TMI Tax Updates - e-Newsletter
December 3, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Rejection of application for advance ruling on the ground that proceedings are already pending before the revenue authorities - Principles of Natural Justice - The matter is remanded to the lower authority for consideration and passing of appropriate orders.
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GST:
Applicability of TDS under GST law - Whether the same is applicable to the Co-operative Society since it is Registered under Tamil Nadu Cooperative Society Act of 1975 and not under society registration act 1860? - TDS provisions are not applicable to the applicant.
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GST:
Legal validity of GSTR-3B returns - The said issued stands concluded on account of notification dated 09.10.2019 bearing No.49/2019, wherein an amendment has been made in Rule 61 of the GST Rules with retrospective effect and filing of GSTR-3B has been made compulsory. - It was mandatory for the petitioner to file GSTR-3B Return.
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GST:
Recovery proceedings under GST - there is no necessity to determine the taxable person, as the liability has been self assessed by the petitioner itself. So far as the determination of taxable person in the present case is concerned, the case of revenue rests on the GSTR declaration made by the petitioner itself, and therefore, there was no need of determination of taxable person
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GST:
Recovery proceedings under GST - petitioner itself has quantified its tax liability under the GSTR-1 Returns. The petitioner's contention that in absence of determination of tax u/s 73 no recovery can be made, is unfounded and in fact Section 73 has got no application in the facts and circumstances of the present case.
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Income Tax:
Revision u/s 264 - benefit u/s 54B denied - land were used for agricultural purposes for two years or not - the factual aspects raised in this writ petition, need to be considered once again by the first respondent and to decide the matter as to whether the petitioner has satisfied the requirement contemplated under Section 54B, while seeking deduction.
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Income Tax:
Addition u/s 56(2)(vii)(c) - difference between the fair market value of the shares and consideration received by the company from the assessee to whom bonus shares issued - issue of Bonus Shares was never envisaged to be taxed under the provisions of section 56(2)(vii) - Additions deleted.
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Income Tax:
Disallowance u/s 37(1) - penalty amount - Merely because the assessee categorised the claim under “penalty levied on the assessee company for not complying to the terms of the contract”, is not permissible to the jump to the conclusion that such penalty was in respect of any offence or infraction of law committed by the assessee so as to invoke the provisions under Explanation 1 to section 37 (1) of the Act.
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Income Tax:
Penalty u/s 271(1)(c) - A mere bonafide omission on the part of the assessee to account for the interest portion of the refund (which though had duly been reflected in his ‘Capital account’), would though have justified an addition to the said extent, however, a levy of penalty u/s 271(1)(c) merely for the said bonafide mistake would be totally unjustified.
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Income Tax:
Revision u/s 263 - Pr. CIT in the garb of his revisional jurisdiction u/s 263 cannot be permitted to traverse beyond the jurisdiction that was vested with the A.O while framing the assessment.
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Income Tax:
Disallowance of agricultural income - the agricultural sector continues to remain unorganized and the agricultural produces are sold in an unregulated market - considering the relevant financial year as well as lack of details of the crop cultivated in the dry land, we are of the considered opinion that 50% of the claim of assessee’s share of income would meet the ends of justice.
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Income Tax:
Expenditure on CSR - Disallowance of 50 % of the expenditure on account of the community development donation expenses under section 37 (1) - We do not find this “just‟ reason for confirming the disallowance. - Prior to 1/4/2014 no such disallowance was provided in the law
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Customs:
Revocation of CB License - the revocation of the license or imposing penalty should also be done within the time prescribed - Merely because the Regulation does not prescribe or spell out expressly or specifically as to what would be the consequence, there could be no presumption that there is no consequence at all in these cases.
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Customs:
Levy of penalty - mis-declaration made by the exporter - goods remained as unclaimed for almost two years - Since appellant had not placed any claim over the imported goods, no finding is required to be given on the confiscation order and its redemption upon payment of fine at this stage which is not under challenge in the forum by the claimants - Levy of penalty set aside.
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Customs:
Continuation of Anti Dumping Duty (ADD) for a further period of 5 years - Legality of second sunset review - imports of “Nonyl Phenol” from Chinese Taipei - There is a fundamental fallacy in the approach of the DA in the determination of likelihood of recurrence of dumping and injury post removal of the duty on the subject goods from the subject country. - Order set aside - Matter restored before the Designated Authority.
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Corporate Law:
Winding up petition - right of tenants over property - the orders/decrees passed by the Courts are passed after the order of winding up was passed - The orders/decrees passed by the Courts in favour of tenants declaring them to be tenants are a nullity in the eyes of law and are declared illegal and void, as being coram non judice and hence not binding on the Official Liquidator
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Indian Laws:
The scheme is so that the construction sector can get the fruits of arbitral awards in their favour, which otherwise was not available at the time under the law. - The petitioner was free to avail of the circular on its terms, or not to avail of the said circular. Having availed of the benefit contained in the circular, it is not possible for his client to now turn around and state, years after availing this benefit, that one part of the circular is onerous and should be struck down.
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Central Excise:
Clandestine removal - job-work - even if there is an oral evidence in the form of a statement, it requires to be corroborated by documentary evidence - there are no such evidence has been put forth. - the allegations of clandestine manufacture and removal do not sustain.
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Central Excise:
Demand of interest for delayed refund - relevant date for calculation of refund - earlier the amount was deposited towards recovery of refund proceedings - he interest on the refund shall be payable @ 12% per annum from the date of deposit till date of refund.
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VAT:
Cancellation of registration of compensation scheme with retrospective effect - the retrospective withdrawal or cancellation of the registration certificate will have no effect upon the assessee who has acted upon it when it was valid and operative
Articles
News
Case Laws:
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GST
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2019 (12) TMI 50
Rejection of application for advance ruling on the ground that proceedings are already pending before the revenue authorities - Principles of Natural Justice - Classification of goods - Chewing Tobacco - applicability of N/N. 01/2017-Compensation Cess-(Rate) - whether, the rejection of the application filed by the Appellant seeking Advance Ruling by the Lower Authority is as per the provisions of Law and Principles of Natural Justice? HELD THAT:- It is seen that the revenue has not represented before the lower authority at the time of hearing. The lower authority has heard the case of the appellant. But subsequently, the CGST officers of Trichy commissionerate has responded to the information sought on the application of the appellant, wherein it is stated that a summon was issued on 8th Jan 2019 and Statement recorded on 9th Jan on the issue of short payment of compensation cess by misclassifying the product supplied by the appellant. On receipt of the said comments, the lower authority, without extending another opportunity to the appellant to hear their contentions on the comments of the jurisdictional authority has rejected the applicant stating that the application is filed when the proceedings are pending before the GST authorities. The appellant is aggrieved of the said decision and considers that the principles of natural justice is not followed in as much as they have not been extended an opportunity to comment on the submissions of the CGST authorities that the question raised in the application was already pending with the department - the-justice be met by remanding the case to the lower authority, to extend an opportunity to the appellant and then decide the case as per the provisions of law. We further find that this authority is empowered vide section 101(1) to Pass such order as deemed fit. The matter is remanded to the lower authority for consideration and passing of appropriate orders on whether the issue raised in the application by the appellant was already pending before the department after extending opportunity to the appellant - appeal allowed by way of remand.
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2019 (12) TMI 49
Applicability of TDS under GST law - Whether the same is applicable to the Co-operative Society since it is Registered under Tamil Nadu Cooperative Society Act of 1975 and not under society registration act 1860? - HELD THAT:- The applicant is an Apex society registered under Tamil Nadu Co-operative societies Act 1961 with head quarters at Kancheepuram. Director of Industries and Commerce has registered the same with a view to hold the weavers, Reelers and members in Sericulture Industry as provided in G.O.Ms. No 832 dated 31st May 1979. The capital structures of the applicant is to be raised from (1) members share capital contribution (2) Government Share Particulars and (3) loan from National Corporation of Development of Co-operative and the Governments Share Contribution will constitute 51% of the total share capital of the Federation. The applicant has sought advance ruling on the applicability of Notification No.33/2017(CT) dated 15.09.2017 relating to the Provisions of Tax Deduction at Source (TDS). In the case at hand, the applicant is an Apex co-operative society, applicant registered as Apex Society under the Tamil Nadu Co-operative Societies Act 1983. It is not a Society under the Societies Registration Act 1860. It was established by the Industries Department of Government of Tamil Nadu based on the G.O. of State Government of Tamilnadu to develop Co-operative silk twisters, reelers, etc. The G.O. specifies that the Government s share contribution will constitute 51% of the total share capital of the Federation - Section 33 of Tamil Nadu Co-operative Societies Act 1983 stipulates that the elected members have voting rights while the functional directors and the Co-Opted member do not have any voting right though they may participate in meetings. Therefore, it is seen that though the Managing Director is appointed by Government of Tamil Nadu and a few of the other Functional Directors are also employees of Government of Tamil Nadu, the control of the Board or management vests with elected members who are elected by the member silk cooperative societies. Hence, the Government of Tamil Nadu does not control the applicant. It is seen that the applicant was established by the Government of Tamil Nadu as a Cooperative Society registered as Apex Society under the Tamil Nadu Co-operative Societies Act 1983 but the equity ownership at present or in the past never beyond 51%, nor is it under the control of the Government as the management do not have any voting rights as stipulated in it s bye laws and by the Tamil Nadu Co-operative Societies Act 1983 - the applicant is not a person or category of person stipulated under Notification No. 33 / 2017-C.T. dated 15.09.2017 as amended and Notification No. II(2)/CTR/783(C-3)/2017 vide G.O. (Ms) No.107 dated 15.09.2017 as amended. TDS provisions are not applicable to the applicant.
