TMI Tax Updates - e-Newsletter
November 7, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
Document Identification Number (DIN) - any specified communication which does not bear the electronically generated DIN and is not covered by the exceptions as mentioned, shall be treated as invalid and shall be deemed to have never been issued.
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GST:
Transitional credit - carry forward denied on account of nonfiling or incorrect filing of prescribed statutory Form i.e. TRAN-1 by the stipulated last date i.e. 27.12.2017 - inspite of being aware of complete facts and figures, the Respondent cannot deprive Petitioners from their valuable right of credit.
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GST:
Grant of Bail - keeping in view that the investigation is going on and apprehensions of applicant tampering with the evidence can not be ruled out. So, this Court is not inclined to grant bail to the applicant at this stage.
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GST:
Availment and utilisation of accumulated credit pertaining to Education Cess (EC), Secondary and Higher Education Cess (SHEC) and Krishi Kalyan Cess (KKC) - Carry forward of credit - Rule 117 of CGST Rules, 2017 - Explanation (3) which clarifies that the expression ‘eligible duties and taxes’ excludes any cess not specified in Explanation (1) or (2), has not been notified.
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Income Tax:
Disallowance of three expenses incurred towards Jhanki-Pradarshani & Seminar, Devi Ahilya Utsav & Malwa Utsav - Such expenses should be considered to have been incurred in the normal course of business allowable u/s 37(1).
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Income Tax:
Accrual of interest income - By merely filing appeal by the assessee before the Hon’ble Delhi High Court, it cannot be said that interest was not accrued to the assessee. The onus was on the assessee to establish that loan was unrecoverable during the year under consideration and no such evidences having been filed.
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Income Tax:
Deduction of mark to market losses (MTM) - MTM losses arising out of contractual obligation existing on the reporting date cannot be regarded as contingent or notional in nature and merely because the liability has to be discharged at a future date, the same cannot be regarded so. - Additions deleted.
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Income Tax:
Liability in special cases u/s 159 - liability of Legal Heir where trust has been created as per the WILL of the deceased assessee - he died testate and when he died testate decided declaring the said TRUST would succeed to his estate and the question of legal heir does not arise.
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Income Tax:
Higher rate of depreciation - Depreciation on business of civil contract @30% or 15% - in the case of assessee’s own business, the wear and tear is lesser than the vehicles used in running on hire - the assessee is disentitled for higher rate of depreciation
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Income Tax:
Taxation of Value of 1 kg. of gold as winning from “Lottery” - Essential ingredients of `lottery’ as it stood prior to the insertion of Explanation to section 2(24)(ix) of the I.T.Act is absent in the facts and circumstances of the case and the same cannot be taxed as a `lottery’
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Customs:
Amendment in shipping bill - amendment of reward option from 'No' to 'Yes' - rejection of request for 'No Objection Certificate' for claiming MEIS - Failure to mention 'Y' in the reward column of the shipping bill for availing the benefit under METS scheme can be corrected by amending the shipping bill
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Customs:
Classification of imported goods - gear reduction blank - The parts which has been imported is part of column type electric powers steering system (CEPS) and not part of motor vehicle so as to classify under chapter 8708 of Customs Tariff.
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DGFT:
Imports of Pulses for the fiscal year 2019-20 - Importers who have got the quota but do not import the same by the same deadline (31st October for Urad and Moong and 15th November for Toor), proceedings will be initiated against them under FTDR Act.
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PMLA:
Money Laundering - no FIR has been registered regarding schedule offence till date. Therefore, it is clear that Enforcement Directorate cannot conduct investigation in the present case in the absence of registration of FIR regarding schedule offences - Trial Court cannot entertain complaint filed by private party for the offence committed under PMLA
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Service Tax:
Wrong availment of service tax credit - rent-a-cab services along with interest thereon - The availment of utilisation of Cenvat credit on rent-a-cab services has duly been acknowledged on behalf of the appellant. Admissions are the best evidences.
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Service Tax:
Security services - Police provide security as a part of their statutory obligations - There is no doubt in the entire proceedings that the amount so received was deposited in the Government treasury - The CBEC circular being binding on the department, a demand to the contrary is not sustainable and needs to be set aside.
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Service Tax:
Renting of Immovable property - joint venture - For a tax to be levied under this heading, there must be a service provider and a service recipient and the service which is provided must be renting of immovable property and such renting must be for use in the course of furtherance of business or commerce.
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Service Tax:
Classification of services - Valuation - No Service Tax could have been levied in regard to the aforesaid services namely, horticulture, housekeeping and cleaning, supply of manpower and pest control.
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Service Tax:
“Sabka Viswas” (Legacy Dispute Resolution) Scheme, 2019 - Case of petitioner is that, he petitioner has fallen in no man’s land and is not entitled the benefit of Scheme - The grievance of the petitioner appears to be justified and the respondents should seriously examine the same.
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Central Excise:
Interest on Refund - The refund was ultimately sanctioned on 27.09.2018 when the Tribunal allowed appeal of the petitioner, thus, respondents are liable to pay interest w.e.f. expiry of three (03) months from 03.09.2009.
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Central Excise:
Valuation - benefit of cum-duty - The abatement of duties and tax to qualify the ‘normal price’ in the Central Excise Act, 1944, as well as in the rules framed for valuation, was intended to ensure that duties of central excise are not levied on other duties. It is not intended to provide for deeming the inclusion of duties in the sale price.
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Central Excise:
CENVAT Credit - duty paying documents - any document if doesn't bear the name of the service recipient the absence thereof is not as relevant as to deny the substantial benefit which otherwise is accruing to the assessee.
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VAT:
Imposition of penalty - discrepancy in Form 31 - certain columns were left blank - only carrying of Form 31 has been prescribed but there is no mention that all column should be duly filled and even from the facts on record it is abundantly clear that there was no intention to evade tax and therefore the penalty order which has been issued is clearly arbitrary and liable to be set aside
Articles
Notifications
GST - States-
G.O.Ms.No.400 - dated
13-9-2019
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Andhra Pradesh SGST
Amendment in the notification issued in the G.O.Ms.No.302, Revenue (CT.II) Department, Dated : 16-05-2019.
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29/2019-GST - dated
14-10-2019
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Assam SGST
Seeks to prescribe the due date for furnishing of return in FORM GSTR-1 for registered persons having aggregate turnover more than 1.5 crore rupees for the months of October, 2019 to March, 2020.
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28/2019-GST - dated
14-10-2019
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Assam SGST
Seeks to prescribe the due date for furnishing of return in FORM GSTR-3B for the months of October, 2019 to March, 2020.
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Order No. 07/2019-State Tax - dated
4-10-2019
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Assam SGST
The Assam Goods and Services Tax (Seventh Removal of Difficulties) Order, 2019.
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FTX.56/2017/Pt-III/230 - dated
4-10-2019
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Assam SGST
Amendments in the Notification No.FTX.56/2017/412 dated the 13th June, 2019.
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FTX.56/2017/Pt-I/238 - dated
4-10-2019
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Assam SGST
Seeks to extend the date from which the facility of blocking and unblocking of e-way bill facility as per the provision of Rule 138E of Assam GST Rules, 2017 shall be brought into force to 21.11.2019.
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13/2019-State Tax (Rate) - dated
4-10-2019
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Assam SGST
Amendments in the notification No. 12 FTX.56/2017/25 dated the 29th June, 2017 (Notification No. 12) - Which seeks to exempt the hiring of Electric buses by local authorities from GST.
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12/2019-State Tax (Rate) - dated
4-10-2019
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Assam SGST
Amendments in the Notification No.FTX.56/2017/14 dated the 29th June, 2017 - (Notification No. 1)Which seeks to reduce the GST rate on Electric Vehicles and charger or charging stations for Electric vehicles.
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ORDER No. 6/2019–State Tax - dated
31-10-2019
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Delhi SGST
Delhi Goods and Services Tax (Sixth Removal of Difficulties) Order, 2019
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30/2019–State Tax - dated
31-10-2019
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Delhi SGST
Seeks to provide exemption from furnishing of Annual Return / Reconciliation Statement for suppliers of Online Information Database Access and Retrieval Services
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06/2019-State Tax (Rate) - dated
31-10-2019
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Delhi SGST
Notify the classes of registered persons
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05/2019- State Tax (Rate) - dated
31-10-2019
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Delhi SGST
Seeks to amend Notification No. 13/2017- State Tax (Rate), dated the 30th June, 2017
Income Tax-
94/2019 - dated
5-11-2019
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IT
Seeks to amend Notification No. 77/2014 dated the 10th December, 2014
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93/2019 - dated
5-11-2019
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IT
Seeks to amend Notification No. 69/2014 dated the 13th November, 2014
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92/2019 - dated
5-11-2019
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IT
Seeks to amend Notification No. 59/2014 dated the 3rd November, 2014
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91/2019 - dated
5-11-2019
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IT
Seeks to amend Notification No. 57/2014 dated the 3rd November, 2014.
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90/2019 - dated
5-11-2019
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IT
Seeks to amend Notification No. 55/2014 Dated 30 October 2014
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89/2019 - dated
5-11-2019
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IT
Seeks to amend Notification No. 52/2014 dated 22 October 2014
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88/2019 - dated
5-11-2019
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IT
Seeks to amend Notification No. 50/2014, dated the 22nd October, 2014
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87/2019 - dated
5-11-2019
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IT
U/s 280A(1) of IT Act 1961, Central Government, in consultation with the Chief Justice of the Gujarat High Court designates Special Court in the State of Gujarat
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2019 (11) TMI 283
Rate of GST - execution of the civil works of Pazhassi Sagar Small Hydro Electric project awarded by Kerala State Electricity Board Ltd - Sl.No.3 (iii) (b) or 3(vi) of Notification No.11/2017 Central Tax (Rate) dated 28.06.2017 - GST taxable at the rate of 12%? - Government Entity - HELD THAT:- The concessional rate of GST of 12% under Sl No. 3 (vi) (a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 is applicable only for composite supply of works contracts as defined in clause (119) of Section 2 of the CGST Act, 2017 supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,- (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession. Whether Kerala State Electricity Board Ltd will fall under any of the categories namely; Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity? - HELD THAT:- Kerala State Electricity Board Ltd; is a Government Company incorporated under the Companies Act, 1956 with 90 per cent or more participation by way of equity or control of the Government of Kerala to carry out the business of generation, transmission and distribution of electricity in the State of Kerala and is a State Transmission Utility within the meaning of Section 2 (67) of the Electricity Act, 2003. Hence, Kerala State Electricity Board Ltd could not be considered as constituted/established by the Government of Kerala to carry out any function entrusted to a municipality under article 243W or a panchayat under article 243G of the Constitution. Therefore, Kerala State Electricity Board Ltd will not come under the definition of Governmental Authority under Para 2(zf) of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017. However, Kerala State Electricity Board Ltd squarely falls under the definition of Government Entity under Para 2 (zfa) of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017.
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2019 (11) TMI 282
Permission to carry forward of unutilized CENVAT credit of duty paid - transitional credit - carry forward denied on account of nonfiling or incorrect filing of prescribed statutory Form i.e. TRAN-1 by the stipulated last date i.e. 27.12.2017 - HELD THAT:- The Petitioners who were registered under Central Excise Act or VAT Act must be filing their returns and it is one of the requirements of Section 140 of CGST Act, 2017 to carry forward unutilized credit. The Respondent authorities were having complete record of already registered persons and at present they are free to verify fact and figures of any Petitioner thus inspite of being aware of complete facts and figures, the Respondent cannot deprive Petitioners from their valuable right of credit. The Respondents are directed to permit the Petitioners to file or revise where already filed incorrect TRAN-1 either electronically or manually statutory Form(s) TRAN-1 on or before 30th November 2019. The Respondents are at liberty to verify genuineness of claim of Petitioners but nobody shall be denied to carry forward legitimate claim of CENVAT / ITC on the ground of non-filing of TRAN-I by 27.12.2017. Petition allowed.
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2019 (11) TMI 281
Holding the meetings between the representatives of the trade and the concerned Senior officers - HELD THAT:- The whole purpose of directing the holding the meetings between the representatives of the trade and the concerned Senior officers, who are involved in the process of implementation of the GST system, was to enable the representatives of trade to put across the day-to-day practical difficulties being faced by them, face to face to the policy makers, so that they are able to address all such issues with the ultimate objective of achieving smooth operation of the GST system. The Respondents to take steps to implement all the decisions which have been taken in the aforesaid two meetings by issuing necessary circulars and notifications, or carrying out appropriate changes in the portal without any further delay. List on 20.11.2019.
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2019 (11) TMI 280
Grant of Bail - offences punishable under Sections 132(1)(d) of Central Goods and Service Tax Act, 2017 and Sections 471 and 120-B of the IPC - short payment of service tax with interest - tax evasion - HELD THAT:- Looking to the alleged huge tax evasion by the applicant and the contention of the learned counsel of the respondent and keeping in view that the investigation is going on and apprehensions of applicant tampering with the evidence can not be ruled out. So, this Court is not inclined to grant bail to the applicant at this stage. The bail application of the applicant is rejected.
