TMI Tax Updates - e-Newsletter
December 30, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax CST, VAT & Sales Tax

Highlights / Catch Notes

• GST:

  Transitional Input Tax Credit - seeking to allow filing of declaration in form GST TRAN-1 and GST TRAN-2 - seeking to reopening the portal - Some concrete solution is needed so that the directions issued by this Court is meaningfully complied with. The Nodal Officer is once-again present in the Court today. The Nodal Officer has heard the entire order, which has been dictated in his presence. We want the Nodal Officer to look into the second option also and try to find out a viable solution. - HC
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• GST:

  Refund - amount which was credited in the wrong account due to inadvertent mistake - Undoubtedly, it was a mistake which was committed by the consultant of the petitioner and therefore, the third party namely M/s. Meet Textiles had been benefited where the amount had been deposited - The amount once again has gone back to the authority by way of DRC-03 on 09.12.2020, hence, the only way out now for availing the legitimate claim of the petitioner is by depositing the amount in his account which he has mentioned. - HC
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• GST:

  Refund - amount which was paid during the course of investigation - It is the case of the petitioner that the amount was paid under coercion - There is no merits in this Writ Petition at this stage. The amount paid by the petitioner shall be treated as amount paid by the petitioner “under protest” and will be subject to the final appropriation in the proceedings to be initiated under Sections 73 / 74 of CGST Act, 2017. - HC
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• GST:

  Violation of principles of natural justice - Validity of assessment order - As adverse orders would have been passed against the petitioner, it was incumbent on the part of the respondents to issue a notice of personal hearing to the petitioner. Though in this case, admittedly the petitioner had filed the reply belatedly on 16.08.2021 having considered the reply and having decided to pass an adverse order, it was incumbent on the part of the respondents to call upon the petitioner for a personal hearing. - Matter restored back - HC
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• Income Tax:

  Validity of Section 194A(3)(ixa) - tax deducted at source on the interest payable under an award of the Motor Accident Claims Tribunal (“MACT”) - The petitioner is not personally aggrieved by the award of the MACT. A challenge of this nature would have to be brought before the Court by a person aggrieved. We see no reason to entertain a petition which is styled one filed in public interest. - SC
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• Income Tax:

  Seeking condonation of delay to file a revised return by an application u/s 119(2)(b) - Unfortunately, the assessee’s application u/s 119(2)(b) has been rejected on the ground that the same was filed beyond the period of 6 years, while observing that the Circular 9/2015 dated 09.06.2015 does not permit condoning the delay beyond 6 years. - Keeping in mind the the peculiar facts of the case, including that letter that could be construed to be a rectification application is not decided, noticing the merits of the claim for exemption, a fit case is made out for consideration of the revised return on its merits. - Delay condoned - HC
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• Income Tax:

  Reopening of assessment u/s 147 - High Court cannot form any opinion in respect of such findings to be made. Only endeavour of the High Court is to ensure that, whether the conditions stipulated and the process adopted for the purpose of reopening of assessment in consonance with the provisions of the Act - The reasons furnished in the case of the petitioner would be sufficient for the purpose of reopening of assessment as the case of the petitioner is initiated beyond a period of four years and therefore, the petitioner is bound to participate in the reopening proceedings - HC
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• Income Tax:

  Correct head of income - nature of receipt from lease/ rent - the assessee employed commercial assets to earn income. Unless and until the income is treated as business income, the scheme does not result on expected lines for losses; unavailed depreciation etc. will continue to be present in the accounts of assessee. The scheme is appreciated as one providing a solution to business problem of the assessee. - the claim of lease rental receipt as income of business is justifiable - HC
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• Income Tax:

  Addition u/s 68 - Estimation of rate of commission - brokerage rate on various bogus transactions - Inasmuch as the assessee accepted the commission at 0.6% by not preferring any appeal against the impugned order, we are not inclined to disturb the findings of the Ld. CIT(A) in this matter to the effect that the commission at 0.6% is appropriate. - AT
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• Income Tax:

  Addition on account of share premium as income from other sources - It becomes income of the assessee only by way of deeming legal fiction. We find that the residuary head “Income from Other Sources” falls in Chapter IV F of the Act. Hence what is added u/s 68 of the Act cannot be treated as income from other sources. The provisions of ‘Income from Other Sources’ starts from section 56 and ends with Section 59 of the Act. Section 68 of the Act falls in totally different chapter altogether. - the provisions of section 68 of the Act are not applicable in respect of addition in the facts and circumstances of the instant case. - once it is not chargeable to tax at all under any of the provisions of the Act, it cannot be brought to tax under the head ‘Income from other sources’. - AT
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• Income Tax:

  Unexplained investment in closing stock u/s. 69 - difference in the quantity of closing stock as per software - once the said software was stopped being used after the search due to its shortcomings and was also removed from all the systems, it was not possible for the assessee to give required details of stock as per Jilaba software - we found that the ld. CIT(A) has passed a well-reasoned and speaking order discussing all the facts and circumstances of the case - CIT(A) rightly deleted the additions - AT
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• Income Tax:

  Addition u/s. 56(2)(vii) - difference between the stamp duty guideline value and purchase consideration i.e. 50 percent u/s 56(2)(vii)(b) - the Department cannot be allowed a second inning by sending the matter back to the Assessing Officer enabling the revenue to fill the lacunae and shortcomings and further putting the assessee to face a re-trail for no fault of him and to prove before the Assessing Officer that the sale consideration was the fair market value of the property purchased by him - We delete the addition made by the AO u/s. 56(2)(vii)(b) of the Act. - AT
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• Income Tax:

  Addition being 40% of cash balance shown in the balance sheet as income of the assessee - A.O without any basis, simply says that the cash in hand is excessive and therefore, estimated 40% of the cash in hand as an income and subsequently, partial relief granted by the Ld. CIT(A) and when the assessee is explaining in detail without considering the same estimation made by the A.O without giving any reasons, in my opinion, it is not correct. Even, the Ld. CIT(A) has granted partial relief without giving any reasons why entire addition cannot be deleted. - Additions deleted - AT
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• Income Tax:

  Disallowance of deduction claimed u/s 10AA after claiming deduction / exemption u/s 10A - SEZ unit - As on the commencement of assessment year 2006-07, which is the effective date of operation of section 10AA, the unit has just claimed deduction under section 10A only for five assessment years and therefore, the assessee has submitted that the assessee company is entitled for deduction under section 10AA. - the assessee is entitled for deduction u/s 10AA(1)(ii) of the 1961 Act for the impugned assessment year, subject to fulfilment of other conditions for grant of deduction u/s 10AA of the 1961 Act. - AT
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• Income Tax:

  Penalty u/s. 271(1)(c) - unexplained loan creditors - as explained by the assessee that said difference is due to reconciliation of year end entries between assessee and his creditors. In our opinion, this cannot be considered as neither concealment nor filing of inaccurate particulars of income. Levying of penalty on this count is not justified therefore, the same is deleted. - AT
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• Income Tax:

  Assessment of income from other sources u/s. 68 r.w.s. 115BBE - As assessments for assessment years 2011-12 to 2014-15 are unabated / completed. Further, no reference of any incriminating material found as result of search in respect of additions made by the Assessing Officer towards disallowance of interest u/s.37 of the Act and for assessment of income from other sources u/s.68 r.w.s 115BBE of the Income Tax Act, 1961 - Additions deleted - AT
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• Customs:

  Refund claim of Special Additional Duty (SAD), which is in lieu of sales tax - rejection on the ground of time limitation - The Hon’ble Delhi High Court has also held that in the matters which deal with substantive rights, such as imposition of penalties and other provisions, that adversely affect statutory rights, the parent enactment must clearly impose such obligations; subordinate legislation or Rules cannot prevail, or be made in such case. - AT
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• Customs:

  Delayed refund - Levy of Interest - interest on excess amount of customs duty deposited under protest at the time of passing of the Bill of Entry on provisional basis - The appellant is entitled to interest from the date of deposit of duty till the date of grant of refund @ 6% P.A. (at the prescribed rate) - AT
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• VAT:

  Principles of Natural Justice - There has been lapse on the part of the petitioner which now is sought to be explained as a mistake and error committed by the petitioner. Once the petitioner itself admits that there were lapses and error on its part, it cannot be termed that there has been gross miscarriage of justice by the authorities requiring interference by the High Court at the very first instance. - HC
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Articles

• e-SHRAM PORTAL FOR UNORGANIZED WORKERS
• GST leviable on reimbursement of electricity and water charges and to be included in the value of supply
• ITC ineligible on CSR activities being excluded from normal course of business

Notifications

• Customs

• 105/2021 - dated 28-12-2021 - Cus (NT)
  Amendment in Notification No. 98/2021-CUSTOMS (N.T.), dated 16th December, 2021

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• GST

• 20/2021 - dated 28-12-2021 - CGST Rate
  Seeks to amend Notification No 21/2018- Central Tax (Rate) dated 26.07.2018

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• 19/2021 - dated 28-12-2021 - CGST Rate
  Seeks to amend Notification No 2/2017- Central Tax (Rate) dated 28.06.2017.

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• 18/2021 - dated 28-12-2021 - CGST Rate
  Seeks to amend Notification No 1/2017- Central Tax (Rate) dated 28.06.2017.

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• 02/2021 - dated 28-12-2021 - GST CESS Rate
  Seeks to amend Notification No 1/2017- Compensation Cess (Rate) dated 28.06.2017.

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• 20/2021 - dated 28-12-2021 - IGST Rate
  Seeks to amend Notification No 22/2018- Integrated Tax (Rate) dated 26.07.2018

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• 19/2021 - dated 28-12-2021 - IGST Rate
  Seeks to amend Notification No 2/2017- Integrated Tax (Rate) dated 28.06.2017.

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• 18/2021 - dated 28-12-2021 - IGST Rate
  Seeks to amend Notification No 1/2017- Integrated Tax (Rate) dated 28.06.2017

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• 20/2021 - dated 28-12-2021 - UTGST Rate
  Seeks to amend Notification No 21/2018- Union territory Tax (Rate) dated 26.07.2018.