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2019 (12) TMI 48
Recovery proceedings under GST - Scope of section 73 - Legal validity of GSTR-3B returns - it has been stated that Revenue has not followed the prescribed procedure relating to demand and recovery, as provided under the Act of 2017 - It has also been contended that without determination of tax payable by taxable person, no recovery could have been initiated under Section 79 (1)(c) of the Act of 2017 - HELD THAT:- The petitioner has certainly not paid the GST. It is noteworthy to mention that GSTR-1 is declaration of tax liability and GSTR-3B is evidence of actual payment. The petitioner has stated that GSTR-1 cannot be termed or classified as self assessed liability, it is only a declaration made for limited purpose. The said issued stands concluded on account of notification dated 09.10.2019 bearing No.49/2019, wherein an amendment has been made in Rule 61 of the GST Rules with retrospective effect and filing of GSTR-3B has been made compulsory. It was mandatory for the petitioner to file GSTR-3B Return - Not only this, bare perusal of the statutory provision as contained under Section 79 of the Act of 2017 and procedure adopted by the respondents reveal that the procedure contemplated under Chapter 15 of the Act of 2017 has been followed as Section 79 (1)(c) falls in Chapter 15 of the Act of 2017 and the same has rightly been invoked. The petitioner has contended that in absence of tax determination under Section 73, no recovery could have been ordered in the manner and method it has been done in the present case - This Court is of the considered opinion that the tax determination has already been done in the present case, as the petitioner itself has quantified its tax liability under the GSTR-1 Returns. The petitioner's contention that in absence of determination of tax under Section 73 no recovery can be made, is unfounded and in fact Section 73 has got no application in the facts and circumstances of the present case. In the present case, there is no necessity to determine the taxable person, as the liability has been self assessed by the petitioner itself. So far as the determination of taxable person in the present case is concerned, the case of revenue rests on the GSTR declaration made by the petitioner itself, and therefore, there was no need of determination of taxable person. Since the liability has already been quantified by the petitioner itself, only attempts are being made for recovering revenue dues under Section 79 (1)(c) of the Act of 2017. It was the petitioner itself, who did not receive the notice issued by the Department, and now, at this juncture cannot blame the Department - The petitioner cannot escape his liability of payment of GST under Act of 2017, especially when he has filed GSTR-1 and has quantified the tax payable by him while submitting the GSTR-1. Petition dismissed.
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2019 (12) TMI 47
Amendment of TRAN-1 form - Transitional input tax credit - GST Act - HELD THAT:- Reliance can be placed in the case of ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. [2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT] wherein the Punjab and Haryana High Court had directed the respondents to permit the petitioners to file or revise where already incorrect TRAN-1 either electronically or manually statutory Form(s) TRAN-1 on or before 30.11.2019. The writ petition is disposed of with a direction to the respondents to consider the case of the petitioner- Company for amendment of TRAN-1 form and pass appropriate orders within a period of three weeks from today.
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2019 (12) TMI 46
Unable to upload TRAN-1 Form - transitional input tax credit - transition to GST regime - HELD THAT:- A Division Bench of this Court has already disposed of the aforesaid writ petition in the case of M/S JAY BEE INDUSTRIES VERSUS UNION OF INDIA AND OTHERS [2019 (11) TMI 1245 - HIMACHAL PRADESH HIGH COURT] wherein it has specifically been held that it was only on the ground of technical glitches that TRAN-1 Form could not be filed as the GST network had prevented the petitioner from claiming input tax credit of the excess duty paid by its vendor. Admittedly, such technical glitches have continued even thereafter. Once, that be so, then obviously, it cannot be said that the respondents have either deliberately or willfully violated the orders of this Court. Contempt petition dismissed.
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2019 (12) TMI 45
Release of detained goods along with vehicle - discrepancy in the origin of goods - section 129 of GST Act - Principles of natural justice - HELD THAT:- This Court is of the considered opinion that the order impugned cannot be held to be justifiable for the reason that the respondent having issued show-cause notice calling upon the petitioner to file objections, cannot turn around and take a decision that the petitioner has no locus standi either to file objections or to putforth dispute on behalf of the consignor/consignee or the owner of the conveyance. Indeed, the order impugned is against the principles of natural justice which is the fundamental parameter required to be observed by the quasi- judicial authority. Hence, the petitioner is at liberty to file any additional objections to the show-cause notice dated 11.10.2019 issued under Section 129(1)(b) of the Act within a period of ten days from the date of receipt of certified copy of the order - the proceedings are restored to the file of the respondent - petition disposed off.
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2019 (12) TMI 44
Grant of regular bail - offences punishable under Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017 - Applicant states that the applicant is ready and willing to file an undertaking to the effect that he shall not transfer or alienate or in any manner create third party rights over those immovable properties which belong to him and shall also supply the details of all the immovable properties belonging to the applicant to the Directorate General of GST Intelligence, Zonal Unit, Ahmedabad - HELD THAT:- This is a fit case to exercise the discretion to enlarge the applicant on bail - Hence, the application is allowed and the applicant is ordered to be released on bail, on executing a bond of ₹ 50,000/- with two local sureties of ₹ 25,000/- each to the satisfaction of the trial Court and subject to the conditions imposed.
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2019 (12) TMI 43
Provisional attachment of petitioner's bank accounts - Section 83 of Central Goods and Services Tax Act, 2017 - HELD THAT:- Let reply by way of affidavit be filed before next date of hearing. In the meanwhile, the amounts lying in both bank accounts, provisionally attached pursuant to Memos dated 22.7.2019 (Annexure-P-2 and Annexure-P-3) as on the date of ordering of provisional attachment shall not be permitted to be withdrawn or utilized by either of the parties, however, petitioner-assessee shall be permitted to operate the bank accounts subject to decision of the writ petition.
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Income Tax
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2019 (12) TMI 42
TP Adjustment - exclusion made by assessing authority in respect of forex gain/loss while arriving at the profit level indicator (PLI) of the assessee and directing the TPO/AO to include the same for determining the PLI - exclusion made by assessing authority in respect of forex gain/loss while arriving at the profit level indicator (PLI) of the assessee and directing the TPO/AO to include the same for determining the PLI - HELD THAT:- In view of the circular dated 8.8.2019 issued by the CBDT, the tax effect being less than two crores, we see no reason to interfere. The special leave petitions are dismissed. Pending applications, if any, shall also stand disposed of.
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2019 (12) TMI 41
Rectification u/s 254 - HELD THAT:- We find that the order dated 9 July 2018 [ 2018 (8) TMI 744 - ITAT MUMBAI] had dealt with the Petitioner s contentions extensively while upholding the order of the Commissioner of Income Tax(Appeals). The view taken by the Tribunal in its order dated 9 July 2018 in both the Assessment Years was on the basis of the record available before it and its understanding/appreciation of the evidence on record for the two Assessment Years. This is not a case of an error apparent on record which would warrant interference. In case the parties are aggrieved by order dated 9 July 2018, it is open to the parties to file an appeal under the Act. The allowing of such an application for rectification by the Tribunal would amount to review of the order dated 9 July 2018. This is impermissible as the Tribunal is not bestowed with powers to review its order.
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2019 (12) TMI 40
Revision u/s 264 - benefit u/s 54B denied - HELD THAT:- Revisional Authority while rejecting the revision under Section 264, has stated so, perusal of the order passed by the AO would show that he was carried over by the fact that the land was sold to a person, who is a developer and therefore, the petitioner is not entitled to benefit under Section 54B. Apart from saying so, the AO has given a finding that the assessee could not show that there has been an agricultural activity. The first respondent has also reiterated the very same contention. On the other hand, it is stated by the petitioner that he has produced chitta, adangal etc., for the relevant period in support of his contention that the subject matter land were used for agricultural purposes two years immediately preceding the date on which the transfer took place. This Court is of the view that the factual aspects raised in this writ petition, need to be considered once again by the first respondent and to decide the matter as to whether the petitioner has satisfied the requirement contemplated under Section 54B, while seeking deduction. Certainly, the reason stated by the Assessing Officer that the purchaser is the builder and therefore, the land is not an agricultural land, cannot be a reason which is in consonance with the requirement made under Section 54B of the said Act. Therefore, it is for the first respondent to consider and decide the matter afresh. Accordingly, this writ petition is allowed and the order passed by the first respondent is set aside. Consequently, the matter is remitted back to the first respondent to consider the matter afresh by giving an opportunity of hearing to the petitioner and pass fresh order on merits and in accordance with law.
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2019 (12) TMI 39
Reopening of assessment u/s 148 - whether documents furnished by the Petitioner that an assessment order under Section 143(3) - HELD THAT:- Case has been put up before the AO by the Petitioner squarely that the entire income earned whether on Shareholders account or Policy holders account should be recorded as income arising from life insurance business. Upon this submission of the Petitioner and the documents furnished by the Petitioner that an assessment order u/s 143(3) of the Act came to be passed. It is clear from the Reasons that there is no reference to any new tangible material, but the reference is only to the financial statement of the Petitioner itself. Therefore, there is not only no failure to disclose any material facts, there is no mention in the reasons that there has been a failure to disclose. A specific query was raised regarding the implications of Shareholders account, which dealt with by the AO in the assessment order and what is sought to be done by the AO in the impugned notice and order is a mere change of opinion, which is not permissible. These grounds, which constitute jurisdictional requirements, by series of judicial pronouncements, are held to be grounds for setting aside the initiation of reassessment proceedings. The impugned notice and impugned order passed by the AO being beyond this jurisdiction are required to be quashed and set aside.
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2019 (12) TMI 38
Levy of penalty under section 271AAB - no search conducted on the assessee u/s 132 - HELD THAT:- There is no need for levy of penalty u/s 271AAB of the Act that search warrant should be in the name of the assessee. CIT(A) admitted that there is no search warrant in the name of the assessee or no search is conducted in the case of assessee but the requirement for levy of penalty under section 271AAB of the Act is fulfilled for the reason that a statement under section 132(4) of the Act was recorded admitting undisclosed income. We noted that in all the case laws relied, the co-ordinate Benches have taken a consistent view holding that the penalty under section 271AAB of the Act cannot be levied where search is not conducted under section 132 of the Act on the assessee. Hence, respectfully following the same we delete the penalty and allow the appeal of the assessee on this jurisdictional issue.