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2019 (11) TMI 279
Provisional attachment of Bank Accounts - time limitation for such attachment to be in effect - Section 83 of the CGST Act, 2017 - HELD THAT:- Perusal of Annexures-D and E, it is not relevant to Section 74 of the Act. Under Section 74 of the Act, petitioner has not been issued notice. The pendency of proceedings under Section 83 of the Act would be only after issuance of notice. In the absence of issuance of notice under Section 74 of the Act or any other Sections quoted in Section 83 of the Act, one cannot draw inference that there is pendency of any proceedings under Section 74 of the Act in the present case. Respondents have not apprised by producing any documentary evidence to show that one of the ingredients under Section 74 of the Act has been invoked so as to pass the impugned order under Section 83 of the Act. Accordingly, writ petition stands allowed. Annexures-D and E are set aside. Petition allowed.
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2019 (11) TMI 278
Availment and utilisation of accumulated credit pertaining to Education Cess (EC), Secondary and Higher Education Cess (SHEC) and Krishi Kalyan Cess (KKC) - Carry forward of credit - Rule 117 of CGST Rules, 2017 - HELD THAT:- Firstly, the Instructions issued by the Central Board of Excise and Customs dated 07.12.2015, reveal a policy decision, not to allow utilisation of accumulated credit of EC and SHEC, but nowhere states that the credit has lapsed - The Board only says that the cesses have been phased out and since there is no new liability to pay these cesses, no vested right can be said to exist in relation to the past accumulated credit in the light of Rule 3(7)(b) of the Cenvat Credit Rules, 2004 which stipulates that Cenvat Credit shall be utilised only as against payment of specified duties. The request of the petitioner in that case has to be seen in this perspective and specifically in the light of the embargo placed by Rule 3(7)(b) as aforesaid. The Board could well have stated even at that juncture that the credit lapsed, but did not choose to do so. A certain amount of planning and strategizing is undertaken by an assessee bearing in mind the credits and concessions available as well as liabilities imposed by a taxing Statute at any given point in time. The credit available in regard to EC, SHEC and KKC are no different. In strategising and conducting its business, the assessee would certainly have taken into account that credit was available for set-off against output tax liability. Such credit accumulated has not been stated to have lapsed. The impugned action of the assessing authority in rejecting the claim has however the consequence of insertion of a Rule/Regulation to this effect, is impermissible. The revenue has not made out any bar for the transitioning of EC, SHEC and KKC into the GST regime and the petitioner satisfies all conditions both under sub-section (1) and (8) of section 140. The embargo placed by Rule 3(7)(b) is long gone with the introduction of GST. Certainly the powers-that-be are conscious of these factors in drafting the new legislation and the specific provision in question i.e., Section 140. Admittedly, the claims were filed beyond the period of six months. Thereafter, Section 11B was amended on 12.05.2000, extending the period of limitation from six months to one year. The benefit of extension of time as sought by the assessee was granted and the assessee s appeal allowed. In appeal before the Supreme Court, the Bench held that the timeline of six months had expired on 20.11.1999 and 10.12.1999 respectively, whereas, the claims had been filed only on 28.12.1999. The provisions of amended 11B were held not to be applicable to revive a claim that was already beyond time - the benefit of one year for filing claim for rebate would be available from 12.05.2000 when the limitation was extended from six months to 12 months. Moreover, the proviso had been added in the section itself to the effect that the amended provision would not have the effect of bringing to life a dead claim. Significantly, Explanation (3) which clarifies that the expression eligible duties and taxes excludes any cess not specified in Explanation (1) or (2), has not been notified. Petition allowed - decided in favor of petitioner.
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Income Tax
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2019 (11) TMI 277
Unexplained investment u/s 69 - High Court which has reversed the said conclusion recorded by the Tribunal and restored the opinion of the Assessing Officer whilst holding that the explanation offered by the assessee was not satisfactory - whether the High Court should have interfered with the finding of fact recorded by the Appellate Tribunal? - HELD THAT:- From the analysis made by the High Court, discerned from the impugned judgment, we find that the High Court has considered all relevant aspects of the matter and concluded that the Appellate Tribunal misdirected itself in assuming certain facts which were not relevant and unsubstantiated. In our opinion, the approach of the High Court is in accord with the material on record and the legal position. That being a possible view, no interference is warranted. In view of the above, the appeal is dismissed.
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2019 (11) TMI 276
Offences committed by the petitioner u/s 276C(1) and u/s 277 - Issuance of show cause notice - it is contended that, when a statutory appeal is filed and pending before the CIT(A) as against the order of assessment, the impugned action is totally unwarranted. - Non filing of stay application - HELD THAT:- it is for the first respondent to consider the said objection dated 14.02.2019 and pass appropriate orders on merits and in accordance with law. It is also open to the petitioner to file appropriate stay petition before the Appellate Authority, more particularly, when the appeal was filed as early as on 10.06.2015 and the same is kept pending all along. The present impugned show cause notice was issued to the petitioner on 19.11.2018. Admittedly, the petitioner has filed their objection, raising all the contentions. Therefore, it is for the first respondent to consider the said objection dated 14.02.2019 and pass appropriate orders on merits and in accordance with law. It is also open to the petitioner to file appropriate stay petition before the Appellate Authority, more particularly, when the appeal was filed as early as on 10.06.2015 and the same is kept pending all along. When all these courses of action are available to the petitioner, do not think that the present writ petition can be still entertained, as it is for the first respondent to pass orders on the objection raised by the petitioner dated 14.02.2019.
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2019 (11) TMI 275
Petitioner with sufficient opportunity or not before passing the order of assessment - HELD THAT:- The petitioner had already approached this Court on two occasions, one immediately, on receipt of notice for reopening and another after rejection of the objections raised against the reasons for reopening. Though the petitioner succeeded in her first attempt, where, this Court has directed the Assessing Officer to furnish the reasons and consider the objections of the petitioner and thereafter, to pass the order, whereas, in the second attempt, challenging the order rejecting her objection for reopening, has not been successful, as this Court has dismissed the writ petition as stated supra. Therefore, the AO has rightly proceeded to pass the order of assessment. The question now to be answered is whether the petitioner was provided with sufficient opportunity or not before passing the order of assessment. Perusal of the impugned order of assessment shows that for five occasions, the matter was adjourned for the appearance of the Assessee and however, the Assessee failed to appear and not furnished any material details either in person or through authorized representative. Assessing Officer has completed the assessment and passed the impugned order. When such being the factual position, I do not think that the petitioner is entitled to canvass the correctness or otherwise of the impugned order by filing the present writ petition only by stating that she is having all the materials and therefore, she must be permitted to get the matter reopened by the Assessing Officer. Therefore, without expressing any view on the merits of the matter, this Writ Petition is disposed of, only by granting liberty to the petitioner to work out her remedy by filing an appeal before the Appellate Authority within a period of two weeks from the date of receipt of a copy of this order.
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2019 (11) TMI 274
Cash found during the course of search by the CBI at residence - search and seizure operation under section 132 - original of cash receipt not produced - HELD THAT:- Assessing Officer has reproduced certain material based on charge sheet filed by the CBI against the assessee and others, in which the CBI has clearly mentioned that there was a criminal conspiracy between assessee, Dr. Sukhvinder Singh and others to get a favour from Shri Ketan Desai for approval of MBBS Course. There was specific information received by CBI and conversation of all the persons have been recorded by the CBI. Nothing have been explained in this regard with regard to allegations made against the assessee and others in the charge-sheet submitted by the CBI and reproduced by the Assessing Officer in the assessment order. Considering the totality of the facts and circumstances of the case and that there was substantial gap between withdrawal of cash by Shri Rahul Ahuja and alleged payment to the assessee. Therefore, assessee has failed to explain source of the cash of ₹ 2 crores found from his possession during the course of search by the CBI. The entire case set-up by the assessee is clearly an afterthought. The MOU and receipt are sham documents and fabricated by the assessee and others later on which fact is further strengthened by the fact that no original of MOU and receipt have been produced before the authorities below. Otherwise, the same could have been subjected to verification by CFSL. Copy of the MOU was produced, but, it was not having the back side which could have throw light on the fact as to when the said stamp paper were purchased and whether stamp papers were genuine or not. Hon ble Supreme Court in the case of Durga Prasad More [ 1971 (8) TMI 17 - SUPREME COURT] and in the case of Sumati Dayal [ 1995 (3) TMI 3 - SUPREME COURT] has held that the Courts and Tribunals have to judge the evidence before them by applying the test of human probability . If the said test is applied in this matter, it is clearly established that the assessee has failed to prove source of ₹ 2 crores found during the course of search by the CBI at his residence.- Decided against assessee
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2019 (11) TMI 273
Exemption u/s 11 - activity of publishing of news paper - charitable activity u/s 2(15) - HELD THAT:- On the issue of exemption u/s. 11 apart from relying on the decision of the AO and Ld. CIT(A), she placed reliance on the following cases. But she could not controvert the contention of the Ld. Counsel for the assessee that the issue of activity of publishing of news paper is squarely covered by the decision of the ITAT, Delhi A Bench vide order dated 17.09.2019 passed in assessee s own case for the assessment [ 2019 (10) TMI 662 - ITAT DELHI] wherein the said activity has been declared as charitable. As regards issues of double addition are concerned, she has no objection if the said issues be set aside to the AO for verification whether the said amount tantamount to double addition or not. Addition on account of income deemed under the provisions of Section 11 (3) - HELD THAT:- After perusing the computation of income for the Assessment Year 2010-11 placed in Paper Book, we find considerable cogency in the contention of the Ld. Counsel for the Assessee that the Assessee suo-moto has already increased its assessable income for the relevant previous year ended on March 31, 2010 and further the said addition made by the AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. In the result, the Assessee s appeal is partly allowed for statistical purposes. Disallowance on account of Provision for Bad and Doubtful Debts and provision for Arrears of Salary - HELD THAT:- After perusing the computation of income for the AY 2010-11), we note that Assessee suo-moto has already increased its assessable income by reducing its expenditure by an amount of ₹ 4,50,000/- and ₹ 5,00,000/- for the relevant previous year ended on March 31, 2010. Further, the said disallowance made by the AO tantamount to double disallowance, which in our opinion, needs to be verified at the level of the AO whether the same tantamounts to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. Addition on account of interest and other income credited in reserve fund for activities centered at Delhi - HELD THAT:- It is noted that Assessee suo-moto has already increased its assessable income for the relevant previous year ended on March 31, 2010. Further, the said addition made by the AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee
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2019 (11) TMI 272
Revision u/s 263 - AO was required to examine and verity the justification of share premium with regard to FMV and the creditworthiness of the subscriber to whom the said shares have been allotted at a huge premium - HELD THAT:- This entire exercise of the Assessing Officer can be seen reflected in the body of the assessment order itself. A conspectus reading of the assessment order vis a vis the issues raised by the PCIT would show that the PCIT has assumed jurisdiction on the ground that no proper enquiries were conducted by the Assessing Officer during the course of assessment proceedings. Whereas, the facts on record and as discussed hereinabove clearly reveal that thorough and investigative enquiries were conducted by the Assessing Officer, not only from the assessee, but also from all the concerned persons. We find that it is a settled position of law that powers u/s 263 of the Act can be exercised by the Commissioner on satisfaction of twin conditions, i.e., the assessment order should. be erroneous and prejudicial to the interest of the Revenue. By 'erroneous' it is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the AO has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Records which were examined by the ld. PCIT, had it been examined by due application of mind, the ld. PCIT would. have known that CCD pertaining to Assessment Year 2013-14 i.e., the immediately preceding Assessment Year and only on conversion, the entries have been made in the share capital and share premium account. The other decisions relied upon by the ld.. DR are misplaced and need no separate adjudication. Considering all supported by a vortex of evidences, examined and analysed by the Assessing Officer during the course of assessment proceedings, further supported by thorough investigations/enquiries made by the Assessing Officer during the assessment proceedings, we are of the considered view that there remains nothing for the PCIT to assume jurisdiction u/s 263 of the Act to say that the assessment order is not only erroneous but prejudicial to the interest of the revenue. We are of the considered view that the ld. PCIT has wrongly assumed jurisdiction u/s 263 of the Act, hence his combined order for all the A.Ys deserves to be set aside. - Decided in favour of assessee.