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• 19/2021 - dated 28-12-2021 - UTGST Rate
  Seeks to amend Notification No 2/2017- Union territory Tax (Rate) dated 28.06.2017.

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• 18/2021 - dated 28-12-2021 - UTGST Rate
  Seeks to amend Notification No 1/2017- Union territory Tax (Rate) dated 28.06.2017.

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• GST - States

• S.O. 140/P.A.5/2017/S.168A/Amd./2021 - dated 12-11-2021 - Punjab SGST
  Amendment in Notification No. S.O. 41/P.A.5/2017/ S.168A/2021, dated the 22nd March, 2021

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• S.O. 138/P.A.5/2017/S.128/2021 - dated 12-11-2021 - Punjab SGST
  Amendment in Notification No. S.O.7/P.A.5/ 2017/S.128/2018, dated the 7th February, 2018

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• S.O. 137/P.A.5/2017/S.168A/Amd./2021 - dated 12-11-2021 - Punjab SGST
  Amendment in Notification No. S.O. 41/P.A.5/2017/ S.168A/2017, dated the 22nd March, 2021

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• S.O. 136/P.A.5/2017/S.148/Amd./2021 - dated 12-11-2021 - Punjab SGST
  Amendment in Notification No. S.O.66/P.A.5/2017/S.148/ 2019, dated the 31st May, 2019

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• S.O. 135/P.A.5/2017/S.128/Amd./2021 - dated 12-11-2021 - Punjab SGST
  Amendment in Notification No. S.O.61/P.A.5/2017/S.128/Amd./2019, dated the 9th May, 2019

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• S.O. 134/P.A.5/2017/S.168A/Amd./2021 - dated 12-11-2021 - Punjab SGST
  Amendment in Notification No. S.O. 41/P.A.5/2017/ S.168A/2017, dated the 22nd March, 2021

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• F.12(1)FD/Tax/2021-89 - dated 29-12-2021 - Rajasthan SGST
  Seeks to notify 01.01.2022 as the date on which the provisions of section 2, 3 and 7 to 15 of the RGST (amendment), Act 2021 shall come into force

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• F.12(1)FD/Tax/2021-88 - dated 29-12-2021 - Rajasthan SGST
  Seeks to bring sub-rule (2) and sub-rule (3), clause (i) of sub-rule (6) and sub-rule (7) of rule 2 of the RGST (Eighth Amendment) Rules, 2021 into force w.e.f. 01.01.2022.

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• Income Tax

• 139/2021 - dated 28-12-2021 - IT
  Faceless Appeal Scheme, 2021

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Circulars / Instructions / Orders

• SEBI - SEBI/HO/DDHS_Div2/P/CIR/2021/699 - dated 29-12-2021
  Non-compliance with provisions related to continuous disclosures
• Income Tax - 21/2021 - dated 28-12-2021
  One-time relaxation for verification of all income tax-returns e-filed for the Assessment Year 2020-21 which are pending for verification and processing of such returns

News

• Customs officials detect around 1 kg of cocaine ingested as pellets by passenger at IGI Airport, one arrested

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• International Financial Services Centres Authority (IFSCA) issues Request For Proposal (RFP) for Supervisory Technology (SupTech) System

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• Income Tax Department conducts searches in Chhattisgarh

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• Over 4.67 crore Income Tax Returns filed on new e-filing portal of Income Tax Department

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• Exchange rate Notification No.105/2021 - Customs (N.T.)

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Case Laws:

• GST

• 2021 (12) TMI 1227
  Seeking grant of Bail - input tax credit - forged documents - HELD THAT:- There is nothing in the record to show whether the input credit actually benefited the applicant. There is no evidence that the applicant was benefited from the aforesaid input credit tax. Courts have taken notice of the overcrowding of jails during the current pandemic situation . These circumstances shall also be factored in while considering bail applications on behalf of accused persons. The applicant is entitled to be enlarged on bail - application allowed.

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• 2021 (12) TMI 1226
  Transitional Input Tax Credit - seeking to allow filing of declaration in form GST TRAN-1 and GST TRAN-2 - seeking to reopening the portal - HELD THAT:- It appears that a second option has been given by the Calcutta High Court to take care of the problems like the one we are tackling with in the present application. The suggestion of the Calcutta High Court is that instead of directing the portal to be opened, the assessees who are facing such kind of difficulties may be permitted to file individual tax credit in the GSTR-3B Forms for the month of January 2022 to be filed in the month of February, 2022 and the concerned Authority/Assessing Officer would be at liberty to verify the genuineness of such claim. We expect the GSTN and the Nodal Officer to explore such possibility also as suggested by the Calcutta High Court. Some concrete solution is needed so that the directions issued by this Court is meaningfully complied with. The Nodal Officer is once-again present in the Court today. The Nodal Officer has heard the entire order, which has been dictated in his presence. We want the Nodal Officer to look into the second option also and try to find out a viable solution. Post the matters for further hearing on 12.01.2022. We hope and trust that atleast on 12.01.2022 a positive statement is made that the order/directions passed in the main matter has been fully complied.