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2019 (12) TMI 37
Assessment u/s 153A - Unexplained cash credit u/s 68 - HELD THAT:- Addition treating the share application money as unexplained cash credit u/s 68 was made in the present case by the AO in the assessment completed u/s 153A for A.Y. 2010-11 on the basis of bank account found during the course of search and since the said bank account as well as transactions reflected therein were duly disclosed by the assessee company in its return of income originally filed for A.Y. 2010-11, we find ourselves in agreement with the contention of the assessee that the same cannot be treated as incriminating material found during the course of search. Addition u/s 68 and confirmed by the CIT(A) thus was not based on any incriminating material found during the course of search and the same, in our opinion, is not sustainable being outside the scope of section 153A. Disallowance made by the AO and confirmed by the CIT(A) u/s 14A read with Rule 8D in both the years under consideration is also not sustainable as the same is not based on any incriminating material found during the course of search. We, therefore, delete the said additions made in both the years under consideration and allow these appeals of the assessee.
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2019 (12) TMI 36
Depreciation to assessee trust - HELD THAT:- CIT(A) on the simple ground that the claim made by the assessee for depreciation for the year under consideration is no longer res integra since the Hon ble Supreme Court in the decision in CIT Vs. Rajasthan Gujarati Charitable Foundation [ 2017 (12) TMI 1067 - SUPREME COURT] has held at para 4(infra) that the amendment in section 11(6) of the Act vide Finance Act No. 2/2014 would be effective from AY 2015-16 and has approved the Hon ble Delhi High court s declaration that the said amendment is prospective in nature We note that the Hon ble Supreme Court has upheld the action of the Hon ble High court which in turn upheld the action of Tribunal in allowing the depreciation claimed by the assessee on the assets acquired/expenditure made has been allowed as application of income as well as the Hon ble Supreme Court also taken note that the amendment in section 11(6) of the Act inserted vide Finance Act No. 2/2014 is effective from AY 2015-16 and, therefore, is prospective in nature, therefore, we allow the claim of the assessee by following the decision of Hon ble Supreme court in the case of Rajasthan Gujarati Charitable Foundation [ 2017 (12) TMI 1067 - SUPREME COURT] and note that the ratio decidendi of the Tribunal (Madras) is not a good law in the light of the Hon ble Supreme Court in Rajasthan Gujarati Charitable Foundation(supra) and the reliance made by the Ld. CIT(A) is thus erroneous and has to be set aside and we direct that depreciation claimed to be allowed. Before parting, we would like to observe that though the Ld. CIT(A) was aware that the Hon ble jurisdictional High Court , Calcutta has passed an order in a similar case CIT Vs. Siliguri Regulated Market Committee [ 2014 (8) TMI 686 - CALCUTTA HIGH COURT] by allowing the claim of depreciation [refer page 9 of the impugned order of CIT(A)] and though the ratio of the case is binding on the Ld. CIT(A) he has preferred to apply the ratio of the Tribunal, ie, Chennai which is situated outside the jurisdiction of State of West Bengal, which is not in consonance with the judicial discipline and cannot be accepted and we expect the lower authorities to be clear in mind that the law laid by the Hon ble jurisdictional High Court is binding on us and CIT(A) and AO and others. We, we hope and expect them to follow the Ratio-decidendi of the Hon ble jurisdictional High Court without fail. - Appeal of the assessee is allowed.
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2019 (12) TMI 35
Addition u/s 56(2)(vii)(c) - difference between the fair market value of the shares and consideration received by the company from the assessee to whom bonus shares issued - HELD THAT:- In the case, the assessee has received bonus shares without paying any consideration, and fair market of which, has been held by the AO as income in the hands of the assessee. We find that the CIT(A) has deleted the addition following the precedent in the case of Sudhir Menon (HUF) [ 2014 (3) TMI 534 - ITAT MUMBAI] . In the case of the assessee, bonus shares were also received in financial year corresponding to assessment year 2010-11 from the same company and the AO made addition u/s 56(2)(vii). Receipt of bonus share without consideration is involved in the year under consideration, respectfully, following the finding of the Tribunal in the case of Sudhir Menon (HUF) [ 2014 (3) TMI 534 - ITAT MUMBAI] in the case of the assessee itself, we uphold the finding of the CIT(A) on the issue in dispute. The ground of appeal of the Revenue is accordingly dismissed.
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2019 (12) TMI 34
Estimation of income - AO estimated the income at 9% of the total turnover - contention of the assessee is that it included reimbursement of expenditure which does not have any profit element in it - According to the AR re-imbursement amount is to be excluded from the total income credited in the P L account, so as to estimate the income of the assessee - HELD THAT:- Assessee has to prove that the income credited in the P L account which includes reimbursement of expenses also. Before us, the assessee has not been able to substantiate the reimbursement of income included in the gross income credited in the P L account. In the interest of justice, this issue is remitted to the file of the Assessing Officer to examine afresh and then determine the income of the assessee. However, we make it clear that if the assessee is not co-operating with the Assessing Officer by producing the books of account before him, in that event, the Assessing Officer is at liberty to estimate the income to the best of his knowledge. With this observation, we remit this issue to the file of the Assessing Officer for fresh consideration. The grounds of appeal of the assessee are partly allowed for statistical purposes.
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2019 (12) TMI 33
Claim for deduction u/s 80P - AO had rejected the claim for deduction u/s 80P for the reason that the assessee has carried on business with nominal/associate members, who cannot be called as members within the meaning of sec.80P(2)(a)(i) - Whether nominal members and associate members would also quality as members within the meaning of sec.80P(2)(i) also requires examination in the light of provisions of Karnataka Co-operative Societies Act and/or Bye Laws of Society - In the instant case, the Ld A.R is also contending that there is difference between nominal members and associate members. HELD THAT:- In the case of Citizen co-operative Society [ 2017 (8) TMI 536 - SUPREME COURT] the majority of income was derived from nominal members and general public and hence the Hon'ble Supreme Court held that the business of the assessee is in the nature of a financial institution and not in the nature of providing credit facilities to its members. Hence the component of income derived from members (who are eligible to participate in profits) and other persons may also require examination and may influence the decision to be taken with regard to the eligibility of the assessee to claim deduction u/s 80P of the Act. If majority of income was derived from members (who are entitled to participate in profits), then the question that would arise is, whether the assessee would be eligible for deduction u/s 80P of the Act fully or proportionately in proportion to the income derived from members, who qualify as participators in profits. This question also requires examination. The foregoing discussions would show that the entire issue requires fresh examination at the end of the assessing officer. Accordingly set aside the order passed by Ld CIT(A) and restore all the issues to the file of the AO for examining it afresh. After affording adequate opportunity of being heard, the AO may take appropriate decision in accordance with law. Assessee is treated as allowed for statistical purposes.
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2019 (12) TMI 32
TP Adjustment - Cash profit margin - HELD THAT:- We hold that albeit the TPO was not legally correct in accepting the Cash profit margin in place of the Operating profit under the TNMM in the remand proceedings, but this issue cannot be raked up in appeal before the Tribunal as the consequential direction of the DRP is based only on the concession of the TPO and not de hors the same. There is no qualitative difference between the two situations, viz., one, in which a legally wrong course of action adopted by the assessee goes unnoticed by the AO/TPO and the order is passed as such, and the two, in which a legally wrong course of action adopted by the assessee comes to the notice of the AO/TPO but the same gets concurrence as correct. Department cannot challenge the action of the AO/TPO directly before the appellate forums. Extantly, we are confronted with the second situation, in which though the acceptance of Cash margin in the determination of the PLI is legally incorrect, but its acceptance by the TPO in the remand proceedings has denuded the Revenue from challenging the same before the Tribunal. This ground, being not maintainable, is dismissed. Granting of custom duty adjustment in the computation of the assessee s PLI rather than that of the comparables - This issue arose for the first time before the DRP. The assessee contended that because of higher volume of imports, it paid additional import duty vis- -vis the comparables paying only the basic custom duty. The assessee furnished calculation of such excess custom duty before the DRP and requested that such excess should be adjusted in the computation of its own PLI. DRP sent such calculation to the TPO for verification and comments. After considering the remand report, the DRP directed to make such adjustment in the assessee s PLI. In sofaras the legal position on this issue is concerned, subclause (i) of rule 10B(1)(e) eloquently provides for computing the net profit margin as realized by the enterprise from the international transaction. Sub-clause (ii) deals with the computation of net operating profit margin from a comparable uncontrolled transaction, may be internal or external. Sub-clause (iii) provides that the net profit margin realized by a comparable company, determined as per sub-clause (ii) above, is adjusted to take into account the differences, if any, between the international transaction and the comparable uncontrolled transactions, which could materially affect the amount of net profit margin in the open market. It is this adjusted net profit margin of the unrelated transactions or of the comparable companies, as determined under sub-clause (iii), which is used for the purposes of making comparison with the net profit margin realized by the assessee from its international transaction as per sub-clause (i). Thus the law explicitly provides for adjusting the profit margin of comparables on account of the material differences between the international transaction of the assessee and comparable uncontrolled transactions. It is not the other way around to adjust the profit margin of the assessee. In other words, the net operating profit margin realized by the assessee from its international transaction is to be computed as such, without adjusting it on account of differences with the comparable uncontrolled transactions. The adjustment, if any, is required to be made only in the profit margins of the comparables. Assessee made a claim before the DRP furnishing necessary details and seeking adjustment in its own profit margin due to Additional custom duty paid because of the excessive imports. The DRP called for a remand report from the TPO on this count. It is on the basis of the above concession given by the TPO himself that the DRP directed to give adjustment on account of additional custom duty paid in the PLI computation of the assessee. Position here is again mutatis mutandis similar to the first issue discussed supra inasmuch as though the direction of the DRP is not legally sound, but the same is based on the concession given by the TPO in the remand proceedings, which has the effect of proscribing the Revenue from agitating this issue in appeal before the Tribunal. This ground of the appeal is also dismissed as not maintainable.