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2019 (11) TMI 271
Disallowance on account of 4/5th out of City Environmental Development and Preservation Expenses - nature of expenditure - HELD THAT:- The alleged expenses are not preoperative expenditure which needs to be allowed @ 1/5th for 5 years. The said expenses can be either termed as non business expenses or business expenditure. If they are termed as business expenditure then they can be either termed as revenue or capital expenditure. No such distinction has been made by the Ld. AO about the alleged expenses. It is noteworthy that the assessee company is working under the direction of State Government. It gets the power to acquire the land, develop housing project and other amenities for the public at large. Such land are acquired on concessional rates. Major reason for giving such wide powers and providing of precious land to the assessee authority is to develop the City in a well-organized manner keeping the interest of public at large. Construction of Flyover, Parks, Central Lighting on various main roads, Plantation on various roads, Construction of OPD at M.Y. Hospital are few of such work which are for the overall development of the City and provides facility for the public. Incurring of such expenses increases the brand value of IDA and also poses confidence of public at large in the working of IDA. Such expenses allowed by the revenue authorities in the past as well as in the future assessment proceedings and also because the impugned expenses have direct bearing with the overall business model of the assessee, find no reason to interfere in the finding of Ld. CIT(A) who has deleted the impugned disallowance. Ground No.1 of Revenue s appeal stands dismissed. Disallowance of provisional expenses claimed under the head Employees Remuneration and Benefits - HELD THAT:- From perusal of the finding as well as going through papers filed in the paper book, we observe that such working of making provision for the expenses and reversing the actual expenses incurred has been carried out consistently from year to year basis and the provisions are made as per the well calculated ascertained liability. There may be some excess provision in some years and may be less provision in same years but the process keeps on going because for the purpose of maintaining accounts on mercantile basis provisioning of expenses has to be made by the assessee in the books of account. Therefore, finding of Ld. CIT(A) needs no interference Addition u/s 14A - HELD THAT:- We find force in the contention of the Ld. counsel for the assessee and the finding of Ld. CIT(A) who was rightly followed the judgment of Hon'ble Delhi High Court in case of Cheminvest Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] . Since there is no exempt income earned by the assessee during the year disallowance u/s 14A of the Act was uncalled for. Disallowance of Audit fees - HELD THAT:- Following the judicial precedence as well as looking to the fact that Local Government Audit Fees bill of preceding year was settled during the year and genuineness of business expenditure is not in doubt, were are of the view that lower authorities erred in denying the claim to the assessee. Thus, we delete the disallowance of Audit Fees Disallowance of three expenses incurred towards Jhanki-Pradarshani Seminar, Devi Ahilya Utsav Malwa Utsav - whether the alleged amount is liable to be disallowed as donation and charity or whether such amount incurred by the assessee is allowable as business expenditure? - HELD THAT:- We, therefore, respectfully following the judgment of Hon'ble Delhi High Court in the case of Pr. CIT vs. M/s. Indian Farm Forestry Development [ 2018 (12) TMI 762 - DELHI HIGH COURT] are of the considered view that the alleged amount should be allowed as business expenditure as it indirectly help to increase business of the assessee authority. Expenses which are incurred on the direction of the State Government for various events in which public at large takes part, are the expenses in the nature of advertisement and brand building of the assessee namely IDA . Such expenses should be considered to have been incurred in the normal course of business allowable u/s 37(1) of the Act. Reliance was also placed by us on the judgment of Hon'ble Delhi High Court in the case of Pr. CIT vs. M/s. Indian Farm Forestry Development [ 2018 (12) TMI 762 - DELHI HIGH COURT] . However, in the instant appeal for A.Y. 2012-13 disallowance of impugned amount also includes the disallowance for ₹ 3,75,065/- debited by the assessee under the head of other donation. No details have been placed before us about the actual purpose of this amount. It is also not emanating from the record that the alleged amount has been paid on the direction of the State Government. We, therefore, are of the considered view that out of total disallowance, disallowance for other donation stands confirmed.
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2019 (11) TMI 270
Disallowance of depreciation on the value of the machinery part treated as capital asset by the assessee - whether capitalising of machinery spares for the purpose of Income Tax Act in view of accounting standards is justified? - assessee has contested the disallowance whereas in ground No. 1(c), the assessee has sought alternative deduction on the basis of the actual consumption of machinery spares as revenue expenditure - HELD THAT:- Before us, the assessee has failed to demonstrate whether the spare parts which are used when a machine malfunctions, has brought into existence a new asset or given enduring benefit to the assessee. In absence of satisfying the requirement for constituting a machinery spare as capital expenditure as laid down in LAKSHMI JI SUGAR MILLS CO. PVT. LIMITED [ 1971 (8) TMI 13 - SUPREME COURT] AND M/S. SRI MANGAYARKARASI MILLS (P) LTD. [ 2009 (7) TMI 17 - SUPREME COURT] , expenditure incurred on machinery repairs can not be allowed as capital expenditure and consequent depreciation claimed also cannot be allowed. Thus the ground number 1(a) of the appeal is dismissed. Asset ready for use or actually used - In the present case machinery spares does not constitute capital expenditures and thus the issue of whether the same were ready for use or actually used is not relevant in the facts of the case. This ground of the appeal no 1(b), is accordingly dismissed. In the event deduction towards depreciation on machinery spare is not allowed, deduction may be allowed on the basis of the actual consumption of the Spares - As mentioned by the assessee that in assessment year 2002-03 also the assessee has been allowed deduction on the basis of the actual consumption of the machinery spares. In our opinion, this prayer of the assessee is justified as the machinery spares which have been consumed in repair of fixed asset, satisfies the requirement of section 37(1) of the Act and accordingly, ground No.1(c) of the appeal of the assessee is allowed. Disallowance of deduction under section 80IA(4) - HELD THAT:- According to the assessment order, copies of all the agreements were before Assessing Officer yet Assessing Officer chose to make sweeping observation that the assessee is not developer. Such sweeping and bald assertion cannot be approved by us. Therefore, taking into the facts of the present case, we are or the considered view that appellant is entitled to claim deduction u/s 80IA, which was wrongly denied. Deduction u/s 80HHC in respect of supply of signalling equipment - claim denied assessee company was obliged to supply services and was also responsible for training commissioning and the said services are not eligible for deduction under section 80HHC - HELD THAT:- As in own case Tribunal has held that services are identical to the supply of material and dominant objective of the contract is purchase of equipment by the government of Iran. Further, it is held that direct shipment of the goods cannot disentitle assessee in claiming the deduction under section 80HHC in respect of the goods exported from one country to the other country outside India. Disallowance on account of miscellaneous donations - HELD THAT:- The expenses have evidently incurred on donation to Railway Board Association and Welfare Societies of Railway employees and not on festivals or community celebration in the area of projects executed by the assessee.In absence of any such evidences of incurring expenses on account of festival or community celebration in the vicinity of project executed, the reliance placed by the assessee on the decision in the case of CIT Vs Bata India Ltd [ 2016 (7) TMI 517 - CALCUTTA HIGH COURT] is misplaced. We do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same. The ground of the appeal of the assessee is dismissed. Disallowance of prior period expenses - AO made disallowance stating that those did not pertain to the previous year relevant to the current assessment year and there is no provision in the Income-Tax Act to allow deduction of prior period expenses - HELD THAT:- The clients of the assessee have rejected the claim of reimbursement of the expenses in previous year relevant to subsequent assessment year, thus, it cannot be said that expenditure crystallized during the year under consideration. The assessee has failed to substantiate before us that the said expenditure was crystallised during the year under consideration. Thus, we do not find any error in the finding of the Ld. CIT(A) on the issue in dispute and accordingly , uphold the same. Prior period expenses in respect of NTPC Korba project - CIT(A) held that no proof was provided by the assessee that the liability arose during the year under consideration, and hence he sustained the disallowance. Before us the Ld. counsel submitted that the expenditure represents the amount of expenditure not accepted by the client for reimbursement in a cost-plus contract and it is a regular expenditure in relation to various years. In our opinion, merely making a claim without substantiating that liability crystallised during the year under consideration, the claim cannot be allowed to the assessee. We do not find any error in the finding of the of the Ld. CIT(A) in sustaining the disallowance, and accordingly we uphold the same. Prior period expenses of Malaysia project - no evidence in support of the claim that oil was lifted in the year under consideration, has been brought on record by the assessee. In absence of any documentary evidence in support of the claim, we uphold the finding of the Ld. CIT(A) in sustaining the disallowance Prior period expenses pertaining to GAIL , L T , and OFC Ambala - Assessee submitted that at the time of raising bill in 1997- 98 and again on receipt of retention money in the year 1999 and this error was detected in the previous year relevant to the assessment year 2001-02 and therefore same was charged to expenses under the head prior period expenses. However, in support of the above explanation, no documentary evidences have been filed either before the Ld. CIT(A) or before us, accordingly the contention of the assessee are not accepted and disallowance sustained by the Ld. CIT(A) is therefore confirmed. Provision for demobilisation expenses and mobilisation expenses - HELD THAT:- CIT(A) has sustained the disallowance only in the event where the assessee failed to substantiate its claim with documentary evidences. As the assessee failed to discharge its onus of substantiating whether the respective liabilities were ascertained or arose during the year under consideration, the ld. CIT(A) is justified in sustaining the respective disallowances. As far as the decisions relied upon the learned counsel of the assessee are concerned, same cannot be applied without ascertaining the facts with documentary evidences. No such documentary evidences, as pointed out by the Ld. CIT(A), have been produced before us also No error in the order of the Learned CIT(A) in deleting the part of disallowance of provision of mobilisation expenses Disallowance of provision for other expenses - HELD THAT:- CIT(A) has sustained the disallowance due to failure on the part of assessee in substantiating whether the liability arose during the year under consideration and also failure to submit necessary documentary evidence in support of the claim. Before us also, no evidences have been furnished by the assessee to substantiate the claim whether the expenses crystallised during the year. In our opinion, the order of the Ld. CIT(A) on the issue in dispute is well reasoned and we do not find any infirmity in the same Accrual of income - interest received vide intimation under section 143(1) which was not shown by the assessee as income in the year under consideration - HELD THAT:- We restore the issue in dispute to the file of the Ld. Assessing Officer for verifying that the interest granted under section 143 (1) in relation to assessment year 2000-01 in the previous year corresponding to assessment year under consideration, but same has been subsequently withdrawn under section 143(3) of the Act passed in financial year 2003-04 and decide the issue in accordance with law after providing adequate opportunity of being heard to the assessee. In the result, the ground No. 8 of the appeal is allowed for statistical purposes. Interest income from M/S National Building Construction Company (NBCC) - HELD THAT:- CIT(A) has brought on record facts in detail that the NBCC had agreed to liquidate the principal and interest due during the financial year relevant to the assessment itself and therefore under no circumstances the interest due could be said to be unrecoverable during the year under consideration. Before us the ld. counsel did not rebut any of the observation of the Ld. CIT(A) or submitted any documentary evidence in support of its claim except the claim that loan was sticky and disputed. In the case, the appellate authority against the award by the arbitrator, directed to refund entire amount of ₹ 15.93 crores within 2 months and beyond which interest would be levied at the rate of 15%. The NBCC complied and partly refunded the amount also. By merely filing appeal by the assessee before the Hon ble Delhi High Court, it cannot be said that interest was not accrued to the assessee. The onus was on the assessee to establish that loan was unrecoverable during the year under consideration and no such evidences having been filed either before the Ld. CIT(A) or before us. In view of the facts and circumstances, we do not find any error in the order of the Ld. CIT(A) Disallowance of deduction of provision for doubtful debts and doubtful advances for computing book profit under section 115JB - HELD THAT:- It is not clear whether the total debts of ₹ 23,366.55 lakhs is after deducting the provision of ₹ 1,063.70 lakhs. The amount of ₹ 624.70 lakhs considered by the Assessing Officer for addition is obviously difference between opening provision of ₹ 439 lakhs and closing provision of ₹ 1063.70 lakhs, mentioned in the above schedule. If the provision debited by assessee is indeed deducted from the total debts and only the net balance shown in the balance-sheet then by virtue of decision of Yokogawa India Ltd. [ 2011 (8) TMI 766 - KARNATAKA HIGH COURT] there cannot be any addition of such amount under section 115JB of the Act. However, as mentioned by us, this aspect is not clear. Hence we are of the opinion that the issue regarding provision for doubtful debts requires a fresh look by the Assessing Officer. Exclusion of income earned from permanent establishment in foreign countries while computing book profit under section 115JB by applying the provisions of Double Tax Avoidance Agreement (DTAA) - HELD THAT:- As relying on own case we direct the Assessing Officer to exclude the income which is subject matter of dispute under this ground of the appeal from the ambit of the computation of book profit under section 115JB of the Act. Denial of exclusion of profit on sale of fixed assets in computing book profit under section 115JB - HELD THAT:- The hon ble Bombay High Court in the case of Veekaylal Investment Company Private Limited [ 2001 (2) TMI 117 - BOMBAY HIGH COURT] held that while computing the book profit under the companies Act, the assessee has to include capital gains for computing the book profit under section 115JB Disallowance of claim of deduction u/s 80HHC while computing the book profit under section 115JB - HELD THAT:- Assessee claim deduction under section 80HHB(A) of the Act as alternative claim that if the deduction under section 80IA of the Act is denied to it, then the assessee might be allowed deduction under section 80 HHB(A) of the Act. Since the assessee has already been allowed deduction under section 80IA of the Act by us while adjudicating the ground No. 2 of the appeal of the assessee, this alternative claim of deduction under section 80HHB(A) cannot be allowed in addition to the claim under section 80IA of the Act. The assessee has also not insisted for this claim before us. Accordingly, the ground of the appeal of the Revenue is allowed. Grant of deduction under section 80HHB in respect of foreign project without allocating corporate office expenses - HELD THAT:- This claim of deduction under section 80HHB was made only as alternative claim before the Ld. CIT(A). Since we have already allowed the main claim of the assessee under section 80HHC of the Act while adjudicating the ground No. 3 of the appeal of the assessee, and thus this claim of deduction under section 80HHB is denied to the assessee. Before us, the assessee has also not insisted for allowing this claim. Accordingly, the ground of the appeal of the Revenue is allowed. Deduction u/s 35DDA being 1/5th paid to the employees under the Voluntary Retirement Scheme (VRS) as applicable in the assessee company - HELD THAT:- All the requisite details of the voluntary retirement scheme and the expenses incurred of ₹ 62, 54, 482/- towards said scheme have already been filed by the assessee and thus the contention of the Ld. DR that no details of the employee resigned were filed, cannot be made a basis for disallowance of the claim of the assessee. In our opinion, the finding of the Ld. CIT(A) on the issue in dispute is well reasoned and we do not find any error in the same. The ground of the appeal of the Revenue is dismissed. Deduction of corporate office expenses by the AO while granting exclusion of income from foreign projects under DTAA - HELD THAT:- The income of the foreign projects through their permanent establishment, is chargeable in the respective country and in such a situation, reducing of promotional corporate office expenses in working out the income of the permanent establishment in the foreign country excludable while computing income chargeable to tax in India, cannot be justified. Accordingly, the finding of the Ld. CIT(A) on the issue in dispute is upheld. The ground of the appeal of the Revenue is accordingly dismissed. Provision of gratuity allowed while computing book profit u/s 115JB - HELD THAT:- CIT(A) has allowed the issue in dispute in view of the decision of the Tribunal in the case of GD Rathi Steels Ltd Vs DCIT [ 1995 (8) TMI 95 - ITAT DELHI-C] wherein it is held that gratuity which has been actually valued is an ascertained liability. We don t find any error in the finding of the Ld. CIT(A) on the issue in dispute following a binding precedent on the issue. Accordingly, we uphold the finding of the Ld. CIT(A) on the issue Book profit for computation of MAT liability u/s 115JB - According to the AO the assessee was required to enhance the book profit of previous/ earlier years corresponding to the reduction in book profit claimed on account of written back liabilities - HELD THAT:- CIT(A) has explained the clause(i) of explanation to section 115JB of the Act that it applies to any amount withdrawn from the reserves or provision which are created and/or provided in the previous year ended on or before 31/03/96 and should be allowed. In our opinion, the Ld. CIT(A) has correctly appreciated the position of the law into the facts of the instant case. We do not find any error in the order of the Ld. CIT(A) on the issue and accordingly, we uphold the same. Interest under section 234D - HELD THAT:- The explanation -2 to section 234D has been inserted by way of Finance Act 2012 which provides that provisions of section 234D would be applicable for assessment year commencing before 01/06/2003 if the proceeding for such assessment year is completed on or after 1.6.2003. It is undisputed that in the present case assessment proceedings have been completed on 25/03/2004 and hence provision of section 234D are applicable. Accordingly, the finding of the ld. CIT(A) are set aside and interest charged by the learned Assessing Officer under section 234D is restored. The ground of the appeal of the Revenue is accordingly allowed.