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• 2021 (12) TMI 1225
  Refund - amount which was credited in the wrong account due to inadvertent mistake - refund of accumulated ITC as per Section 54(3) - mistakenly the consultant had given the bank account details of another client and thus, the details entered in the petitioner s GST is of one third party wrongly - HELD THAT:- It is not in dispute that due to the mistake of the consultant engaged by the petitioner, the amount has been deposited in the wrong account. The bank details are to be entered under RFD-05. The petitioner also did not raise the grievance immediately and made an application with reference to the said issue after nearly three months. The amount which had gone to the wrong account of M/s. Meet Textiles had been refunded on 09.12.2020 by way of DRC-03 under Section 73(5) by way of voluntary payment. The Deputy State Tax Commissioner Circle-16, Surat vide its communications dated 21.01.2021 and 11.02.2021 had requested the Joint Commissioner of State Tax E-governance, Gujarat State to resolve the peculiar issue on hand. It emerges that second time when the application had been made by the petitioner, the rejection has come as there is a technical glitch. Even by specifying that the refund is being claimed under the head others the system has not permitted the amount to be given by way of refund to the petitioner. Undoubtedly, it was a mistake which was committed by the consultant of the petitioner and therefore, the third party namely M/s. Meet Textiles had been benefited where the amount had been deposited - The amount once again has gone back to the authority by way of DRC-03 on 09.12.2020, hence, the only way out now for availing the legitimate claim of the petitioner is by depositing the amount in his account which he has mentioned. Let the same be done as the application has already been made. No further application will be necessary at a manual level. The officer concerned shall apply the mind and the deposit shall go directly in the account of the petitioner - Application disposed off.

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• 2021 (12) TMI 1224
  Seeking direction to allow the presence of applicant s advocate at a visible but not audible distance during the course of interrogation and/or recording of the statement of the applicant - HELD THAT:- Considering the role attributed to the present applicant in the alleged transaction, the applicant s advocate is permitted to be present during interrogation of the applicant, but he should be made to sit at a distance beyond hearing range, but within visible distance and the concerned advocate must be prepared to be present whenever the applicant is called upon to attend the interrogation. Application disposed off.

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• 2021 (12) TMI 1223
  Refund - amount which was paid during the course of investigation - seeking direction to respondent to pay the amount which was paid by the petitioner during the course when the officers of the respondent visited the premises of the petitioner and investigated - It is the case of the petitioner that the amount was paid under coercion - Wrong availment of Input Tax Credit - HELD THAT:- The amount paid by the petitioner are only deposits pending proper adjudication under Section 73 / 74 of the CGST Act, 2017. It appears that the amounts were collected from the petitioner during March 2021, at the time when summons were also issued to the petitioner, Mahazar was drawn and seizure memo was also issued to the petitioner on the same date. The petitioner also appears to have sent a representation on 01.04.2021. There is no merits in this Writ Petition at this stage. The amount paid by the petitioner shall be treated as amount paid by the petitioner under protest and will be subject to the final appropriation in the proceedings to be initiated under Sections 73 / 74 of CGST Act, 2017. The respondents perhaps are investigating and therefore, seized the documents from the petitioner - the respondent is also directed to return the photo copies of the seized documents to the petitioner, if they have not been already returned to the petitioner. Petition disposed off.

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• 2021 (12) TMI 1222
  Violation of principles of natural justice - validity of assessment order - opportunity of personal hearing as is contemplated under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017, not provided - HELD THAT:- Though specifically the petitioner has not requested for a personal hearing in the aforesaid reply/representation, the respondents have proceeded to pass the impugned orders by confirming the demand proposed in the notice. As adverse orders would have been passed against the petitioner, it was incumbent on the part of the respondents to issue a notice of personal hearing to the petitioner. Though in this case, admittedly the petitioner had filed the reply belatedly on 16.08.2021 having considered the reply and having decided to pass an adverse order, it was incumbent on the part of the respondents to call upon the petitioner for a personal hearing. The impugned orders stand quashed and these cases are remitted back to the respondents to pass a speaking order after giving an opportunity of hearing to the petitioner on the reply/representation made by the petitioner on 16.08.2021 - Writ Petitions stand disposed off.

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• 2021 (12) TMI 1221
  Cancellation of registration of registration of petitioner - non filing of returns for a continuous period of six months - non-deposit of interest liability against late discharged cash payment - HELD THAT:- The appellant has filed and submitted copies of GSTR-3B return for the period April-2020, and May-2020, June-2020, July-2020, August-2020, and September-2020 respectively and also submitted copy of Form DRC-03 ARN No. AD0802210113550 dated 22.02.2021 amounting to ₹ 61,064/- towards payment of due interest liability. The appellant has filed returns upto date of cancellation of registration hence, the appellant has substantially complied with the said provisions of the CGST Act/Rules,2017 in the instant case. Therefore, the registration of appellant may be considered for revocation by the proper officer. The proper officer to consider the revocation application of the appellant after due verification of payment particulars of tax, late fee, interest and status of returns - Appeal disposed off.