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2019 (12) TMI 31
Reopening of assessment u/s 147 - HELD THAT:- No doubt that in the reopening of assessment notice issued beyond four years, the AO has established the fact that the assessee has not disclosed all the facts fully and truly to complete the assessment. From the reading of the above reasons recorded by the AO, we find that the AO after examining the entire file of the assessee came to the conclusion that the assessee has not disclosed true facts before him to complete the assessment. AO also clearly mentioned that the assessee has failed to disclose truly and fully all the material facts to complete the assessment. Thus, we find that the AO has rightly reopened the assessment. Even the CIT(A) in his order gave ca categorical finding that the statements given by Chairman/Promoter of the SCSL dated 07/01/2009 with reference to 33 specified companies fudged all the books of account and the AO based on the statement given by the Chairman of the SCSL and information gathered from the books of account of the assessee and other documents, came to a prima facie conclusion that the assessee has not disclosed the true facts and all other materials to complete the assessment. AO has rightly reopened the assessment and accordingly we uphold the order of CIT(A) in confirming the reopening of assessment made by the AO u/s 147 Disallowance u/s 14A - HELD THAT:- No infirmity in the decision of the CIT(A) in restricting the disallowance to ₹ 50,000/- and accordingly, we uphold the order of CIT(A) on this issue and dismiss the ground raised by the assessee. Similar ground u/s 14A was raised by the assessee. CIT(A) has restricted the disallowance to ₹ 50,000/- as against the disallowance made by the AO. Accordingly, we find no reason to interfere with the decision and hence, uphold the order of CIT(A) on this issue and dismiss the ground raised by the assessee. Computation of income and segregation of loss from speculation business - HELD THAT:- As perused the material on record as well as gone through the orders of revenue authorities. We are of the view that the CIT(A) has rightly directed the AO to verify the true nature of the transactions and decide the issue in accordance with law and recompute the income of the assessee accordingly. We do not find any reason to interfere with the decision of the CIT(A) and accordingly, we uphold the order of the CIT(A) and dismiss the ground raised by the assessee on this issue.
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2019 (12) TMI 30
Order u/s. 201(1)/ 201 (1A) - whether interest payable by the assessee u/s. 201 (1A) does not arise as the income tax was assessed in the hands of the foreign company which was done by the revenue authority by passing assessment order in M/s. Formula One World Championship Ltd. and has been taxed in the hands of the foreign entity - HELD THAT:- Since the foreign company i.e. Formula One Championship Ltd. [ 2016 (12) TMI 123 - DELHI HIGH COURT] has already been taxed and the Hon ble Supreme Court [ 2017 (4) TMI 1109 - SUPREME COURT] has confirmed the same in foreign company s case, it will be appropriate to remand back this issue for modifying the demand if any arise after verifying the records as per decisions of the Hon ble Supreme Court in foreign company s case, as the assessee has already deducted the TDS and paid the same with interest. Needless to say the assessee be given an opportunity of hearing by following the principles of natural justice. Ground No.2 and 3 are partly allowed for statistical purposes.
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2019 (12) TMI 29
Disallowance u/s 37(1) - penalty amount for supply of the coal with high moisture and low gross calorific value - HELD THAT:- As rightly held by the CIT(A),the inability to meet the contractual obligation by the assessee cannot be termed as an offence or infraction of law so as to deny the claim of the assessee by invoking the expression 1 to sec 37(1). We are in agreement with the CIT(A) that the eligibility of an item to tax or tax deduction can hardly be made to depend on the label given to it by the parties and at the same time the absence of a specific label cannot be destructive of the right of an assessee to claim a deduction, if in fact, the consideration for the receipt can be attributed to the sources indicated in the section. Merely because the assessee categorised the claim under penalty levied on the assessee company for not complying to the terms of the contract , is not permissible to the jump to the conclusion that such penalty was in respect of any offence or infraction of law committed by the assessee so as to invoke the provisions under Explanation 1 to section 37 (1) of the Act. The expression penalty was levied on the assessee company for not complying to the terms of the contract , clearly indicates that it is a civil consequence for not complying with certain terms of contract and has nothing to do with any offence. CIT(A) rightly applied the law laid down in the case of Prakash Cotton Mills [ 1993 (4) TMI 3 - SUPREME COURT] , Swadeshi Cotton Mills [ 1997 (5) TMI 5 - SUPREME COURT] and Continental Construction Limited [ 1992 (1) TMI 5 - SUPREME COURT] and Catholic Syrian Bank [ 2002 (11) TMI 17 - KERALA HIGH COURT] and Bharat Televisions Private Limited [ 1998 (3) TMI 2 - SUPREME COURT] to the facts of this case, and reached a right conclusion that the disallowance cannot be sustained. Appeal of the Revenue is dismissed
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2019 (12) TMI 28
Penalty u/s 271(1)(c) - whether it was levied for concealment of income or for furnishing inaccurate particulars of income? - HELD THAT:- Authorities below has failed to come to a definite finding regarding the charge/guilt committed by the assessee as mandated under section 271(1)(c) while either issuing of show-cause under section 271(1)(c) r.w.s. 274 of the Act or at the final stage of issuing penalty both of which suffer from ambiguity in the light of the judgment passed in the matter of Snita Transport Pvt. Ltd.-vs-ACIT [ 2012 (12) TMI 981 - HIGH COURT OF GUJARAT] whereby and whereunder the principle of specifying the guilt committed by the assessee in the show-cause under section 271(1)(c) as well as in the penalty order by the AO has been directed to be applied. AO has not mentioned the specific charge in its penalty orders as to whether it was levied for concealment of income or for furnishing inaccurate particulars of income. No such definite finding is reflecting from the orders impugned before us. Therefore, in our considered view, the penalty levied by the AO and confirmed by the Learned CIT (A) is not sustainable in the eye of law. The penalty is, thus, deleted. Hence, the ground of appeal of the assessee is allowed.
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2019 (12) TMI 27
Penalty u/s 271(1)(c) - omission on the part of the assessee to account for the interest portion of the refund - HELD THAT:- We have given a thoughtful consideration and are unable to subscribe to the imposition of penalty u/s 271(1)(c) on the amount of interest of ₹ 2,455/- received by the assessee on the Income Tax Refund for A.Y 2006-07 received during the year under consideration. As observed by us the assessee had credited his Capital account for the year under consideration by the amount of the Income Tax Refund (including interest) of ₹ 1,08,910/-. A mere bonafide omission on the part of the assessee to account for the interest portion of the refund (which though had duly been reflected in his Capital account ), would though have justified an addition to the said extent, however, a levy of penalty u/s 271(1)(c) merely for the said bonafide mistake would be totally unjustified. Our aforesaid view is fortified by the judgment in the case of Price Waterhouse Coopers Pvt. Ltd. Vs. CIT [2012 (9) TMI 775 - SUPREME COURT] . We thus set aside the penalty imposed by the A.O in respect of the addition of the Income Tax refund. On the basis of our aforesaid observations, we vacate the penalty imposed by the A.O u/s 271(1)(c), which thereafter had been sustained by the CIT(A). - Decided in favour of assessee.
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2019 (12) TMI 26
Revision u/s 263 - Failure to carry out proper investigation as regards the issue of valuation of the closing stock as reflected in the audited accounts of the assessee - HELD THAT:- Case of the assessee was selected for limited scrutiny for the reasons viz. (i). Large other expenses claimed in the P L A/c.; and (ii). Low income in comparison to High Loans/advance /Investment in shares, therefore, no infirmity could be attributed to the assessment framed by the A.O on the ground that he had failed to deal with other issues which though did not fall within the realm of the limited reasons for which the case was selected for scrutiny assessment. Pr. CIT in the garb of his revisional jurisdiction u/s 263 cannot be permitted to traverse beyond the jurisdiction that was vested with the A.O while framing the assessment. In sum and substance, revisional jurisdiction cannot be exercised for broadening the scope of jurisdiction that was vested with the A.O while framing the assessment. As a matter of fact, what cannot be done directly cannot be done indirectly. A.O had aptly confined himself to the issues for which the case of the assessee was selected for limited scrutiny, therefore, no infirmity can be attributed to his order, for the reason, that he had failed to dwell upon certain other issues which did not form part of the reasons for which the case was selected for limited scrutiny under CASS. We thus not being able to concur with the view taken by the Pr. CIT that the order passed by the A.O under Sec. 143(3), dated 08.12.2016 is erroneous, therefore, set aside his order and restore the order passed by the A.O. As we have quashed the order passed by the Pr. CIT u/s 263 on the ground of invalid assumption of jurisdiction by him, therefore, we refrain from adverting to and therein adjudicating the contentions advanced by the ld. A.R on the merits of the case, which thus are left open.
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2019 (12) TMI 25
Addition on investment in properties - HELD THAT:- With regard to the claim of the assessee that the sum of ₹.3,83,000/- would have been paid earlier in the assessment year 1998-99 for the purchase of the Crawford land property, the assessee has not brought on record any material evidence. Moreover, from the purchase deed, the AO noticed that the entire consideration was paid for the purchase of the Crawford land property on the day of registration on 09.05.2001, which is relevant to the assessment year 2002-03. In the absence of any material evidence, we find no infirmity in the order passed by the authorities below. Thus, the ground raised by the assessee stands dismissed. Addition made on account of investment in individual money lending and interest income from private financing - HELD THAT:- As in assessee s partner s case [ 2016 (10) TMI 882 - ITAT CHENNAI] Tribunal has deleted the addition by observing that estimation of interest made by the AO at 25% was highly arbitrary and without any supporting materials. The above case law has no application to the facts of the present, because, by considering the system of money lending business explained by the assessee as well as gist of computation of income filed in the return of income for the assessment year 1999-2000 is the only basis for quantifying the rate of interest in the assessment year under appeal by the AO. Assessee s partner s case, the basis for quantification of interest was not on record and nothing was available in the Tribunal s order. Therefore, we are of the considered opinion that the above additions made by the Assessing Officer was validly confirmed by the CIT(A). Thus, the grounds raised by the assessee stand dismissed. Disallowance of agricultural income - HELD THAT:- What is possible to earn from the agricultural land is not the matter of dispute. In the absence of books of accounts for the agricultural operations in the dry land of 5.5 hectares, the Assessing Officer estimated the income at ₹.38,000/-, is admittedly very low, but the claim of the assessee of earning ₹.1,10,000/- (assessee s share) from the dry land is also exorbitantly higher. Though the Tribunal is of the considered opinion that the agricultural sector continues to remain unorganized and the agricultural produces are sold in an unregulated market, considering the relevant financial year as well as lack of details of the crop cultivated in the dry land, we are of the considered opinion that 50% of the claim of assessee s share of income would meet the ends of justice. Accordingly, we give relief to the extent of ₹.55,000/- and the balance disallowance of ₹.55,000/- stands confirmed. Thus, the ground raised by the assessee is partly allowed.