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2019 (11) TMI 269
TP Adjustment - addition on account of corporate guarantee fee - HELD THAT:- As decided in own case [ 2016 (9) TMI 1456 - ITAT KOLKATA] the assessee`s expectation from provision of loan and guarantee are not that of a lender or guarantor i.e. to earn a market rate of interest or guarantee fee, rather, the expectation was of a shareholder- to protect its investment interest, help it to achieve acquisition of Tega Beruc for furtherance of its own business and get return in terms of appreciation in value and dividends. It can be verified from the fact that no third party would have agreed to grant loans, on an independent basis, to the tune of ₹ 5 Crores to Tega Bahamas given its skewed debt-equity ratio reflected in the balance sheet, as equity funding is mere ₹ 23 Lakhs, therefore in the present case the guarantee is a shareholder activity hence no TP adjustment on account of corporate guarantee should be required. Accordingly, we direct the Ld.DRP/AO to delete the addition Transfer Pricing Adjustment on account of interest on loan given to subsidiary company - HELD THAT:- As the issue is squarely covered in favour of the assessee by the decision of the coordinate bench, in assessee`s own case 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 Division Bench (supra). We find no reason to interfere in the said order of the Division Bench, therefore, respectfully following the judgment of the Coordinate Bench in assessee s own case wherein the Division Bench of this Tribunal noticed in the additional evidences that the assessee has computed credit rating of Taga Australia at BBB and Tega US at AA by applying scientific and logical method, and submitted before this Tribunal additional evidences and directed ld. TPO/A.O for fresh examination. Accordingly, we also direct the ld. TPO/Assessing Officer to examine credit rating of Taga Australia at BBB and Tega US at AA which was computed by assessee by applying scientific and logical method. Therefore we restore this issue to the file of the TPO/AO with the direction to ascertain the arm`s length price of the loan. Therefore grounds raised by Revenue are dismissed. Disallowance u/s 14A r.w.r 8D - HELD THAT:- We note that Coordinate Bench of ITAT, Kolkata in the case of REI Agro vs. DCIT [ 2013 (9) TMI 156 - ITAT KOLKATA] has held that it is only the investments which yielded dividend during the previous year that has to be considered while adjudicating the average value of investment for the purpose of Rule 8D(2)(ii) and (iii) of the Rules. The aforesaid view of the Tribunal has since been affirmed as correct by the Hon ble Calcutta High Court [ 2014 (4) TMI 713 - CALCUTTA HIGH COURT] in the appeal against the order of the Tribunal in the case of REI Agro Ltd. (supra). We note that in assessee s case, the assessee has not disallowed any expenditure under Rule 8D(2)(i), as there was no direct expense incurred by the assessee. No disallowance is attracted under Rule 8D(2)(ii) as the assessee s own funds are more than investments. Now coming to the third limb, namely Rule 8D(2)(iii), wherein we note that the disallowance can be made with reference to the dividend bearing securities. We note that the disallowance as per Rule 8D(2)(iii) by taking into account only dividend bearing securities, as per assessee`s computation comes to ₹ 86,863/-, whereas the assessee has suo moto disallowed ₹ 3,50,000/- which is more than ₹ 86,863/- therefore, no further disallowance is required. Addition regarding loss from option contracts in foreign currency with banks held as Speculative loss - HELD THAT:- AR has supported the order of ld. CIT(A). On the other hand, the ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity. We note that the currency option contracts were executed by the assessee with the sole purpose of hedging the export receivables import payables. Therefore, the ld CIT(A) has rightly held that the loss of ₹ 4,74,97,275/- incurred in such option currency contracts was non-speculative in nature and allowable as deduction from the profits of the business. That being so, we decline to interfere with the order of Id. C.I T.(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. Education cess is allowable for deduction u/s 37(1) - HELD THAT:- Respectfully following the judgment of this Coordinate Bench in the case of ITC Limited [ 2019 (4) TMI 1574 - ITAT KOLKATA] we allow the claim of the assessee.
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2019 (11) TMI 268
Deduction of mark to market losses (MTM) - assessee being a stockbroker and engaged in the business of trading in derivative segment by entering into future and options contracts, some of the future and options contracts could not be squared up at the end of the financial year and, therefore, the assessee booked the expected loss in such contracts on Mark to market basis - HELD THAT:- There is no dispute that the assessee is engaged in stockbroking business. It is also not in dispute that the assessee also engaged in the business of trading in derivatives segment and entered into the future and options contract, some of which could not be squared up at the end of the financial year and, therefore, the assessee booked the expected loss in such contracts on Mark to market basis. Assessee claimed a loss as calculated on Mark to market basis claiming that he was following this practice continuously year after year and according to the assessee, the same was as per recognised accounting standards. Contention of the assessee has been that since the MTM losses arise out of contractual obligation existing as on the reporting date, the same cannot be regarded as contingent or notional loss in nature. As rightly considered by the CIT(A), the question involved in this matter is whether such MTM losses are allowable as expenditure or how to be disallowed on the ground that these were notional losses. The authorities below, however, placing reliance on the circular dated 23/3/2010, decided the issue against the assessee. According to the Ld. AR this issue is no longer res Integra. MTM losses arising out of contractual obligation existing on the reporting date cannot be regarded as contingent or notional in nature and merely because the liability has to be discharged at a future date, the same cannot be regarded so. With this view of the matter, we find it difficult to sustain the addition and accordingly set aside the impugned order and direct the assessing officer to delete the addition made in this regard. Appeal of the assessee is allowed.
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2019 (11) TMI 267
Re-opening of the assessment u/s 147 - validity of reason to believe - HELD THAT:- In the present case, notice u/s 148 has been issued on 28.03.2016 in relation to assessment year 2011-12. Hence, the reopening of assessment is within a period of four years from the end of the relevant assessment year. In such cases, the AO would be clothed with jurisdiction to issue a notice for reopening of an assessment if he has reason to believe that income chargeable to tax has escaped the assessment. The requirement of failure to make true and full disclosure as provided in the proviso to Section 147 is not to be satisfied for issuing of re-opening notice within the period of four years from the end of the relevant assessment year. Thus, in the absence of cumulative satisfaction of reason to believe and in the absence of any income chargeable to tax escaping assessment, the Assessing Officer is not empowered with jurisdiction to reopen an assessment. In the present case, it is also a fact that original assessment for the year under consideration was framed under section 143(3) of the Act. In such a situation, another aspect that has to be kept in mind is as to whether the reopening is based upon any tangible material which has come to the knowledge of the Assessing Officer subsequent to the framing of the earlier assessment or whether the same is merely a change of opinion on the part of the AO. In the present case find force in the contention of the Ld AR that the impugned notice have been occasioned by a change of opinion. It is trite law that a mere change of opinion cannot constitute a reason for re-opening the assessment - notice of reopening the assessment u/s 148 of the Act is on account of change of opinion by the AO, which is not permissible as per law - Decided in favour of assessee.
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2019 (11) TMI 266
Validity u/s 147/143(3) - addition u/s 68 - bogus purchases - HELD THAT:- Payments against the said purchases were made by the assessee by account payee cheques and there were corresponding sales made by the assessee out of the said purchases. He, however, doubted the corresponding sales claimed to have been made by the assessee since the same, according to him, were unverifiable in the absence of details furnished by the assessee regarding names and addresses of the parties to whom the same were made. He accordingly treated the proceeds of such sales made by the assessee in cash as unexplained cash credits and made addition u/s 68. No addition was made by the AO to the total income of the assessee in the assessments made under section 147/143(3) for both the years under consideration on account of the alleged bogus purchases, which formed the basis of reopening and the addition was made on account of different issue by treating the proceeds of the corresponding sales made out of such purchases as unexplained cash credit under section 68 Addition made by the AO to the total income of the assessee in the assessments completed under section 147/143(3) for both the years under consideration on a different issue, which did not form the basis of belief entertained by the AO as per the reasons recorded, is not sustainable and the ld. CIT(Appeals) is not justified in sustaining the same. Delete the addition made by the AO and confirmed by the CIT(Appeals) u/s 68 in both the years under consideration and allow these appeals of the assessee. - Decided in favour of assessee.
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2019 (11) TMI 265
Stay applications seeking stay of outstanding demand - HELD THAT:- Balance of convenience is in favour of the assessee, considering the facts brought to our notice on the financial hardship. If an order of stay is not granted, we are of the view that the assessee may be put to hardship. Even if adjustment of refund due to the assessee for earlier assessment years is against the outstanding demand for the aforesaid assessment years, which are subject matter of appeals before the Tribunal, that would also amount to recovery of outstanding demand as held by Hon ble Delhi High Court in the case of Maruti Suzuki Ltd [ 2011 (11) TMI 312 - DELHI HIGH COURT] In coming to the conclusion that the assessee has a prima facie case, we have also kept in mind the observations of Hon ble Delhi High Court that outstanding demand arising out of issues already decided in favour of the assessee by the Tribunal in the earlier assessment years cannot be recovered. We also notice from the chart of outstanding demand filed by the assessee before us, which has been extracted in the earlier part of the order, that more than 50% of the tax portion of the outstanding demand has been paid by the assessee in AY 2010-11 to 2012-13. We therefore grant stay of recovery of outstanding demand for these years for a period of six months from the date of this order; or till the disposal of appeals of these years, whichever period expires earlier. As far as AY 2013-14 is concerned, we find that only 35.48% of the outstanding tax portion has been paid by the assessee till date. We are of the view that it would meet the ends of justice, if the revenue is permitted to adjust a sum of ₹ 5.00 crores towards outstanding demand for AY 2013- 14 out of the refund arising to the assessee. Subject to the payment of tax by way of adjustment as aforesaid, there will be stay of recovery of outstanding demand for AY 2013-14 for a period of six months from the date of this order; or till the disposal of appeals of the Assessee, whichever period expires earlier.