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• Income Tax

• 2021 (12) TMI 1220
  Validity of Section 194A(3)(ixa) - tax deducted at source on the interest payable under an award of the Motor Accident Claims Tribunal ( MACT ) - petitioner had filed a writ petition initially before the High Court of Delhi which was disposed of by granting him liberty to move the Central Board of Direct Taxes ( CBDT ) in a representation - fresh writ petition challenging the decision of the CBDT was dismissed both on the grounds of locus and delay with liberty to file a public interest litigation. HELD THAT:- The petitioner is not personally aggrieved by the award of the MACT. A challenge of this nature would have to be brought before the Court by a person aggrieved. We see no reason to entertain a petition which is styled one filed in public interest. In the circumstances, this Court is not expressing any opinion on the question of law raised. The petition is dismissed on the grounds which are set out above.

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• 2021 (12) TMI 1219
  Validity of assessment u/s 144B - main contention of the Petitioner as denied the opportunity of personal hearing before passing the assessment order - HELD THAT:- As Petitioner had made an oral request for personal hearing. However, the said request was turned down without assigning any reason. It is, in these circumstances and to comply with Section 144B the Petition deserves to be allowed and remitted back to the Respondent No.1. The following order is passed Assessment Order dated 17/8/2021, passed under Section 143(3) r/w Section 144B of the Income Tax Act, 1961 passed by the National Faceless Centre is, hereby, quashed and set aside. The matter is remanded to the Respondent No.1 to complete the assessment proceedings by following due procedure as contemplated by Section 144B of the the Income Tax Act, 1961.

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• 2021 (12) TMI 1218
  Exemption u/s 10(10C) - seeking for condonation of delay to file a revised return by an application u/s 119(2)(b) - Period of limitaiton of 6 years - Earlier the request for rectification of mistake was rejected - HELD THAT:- Taking note of the peculiar facts of the case, the fact remains that the entitlement of exemption under Section 10(10C) of the Act was noticed by the Assessing Officer. In fact the petitioner had also sought relief of rectification by way of letter dated 18.03.2008. As no order appears to have been passed on the letter of 18.03.2008, the petitioner decided to seek for condonation of delay to file a revised return by an application u/s 119(2)(b) of the Act. If an order had been passed as regards the rectification application, the assessee may have got relief at that end itself. As no order was passed, the assessee then decided to explore the possibility of filing a revised return. Unfortunately, the assessee s application u/s 119(2)(b) has been rejected on the ground that the same was filed beyond the period of 6 years, while observing that the Circular 9/2015 dated 09.06.2015 does not permit condoning the delay beyond 6 years. Letter that could be construed to be a rectification application is not decided, noticing the merits of the claim for exemption, a fit case is made out for consideration of the revised return on its merits. Accordingly, it would be appropriate to set aside the order of 119(2)(b) and condone the delay. It is also to be noticed that the reasons assigned while seeking condonation of delay are also satisfactory. Accordingly, the impugned order at Annexure-G dated 17.02.2017 is set aside, the delay is condoned and the application under Section 119(2)(b) of the Act is allowed. It is however clarified that as regards to the grant of refund, eventually in light of the delay, there would be exclusion of interest on the amount of refund. It is also clarified that the order is passed taking note of the peculiar facts and circumstances of the case and accordingly, may not be considered to have laid down the law as regards the aspect of condonation of delay under Section 119(2)(b) of the Act or on other issues dealt with herein.

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• 2021 (12) TMI 1217
  Revision u/s 263 by CIT - Violation of principles of natural justice - no opportunity of hearing to the assessee given - HELD THAT:- The procedure followed by the Principal Commissioner in passing the impugned order without giving an opportunity of hearing to the assessee is in clear violation of Section 263 of the IT Act and in breach of principles of natural justice. Thus, on this score alone, we allow this Writ Petition by setting-aside the impugned orders and remand the matters before the Principal Commissioner of Income-Tax (Central), Visakhapatnam, who is directed to give an opportunity of hearing to the assessee and pass appropriate orders in accordance with law. Such exercise shall be concluded within three (3) months from the date of communication of this order and the assessee shall not seek un-necessary adjournment in the matter. We further make it clear that we have not expressed any opinion with regard to merits of the case, which is kept open to be decided by the respondent-Principal Commissioner, independently

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• 2021 (12) TMI 1216
  Reopening of assessment u/s 147 - income of Assessee escaped assessment in the subject Assessment year - HELD THAT:- It is not the case of Revenue that the subject matter of the notice under Section 147 was not the subject matter before the Appellate Authority. Therefore, in all fours, the second proviso is attracted to the case on hand. After the reading of the second proviso to Section 147 of the Act and the consideration by the CIT(Appeals) and the Tribunal, we are of the view that the distinction sought to be introduced by the Standing Counsel fails, for the very reasons recorded by the Authorities in the orders under appeal. We are of the view that the re-assessment proceedings in the subject assessment year, has been initiated contrary to second proviso to Section 147 (1) of the Act. For the above reasons and expressing full agreement with the the findings recorded by the CIT(Appeals) and Tribunal, we answer the question against Revenue and in favour of the Assessee. Addition on electricity duty and short provision of interest on Government loan made u/s 43B - HELD THAT:- Question No.2 is covered by the judgment of this Court in Kerala State Electricity Board V. Deputy Commissioner of Income Tax [ 2019 (8) TMI 727 - ITAT COCHIN] against the Revenue and in favour of Assessee.