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2019 (12) TMI 24
Addition on account of capitalization of share listing expenses - HELD THAT:- The status of the company is one in which public is substantially interested and for that purpose listing of shares in the stock exchange would assume importance so far as the public limited company is concerned. The business of the company also carries better prestige and better status when its shares are listed in the stock exchange. Such listing adds several advantages to the business carried on by the company, particularly in the matter of confidence of customers and loyalty of employees, which generate value. The expenditure on account of listing fees paid to the stock exchange could not be said to be capital expenditure, and that it shall have to be regarded as expenditure of revenue nature. Therefore, for the reasons we do not find any infirmity in the order of the learned CIT A in deleting the above disallowance noting that there is no increase in the capital base of the assessee company. In view of this, we dismiss ground number 1 of the appeal of the learned AO. Disallowance of 50 % of the expenditure on account of the community development donation expenses under section 37 (1) - HELD THAT:- Following the decision of the honourable Karnataka High Court in case of CIT vs. Infosys Ltd [ 2013 (7) TMI 451 - KARNATAKA HIGH COURT] , we do not find any reason to sustain the order of the learned CIT A upholding the above disallowance. Further the reasons given by the learned CIT A that as the PSU are directed by Government Of India to incur certain expenditure in the form of corporate social responsibility, if such expenditure are allowed to them as deduction, then in case of private corporate assessee also the above expenditure is to be allowed. We do not find this just‟ reason for confirming the disallowance. Express provision of disallowance of the corporate social responsibility expenditure is provided under explanation 2 of the provisions of section 37 (1) of the income tax act with effect from 1/4/2014 by The Finance (Number 2) Act, 2014. Thus, prior to that it is clear that no such disallowance was provided in the law. As the honourable Karnataka High Court has held that such expenditure is allowable to the assessee u/s 37 (1) of the income tax act as it is wholly and exclusively incurred for the purposes of the business, we are of the view that such disallowance can only be made after 1/4/2015, if at all. - Decided in favour of assessee.
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2019 (12) TMI 1
Deduction u/s. 80P - HELD THAT:- The Citizen Co-operative Society Ltd. Vs. ACIT [ 2017 (8) TMI 536 - SUPREME COURT] is not applicable in Assessment Year 2016-17 in the present case. In reply, the ld. AR of assessee made various submissions such as no power to remove any existing associated member and no/negligible transaction with good no. of associated members but find no merit in these contentions because I find that till Assessment Year 2015-16, the number of associated members was well within the limit prescribed as per the provisions of section 18 of the Karnataka Cooperative Societies Act, 1959 amended w.e.f. 06.09.2014 and thereafter, the assessee has admitted 233 new associated members in violation of the provisions of the Karnataka Cooperative Societies Act, 1959 and hence, it is seen that in the present case in Assessment Year 2016-17, the assessee society has intentionally violated the provisions of the Karnataka Cooperative Societies Act, 1959 and hence, this judgment of the Hon ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT (supra) is squarely applicable in this year and respectfully following the same, I hold that the present assessee is not eligible for deduction u/s. 80P in Assessment Year 2016-17. In the result, the appeal filed by the assessee for Assessment Year 2016-17 is dismissed. Number of associated members is well within the prescribed percentage of 15% of regular members and hence, on this aspect, there is no violation of the provisions of the Karnataka Cooperative Societies Act, 1959 in Assessment Year 2015-16. In Assessment Year 2015-16 also, the AO and ld. CIT(A) has followed the same judgment of the Hon ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT (supra) without any specific finding as to which provisions of the Karnataka Cooperative Societies Act, 1959 is being violated by assessee society in Assessment Year 2015-16. Hence, I feel it proper to restore the matter back to the file of ld. CIT(A) for fresh decision in Assessment Year 2015-16. Hence set aside the order of ld. CIT(A) in Assessment Year 2015-16 and restore the matter back to his file for fresh decision.
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Customs
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2019 (12) TMI 23
Release of detenue - Smuggling - Drones - COFEPOSA Act - petitioner stated that the alleged recoveries in the present case had been falsely attributed to the detenue inasmuch as the concerned officer had illegally clubbed all the recoveries made from four different passengers and attributed the same to the detenue - HELD THAT:- This Court is of the view that the ownership of the recovered goods had been attributed to the detenue on the basis of the voluntary statements made by other accused persons namely Mr. Harmeet Singh (brother of the detenue), Mr. Sumit Varma, Mr. Sourabh Chopra, Mr. Amarjeet Singh and co-accused/partner of the detenue Mr. Gurpreet Singh. Perusal of the voluntary statements made by them under Section 108 of the Customs Act shows that they had been carrying the recovered goods on the instructions of the detenue and he was in fact, the real owner of all the goods recovered. Consequently, the contention of the petitioner that the Custom officers had illegally clubbed all the recoveries to exaggerate the value of the goods is contrary to facts. This Court is of the opinion that the present case squarely falls under clause a of the exceptions provided under the notification as the detenue was a kingpin and a repeat offender and according to the material placed on record, it was the fifth offence of smuggling in which the detenue had been found involved - The fact that the detenue was a kingpin and a repeat offender and had indulged in smuggling activities prior to the impugned detention order being passed against him proves that he had the propensity and potentiality to continue with such acts and/or finance other persons to commit such acts in future. In any event, there is evidence to show that the detenue need not travel outside India to commit an offence of smuggling as he was a kingpin who had multiple associates who had been smuggling goods into India at his behest. Keeping in view his past conduct, there seems to be every likelihood of him indulging in the activities of smuggling. Consequently, the likelihood of the detenue indulging in smuggling activities was not effectively foreclosed by deposit of his passport - This Court also finds that the bail applications preferred by the detenue were a part of the relied upon documents of the detention order and in the grounds of detention, the Detaining Authority had noted that even though the detenue was in judicial custody, yet there was an immediate possibility of him being released on bail and continuing with illegal acts of smuggling. The same proves that the detaining authority had justifiable reasons to pass the impugned detention order to prevent the detenue from indulging in illegal acts. This Court is of the view that the Detaining Authority committed no error in passing the impugned detention order against the detenue. The impugned order had been passed against the detenue after due consideration of the evidence, which clearly shows that the detenue had been involved in smuggling of commercial quantities of drones, prohibited cigarettes, electronic items etc. into India and had an inclination to indulge in such activities had he not been prevented from doing so - impugned order upheld - petition dismissed.
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2019 (12) TMI 22
Revocation of Customs Brokers (CB) License - forfeiture of security deposit - time limit for issuance of offence/enquiry report - main contention of the petitioners in all these cases is that the time prescribed under the Regulations for doing each act is mandatory and therefore, if no such act is done within the time prescribed, the same cannot be sustained. HELD THAT:- The Authority, who suspends the license/revokes the license/imposes penalty, should act/issue certain proceedings within the time stipulated therein. Under 19(1) of 2013 Regulations, the Commissioner of Customs is empowered to suspend the license in an appropriate case, where immediate action is necessary and where an enquiry against such agent is pending or contemplated. It is further seen that if a license is suspended under Sub Regulation (1) of Regulation 19, the Commissioner shall give an opportunity of hearing to the customs broker within 15 days from the date of suspension of license and pass such order, as he deems it fit, either revoking the suspension or continuing it within15 days from the date of hearing granted to such customs broker. In case, the Commissioner passes an order for continuing the suspension, further procedure thereafter shall have to be followed as provided under Regulation 20. This Court, after considering the scope of the relevant regulation and the time frame fixed therein and also after following the Division Bench decision of the Delhi High Court in IMPEXNET LOGISTIC VERSUS COMMISSIONER OF CUSTOMS (GENERAL) [ 2016 (6) TMI 348 - DELHI HIGH COURT] found that the time limit fixed is mandatory and that the Enquiry Report filed beyond the period of 90 days cannot be considered as a valid report and consequently, further proceedings cannot be allowed to go as a follow up action. No doubt, under the Regulations, it is not specifically stated as to what would follow as a consequence if each and every act contemplated under the Regulations is not done or completed within the prescribed time limit. Merely because the Regulation does not prescribe or spell out expressly or specifically as to what would be the consequence, there could be no presumption that there is no consequence at all in these cases - a broker, whose license is suspended and is not visited with any further order within the time limit prescribed, is undoubtedly deprived of his business endlessly and thus, such hardship detrimental to the interest of the licensee is to be treated and viewed as consequence. Likewise, the revocation of the license or imposing penalty should also be done within the time prescribed so that the customs house agent will be in a position to know where does he stand. In this case, non compliance of the time limit would certainly affect the interest of the customs house broker and therefore, the above said decisions relied on by the respondents are not applicable to the present facts and circumstances. In other words, it is obvious that by not adhering to the time limit, the substantial right of the licensee to continue the business is affected and therefore, it is evident that only to protect such substantial right, the time limit is prescribed under the regulations and thus, the compliance of the same is mandatory and not directory. Petition allowed.
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2019 (12) TMI 21
Rectification of mistake - it is pointed out that the order dated 5 July 2018 of the Tribunal should be restricted only to the proceedings emanating from notice dated 28 June 2017 as the Appeal of the revenue from order of the Commissioner dated 29 September 2017 to the extent it emanated from notice dated 23 October 2015 is pending before the Division Bench of the Tribunal - HELD THAT:- The Tribunal ought to have allowed the Petitioner s rectification application and restricted its order dated 5 July 2018 only to the show cause notice dated 28 June 2017 by which the Petitioner was aggrieved. The Tribunal could have addressed the above issue in favour of the Petitioners while disposing of the rectification application. Thus we set aside the impugned order dated 11 July 2019. The parties are ad-idem that the order dated 5 July 2018 of the Tribunal deals only with the Petitioner s appeal and not with the Revenue s appeal which is pending with the Tribunal. Therefore, instead of restoring the Petitioners rectification application to the Tribunal for final disposal, we make it clear that the order of the Tribunal dated 5 July 2018 is only restricted to the Petitioner s appeal arising on account of confirmation of the show cause notice dated 28 June 2017 - petition disposed off.