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2019 (11) TMI 264
Validity of reopening u/s.147 r.w.s. 148 - Notice sent to wrong address - HELD THAT:- We find that the assessee was regularly assessed to tax with Range-4(3) Kanpur with PAN ABZPT6114G. Since Assessment Year 2003-04, the assessee has been regularly filing the return of income and even up to Assessment Year 2018-19, the income tax return has been filed with the same PAN to be Ward 4(3) Kanpur and address mentioned is, 117/H-1/1529, Pandu Nagar, Kanpur. If in the Income Tax records and in PAN data, assessee s address as well as the jurisdiction of the Assessing Officer has been categorically given, then without verifying the same, how ITO Ward-2(5) NOIDA ca issue a notice at a wrong address. Not only that, even going by the records of deeds on the basis of which assessee s case was reopened that he has sold some immovable property at NOIDA, mentions address A-72, 1st Floor Sector 17, NOIDA whereas the address on which notice has been sent mention A-72N, Sector-17, NOIDA, which, as brought out by the ld. counsel is not an address at all. Also it is an admitted fact that neither notice u/s.148 has been served upon the assessee by the AO nor has been sent at a proper address. Thus, in absence of any valid service of notice, u/s.148, which is condition precedent for assuming the jurisdiction for reopening the case u/s.147, the entire proceedings gets void ab initio and is to be held as null and void. Accordingly, the impugned assessment order is quashed as null and void as held in the Commissioner of Income Tax vs. Shital Prasad Kharag Prasad [2004 (12) TMI 28 - ALLAHABAD HIGH COURT] - Decided in favour of assessee.
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2019 (11) TMI 263
Liability in special cases u/s 159 - liability of Legal Heir where trust has been created as per the WILL of the deceased assessee - Addition on account of difference between sale consideration and market value of properties - HELD THAT:- The liability in special cases regarding legal representatives is provided in Section 159 in chapter XV of the Income Tax Act. The provision u/s 159 of the Act explains that where a person dies, his legal representatives shall be liable to pay any sum which the deceased have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. As discussed above there is no evidence in the hands of the AO to treat Smt. Sumita Bhattacharya(Das) as the legal representative of the deceased assessee. The definition of legal representative is provided in sub- Section 11 of Section 2 of Code of Civil Procedure. Legal representative means a person who in law represents the estate of a deceased person in a representative character the person on whom the estate devolves on the death of the party. As discussed above, the deceased assessee late Rathindranath Bhattacharya left a WILL giving effect to the same after his death declaring that all his immovable and movable properties would devolve on the TRUST and nothing of his estate devolved on Smt. Sumita Bhattacharya (Das), alleged legal heir. It is noted from the WILL that he is a bachelor having intended to create a TRUST after his death in the name of his deceased father for the activities discussed therein. Therefore, it clearly shows that late Rathindranath Bhattacharya died executing a WILL declaring all his immovable and movable properties to be devolved in the said TRUST after his death. It is established that he died testate and when he died testate decided declaring the said TRUST would succeed to his estate and the question of legal heir does not arise. Therefore, Smt. Sumita (Bhattacharya) Das cannot be said to his legal heir. Thus, we find no infirmity in the order of CIT(A) and it is justified. Ground nos. 1 to 4 raised by the Revenue involving the issue are dismissed.
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2019 (11) TMI 262
Validity of issue of notice u/s 148 - depreciation on plant and machinery @30% which is to be allowed in the case of the business of running vehicles on hire. Normal depreciation allowable in the case of usage of vehicles in the business is 15% - HELD THAT:- In the instant case, as per the information available on record, the assessee is engaged in the business of civil contracts and claimed the depreciation on earth moving machinery @30% instead of 15%. Therefore, as observed by the Ld.CIT(A), the AO has fulfilled the crucial link between the information available and the inference drawn to have belief that the income chargeable to tax had escaped the assessment. There is no dispute that the AO had recorded the reasons and obtained the approval from the competent authority as provided in the Act. The AO satisfied all the requirements for issue of notice u/s 148. CIT(A) has rightly relied on the decision of Hon ble Supreme Court in the case of Rajesh Jhaveri Stock Broker Pvt. Ltd. [ 2007 (5) TMI 197 - SUPREME COURT] observed that the intimation u/s 143(1) is not an assessment. Since the intimation u/s 143(1) is not an assessment within the meaning of statute, there is no question of treating the reassessment was based on change of opinion. Therefore, we hold that in the instant case having processed the returns u/s 143(1), there is no case for change of opinion and the AO has rightly reopened the assessment after being satisfied with the reason that the income chargeable to tax had escaped the assessment. AO ought to have resorted for action u/s 154 or 263 instead of reopening the assessment u/s 147 - It is for the AO to take appropriate remedial action and to bring the escaped income to assessment but not for the assessee to dictate the terms. In the instant case, the AO viewed that correct remedial action is reopening of assessment and rightly invoked jurisdiction u/s 147, hence we reject the argument of the Ld.AR. Accordingly, we uphold the order of the CIT(A) and dismiss the appeal of the assessee on this ground for the A.Y. 2011-12, 2012-13, 2014-15 and 2015-16. Reopening on audit objection - A.Y.2013-14 - HELD THAT:- Assessee could not submit complete information before the AO. Further since the assessment was reopened within 4 years from the end of the relevant A.Y. As per the provision of the income tax failure attributable to the assessee is not applicable in case of assessments reopened within four years. It is evident from the assessment order that the assessee has claimed higher rate of depreciation for which the assessee did not furnish the details and the AO also did not examine the issue at the time of original assessment. Hence, we agree with the order of the Ld.CIT(A) that the AO has rightly invoked jurisdiction u/s 147 and reopened the assessment within 4 years. Accordingly, we uphold the issue of notice u/s 148 for all the impugned assessment years. In the instant case there is no dispute that the Audit party has raised the objection with regard to the excess claim of depreciation and there is no evidence available on record to show that the assessee is using the vehicles for running them on hire. Therefore we, find no merit in the argument of the Ld.AR and reject the same. Delay in remittances of EPF and ESI contributions of employees u/s 43B - HELD THAT:- For all the impugned assessment years, it is found from the assessment order that the assessee remitted the employees contribution relating to EPF and ESI beyond due date provided under the relevant Acts but before the due date for filing the return of income. This Tribunal has consistently taken view that PF, ESI remitted before the due date for filing the return of income is required to be allowed as deduction. The Coordinate Bench has followed the decision of Hon ble High Court of Karnataka in the case of ESSAE TERAOKA PVT Ltd. Vs. DCIT [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] and allowed the deduction. On identical facts, this Tribunal in the case of ACIT Vs. Brandix India Apparel City Private Ltd. vide I.T.A. [ 2019 (1) TMI 1547 - ITAT VISAKHAPATNAM] held that employees contribution to PF required to be allowed even if the same is paid before the due date of filing the return u/s 139(1) - assessee is entitled for deduction on account of PF and ESI if the same is remitted before the due date of filing the return of income Higher rate of depreciation - Depreciation on business of civil contract @30% or 15% - AO disallowed the excess depreciation claimed by the assessee holding that the assessee is not in the business of running them on hire - HELD THAT:- In the instant case, the assessee failed to establish that the dominant purpose was to use the vehicles for running them on hire. The dominant purpose is to use the vehicles for its own business. The purpose of allowing deduction at higher rate of depreciation in vehicles running them on hire is that the vehicles are used extensively without taking much care and suffer heavy wear and tear. Whereas in the case of assessee s own business, the wear and tear is lesser than the vehicles used in running on hire. In the instant case, the assessee also failed to establish that the vehicles were used in the business of running them on hire. Following the decision of Hon ble Kerala High Court in the case of N.D.Joseph Vs.CIT [ 2010 (1) TMI 382 - KERALA HIGH COURT] and CIT Vs. Gupta Global Exim [ 2008 (5) TMI 7 - SUPREME COURT] we hold that the assessee is disentitled for higher rate of depreciation. - Decided against Assessee
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2019 (11) TMI 261
Rejection of books of accounts - profit estimation - HELD THAT:- It is an admitted fact that the assessee, in the instant case, has not maintained any stock register so as to give the details of datewise purchase and sales of items traded and the closing stock balance position on a particular day. Similarly, notices u/s 133(6) were issued to various sundry creditors which were returned unserved on the ground that either they have left or the premises are locked or the addresses were insufficient. It is also an admitted fact that the commission paid to various parties remained unsubstantiated in absence of nature of services rendered by them. Similarly, the assessee also could not substantiate the advertisement expenses incurred by it and could not substantiate that no element of personal use is there in respect of the telephone expenses and the motor car running expenses. We hold that the ld.CIT(A) was fully justified in upholding the action of the Assessing Officer in rejecting the book results and going for estimation of the profits. Rate of profit - HELD THAT:- As books of account of the assessee are audited and the auditors have not pointed out any defects and the turnover of the assessee has gone up substantially during the year as against the immediately preceding assessment years, therefore, we deem it proper to adopt the net profit ratio of 1.88% which is the average of the current year as well as the two immediately preceding assessment years. The Assessing Officer is directed to recompute the addition to be made on the basis of the net profit ratio as against the GP ratio adopted by him and upheld by the CIT(A). Since we are going for net profit addition, the various other additions made by the Assessing Officer and sustained by the CIT(A), in our opinion, do not require any separate addition and the same are liable to be deleted.
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2019 (11) TMI 260
Taxability of Value of 1 kg. of gold as winning from Lottery - assessee did not pay any consideration for the price coupons. - the price coupon given to the assessee was under a scheme of the Kasargod Vyapari Vyavasaya Ekopana Trust (KVVES Trust) - HELD THAT:- It is customary in Kerala to buy new clothes during onam festival. The intention of the assessee was to purchase new clothes for himself and his family. The assessee approached the cloth merchant with this predominant intention. This particular scheme of distributing free coupons at the time of festival seasons like Onam is offered by almost all the merchants in the town, be it Textiles, Footwear, Groccery, Jewellry etc. In the case of this assessee, the choice of a particular cloth merchant was the availability of the desired dress material at his affordable price and not the offer of a free coupon. Hence it cannot, by any stretch of imagination, be presumed that the assessee visited a particular merchant and purchased the dress material from him with intention to participate in the lot. Hence there is no intention to participate . Essential ingredients of `lottery as it stood prior to the insertion of Explanation to section 2(24)(ix) of the I.T.Act is absent in the facts and circumstances of the case and the same cannot be taxed as a `lottery . Hence, we reverse the order of the CIT(A). It is ordered accordingly.
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Customs
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2019 (11) TMI 259
Amendment in shipping bill - rejection of request for 'No Objection Certificate' for claiming MEIS by amendment of reward option from 'No' to 'Yes' in shipping bills - CBIC Circular No.36/2010-Customs dated 23.9.2010 - HELD THAT:- The Commissioner has failed to notice that the appellant has declared their intention to claim METS benefits in all the shipping bills which have been produced on record. The only lapse on the part of the appellant was that they have mentioned in the reward column as 'N' instead of 'Y', which is only a procedural defect. Further, it is found that otherwise the appellant is entitled to claim METS benefit as per the export policy. Failure to mention 'Y' in the reward column of the shipping bill for availing the benefit under METS scheme can be corrected by amending the shipping bill as held by the Hon'ble Madras High Court in the case of M/S. PASHA INTERNATIONAL VERSUS THE COMMISSIONER OF CUSTOMS, THE ASSISTANT/DEPUTY COMMISSIONER OF CUSTOMS (EXPORTS) , THE JOINT DIRECTOR GENERAL OF FOREIGN TRADE [ 2019 (2) TMI 1187 - MADRAS HIGH COURT] . The rejection of request for amendment of shipping bill by the Commissioner is not sustainable in law - appeal allowed - decided in favor of appellant.
