating structural support will fall within the purview of clause (iii) of Rule 2(a)(A). Therefore, it has to be held that the MS angles, plates and rounds used by the Respondent for fabricating structural support for machinery would qualify to be capital goods for the purpose of availing CENVAT credit. The view of the Tribunal s Larger Bench in the case of Vandana Global Ltd. [ 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) ], taken much before the Hon ble Supreme Court rendered the judgement in the case of Rajasthan Spinning Weaving Mills Ltd. [ 2010 (7) TMI 12 - SUPREME COURT ], was to the effect that the supporting structure for a machinery could not be considered to be part or accessories of the machinery and, therefore, the steel items used for constructing such supporting structure would not be capital goods for the purpose of CENVAT credit. This view of the Larger Bench is no longer valid as it runs contrary to the subsequent ruling of the Apex Court. The Appeal filed by the Appellant is allowed.
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CST, VAT & Sales Tax
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2022 (11) TMI 1142
Classification of goods - rate of tax - Thermoplastic Road Marking Material - petitioner could not know the proceedings and was not informed about the date of hearing - opportunity of hearing was not provided - violation of principles of natural justice - HELD THAT:- This Court is of considered view that though the registry of Commercial Tax Tribunal had issued notice but the same was not served on the revisionists and they remained unrepresented before the Tribunal. It is further noticed that their non-appearance was not intentional or deliberate and, hence, it will be in fitness of things that the revisionist is permitted to place his arguments / contentions before the Tribunal and the Tribunal may also take into consideration such arguments before coming to conclusion with regard to issues engaging the Tribunal in the present case. The matter is remitted back to Commercial Tax Tribunal for a fresh determination and such determination be done expeditiously - Revision allowed.
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2022 (11) TMI 1141
Claim of reduced the levy of Central Sales Tax @ 1% for the financial year 2010-11 onwards) after the Capital Investment of Plant and Machinery, having exceeded R. 25 Crores in it s Unit-1, as on 18.03.2010 - Applicability of Notification No. 6222 on 25.07.2001 - HELD THAT:- As per the scheme envisaged by the Government Order, the total capital investment in Plant and Machinery by assessee has to be determined by a Committee constituted by the State Government in that behalf. Admittedly, in this case there is no decision of the Committee and the Assessing Officer has himself assessed the capital investment. The learned counsel appearing of the revisionist has taken us to the order passed by the Assessing Officer and the Tribunals. A careful reading of all the orders reveal that the total capital investment has never been assessed by any Committee as envisaged under Condition No.1 of the Notification referred to above. Thus, it is clear that the law governing the field provided for the assessment of the capital investment by a Committee whereas the same has never been done in this case. It is trite that if the law provides that a particular procedure has to be followed while deciding an issue or a lis before the authorities then the procedure should be followed according to the law established and not otherwise - it is clear that in this case while imposing the Tax at the rate of 2% the Assessing Officer has not considered the assessment determined by any Committee, further he has relied on his own assessment. In that view of the matter, the order passed by the Assessing Authority, confirmed by the Appellate Authority and the Commercial Tax Appellate Tribunal is not sustainable. In that view of the matter, the Central Tax Revision is allowed.
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Indian Laws
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2022 (11) TMI 1140
Justice delayed is justice denied - compensation for land acquired for coal mining - date or dates on which compensation became reckonable - applicability of the R R Act, 2013 - Whether the R R Policy 2006 applied, or the subsequent policy of 2013? - purpose of employment benefits - reopening of determinations based on change of policies of the State - Entitlement to housing plots - Creation of facilities and amenities, such as schools, community centres, medical facilities, etc. Date or dates on which compensation became reckonable - HELD THAT:- The date fixed in the Gopalpur report, by the Commission (i.e., September, 2010) would be the basis for compensation determination. Apart from compensation, the claimants would also be entitled to statutory benefits (solatium, additional compensation, interest, etc.) in accordance with the Land Acquisition Act, 1894. Applicability of the R R Act, 2013 - HELD THAT:- The First Schedule of the R R Act, 2013 is applicable to the acquisition in question, made by the Central Government in favour of MCL, in respect of the villages, the reports of which were not approved prior to 28.10.2015. Accordingly, the compensation based upon the market value for the four villages i.e., Tumulia, Jhupuranga, Ratansara, and Kirpsara have to be re-determined in accordance with the provisions of the First Schedule to the R R Act, 2013. Since the extent to land involved, identification of land owners, and the basic market value along with solatium and interest payments, have been determined, the only additional exercise which the Commission has to carry out is the differential payable after the re-determination in respect of all the elements i.e., the market value, solatium, and further interest. It is also further clarified that the villages in respect of which this court has already approved reports of the Commission, and entitlements have been determined, even availed of, or pending implementation, i.e., the other ten villages, the issues shall stand finalized - there can be no re-determination on the basis of the present judgment. Whether the R R Policy 2006 applied, or the subsequent policy of 2013? - If the latter policy (of 2013) applied, then for the purpose of employment benefits, whether the family unit was deemed to be represented by a singular member, or several of them? - whether the Commission could re-open determinations