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• 2021 (12) TMI 1215
  Reopening of assessment u/s 147 - assessment as reopened beyond a period of four years - Availability of tangible material to initiate reopening - HELD THAT:- Mere availability of tangible material would be sufficient for the purpose of invoking the powers under Section 147 of the Act. This failure on the part of the petitioner was considered for reopening of assessment and the finding is given that the assessee company has misleading the assessing authorities by furnishing incorrect particulars. However, this Court cannot arrive a finding in this regard. It is for the assessee to establish his case during the course of reassessment proceedings. The writ petition is filed, challenging the reopening proceedings. Objective satisfaction would be sufficient for the purpose of allowing the Assessing authority to proceed with the reopening proceedings. Once, the materials are available and such materials were not taken into consideration by the original assessing authority, or any findings are given in the assessment order, which would be sufficient for the purpose of reopening of assessment and once such reopening is made based on tangible materials, then the assessee has to defend his case by furnishing further particulars or explanations or documents during the course of reopening proceedings. High Court cannot form any opinion in respect of such findings to be made. Only endeavour of the High Court is to ensure that, whether the conditions stipulated and the process adopted for the purpose of reopening of assessment in consonance with the provisions of the Act and in accordance with the Directives of the Hon ble Supreme Court of India in the case of GKN Driveshafts [ 2002 (11) TMI 7 - SUPREME COURT] are not. If the conditions are fulfilled, then it is for the assessee to defend their case in the manner known to law. The reasons furnished in the case of the petitioner would be sufficient for the purpose of reopening of assessment as the case of the petitioner is initiated beyond a period of four years and therefore, the petitioner is bound to participate in the reopening proceedings for the purpose of defending their case by availing the opportunities to be provided by the authorities in accordance with law.

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• 2021 (12) TMI 1214
  Compounding of the alleged offence u/s 279 (2) - belated filling of returns - HELD THAT:-Since there has been belated filing of income tax return, which can attract the penal provisions, therefore, the prosecution in this regard can be launched. On perusal of the sanction order passed by the first respondent dated 06.02.2017 in this regard, it discloses that the return of income tax for the assessment year 2013-14 should have been filed on or before 3/1.07.2013 u/s 139(1) since the same has not been filed, which was belatedly filed, it attracts the penal provisions u/s 276 CC (ii) and therefore, Sanction u/s 279 was given. Insofar as the belated filing of income tax return for other year, that is, assessment year 2012-13, no such prosecution was launched, it seems. This has been exactly pointed out by the learned counsel for the petitioner that the reason for non-filing of return or belated filing of return for the two or three assessment years consecutively is because of the calamities, which he pointed out in his representation, taken place in his family, where there has been a lot of litigations, which had to be faced by the family of the petitioner, hence he could not concentrate on filing of returns. Whether these reasons have been considered in a proper perspective before rejecting the said reason by analyzing the same, has to be looked into and in this context, when we read the impugned order, no such consideration seems to have been shown by the first respondent except the generalized comment as stated supra in the impugned order. This Court feels that, the reason cited by the petitioner, after giving him an opportunity, can once again be considered and accordingly, a fresh order can be passed by considering all these aspects in a proper perspective by the first respondent. For the said purpose, this Court feels that, the impugned order can be set aside and remanded back for fresh consideration. This Court is inclined to dispose of this writ petition with the following order: that the impugned order is set aside and the matter is remitted back to the first respondent for re-consideration. While reconsidering the same whatever the reasons cited by the petitioner in his representations to invoke Section 279 (2) for compounding the offence and also further inputs if any to be supplied in this regard, for which, an opportunity of being heard be given to the petitioner assessee, the first respondent can consider the said aspects objectively and pass a reasoned order to that effect.