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2019 (11) TMI 258
Refund of SAD - rejection on the ground of Time limitation - N/N. 102/07-Cus, dt.14.09.2007 - whether refund of 4% SAD paid at the time of import of CBU cars on 25.10.2007 is barred by limitation when the refund claim was filed on 05.11.2008 under Notification No.102/2007Cus. Dt.14.9.2007? - HELD THAT:- It is not in dispute that prior to the amending Notification No.93/2008-Cus dt.01.08.2008, no time limit has been stipulated under the base of Notification No.102/07-Cus. dt.14.9.2007 for filing of refund claim of 4% SAD paid at the time of import. It is the contention of the Appellant that since at the time of import, there is no condition in the notification specifying time limit to file refund claim, accordingly, the period of one year introduced subsequently by Notification No.93/08-Cus, dt.01.08.2008 cannot be made applicable to the refund claim filed on 05.11.2008. A simple reading of the aforesaid ratio makes it crystal clear that the period of limitation even if specifically not mentioned under the Notification No.102/07-Cus. dt.14.9.2007, before its amendment by the amending Notification No. 93/08-Cus, dt.01.08.2008, all refund of customs duty being governed by Sec.27 of Customs Act, 1962, therefore, the time limit of one year from the date of payment of 4% SAD would be applicable - In the present case, since the refund claim filed by the Appellant on 05.11.2008 i.e. after one year from the payment of 4% SAD on 25.10.2007, is barred by limitation. Since, it is held that the refund is barred by limitation and hence not admissible, consequently other issues raised became academic and hence not considered - appeal dismissed.
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2019 (11) TMI 257
Classification of imported goods - gear reduction blank - to be classified under tariff item 8483 40 00 or under tariff item 8708 94 00 of the Customs Tariff Act, 1975? - HELD THAT:- Tribunal in case of COMMISSIONER OF CENTRAL EXCISE, CHENNAI VERSUS BEST CAST (P) LTD. [ 2000 (10) TMI 91 - CEGAT, CHENNAI ] has occasion to decide the classification of gear box part and clutch, wherein it is held that the proper classification of the parts gear box and part of clutch will be under 8483.00 of Central Excise Tariff and not under Chapter Heading 8708 as a part of motor vehicles. There is no reason to classify the goods under heading 8708 as the part of motor vehicles as held in the impugned order. The parts which has been imported is part of column type electric powers steering system (CEPS) and not part of motor vehicle so as to classify under chapter 8708 of Customs Tariff. Appeal allowed - decided in favor of appellant. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 256
Valuation of imported goods - determination of assessable value of imported aluminium waste and scrap - rejection of declared value - HELD THAT:- The Commissioner (Appeal) has made open remand to the lower Adjudicating authority to decide the valuation depending on the contemporary import price available with the Department within three months from passing of the impugned order. At this stage, we find that large number of cases which has been cited by the ld. Advocate, have been decided by this Tribunal rejecting the transaction value adopted by the Department having contrary to Section 14(1) of Customs Act and the Customs Valuation Rules. The order passed by the Hon ble Supreme Court in case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, NOIDA VERSUS M/S. SANJIVANI NON-FERROUS TRADING PVT. LTD. [ 2018 (12) TMI 738 - SUPREME COURT ] was not available before the Commissioner (Appeals). In the circumstances, we do not find any infirmity in the impugned order. Appeal dismissed - decided against appellant.
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2019 (11) TMI 255
Classification of imported goods - AG 401 Laser Level Transmitter with battery pack and charter - Single Grade Laser Package W/RC 602, Remote, HL 750 receiver - AG GCS 100 Rigid Mass Package for Agriculture - Yuma 2CLX Tablet PC - whether classifiable under Customs Tariff Heading 84328090 or under Customs Tariff Heading 90319000? - benefit of N/N. 12/2012-Cus. Dated 17 March 2012 Sl. No. 399-A. HELD THAT:- In the appellant own case MANOJ KUMAR SHARMA, DIRECTOR OF M/S. SPL TECHNOLOGIES PVT. LTD. VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS (PREVENTIVE) [ 2019 (8) TMI 141 - CESTAT NEW DELHI] where it was held that The parts and components as have been imported by the appellants since do not require any activity which can be called as manufacture, but when cabled at the site they can be used as a laser land levelling, an agricultural machine, the product qualifies to fall under serial No. 399(A) of the Notification No. 12/2012 dated 17.03.2012 to which a concessional/exceptional duty @ 2.5% is applicable. Appeal allowed - decided in favor of appellant.
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Corporate Laws
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2019 (11) TMI 254
Grant of anticipatory bail - petitioner has signed forged letter of credits and other documents for availing credit facility from the Bank on behalf of A-1 Company. - the petitioner has prayed for anticipatory bail on the ground that petitioner is 65 years old - offences alleged in the said complaint against the petitioner are under Section 128, 129, 447, 448 of the Companies Act, 2013, Section 209, 211 read with 628 of the Companies Act, 1956, and Section 467, 468, 471 read with Section 120-B IPC - HELD THAT:- The allegations levelled against the petitioner are prima facie serious in nature. The allegations are that petitioner was one of the signatories of the financials of A-1 company and Director in category C Company. The details of the same have been described in the summoning order dated 16.08.2019 of the Ld. ASJ/Special Judge (Companies Act). It is alleged that petitioner has signed forged letter of credits and other documents for availing credit facility from the Bank on behalf of A-1 Company. Thus, prima facie there are serious allegations of fraud committed by the petitioner in conspiracy with other co-accuseds. Perusal of para No. 8 (i) of the petition reveals that Ld. Counsel for the petitioner was not able to inspect the judicial record. It, therefore, cannot be said as to what was the report of process serving agency on the summons issued to the petitioner. Without seeing the copy of the report on summons, it cannot be said whether petitioner was properly served or not. This submission is, therefore, made without seeing the record. In case, the petitioner is correct to the extent that he was not duly served, the Ld. ASJ/ Special Judge after considering the submission of Ld. Counsel for petitioner and Ld. counsel for SFIO and perusal of report on summon can pass the appropriate order in accordance with law. In these circumstances, it will be appropriate for the petitioner to approach the Ld. ASJ/ Special Judge and make all his submissions made herein, before the Ld. Trial court as well. Keeping in mind the facts and circumstances of the case and serious nature of offence and amount of cheating involved as well as allegation of forgery, no grounds for anticipatory bail are made out - the anticipatory bail application is disposed off.
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PMLA
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2019 (11) TMI 253
Money Laundering - proceeds of crime - scheduled offences - HELD THAT:- It is not in dispute that the Prevention of Money Laundering Act is a complete code in itself dealing with the offence of money-laundering. It provides complete mechanism for investigation by an independent agency other than the police, in respect of offences under Prevention of Money Laundering Act - It is clear that unless and until there is a case registered under a scheduled offence, Enforcement Directorate shall not have cause of action to institute proceedings under Prevention of Money Laundering Act which means that registration of ECIR by Enforcement Directorate can be only after registration of case for a scheduled offence. ECIR is the information recorded by the Enforcement Directorate regarding the registration of predicate offences and is basis for initiating their investigation. It is also not in dispute that no FIR has been registered regarding schedule offence till date. Therefore, it is clear that Enforcement Directorate cannot conduct investigation in the present case in the absence of registration of FIR regarding schedule offences - the learned Trial Court opined on the same analogy that the Special Court cannot pass direction under Section 156 (3) Cr.P.C. to Enforcement Directorate to register FIR. The second question before the learned Trial Court was that whether the Trial Court can entertain complaint filed by private party for the offence committed under Prevention of Money Laundering Act. On this issue, Section 44 (b) of Prevention of Money Laundering Act clearly stipulate that Special Court may upon a complaint made by an authority authorised in this behalf under this Act take cognizance of offence under section 3. Further, second proviso to Section 45, Prevention of Money Laundering Act makes it clear that the Special Court shall not take cognizance of offence under section 4 except upon a complaint in writing made by the Director; or any officer of Central Government or State Government authorised in writing in this behalf by Central Government. There is no illegality or perversity in the impugned order - Petition dismissed.
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Service Tax
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2019 (11) TMI 251
Refund of service tax - certain services received and used for export of goods - N/N. 41/2007-ST dated 06.10.2007 - period from April 2008 to June 2008 - HELD THAT:- Present is the case where the appellant had filed refund claims in respect of service tax paid on certain services received and used for the export of goods during the period from April, 2008 to June, 2008. The refund claims were accordingly filed on 29.08.2008 29.06.09. The provision makes it, abundantly, clear that the interest is allowed on delayed refunds. But the provision is silent about any interest on delayed payment of interest as claimed herein. Learned Counsel for appellant has relied upon Sandvik Asia Ltd. (Supra) case, impressing upon that the Hon ble Apex Court has allowed such amount in case of apparent delay. But it is observed that there has been expressed clarification that such interest only can be claimed by an assessee which is provided under the statute and no other interest on such statutory interest can be granted. The first argument of the appellants that they are entitled for interest on interest being compensatory in nature is not sustainable. Since, it technically is interest on interest it cannot be called as compensation suo moto, nor has been so prayed by the appellant himself - Decided in favor of Revenue - decided in favor of Revenue. The alternate argument of the Appellant that from the amount of refund sanctioned since there is an interest liability, the amount should be first adjusted towards the interest liability - HELD THAT:- It is observed that this rule of first appropriating the interest is applicable only to the debts or to the decreetal amount. The case law as relied upon by the appellant is also either qua debts or qua the decreetal amount. Hence, the same is not applicable to the present case of refund of indirect taxes. The said rule of interpretation is otherwise contained in order-21 Rule-1 of Civil Procedure Code relating to execution of decrees for recovery of money. Such a provision stands absolutely excluded from the Central Excise Act, 1944 - the second line of argument of Appellant is also opined not applicable to the given set of facts circumstances. Appeal dismissed.
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2019 (11) TMI 250
Security services - appellant had provided guards to various branches of State Bank of Bikaner and Jaipur(SBBJ) in Sawai Madhopur district and conducted verifications - demand of service tax alongwith interest - CBEC Circular No. 89/07/2006-ST dated 18/12/2006 - if the Police provides guards to banks or other commercial concerns and charges a fee as per the rates determined by the Government whether service tax can be charged under Security Agency Services on such fee or otherwise? - HELD THAT:- A perusal of the definition of Security Agency shows that it has to be any person engaged in the business of providing security . Police provide security as a part of their statutory obligations. In most cases they do not charge any fee for such security but in some cases they charge a fee as determined by the State Government. Merely because they are charging a fee, Police do not become person engaged in the business of providing security . As per clarification issued by the CBEC Circular No. 89/07/2006-ST dated 18/12/2006 charges recovered by any sovereign or public authority for carrying out any statutory function will not be liable for service tax fees if three conditions are fulfilled. There is no doubt in the entire proceedings that the amount so received was deposited in the Government treasury. Thus, all conditions required in the above circular of CBEC are fulfilled. Therefore, no service tax chargeable under Security Agency Services upon the Appellant. The CBEC circular being binding on the department, a demand to the contrary is not sustainable and needs to be set aside. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 249
Renting of Immovable property - SCN was issued to the Appellant by the Department alleging that the amounts received by them in the aforesaid joint venture is a consideration for renting of immovable property service rendered to MPWLC - Charge of service tax. HELD THAT:- Section 65(105)(zzzz)of the Finance Act, 1994 provides for charging service tax on any service provided or to be provided to any person, by any other person by renting of immovable property or any other service in relation to such renting for use in the course of or for furtherance of business or commerce - For a tax to be levied under this heading, there must be a service provider and a service recipient and the service which is provided must be renting of immovable property and such renting must be for use in the course of furtherance of business or commerce. No service tax can be levied on renting of immovable property in the present case. Also, no evidence that there was any renting of the warehouses by the Appellant to MPWLC was for use in the course of or furtherance of business or commerce. Thus, there is no renting, no service provider and no service recipient in their arrangement and hence is not covered by the charging section. There is no hesitation in holding the impugned order unsustainable, with respect to the demand of service tax, interest as well as imposition of penalties and needs to be set aside - appeal allowed - decided in favor of appellant.
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2019 (11) TMI 248
Classification of services - facilitation service by appointing a facilitation manager to supervise and manage the management and maintenance of immoveable property - whether classified under Real Estate Agent Services or Real Estate Consultant Services ? HELD THAT:- The services involved in the present appeal are services in relation to horticulture, housekeeping and cleaning, rent-a-cab operator, supply of manpower, maintenance of immovable property, security, pest control. Out of the aforesaid services, the Appellant deposited Service Tax for services in relation to security and rent-a-cab for the reason that they were taxable services. In regard to maintenance and immovable property services, the Appellant started paying Service Tax w.e.f 16 June 2005 from which date it became a taxable service. Regarding the remaining services, the Appellant did not pay Service Tax as the Appellant claimed that the amount was reimbursed. Section 67 of the Act deals with valuation of taxable services for charging Service Tax. Sub-section (1) of section 67 provides that where Service Tax is chargeable on any taxable service with reference to its value, then such value shall, where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by the service provider. It is, therefore, clear that only such amount is subject to Service Tax which represents consideration for provision of service and any other amount which is not a consideration for provision of service cannot be subjected to service tax. No Service Tax could have been levied in regard to the aforesaid services namely, horticulture, housekeeping and cleaning, supply of manpower and pest control. Valuation - expenses incurred in relation to maintenance of immovable property services - Real Estate Consultant Services - HELD THAT:- When the nature of service provided by the Appellant is specifically covered by the amendment made in the definition of management and maintenance of immoveable property w.e.f. 16 June 2005, the Appellant could not have been subjected to payment of Service Tax under the category of Real Estate Agent Services since the definition of Real Estate Agent Service had not undergone any change. Cenvat Credit reversal in excess of 20% of the tax payable - HELD THAT:- The Commissioner has failed to appreciate the contentions advanced on behalf of the Appellant in the correct perspective nor is there any discussion on this issue. The imposition of penalty and interest upon the Appellant under this issue has, therefore, be considered afresh. Appeal allowed in part and part matter on remand.