based on change of policies of the State, after its report was accepted by this court? - HELD THAT:- R R Policy 2006, as amended in 2013, being more beneficial, would be applicable, subject to the above interpretation. At the same time, it is clarified that in cases where anyone has accepted employment, the issue cannot be re-opened it shall be treated as final and binding. It is also clarified that in the event anyone among the displaced families is not interested in employment, and states so expressly, the alternative of one-time monetary payment, in terms of clause 3 of the 2006 policy, would be provided - it is held that though the R R Policy 2006 as amended in 2013 is applicable, the question of the father, the son and grandson, being eligible for employment benefit, concurrently, does not arise. Either one major son, or, in his absence, or unwillingness, a major grandson, would be eligible. This is apart from the entitlement of unmarried daughters: in their case, the aforementioned note to the definition had treated such daughters as a separate family; the amendment has only removed the age threshold. Thus, the R R Policy 2006, as amended in 2013 would apply. A displaced family has to be determined in the light of the definition, which includes the individual, and one major son, and an unmarried daughter. It is when, for some reason, the son cannot be offered or given employment, then one major grandson would be eligible for consideration. This court also holds that cases which have attained finality cannot be re-opened on the basis of this interpretation. The interpretation would inure in respect of cases where the reports have not been approved i.e., villages Tumulia, Jhupuranga, Ratansara, and Kirpsara. Entitlement to housing plots - HELD THAT:- Having regard to the fact that the judgment of this court was delivered in 2010 after which compensation determination and reports of the committee were prepared and submitted to this court mostly between 2010 and 2013, and further having regard to the fact that two other reports are pending consideration of this court, it would, in the fitness of things, be appropriate that such of the resettlement plots which have been acquired, should be developed in consultation with the Collector. The Collector will hold hearings, after giving due publicity to the land owners, indicating the place and providing adequate time for all land owners and stakeholders to be present. Having considered the views of the land owners, the Collector will, with the involvement of three nodal officers to be specially assigned with the task of implementation of the resettlement policy, by coordinating with all State agencies, finalise and approve the plots. This process should be completed within nine months of judgment of this court. The Court is also of the opinion that the development of such plots should not exceed 15 months in all. This court is constrained to adopt the procedure indicated, having regard to the fact that the process of compensation determination, identification of resettlement sites and development has taken inordinately long during which the displaced families must have undergone multiple changes by births and death. It would therefore, be appropriate and in the interests of justice, that at some stage, the entire rehabilitation and resettlement process is brought to an end and the land owners are provided resettlement and rehabilitation by way of cash benefits, whenever it is not possible to provide plots. Creation of facilities and amenities, such as schools, community centres, medical facilities, etc. - HELD THAT:- In the present case, the materials on record show that those resettlement sites have been earmarked and are at different stages of development. The mandate of the law i.e., the Third Schedule to the R R Act, 2013 is very clear in that all the amenities to the extent they conform to the population in each of the resettlement areas have to be provided. In these circumstances, there may be no escaping these obligations. The State Government, through its appropriate agencies should draw up a comprehensive plan for creation of such amenities and ensure that they are functional so as to complete rehabilitation and resettlement in a meaningful manner. As is evident, the R R Act, 2013 has nuanced application and makes special provisions to prevent hardships to members of the Scheduled Caste and Scheduled Tribe communities. Section 41 requires review exercises to ensure that the least possible harm befalls SC/ST members living in the areas sought to be acquired. It also mandates that formulation of a development plan and protective provisions invalidating alienation of tribal lands or lands belonging to the SC/ST in disregard of laws and regulations as null and void. Section 42, on the other hand ensures that all benefits, including reservation benefits available to SC/ST in the affected area shall continue in the resettlement area. In this case, the land owners were displaced on account of the acquisition in favour of MCL, which is entirely involuntary. It is not in dispute that these displaced families/land owners are residents of the Fifth Schedule Areas. The court hereby directs that the Commission should complete its task and that its report should be the basis for disbursement of compensation, onetime rehabilitation package of ₹25 lakhs per family as indicated above and employment offer within one year from today. In case of any vacancy in the Office of Chairman of the Commission, the Chief Justice of the Orissa High Court shall nominate a retired judge of that court. In the event of any other vacancy, the Government of Orissa shall nominate the concerned members. However, it is clarified that the government nominees should not be ex-officio or part time members, and should be of the rank and status of Additional Secretary, with experience in the Social Welfare or Revenue Departments at senior levels - It is further directed that all concerned landowners who have continued to occupy the lands shall vacate it upon the deposit of compensation. MCL shall be immediately granted possession of such lands. The Collector or the concerned authority shall issue a certificate in this regard which shall entitle them to the one-time rehabilitation payment or payment in lieu of compensation or any other benefit under the Act, according to the choice exercised by them in the manner indicated. Application disposed off.
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