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• 2021 (12) TMI 1213
  Correct head of income - nature of receipt from lease/ rent - assessee moved BIFR for rehabilitation scheme - rental income received by the assessee from Apollo Tyres Ltd. - whether constitutes business income or income from other sources? - HELD THAT:- AO preferred to decide the contemporaneous activity undertaken by the assessee by referring to the lease agreement and absence of a clause in the lease agreement about the revival of business of assessee. This consideration throughout weighed with AO for reaching the final conclusion. The fallacy in this behalf is further evident that the AO, inspite of noticing that all the terms and conditions are governed by the scheme sanctioned by the BIFR, declines to give effect to the working of scheme by observing that the scheme is not clear on what would happen after the expiry or completion of lease period. Under the scheme, the assessee has reduced its overhead expenditure by closing down the head office, sales and marketing offices. With the closure of these divisions, there is no chance of revival of business of the assessee as Tyre manufacturer. These observations are very centric or influenced the conclusion. We are, prima facie, of the view that there is no objective consideration of the modus operandi or working of the scheme, the statutory obligation under which the assessee had come by filing an application before BIFR. The subtle difference between a voluntary arrangement between parties and arrangement approved as part of a statutory consideration for revival is not noticed by the AO, while concluding that the lease rental income shall be computed under the head income from other sources. The Appellate Authority has confirmed the order of AO and the dismissal of first appeal resulted in filing of appeal before the Tribunal. Tribunal in the impugned order first appreciated the scheme approved by BIFR, agreement between parties for irrevocable lease for 8 years of assessee's plant, machinery, land etc. and held that inspite of the agreement with ATL the assessee continues to exist as a corporate entity. The additional investment of 110 crores by ATL for eight years is to modernise the plant and again to make the manufacturing viable, the induction of a few directors from ATL in Board of the assessee is merely change in administration and of administrative officers, such changes could not be understood as the existence of assessee as corporate entity has disappeared or the assessee ceases to exist. The taking over of the manufacturing activity by ATL is not to take over the assessee company. The consideration of future happening of reviving the business by assessee is not a circumstance in the facts of the case. Finding is recorded that the lease rental receipt is income of business of the assessee. Case for revival and rehabilitation of its business before BIFR - The assessee, under approved scheme is obligated to exploit the business assets, earn income, adjust/get off accumulated losses/unadjusted depreciation, and turn as a positive company. Any other view in a situation as the present is unavailable and again counterproductive to an approved scheme under Act, 1985. Sequentially enquired, it transpires that the assessee was obligated to work under a statutory approved scheme; the lease of eight years is to ATL, which is into the same business and lease was for utilising the Plant, Machinery etc. for manufacturing tyres; the actuals are reimbursed to assessee by ATL; the work force of assessee has been deployed for manufacturing tyres; the total production from the assessee unit is taken over by ATL; over all affairs of assessee company are made viable by entering into settlement etc; at this juncture, we are convinced that coupled with all other primary circumstances, the assessee employed commercial assets to earn income. Unless and until the income is treated as business income, the scheme does not result on expected lines for losses; unavailed depreciation etc. will continue to be present in the accounts of assessee. The scheme is appreciated as one providing a solution to business problem of the assessee. From the above discussion we are convinced that the claim of lease rental receipt as income of business is justifiable for the subject assessment years and the findings of the Tribunal even if treated as mixed question of law and fact, we hold that the findings are justifiable and warranted in the circumstances of the case. Hence substantial question as answered in favour of the assessee and against the revenue

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• 2021 (12) TMI 1212
  Addition u/s 68 - Estimation of rate of commission - CIT(A) observed that in the interest of Justice and revenue to tax the assessee by adopting the brokerage rate on various bogus transactions at 0.75% is proper - HELD THAT:- The assessee is an accommodation entry provider and his real income is only towards the commission/brokerages, we are of the considered opinion that the estimate shall be reasonable having regard to the business conducted by the assessee. In the case of JRD stockbrokers [ 2008 (7) TMI 449 - ITAT DELHI-C] it was held to be appropriate at 0.6% whereas in the case of Adonis financial services private limited it was held to be at 0.5%. Inasmuch as the assessee accepted the commission at 0.6% by not preferring any appeal against the impugned order, we are not inclined to disturb the findings of the Ld. CIT(A) in this matter to the effect that the commission at 0.6% is appropriate. On this premise, we uphold the findings of the Ld. CIT(A) and find the grounds of appeal of the Revenue is devoid of any merits. Accordingly, the appeal of the Revenue is liable to be dismissed.

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• 2021 (12) TMI 1211
  Bogus LTCG - undisclosed income u/s. 69 - HELD THAT:- The factual contentions of the assessee, vis- -vis the addition made on account of alleged bogus Long Term Capital Gain pertaining to the investment made in the securities therein as detailed in the reasons recorded for reopening the case of the assessee as reproduced was never considered either by the A.O. or the Ld. CIT(A). This despite the fact that the assessee had filed all documents before them in support of its contention that it had never claimed any Long Term Capital Gain or for that matter the impugned investment did not relate to it at all. We are of the view that the issue needs to be reconsidered and decided in the light of the factual contentions made by the assessee after duly verifying the same. The issue is therefore restored back to the A.O. to consider both the factual contentions of the assessee as stated above regarding no claim of any Long Term Capital Gain made by it nor any such investment ,as stated in the reasons recorded ,being made. The A.O. is directed to verify the claim of the assessee and thereafter adjudicate the issue in accordance with law. . Appeal of the assessee is therefore allowed for statistical purpose.