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2019 (11) TMI 247
Entitlement of interest on pre-deposit made - Section 35FF of Central Excise Act, 1944 - It is the contention of the Revenue that the learned Commissioner (Appeals) has failed to appreciate the provision of Section 35FF of Central Excise Act, 1944 as was in existence, on the date the pre-deposit was made - HELD THAT:- Various provisions of Section 35F and 35FF of CEA makes it clear that the Appellants are entitled to interest from the date only after expiry of 3 months from the date of communication of the order i.e. in the present case from 17.03.2019. The impugned order is modified and for calculation of the interest on the refund amount, the matter is remanded to the Adjudicating authority - Appeal allowed by way of remand.
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2019 (11) TMI 246
Refund of service tax - time limitation - Department was of the view that the refund claim ought to have been filed within six months from the date on which Section 104 of Finance Act, 2017 was introduced and received assent of the President - HELD THAT:- Only if it is established by the appellant that the amount has been deposited by SIPCOT with the government, the appellant would be eligible for refund. For this, appellant has to get assistance from SIPCOT and only thereafter they would be able to file refund claim. In the present case, SIPCOT though was aware of the amendment by which the exemption to service tax on development chares was extended to the beneficiaries, has been in a slumber and has not taken any initiative to inform the beneficiary about the exemption. Had SIPCOT taken action within the time prescribed appellant would have filed the refund in time. Thus it established that delay was not due any reasons on the part of appellant. Hon'ble High Court in the case of JSW DHARMATAR PORT PVT. LTD., JSW JAIGARH PORT LTD. VERSUS UNION OF INDIA, THROUGH THE SECRETARY DEPARTMENT OF REVENUE, MINISTRY OF FINANCE [ 2018 (12) TMI 1118 - BOMBAY HIGH COURT] held that rejection of refund claim on the ground of time bar is unjustified. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 245
Refund of service tax - works contract services - reverse charge mechanism - refund rejected on the ground that the value shown in the input service invoices vis-a-vis value shown in the S.T return do not match as far as the total value paid for receiving work contract services - principles of unjust enrichment - HELD THAT:- Nothing has been brought to the notice that any appeal has been preferred by the department challenging those findings. However, the amount of said refund has been denied to be disbursed rather is ordered to be deposited with consumer welfare fund for want of the evidence regarding not passing of the incidence of the impugned services by the Appellant to any other person. Perusal thereof shows that since the year 2015 till the time of filing the impugned refund Appellant is showing the impugned amount of ₹ 6,36,415/- as an advance recoverable in cash as being paid towards the Service Tax - thus, there is sufficient evidence otherwise on record to falsify any unjust enrichment as is alleged on part of the Appellant. Thus, the Commissioner Appeals has committed an error while holding the unjust enrichment on part of the Appellant without any cognizant reason being given to support that finding - appeal allowed - decided in favor of appellant.
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2019 (11) TMI 243
Sabka Viswas (Legacy Dispute Resolution) Scheme, 2019 - delay in notification of the Scheme - the scheme was notified on 21.08.2019 - since the Scheme had not been notified, the petitioner out of abandoned caution had preferred the appeal on 16.08.2019 in respect of adjudication order dated 14.06.2019 - Case of petitioner is that, he petitioner has fallen in no man s land and is not entitled the benefit of Scheme - HELD THAT:- The grievance of the petitioner appears to be justified and the respondents should seriously examine the same. List on 20.11.2019.
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Central Excise
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2019 (11) TMI 244
Interest on Refund - Section 11BB of the Central Excise Act, 1944 - time limitation - respondent contended that interest was paid within three (03) months from the date of order passed by the Tribunal, thus department is not liable to pay interest - HELD THAT:- As per Section 11BB of the Central Excise Act, 1944, if duty is not refunded within three (03) months from the date of application, applicant is entitled to interest. In the present matter, refund application was filed on 03.09.2009 which was rejected and the petitioner unsuccessfully assailed said order before Commissioner (A). The petitioner filed further appeal before the Tribunal which vide order dated 21.02.2018 (Annexure P-3) allowed appeal of the petitioner and accordingly, the respondent sanctioned refund on 27.09.2018. Hon'ble Supreme Court in the case Ranbaxy Laboratories Ltd. Versus Union of India, [2011 (10) TMI 16 - SUPREME COURT] has clearly held that interest is payable from the expiry of three months from the date of filing refund application and not from the date of favourable order of Appellate Authority. From the reading of Section 11BB, it is quite apparent that liability of interest relates back to date of filing application and not date of order passed by one or another authority. As the respondents failed to sanction refund within three (03) months from the date of application, thus they are liable to pay interest for the delayed period - In the present case, refund application was filed on 03.09.2009 (P-1) which was rejected by the respondent vide order dated 30.04.2010. The refund was ultimately sanctioned on 27.09.2018 when the Tribunal allowed appeal of the petitioner, thus, respondents are liable to pay interest w.e.f. expiry of three (03) months from 03.09.2009. The respondents are hereby directed to pay interest at prescribed rate within one (01) month from the date of receipt of certified copy of this order, failing which the Sanctioning/Competent Officer shall be liable to pay interest @ 6% on the amount due from his/her own pocket, apart from liable to be hauled up in contempt proceedings - petition allowed.
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2019 (11) TMI 242
Classification of imported intermediate goods - Reformate - classified under CETH 27101113 or under CETH 27101119? - Revenues case is that the reformate imported by the appellants is nothing but Motor Spirit commonly known as Petrol; as per definition at supplementary notes to chapter 27 of Schedule to the CETA - HELD THAT:- The Chemical Examiner Report is not comprehensive and therefore, it cannot be concluded on basis of the report that the impugned product i.e., reformate is motor spirit adhering to BIS: 2796-1995 standards for EURO II, III, IV Standards. Therefore, it cannot be called motor spirit commonly known as petrol as is understood in common parlance - the report of BPCL who are experts in the field is to be relied upon in comparison to Chemical Examiner's report which is not comprehensive and conclusive. Appeal dismissed - decided against Revenue.
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2019 (11) TMI 241
SSI Exemption - byproducts namely fatty acid, soap stock, spent earth emerged - demand of duty along with interest and for imposing penalties - HELD THAT:- The issue decided in the case of M/S RICELA HEALTH FOODS LTD., M/S J.V.L. AGRO INDUSTRIAL LTD., M/S KISSAN FATS LIMITED VERSUS CCE, CHANDIGARH, ALLAHABAD [ 2018 (2) TMI 1395 - CESTAT NEW DELHI] where it was held that Noting that the reference is to decide whether these are to be treated as waste for the purpose of exemption N/N. 89/95-CE we note though the excisability of the product itself is seriously in dispute as per the opinion expressed by us, these cannot be considered as anything other than waste and as such will be covered by the exemption N/N. 89/95-CE. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 240
Clandestine removal - clandestine purchase of texturized yarn, 43920.310 kgs under 7 bills, and clearance of dyed yarn made out of the same without payment of duty - Substantial evidence present or not - benefit of N/N. 5/1999 dated 28.02.1999 - principles of natural justice - HELD THAT:- It is not understood as to how the Original Authority and the Appellant Authority have given a finding that the concerned persons of the Appellants have accepted their guilt. It is seen from the Show Cause Notice that Shri Jayesh Pathak did not provide the copy of the bank account statement. This being the case it appears that the allegation is built up by the department only on the basis of the sales register, delivery orders and ledger of the supplier of texturized yarn. This at best is a third party evidence. No corroborate to evidence has been pla Though it can be argued that the cases of evasion cannot be proved with mathematical precision, at the same time the same cannot be sustained with a single evidence that too found in some other premises. The charge of clandestine removal is a serious charge and requires to be substantiated by completing the chain of procurement of raw material, use of other raw material, electricity consumption, labour charges, manufacture of final products, sale of final products, transportation of final product and financial transaction - In the instant case no trace of evidence, even on sample base, has been adduced to complete the chain and prove the allegation. It is not the case of the department that there were discrepancies in the stock in the factory premises of the appellants. The allegation cannot be sustained by negative application i.e. just by alleging that the appellants have not maintained any records for receipt of the texturised yarn alleged to have been received by the appellants. No other evidence, except for the entries in the sales register of another company, to show receipt of raw material, use of other material, labour and fuel and clandestine manufacture and removal, has been put forth by revenue. That being the case we are doubtful if a case of clandestine removal can be sustained. Benefit of concessional of rate of duty as contained in notification No.5/99 - HELD THAT:- The side making allegation has to prove and not the other way round. However, as we have held that the charge of clandestine removal is not sustainable, we find that there is no need to go into the merits of alternate arguments as submitted by the appellants. We also find that as the duty demand itself is held to be non sustainable, penalties on the director and the company need to be accordingly set aside. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 239
Refund of duties of central excise discharged by Deputy Executive Engineer (Civil), Maharashtra State Electricity Distribution Co Ltd, Murud - eligibility for exemption afforded by notification no. 74/1993-CE dated 28th February 1993 - HELD THAT:- The exercise of jurisdiction by any appellate forum is restricted to the dispute before that authority and the effect of the order is limited to that. There was, understandably, no appeal of Revenue against rejection of the claim in its entirety in the order of the original authority and in the absence of such appeal, the decision of the first appellate authority is but a decision that, presuming the validity of eligibility in the order of Assistant Commissioner of Central Excise, Nanded, on the bar of limitation. While we had, on the former occasion, held that the claim of eligibility for the earlier period was not valid in law, the challenge to the grant of eligibility for exemption for the period thereafter, which is now before us, will have to be decided in the context in which the claim was accepted. The appeal of Revenue against the modification of rejection by the original authority in the order impugned before us does merit attention for that very reason. However, the conformity thereof should be tested before the authority that granted such relief. The appeal of Revenue is allowed by way of remand to the first appellate authority to subject the claim of the appellant therein to relief. The eligibility to consequential relief, including interest for delayed disbursal, is dependent on this determination. The first appellate authority is directed to consider all the appeals before it afresh after giving due consideration to the submissions made by the respective appellants therein - appeal allowed by way of remand.
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2019 (11) TMI 238
Valuation - benefit of cum-duty - membrane switches - reconsideration of the assessable value for ascertainment of duty liability - applicability of concessional rate of duty - N/N. 1/93-CE dated 28th February 1993 - HELD THAT:- As the dispute in the present case relates to a different rate of duty it should rightly be applicable on the normal price declared and adopted under rule 173C of Central Excise Rules, 1944 (as it then was). The abatement of duties and tax to qualify the normal price in the Central Excise Act, 1944, as well as in the rules framed for valuation, was intended to ensure that duties of central excise are not levied on other duties. It is not intended to provide for deeming the inclusion of duties in the sale price. The benefit of cum-duty, if extended to appellant, would be contrary to the provisions of section 4 of Central Excise Act, 1944 - Appeal dismissed.
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2019 (11) TMI 237
Valuation - semi-finished PVC compound and PVC sheet supplied to their own manufacturing units for cables and wires at Urse - enhancement of value - HELD THAT:- The arbitrary loading of 15% on the assessable value computed by the appellant is not in accordance with law. It is an admitted fact that the CAS-4 statements, submitted during the course of adjudication, were not tested for its validity and in the light of the referred circular should have been the basis for assessment to duty. Having failed to do so, it is necessary that this deficit must be rectified. Matter remanded back to the original authority to consider the several claims of the appellant - appeal allowed by way of remand.