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2019 (12) TMI 20
Smuggling - Gold Bars - Detention order - Sub-Section (1) of Section 3 of COFEPOSA Act - petitioner contended that the satisfaction of the Detaining Authority was vitiated inasmuch as the retraction made by Mr. Adel Saeeed Ghulam was not placed before the Detaining Authority - HELD THAT:- This Court is of the view that the petitioner s contention that investigation is incomplete in the present case or that the detention order is based on perfunctory and inchoate material, is contrary to the facts. In fact, as smuggled gold had been found concealed in the consignment imported by the petitioner, there is no dispute or inconclusiveness of the allegations in the present case - Moreover recovery of smuggled gold proves that the petitioner has the propensity as well as potentiality to indulge in similar acts of smuggling of goods into India and it further proves existence of live-link. Retraction of statements - HELD THAT:- The detaining authority could not have considered the retraction made subsequently by Mr. Adel Saeeed Ghulam - Also, as there is no denial by the petitioner to the fact that the retraction by Mr. Adel Saeeed Ghulam had been made post the detention order dated 15th March, 2019 having been passed, there was no occasion for the Detaining Authority to have considered the same prior to passing the impugned order. There is no illegality in the impugned order - Petition dismissed.
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2019 (12) TMI 19
Levy of penalty - mis-declaration made by the exporter - goods remained as unclaimed for almost two years - Confiscation - imposition of redemption fine and penalty - mis-declaration of imported goods - goods lying abandoned in customs custody - appellant submitted that owing to mis-declaration made by the exporter, appellant had neither released the import documents from the bank upon payment nor filed bills of entry for release of goods but penalty has been imposed on it - HELD THAT:- After alert was issued by the CIU on 03.11.2008, the goods in question was lying abandoned in the Customs custody up to 18th June, 2010 till the request for amendment was made by the Shipping Line. Except the statement of the proprietor of the appellant firm and Managing Director of the intended importer M/s Diamond Mink Blankets Ltd. recorded under Section 108 of the Customs Act, other documentary evidence on record is available to substantiate that appellant was earlier engaged in mis-declaration or undervalued imported goods and not a single reference like bill of entry number is made to that effect that would provide any detail concerning involvement of appellant in previous occasions. It appears to be a self-exculpatory statement given under Section 108 of the Customs Act, but no materials evidence on record has been placed by the respondent-department that would substantiate involvement of the appellant firm in the alleged transaction except that of the reply of the appellant regarding his source of acquirement of knowledge of discrepancy in the item supplied to the appellant firm - However, suspicion however strong cannot take the place of proof to established guilt of the appellant. Penalty - HELD THAT:- The ground taken in the Order-in-Original and Order-in-Appeal with reference to sub-Section (iii) of Section 30 of the Customs Act, 1962 is of no use to impose penalty on the appellant in view of the fact that import manifest or import report, even if considered as incorrect and done with fraudulent intention since was not established to have been done by the appellant, amendment may only be refused on that ground that would have bearing on the exporter or the intended purchaser and not on the appellant - penalty set aside. The penalty imposed on the appellant is unsustainable and the same is required to be set aside - Since appellant had not placed any claim over the imported goods, no finding is required to be given on the confiscation order and its redemption upon payment of fine at this stage which is not under challenge in the forum by the claimants - appeal allowed in part.
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2019 (12) TMI 18
Continuation of Anti Dumping Duty (ADD) for a further period of 5 years - Legality of second sunset review of the duty which was initiated at the behest of Appellant-domestic industry - imports of Nonyl Phenol from Chinese Taipei - case of appellant is that the nature of exercise to be undertaken in the sun set review proceedings is different from the initial exercise which is directed with the objective whether anti dumping duty is warranted or otherwise. Whether the conclusions and the recommendations of the designated authority dated 11.01.2019 against continuation of anti dumping duty on the subject goods Nonyl Phenol from the subject country Chinese Taipei, pursuant to the sunset review, is correct in law or otherwise? HELD THAT:- The decisions in the cases of M/S. PT. ASAHIMAS CHEMICALS VERSUS DESIGNATED AUTHORITY/ MINISTRY OF FINANCE [ 2015 (2) TMI 912 - CESTAT NEW DELHI] and THAI ACRYLIC FIBRE CO. LTD. VERSUS DESIGNATED AUTHORITY [ 2010 (4) TMI 389 - CESTAT, NEW DELHI] considered - the object and purpose of the sunset review as explained in the aforesaid judgments, precisely is to examine as to whether on removal of anti dumping duty, there is likelihood of recurrence of dumping and injury to the domestic industry. It has also been held that the degree and extent of dumping and consequent injury to the domestic industry during the POI is not of much relevance. The mandate or requirement under Section 9A(5) of CTA,1975 read with Rule 23 of Anti dumping Rules,1995 and Annexure-II (vii) is that the authority has to examine all relevant aspects to ascertain the likelihood of dumping and injury, once the present anti dumping duty is removed. It is obvious that such determination cannot be based on a guess work or on mere assumption presumption, but definitely to rest on the past present facts, influencing the trend of dumping, resultant injury, performance and other relevant economic and other factors relating to the domestic Industries as well as the exporting Industries/countries to analyse and arrive at a probable situation of continuation of dumping and injury in future to the domestic industry. In the present case, admittedly there has been no participation by the exporting industries in the investigation conducted by the DA. The relevant data have been provided by the Domestic Industry and no serious dispute in this regard i.e. authenticity/correctness of the data raised by the DA or interested opposing parties and the data had been accepted without reservation - The finding and conclusion of the designated authority, reproduced below, in nut shell indicates that since the health and condition of the domestic industry is not in bad shape during the relevant period and also as the Appellant could not prove/establish from the existing facts and evidences that there is any likelihood of dumping and injury to the domestic industry that would recur in future once the duty is removed extension of antidumping duty is not warranted. There is a fundamental fallacy in the approach of the DA in the determination of likelihood of recurrence of dumping and injury post removal of the duty on the subject goods from the subject country. There is no dispute of the fact that evidence of past and present circumstances is relevant and necessary to arrive at a reasonable and logical determination of continuation of same scenario in future warranting continuation of antidumping duty or otherwise. However, it is impractical and also illogical to insist on the positive evidences on future events, for determination of the likelihood of dumping and injury in future on removal of duty - the Appellant domestic industry could reasonably establish through present and past evidence that most of these parameters are satisfied in the present case. The dumping margin is in the range of 10-15% and is positive and above de-minimis. Despite anti dumping duty, the earning of domestic industry is meagre 2% and return of capital is around 5% against the normal return of 22%. The landed value of import without anti dumping duty are below the cost of production of domestic industry. The conclusions and the recommendations of the Designated Authority dated 11.01.2019 is not agreed upon - The same is liable to be set aside and consequently the conclusions and recommendations is set aside and matter remanded to the Designated Authority to calculate the appropriate anti dumping duty while taking note of overall circumstances of the case - appeal allowed by way of remand.
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2019 (12) TMI 17
Valuation of imported goods - related party transactions - rejection of declared value - Rule 5 to Rule 7(a) of Custom Valuation Rules, 1988 - all points were not considered - principles of natural justice - HELD THAT:- It is clear that none of the submissions made by the appellant were considered by the adjudicating authority for the reason that these submissions were not before him when the matter was adjudicated by him. Also from the observations made by the Commissioner (Appeal) in his order, and reproduced in para 1.2, supra it is clear that Commissioner (Appeal) too have not considered the defence submission - Thus it is clear that orders have been passed without considering the defence submissions and hence is in violation of principle of natural justice, which clearly state audi alteram partem i.e. nobody should be condemned unheard . The matter needs to be remanded back to the concerned adjudicating authority for reconsideration - Appeal allowed by way of remand.
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2019 (12) TMI 16
Violation of the provisions of Section 4 of Competition Act, 2002 - Anti competitive clauses - Appointment as State Trading Enterprise (STE) under Notification issued by DGFT - removal of the clauses in the SOP which are anti-competitive - direction to permit export of BSMs regardless of the Notification and the SOP, during pendency of the information - Commission notes that the Informant is mainly aggrieved by the policy of OP-1, which has brought exports of BSMs under STE regime, and allegedly onerous terms of SOP for exporters. HELD THAT:- The Commission observes that STEs deal with export/import of products in pursuance of government policies in relation to products/industries considered to have strategic importance. The Commission also notes that BSMs, inter alia, have space, defence and atomic applications and have also been specified as Atomic Minerals under the provisions of the MMDR Act and Prescribed Substances under the provisions of the Atomic Energy Act, 1962 - The Commission observes that the impugned allegations arise from the policy formulation by OP-1 regarding export of BSMs under the provisions of FTDR Act and FTP and implementation thereof by OP-3. Having looked into the nature of allegations raised by Informants the Commission is of the considered view that change in export policy by OP-1 in pursuance of its statutory duties and implementation thereof by OP-3 are not amenable for examination within the framework of Section 4 of the Act - the Commission is of the view that no case of contravention of the provisions of the Act is made out against OPs.
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Corporate Laws
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2019 (12) TMI 15
Winding up petition - Official Liquidator's Report has been filed on the basis that the ex-directors of the Company in Liquidation have colluded with the partners/directors of the alleged tenants - Appointment of liquidator of company - physical possession of property - HELD THAT:- The record reveals gross collusion between the ex-directors of the Company in liquidation and the directors/partners of the tenants. All the suits referred to above have been filed by the tenants in the year 2011, which is the same year in which the Company Petition was filed against the Company under Sections 433 and 434 of the Companies Act. It is during that time, the tenants, claiming a right in the assets of the Company (in liquidation), approached the Courts in Mumbai and in Surat, where the various assets of the Company are situated and obtained orders/decrees from the Courts, which forms the underlying basis on which the tenants are claiming protection and have obstructed the Official Liquidator from taking possession of the assets of the Company in liquidation. It is an admitted fact that the properties are the assets of the Company in liquidation. Hence, under the scheme and the provisions of the Companies Act, 1956, this Court is required to protect the assets of the Company in order to not defeat the rights of the workers and the creditors of the Company. The record reveals a shocking state of affairs, which supports the stand of the Official Liquidator of the collusion and fraud on part of the ex-directors of the Company and the tenants. The relationship between the ex-directors of the Company and the directors/partners of the tenants is not in dispute. It is also not in dispute that the orders/decrees passed by the Courts are passed after the order of winding up was passed - In view of the record and facts extensively dealt by me above, it can be hardly contended by the tenants that the orders/decrees were not collusive and/or that no fraud was played by the tenants and the ex-directors of the Company on the Courts in Mumbai and Surat. The orders/decrees passed by the Courts in favour of tenants declaring them to be tenants are a nullity in the eyes of law and are declared illegal and void, as being coram non judice and hence not binding on the Official Liquidator of the Company (in liquidation) - tenants are directed to handover physical possession of the properties set out in paragraphs 7 and 8 above within a period of one (1) week from the date of uploading this Order - application disposed off.