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2019 (11) TMI 236
Valuation - physician s samples are not distributed to physicians by the appellant - period between January 2005 and January 2008 - HELD THAT:- Taking recourse to section 4 of the Central Excise Act,1944, the appellant has adopted cost construction which is the appropriate method considering that the transaction is not one of sale. The issue decided in the case of M/S MEDISPRAY LABORATORIES PVT. LTD., M/S MEDITAB SPECIALITIES PVT. LTD., AND M/S OKASA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GOA [ 2017 (2) TMI 309 - CESTAT MUMBAI ] where it was held that The valuation shall be determined on the basis of cost of raw material + job charges including the profit of the job worker. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 235
Default in making payment of monthly liability of duty - Wrongful utilization of CENVAT Credit - contravention of Rule 8(3A) of Central Excise Rules, 2002 - period i.e. July 2002 to June 2011 - whether for the default in making payment of monthly liability of duty during the period May 2008 to September 2008, the Appellant would be debarred from utilising CENVAT Credit for the period thereafter i.e. from July 2010 to June 2011? HELD THAT:- The issue of utilisation of CENVAT Credit post default in monthly payment of duty under Rule 8(3A) of Central Excise Rules, 2002 is no more res integra. The relevant portion, which debars utilisation of such credit, has been struck down by the Hon ble Gujarat High Court in Indsur Global case [ 2014 (12) TMI 585 - GUJARAT HIGH COURT ] where it was held that Condition contained in sub-rule (3A) of rule 8 for payment of duty without utilizing the cenvat credit till an assessee pays the outstanding amount including interest is declared unconstitutional. Therefore, the portion without utilizing the cenvat credit of sub-rule (3A) of rule 8 of the Central Excise Rules, 2002, shall be rendered invalid. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 234
Interest on delayed refunds - Whether Appellant is entitled for interest on the amount refunded w.e.f the date of respective payments in accordance of Section 35 FF of the Central Excise Act, 1944? - HELD THAT:- This provision is the amended provision as applicable w.e.f 06.08.2014, the proviso makes it abundantly clear that this will be applicable only for such deposits as are made after coming into existence of this amendment - Apparently and admitted, the amounts in this case were paid in the year 2003 and 2012. The both payments being prior the aforesaid amendment in Section 35FF, this provision is not applicable. Otherwise also it is an admitted fact that order of refund was announced on 08.02.2016, the amount was disbursed on 29.04.2016 once the payment is made within three months of the refund, no question of any interest to be paid along therewith at all arises. Even for the period since August, 2012 till February, 2016, the Appellant is held not entitled for the interest as prayed - Appeal dismissed - decided against appellant.
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2019 (11) TMI 233
Calculation of interest on duty demanded - relevant date for calculation of interest - case of appellant is that they are required to pay interest only from the date of ascertainment of the duty by the Commissioner (Appeals) - HELD THAT:- Appellant is liable to pay interest from 24.02.2012 on the demand that has been confirmed. The prayer of the appellant is allowed. With respect to liability to pay interest it is limited from 24.2.2012 to the date of payment of the duty amount. The Ld. A.R has relied upon the decision of the Hon ble Apex Court in the case of M/S. STEEL AUTHORITY OF INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [ 2019 (5) TMI 657 - SUPREME COURT] - On perusal of the facts of the case the question that was considered by the Hon ble Apex Court is with regard to interest liability in the case of final determination of duty when the assessee resorts to provisional assessment. Therefore, the said case is distinguishable on facts. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 232
CENVAT credit - input services - Sales Promotion Service / Customer Care Services - period from November 2010 to May 2015 and June 2015 and June 2017 - extended period of limitation - HELD THAT:- Thus period involved is after 1.4.2011 as well as prior to this date. For the period prior to 1.4.2011 the definition of input services included the words activities relating to the business and therefore the services availed by the appellant would undoubtedly be eligible for credit prior to 1.4.2011. Ld. counsel has explained the segregation of the amounts with different units of the appellant. There are six units of the appellant and the amount shown for services mentioned in the agreement is for all the six units. Thus the appellant unit has to pay ₹ 3 lakhs as per the agreement for the entire services provided. The adjudicating authority has apportioned the whole amount of ₹ 3 lakhs towards customer care services without any basis and thereafter rejected the credit. It is indeed the allegation stated in the SCN that appellant has availed credit of service tax paid on sales promotion and customer care services. Then findings of the adjudicating authority that the entire amount is for customer care services cannot sustain. The manufacturer has to maintain the customer sales / help line / cell for redressing the customer s grievances. Indeed, the manufacturer being liable for the manufacturing defect of the product, the activity is in relation to manufacture. Such customer care services help in augmenting the sales and therefore is closely related with the sales promotion also. The finding of the authorities below that customer care service does not have direct nexus with the final products, in my view is legally incorrect. Extended period of limitation - HELD THAT:- The department has not been able to establish any positive act of suppression on the part of the assessee. The audit that culminated in issuance of the SCN in 2015 took place in2012. Further, department did not raise any objection in earlier audits for the availment of credit in respect of these input services - the invocation of extended period cannot sustain. The credit availed in respect of sales promotion service / customer care services are legal and proper - appeal allowed - decided in favor of appellant.
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2019 (11) TMI 230
Imposition of penalty u/r 15 (1) of CCR - wrongful availment of CENVAT Credit - it was alleged that appellant company have deliberately taken cenvat credit of the full quantity of input, being of petroleum coke which was imported in one ship load vide one Bill of Entry, but on the date of taking credit, only about 1/5 of the consignment had reached the factory and about 4/5 was still in the transit or lying at the port in the ownership of the appellant company - HELD THAT:- It is a case of taking credit, part of which was rightly taken and part of which was prematurely taken. Though the same was found to be fully allowable at a later point of time after about 70 days. Admittedly there is no case of non receipt of inputs by the appellant. Further the inputs which were received in part, and the other part not received as on 30th June, 2015 was lying under the ownership of the assessee at the port or was in transit. Appeal disposed off.
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2019 (11) TMI 229
CENVAT Credit - duty paying documents - period from March, 2010 to January, 2011 - it is alleged that credit availed on the basis of improper documents - Rule 9 of Cenvat credit Rules 2004 - HELD THAT:- Perusal of this provision makes it clear that Sub-Rule 2 uses word shall due to which, no doubt, it is mandatory that before availing Cenvat credit with all complete particulars as are prescribed under Rule 11(2) of Central Excise Rules, 2002 and Rule 4 (A)(1) of Service Tax Rules, 1994 are required to be contained in the document for availment of Cenvat credit is concerned. However, the proviso thereof makes it abundantly clear that the Cenvat credit can still be allowed in the absence of any prescribed document provided the details of duty etc as mentioned therein are mentioned in the tendered document - Thus, it becomes clear that any document if doesn't bear the name of the service recipient the absence thereof is not as relevant as to deny the substantial benefit which otherwise is accruing to the assessee. There is no denial to the fact that the service recipient is Rampura Agucha Mines the short form thereof cannot be ruled out to be RAM which is, specifically, mentioned in the said invoices. Department has not come up with any documentary or otherwise evidence to substitute said RAM mentioned in the invoice to someone else than the service recipient - Not only this, the Appellant has also produced on record the copies of the supplementary invoices where RAM is clarifying to mean as R.A, Mines of Hindustan Zinc Ltd. In the given circumstances, the findings of Commissioner Appeals that the impugned letters are not the integral part of the invoices they being of a bit prior to the invoice are not reasonably sustainable. CBEC Circular No. 441/7/99 dated 23.02.1999 - HELD THAT:- This Circular itself in para 3 thereof directed that the adjudicating authorities of the Department to ensure that show cause notices are not issued for procedural lapses as mentioned in the Notification without making proper enquiries and it has to be issued only the enquiry and it is only if Assistant Commissioner is satisfied that the credit availed is incorrect that the adjudication should be started. Extended period of limitation - HELD THAT:- The entire issue was in the notice of the department since February, 2011. The notice of 30.05.2013 is definitely beyond one year of the said date of knowledge, hence is definitely barred by limitation - Department was not entitled to invoke the extended period of limitation. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2019 (11) TMI 231
Imposition of penalty - Form-31, which was accompanying the consignment of PET/ Preform/Plastic bags was blank - intent to evade tax, present or not - HELD THAT:- The penalty could have been imposed upon the revisionist in accordance with Section 15A (O) which provides that the same can be levied in case the goods are being transported in contravention to the provision of Section 28A - The perusal of Section 28 A of the U.P. Trade Tax Act would indicate that it is mandatory for a person who intends to bring the import, otherwise to receive into the State from any place within the State any goods or other than the goods exempted in Clause (A) of Section 4 shall obtain a prescribed Form of declaration for payment of the prescribed fee from the Assessing Authority, having jurisdiction of the area wherein the principal place of business is situated or in case any such place where he ordinarily resides. Only because certain columns were left blank, could it be concluded that there was intention on the part of the revisionist to evade tax or that goods were being carried in contravention to the statutory provisions contained in Section 28 A of the Trade Tax Act? - HELD THAT:- From a perusal of the statutory provision Section 28 A it is clear that there is no violation of statutory requirement contained therein and only carrying of Form 31 has been prescribed but there is no mention that all column should be duly filled and even from the facts on record it is abundantly clear that there was no intention to evade tax and therefore the penalty order which has been issued is clearly arbitrary and liable to be set aside - The Deputy Commissioner, Trade Tax has given a categorical finding that the goods accompanied by the Billity No. 1463/18.04.1998 wherein details of all the goods was mentioned and had further relied upon the Circular of the Department which provide that in case any columns are left blank in Form 31 the authorities concerned should fill up the said Form and release the goods. The Hon'ble Apex Court in the case of M/s. Commissioner of Sales Tax, U.P. Lucknow Vs. M/s Oriental Carbon Ltd. Ghaziabad as reported in 1997 NTN (Vol.10)-105 and a Division Bench decision of this Court in the case of M/s Rama Pulses Vs. State of U.P. Others as reported in 2009 NTN (Vol.41)-189 [ 2009 (10) TMI 885 - ALLAHABAD HIGH COURT ] wherein this Court has held that the intention to evade payment of tax is Since qua non for levy of penalty and has held that the law laid down in Jain Shudh Vanaspati Ltd., is still good law to the extent that before the imposition of penalty the authority must give to the assessee a notice under the provisions of the Act to record a finding that there was an intention to evade the payment of tax. The order of the Commercial Tax Tribunal, is liable to be set-aside and is set-aside - Revision allowed.
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2019 (11) TMI 228
Validity of Form C - Gazette Notification No. D.L. 33002/99 dated 23.2.2018 - Concessional rate of tax - respondent No. 1 declared the C form as obsolete and invalid vide notification dated 22.02.2018 with immediate effect and the same was notified in Delhi Gazette on 23.02.2018 - case of the respondents is that the aforesaid C form has been declared as obsolete and invalid on account of the dealings of respondent No. 4 being found to be unexplained and suspicious. HELD THAT:- This Court had the occasion to deal with similar issues and grievances in MAA JAGDAMBA TRADERS VERSUS THE COMMISSIONER VALUE ADDED TAX [ 2019 (7) TMI 648 - DELHI HIGH COURT] and in the case of SHEEL CHAND AGROILS (P) LTD. VERSUS GOVERNMENT OF NCT OF DELHI ANR [ 2019 (8) TMI 523 - DELHI HIGH COURT] where it was held that Once the form that has been issued is utilized, the question of subsequently declaring such used forms as obsolete would not arise. The notification dated 23.02.2018 declaring the aforesaid C form to be obsolete and invalid is quashed - petition allowed.
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2019 (11) TMI 227
Recovery proceedings initiated under Maharashtra VAT Act, 2002 - whether the obtaining of TDR from SRA against handing over of land and constructed tenaments amount to sale for valuable consideration? - HELD THAT:- The AGP makes a statement that demand made consequent to the three assessment impugned orders for the Assessment Years 2008-09, 2010-11 and 2012-13 will not be given effect to/enforced till such a time as the Hon ble Supreme Court decides the appeal filed by the Petitioner against the order and judgment dated 25 April 2017 of this Court in Writ Petition No.2119 of 2016 and MVAT Appeal No. 68 of 2016. [ 2017 (5) TMI 734 - BOMBAY HIGH COURT ] . Petition disposed off.
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Indian Laws
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2019 (11) TMI 226
Service of notice - interpretation of statute - Dishonor of cheque - Whether non-framing of formal notice under Section 251 Cr.P.C. would vitiate entire proceedings requiring a fresh trial? HELD THAT:- In terms of Section 143 NI Act, subject to the proviso, as per normal rule, the proceedings under Section 138 of Negotiable Instrument Act are summary in nature. On appearance of the accused, the Magistrate is required to explain the substance of accusation to the accused and ask him whether he would plead guilty or has any defence to make, however in terms of the mandate of the Section, it would not be necessary to frame a formal notice. Looking at the issue from another angle as to whether any failure of justice has occurred on account of non framing of formal Notice under Section 251 CrPC by the trial court on 20.12.2016. In this regard, it is profitable to refer to Section 464 CrPC which provides that no finding, sentence or order by a Court of competent jurisdiction shall be deemed invalid merely on the ground that no charge was framed or on the ground of any error, omission or irregularity in the charges, unless, in the opinion of the Court of appeal, confirmation or revision, a failure of justice has been occasioned thereby . Thus, as per mandate of the section 251 CrPC, no formal notice is required to be framed so long as the substance of the accusation is stated and the accused is asked whether he pleads guilty or intent to lead any defence evidence. It is apparent that the petitioner has been found guilty of causing delay in the trial for one reason or the other. The present case pertains to a complaint of the year 2016. It appears that earlier, the petitioner had deliberately raised a piecemeal challenge to the order dated 20.12.2016 with respect to closure of petitioner s right to cross-examine the complainant and now, the very same order is challenged for non-framing of a formal notice under Section 251 CrPC by the trial court - Looking at the overall conduct of the petitioner in delaying the proceedings for one reason or the other, the present petitions are dismissed with costs of ₹ 10,000/- to be paid to the complainant.
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