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Service Tax
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2019 (12) TMI 14
Levy of service tax - constructions of complex services - Consulting Engineer Service - period 01.04.2007 to 31.03.2012 - time limitation - HELD THAT:- The present SCN is issued on 19.10.2012. The explanation was added on 1-7-2010, the services rendered by the appellants before the issuance of completion certificate were not taxable as they were deemed to be services rendered by the builder to himself. CBECD circular dated 29-1-2009 and the trade Facility notice No 1/2011 dated 15-2-2011 issued by Pune Commissionerate have amply clarified that same - As submitted by the appellants, the tribunal has consistently taken the stand that the explanation inserted in 2010 cannot be retrospective. Under the circumstances, it is to be held that such service was not liable to service tax before 1-7-2010. Extended period of limitation - HELD THAT:- Department was well aware of the activities and transactions while issuing the first show cause notice itself. Therefore, no suppression could be held against the Appellants and invoked while raising demand for the subsequent period - extended period cannot be invoked in subsequent SCN, more so, when the first SCN itself was issued invoking extended period. Classification of services - Construction of Residential Complex service or not - construction of villas - HELD THAT:- The construction of villas would not fall within the ambit of construction of residential complex service and no service would be liable to be paid on villa receipts. Regarding the activity of construction undertaken by the appellant in respect of other residential complexes, we find that the appellants have submitted various decisions. They appear to be diverse and the issue has not reached finality - the demand on this count if any is sustainable for the normal period i.e. 1-4-2011 to 31-3-2012. Learned Counsel further submits that the Commissioner has not considered their submissions in the impugned order - the case needs to go back to the original authority, to appreciate the evidence submitted by the appellants and to re-quantify the duty liability for the period 1-4-2011 to 31-3-2012. Consulting Engineer Service - penalty - appellants have submitted that they are not contesting the duty paid by them in respect of Consulting Engineer s Service . However, they submit that the penalty may be set aside on the ground that entire tax was paid before the issuance of Show Cause Notice - HELD THAT:- In respect of Construction of Residential Complex , we hold that most of the demand has been held to be barred by limitation. Consequentially, the penalty also is not imposable for the period. Moreover, looking in to the facts and circumstances of the case, where the issue is mired by frequent changes in law, clarifications and judicial pronouncements, it is not proper to allege that the appellants had a mens rea in the case. Therefore, for extended period penalty is not imposable. For normal period also, there are enough conditions to waive penalty in terms of Section 80 of Finance Act, 1994 - In respect of Consulting Engineer s Service as the demanded duty is paid before the issuance of notice, no penalty can be imposed - penalty set aside. Appeal allowed in part.
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Central Excise
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2019 (12) TMI 13
Clandestine removal - job-work - contracts of fabrication of structures and erection of the same in various sites of builders - it is alleged that the appellants have manufactured excisable goods and cleared them without payment of duty - corroborative evidences or not - HELD THAT:- It is abundantly clear from the work orders that the work has been of a composite nature and fabrication of large items has been done at the site. Therefore, it is not correct to allege that the entire amount received by the appellants as shown in the balance sheet pertains to the value of excisable goods alleged to have been manufactured. The allegation of clandestine manufacture and clearance is a very serious charge. The department was required to prove right from the procurement of raw material, use of raw material along with other inputs, deployment of labour, consumption of power, manufacture of final products, transportation of final products to the alleged destinations and financial flow there upon - None of the above parameters have been conclusively addressed by the Department. In fact, the appellant claimed and has demonstrated the figures from the balance sheet pertaining to the power consumption in the unit. No contra evidence has been adduced by the Department. There are force in the arguments of the appellants that the structures fabricated and erected by them are so huge that it would be neither feasible nor economical to transport them from their factory premises to the premises of the projects. In the case of projects undertaken at other places than Bangalore, it will be fallacious to assume that such structures are transported to far of places like New Delhi, Bellary, Baddi, etc. Similarly, no proof of deployment of labour and use of other raw material, etc., has been put forward. From the statement of Mr. Mohammed Yamin Khan, it is only evident that sometimes they fabricate smaller items in the factory. As discussed above, we find that for this reason, it cannot be said that they have manufactured the entire goods in their factory premises. Moreover, even if there is an oral evidence in the form of a statement, it requires to be corroborated by documentary evidence - there are no such evidence has been put forth. Under the circumstances, we find that the allegations of clandestine manufacture and removal do not sustain. Penalty - HELD THAT:- When the duty liability is not sustained, consequentially, the penalties also do not sustain. Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 12
Suo-moto credit of duty paid - price revision clause - compounded levy scheme - the appellant was entitled for refund on pro-rata basis for reduction in the price, for the period from 13 April 2010 to 30 April 2010, as per 5th proviso to Rule 9 of Chewing Tobacco Un-manufactured Tobacco Packing Machines (Capacity Determination Collection of Duty) Rules, 2010 - HELD THAT:- The Chewing Tobacco Un-manufactured Tobacco Packing Machines (Capacity Determination Collection of Duty) Rules, 2010 has explicitly provided that in case of revision of rate of duty, the department should itself refund the differential duty paid which is in excess of the revised rate. Proviso to Rule 9 clarifies that there is no need of filing any application. Department was duty bound to give refund by 20th day of the following month. Therefore, the appellant s action of taking suo-moto credit on 20 May 2010 is in accordance with the 5th proviso to Rule 9 of Chewing Tobacco Un-manufactured Tobacco Packing Machines (Capacity Determination Collection of Duty) Rules, 2010 - there are no illegality or incorrect in taking suo-moto re-credit by the appellant. Therefore, the order inasmuch as for demand of differential duty and penalty, is set-aside. Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 11
Clandestine removal - confiscation - redemption fine - manufacture of goods in the brand name which was not registered - HELD THAT:- In the instant matter the appellant is neither challenging the Central Excise duty nor interest or penalty, rather the same have been accepted and deposited by the Appellant immediately after the passing of the Order-in-Original by the Adjudicating Authority - Had the department accepted the request of the Appellant and granted the benefit of notification No.01/2011 dated March 01, 2011 as amended vide Notification No.16/ 2012 CE, dated 17.3.2012, which was later on appreciated and accepted by the Adjudicating Authority, then the matter would have been settled even without the issuance of show cause notice - The Appellant had shown the bonafide by depositing the amount of duty along with interest and penalty and did not contest the same. In view of the facts of the present case this is not a fit case for confiscation of the goods and this case cannot be equated with the case of attempt to clear the goods clandestinely - the redemption fine is liable to be set aside. Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 10
Service of order - compliance with the time Limit for filing appeal - whether the order dated 29.08.2017 was delivered to the appellant on 12.09.2017 or the order was delivered on 06th August, 2018 by hand delivery/11th August, 2018 through speed post, and the time limited prescribed under Section 35(1) of CEA, 1944, has been adhered to or otherwise? - difference of opinion - present matter has been referred to third member by Hon ble President on account of difference of opinion in the Bench. HELD THAT:- The relevant dispatch register and speed post register maintained at the Division office have been placed before the Bench earlier and also today for examination. Besides the envelope bearing the speed post no. ER924187517IN issued on 01.9.2017 and the envelope bearing speed post no. ER956130766IN with its contents received by the Appellant on 11.8.2018 are also presented. The size of the former envelope is of 23cm 10cm and is a window envelope, whereas the second one is of 27cm 12cm size. On examination of these envelopes, it has been fairly accepted by all concerned that the first envelope is not fit enough to contain the order dated 29.08.2017, which of eleven pages and legal size paper. The learned Commissioner (Appeals) on the basis of the report of the Adjudicating Authority dated 20.11.2018 arrived at the conclusion that the Order-in-Original dated 29.08.2017 has been sent by speed post no. ER9241875719IN dated 01.09.2017 and thus the procedure prescribed under Section 37C of the Central Excise Act, 1944 has been complied with since the speed post has not been returned by the postal authorities to the Department. Also, from the correspondences independently undertaken by the learned Commissioner (Appeal) with the postal Department it was revealed that the said speed post letter was delivered - the appellant even though not disputed the receipt of the said speed post letter no. ER9241875719IN dated 01.09.2017 but contended that it was a letter written by the Range Superintendent to the Appellant in the context of applicability of service tax on the License/royalty fees, and the said envelope did not contain the adjudication order dated 29.08.2017 issued by the Assistant Commissioner. The department could not place any evidence to rebut the said claim of the Appellant. In the present case the appellant could able to demonstrate and rebut the presumption that the order dated 29.08.2017 could not have been delivered to them through the speed post and in fact they have not been communicated about the said Order on 12.9.2017 as held by the Ld. Commissioner(Appeals). Therefore, the finding of the learned Commissioner (Appeals) is unsustainable. In their separate orders, Hon ble President and Hon ble Technical Member have arrived at the same conclusion that the Order-in-Original is claimed to have been dispatched through Range office. Examination of the speed post register maintained at the division office indicates the speed post. The findings and conclusion of the Hon ble President that order dated 29.08.2017 has been communicated to the Appellant only on 06.08.2018, and the Appeal has been filed before Commissioner(Appeals) within the time limit prescribed under Section 35(1) of CEA,1944, is agreed upon - the matter is remanded to the learned Commissioner (Appeal) to decide the issue on merits. This order may be placed before the Division Bench for passing the Final Order.
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2019 (12) TMI 9
Demand of interest for delayed refund - relevant date for calculation of refund - earlier the amount was deposited towards recovery of refund proceedings - case of appellant is that they are entitled to claim interest from the date of deposit of the amount till its realization as the amount paid by the appellant as was not a duty - whether the appellant is entitled to claim interest from the date of deposit till its realization of the amount? HELD THAT:- The issue decided in the case of M/S. FUJIKAWA POWER AND M/S. KENZO INTERNATIONAL VERSUS CCE ST, CHANDIGARH-I [ 2019 (11) TMI 1197 - CESTAT CHANDIGARH] where it was held that the appellants are entitled to claim interest from the date of payment of initial amount till the date its refund @ 12% per annum. Thus, the appellant is entitled to claim the interest on delay refund from the date of deposit till its realization. The interest on the refund shall be payable @ 12% per annum - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2019 (12) TMI 8
Validity of assessment order - input tax credit - burden to prove - whether the assessee has discharged the burden of proving the claim of input tax credit on the payment of taxes alleged to have been made? - HELD THAT:- Without examining the discharge of burden of proving, merely on the ground that no selling dealer has deposited the collected taxes, input tax credit has been denied. This factual aspect requires to be re-considered by the Assessing Authority. Even as regards denial of input tax credit relating to the purchase of old used machinery from M/s. Saibaba Industries claimed as capital goods by the assessee is not supported by any satisfactory reasons. The assessment order impugned deserves to be set aside - appeal allowed by way of remand.
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2019 (12) TMI 7
Cancellation of registration of compensation scheme with retrospective effect - Karnataka VAT Act - Rule 137[2] of the KVAT Rules read with Section 15 of the Act - validity of notice impugned dated 9.2.2004 issued by the respondent No.4 to initiate reassessment proceedings for the tax periods April 2012 to March 2013 - time limitation. HELD THAT:- The order of cancellation is based on the inspection report dated 30.5.2015 forwarded to the Divisional VAT officer, D.V.Road, Mangalore, to take action to cancel the composition registration scheme granted under Section 15 (1) (c) of the Act. During the course of inspection on verification of the books of accounts relating to the business activities of the dealer, it was found that the petitioner is engaged in sale of Indian Made Foreign Liquor (IMFL) along with articles of food which is a condition prohibited for grant of composition under sub rule(4) of Rule 135 of the Rules. The order impugned does not traverse beyond this inspection report. The petitioner has not collected tax on his sales during the period of the operation of the composition scheme and has not claimed the input tax credit. Cancellation of the composition scheme retrospectively creates additional tax liability where the dealer has not collected the tax while opting for composition under Section 15 of the Act, otherwise the dealer was entitled to collect tax if the liability to pay tax was under Sections 3 and 4 of the Act. It is well settled that the retrospective withdrawal or cancellation of the registration certificate will have no effect upon the assessee who has acted upon it when it was valid and operative - In the present case, it is not in dispute that the petitioner had acted on the composition registration certificate issued by the competent authority and it had carried on its business on the basis of the said certificate. Thus it will be harsh for the respondents to assess the petitioner under the VAT regular scheme and demand the payment of tax even for that period for which the petitioner had carried on his business under the composition scheme. Cancellation of the composition certificate with retrospective effect would damage the business activity of the dealer with cascading effect denying the input tax credits which would have been claimed by the petitioner collecting the taxes on his sales for which maintaining of regular books of accounts would be necessary - Since the cancellation of composition registration certificate with retrospective effect cannot be approved, the re-assessment notice dated 09.02.2018 at Annexure-A2 deserves to be quashed. Petition allowed.
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2019 (12) TMI 6
Validity of assessment order - service of order - principles of natural justice - main grievance of the petitioner is that the impugned assessment order was passed in violation of the principles of natural justice, as the petitioner was not issued with any notice at any point of time before passing the impugned order - HELD THAT:- When the petitioner has specifically raised the ground that no notice was served on them at any point of time, then it is the bounden duty of the Assessing Officer to prove before this Court about service of such notice - In this case, the Assessing Officer failed to prove the service of notice. Therefore, this Court has to reasonably conclude that no notice was served on the petitioner before passing the impugned order - Therefore, without expressing any view on the merits of the matter, this Court is inclined to remit the matter back to the Assessing Officer for redoing the assessment, after gettiing a reply from the petitioner. The matter is remitted back to the Assessing Officer for redoing the assessment - petition allowed by way of remand.
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Indian Laws
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2019 (12) TMI 5
Constitutional validity of Section 87 of the Arbitration and Conciliation Act, 1996 - Validity of repeal (with effect from 23.10.2015) of Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 - sum awarded as arbitral award - repayment of pending dues - the Petitioner sought interim reliefs from this Court for the repayment of the said amounts from the Respondent PSUs, so as to enable it to repay its pending dues to its own operational creditors. HELD THAT:- A perusal of the rival contentions makes it clear that there is a factual dispute between the parties relating to: (I) the exact quantum of the arbitral-awards in favour of the Petitioner company due from the Respondent PSUs; (II) the amounts which may have already been paid and/or deposited by the Respondent PSUs in favour of the Petitioner company under the said arbitral awards; and (III) whether stay orders of competent Courts were passed in respect of these arbitral awards, and if so, whether they were under the automatic-stay mode or not. It is settled law that when exercising its jurisdiction under Article 32 of the Constitution, this Court cannot embark on a detailed investigation of disputed facts - This Court cannot, therefore, in exercise of its jurisdiction under Article 32 of the Constitution undertake a detailed investigation to determine the status of monies paid/deposited pursuant to arbitral-awards in favour of the Petitioner company. Consequently, no directions in respect thereof can be made in the present proceedings. A look at the circular dated 05.09.2016 shows that the scheme is in order that the hardship felt by the construction sector, thanks to the automatic-stay regime under Section 36 as originally enacted, be mitigated. It can thus be seen that the scheme is so that the construction sector can get the fruits of arbitral awards in their favour, which otherwise was not available at the time under the law. Dr. Singhvi s client was free to avail of the circular on its terms, or not to avail of the said circular. Having availed of the benefit contained in the circular, it is not possible for his client to now turn around and state, years after availing this benefit, that one part of the circular is onerous and should be struck down. Petition disposed off.
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2019 (12) TMI 4
Dishonor of Cheque - section 138 of Negotiable Instruments Act - territorial Jurisdiction - transfer of the case to another state - HELD THAT:- It is not in dispute that the plaintiff/appellant had filed his evidence by way of, affidavit and in the affidavit also he had mentioned about the pendency of complaint under Section 138 of the Negotiable Instruments Act against the respondent No.2/defendant. The aforesaid suit was last listed on 11.04.2017 for evidence of the plaintiff and on which date the plaintiff was cross examined by the counsel for the defendant/respondent No.2 in part. Fact remains that when the Gurugram Court transferred the matter vide order dated 29.10.2015, it was to be listed before the District Court, Delhi on 11.01.2016, however, it was not listed on that day. Thereafter, there was no information further to the appellant, as to when and where the matter was to be posted - in view of the peculiar circumstances of the present case and the fact that the appellant was running from pillar to post as complaint was initially filed at Delhi, thereafter transferred to Gurugram and then to Delhi again. The Trial Court is directed to restore the Complaint - parties are directed to appear before the concerned Court on 02.12.2019 - Petition allowed.
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2019 (12) TMI 3
Whether or not the 7th December, 2015 Order decided the necessary jurisdictional facts which in turn enabled CCI to pass the Impugned Order commencing investigation? HELD THAT:- A bare perusal of the 7th December, 2015 Order demonstrates that it pertains only to general/industry-wide issues relating to the concept of RIO and the law declared therein is intended to be prospective in operation. This is evident from the fact that TDSAT did not deal with the finer and specific issues of discriminatory conduct alleged by NSTPL against Media Pro, Taj and Star in the First TDSAT Petition. In fact, none of the specific reliefs sought against Media Pro, Star and Taj in the First TDSAT Petition were even considered, let alone granted, when passing the TDSAT Order. The 7th December, 2015 Order does not consider, let alone find, that NSTPL is similarly placed with other distributors. The order merely holds that HITS technology operators, being part of the addressable systems (as opposed to analogue/ non-addressable systems) are at par with other addressable system technology operators and must, therefore, receive the same treatment. The factors peculiar to NSTPL's market position, which would determine whether NSTPL is in fact similarly placed with other distributors such as (i) viewership, (ii) advertisement revenue potential, (iii) regional, cultural, linguistic considerations, and (iv) other special considerations have not even been considered in the 7th December, 2015 Order - the liability, once determined, will constitute the final adjudication of the rights and liabilities of the Petitioners and NSTPL inter se. In the Impugned Order, in order to hold a prima facie contravention of Section 3(4), CCI ought to have formed a prima facie view that there exists an agreement either between Star/Sony and NSTPL which provides for a refusal to produce, supply, distribute, store or trade in goods or provision of services with/to NSTPL and that such agreement causes AAEC - Since there is no prima facie finding by CCI on AAEC, according to us, the mandatory jurisdictional pre-requisite of a prima facie view of contravention of Section 3(4) is absent. Therefore, once again, we are unable to find any reasonable justification justifying CCI's failure to apply the aforesaid analysis whilst passing the Impugned Order. This being so, the Impugned Order cannot stand the test laid down under the Act. The present Writ Petitions against the Impugned Order are maintainable and this Court ought to interfere with the Impugned Order in view of the fact that the procedure laid down under the Competition Act was not adhered to whilst passing of the Impugned Order. Petition allowed.
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2019 (12) TMI 2
Right to seek information - Raid - whether a party to a case pending in a court can seek copies of documents which form part of the court record under the Right to Information Act, 2005? - interpretation of statute - prevailing of Delhi District Court rules over RTI Act. HELD THAT:- In view of Rule 7 (iv), (v) and (vi) of Delhi District Courts (Right to Information) Rules, 2008, there is exemption from disclosure of information which pertains to judicial proceedings or judicial functions of the court. The application of the respondent seeking a copy of a document which forms part of the judicial record would clearly be exempted from Rule 7 of the aforenoted Rules. In fact the said court where the suit of the respondent is pending has by a judicial order declined to provide the said document to the petitioner. The Delhi District Court rules will prevail - Petition allowed.
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