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• 2021 (12) TMI 1210
  Addition made on account of deemed rental income on unsold flats / units held by the assessee as stock in trade - HELD THAT:- We hold that no addition on account of deemed rental income could be made in respect of unsold stock of flats held as stock in trade upto A.Y.2017-18. However, the amendment has been brought in the statute in Section 23(5) from A.Y.2018-19 providing a moratorium period of two years. Hence, no addition could be made even for A.Y.2018-19 also. Accordingly, the ground raised by the assessee for all the three years in respect of addition made on account of deemed rental income of unsold stock of flats as stock in trade are allowed. Addition u/s.69A on account of alleged unaccounted cash - whether any protective addition could at all survive when no substantive addition at all were made in the hands of any other person? - HELD THAT:- Admittedly, no substantive addition was made by the revenue either in the hands of M/s Fisher Health Resorts Pvt ltd or in the hands of any other person. In Respectfully following the aforesaid decision of VIKASH IRON STEEL PRIVATE LIMITED [ 2015 (7) TMI 1394 - ITAT KOLKATA] since no substantive addition was made, the protective addition made in the hands of the assessee company does not survive. Hence, we have no hesitation in directing the ld. AO to delete the addition made in the sum of ₹ 13,86,600/- on protective basis u/s.69A of the Act for A.Y.2018-19. Accordingly, the ground raised by the assessee is allowed.

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• 2021 (12) TMI 1209
  Addition on account of share premium as income from other sources - addition of share capital and premium as unexplained cash credit u/s 68 - character and nature of receipt - admissibility of additional evidence under rule 29 of the Rules - HELD THAT:- Additional evidence filed in the form of Revenue s paper book which mainly contains the CBI charge sheets, statements recorded before CBI under section 161 of CrPC and 164 CrPC before Magistrate, correspondences between the companies and the Govt. of Andhra Pradesh, documents procured from various State Govt. Authorities i.e. Govt. of Andhra Pradesh, statements recorded by the AO during the penalty proceedings, various documents containing allotment of land etc., in our view, are not relevant for deciding the issues before us i.e. addition of share premium under section 56 of the Act and share capital and share premium u/s 68 because the entire details relating to facts and tax laws are available in the orders of the lower authorities i.e. assessment order and the order of CIT(A) and assessment records. Hence, we do not admit these additional evidences and reject the application filed by Revenue under rule 29 of the Rules. Addition u/s 56 - lower authorities had made an addition under the head income from other sources without mentioning the relevant section under which the addition is sought to be made. If the same is to be considered as an addition made u/s 56(1) of the Act, then the receipt should be income - lower authorities had categorically accepted to the fact that the nature of receipt was only share capital and share premium from the investor companies. Their only allegation is that these investor companies had paid share capital and share premium to the assessee company and that the share capital component at par value is acceptable and reasonable, but the premium component at ₹ 350/- per share was not justifiable since assessee is a nascent company. Provisions of section 56(1) of the Act are general provisions and gets triggered for a receipt having the character of income u/s 2(24) of the Act and not getting taxed under Chapter IV A to IV E of the Act. Though the ld. Special Counsel for the Revenue argued the case on the basis of applicability of provisions of section 68 of the Act, but that was not the section in which, the addition was sought to be made by the lower authorities. Hence it results in a situation wherein, the ld. Special Counsel for the Revenue is only trying to improve the case of the lower authorities before us, which is impermissible in law , as this tribunal does not have power of enhancement. We find that the provisions of section 68 of the Act , either way, falls in Chapter VI of the Act under the heading Aggregation of Income . It becomes income of the assessee only by way of deeming legal fiction. We find that the residuary head Income from Other Sources falls in Chapter IV F of the Act. Hence what is added u/s 68 of the Act cannot be treated as income from other sources. The provisions of Income from Other Sources starts from section 56 and ends with Section 59 of the Act. Section 68 of the Act falls in totally different chapter altogether. We hold that Income from other sources is mutually exclusive to section 68. We find that the ld. CIT(A) having co-terminus powers could have enhanced the assessment by invoking the provisions of section 68 of the Act in the instant case, which was not done by him. This goes to conclusively prove that both the lower authorities were thoroughly convinced of the fact that the assessee company had duly proved the three necessary ingredients of section 68 of the Act viz. (i) identity of the investors ; (ii) creditworthiness of the investors and (iii) genuineness of transactions. Either way, on merits, it could be seen from the aforesaid submissions of the ld. AR that assessee had indeed duly proved the three necessary ingredients of section 68 of the Act in the instant case, in view of the fact that those factual submissions remain uncontroverted by the revenue before us. Hence we hold that the provisions of section 68 of the Act are not applicable in respect of addition in the facts and circumstances of the instant case. Hence all the case laws that were relied upon by the ld. Special Counsel for the Revenue in the context of provisions of section 68 of the Act, need not be gone into at all, as they are not germane to the issue before us. As first the receipt of share capital and share premium should be income u/s 2(24) of the Act. It is trite law that the receipt of share capital and share premium are only capital receipts, not chargeable to tax at all under any of the provisions of the Act, atleast for the year under consideration. Hence a receipt , once it is not chargeable to tax at all under any of the provisions of the Act, it cannot be brought to tax under the head Income from other sources . Receipt of share capital and share premium had been construed to be capital receipts not chargeable to tax by the decision of the Hon ble Bombay High Court in the case of Vodafone India Services Pvt. Ltd.,[ 2014 (10) TMI 278 - BOMBAY HIGH COURT] -We find that this decision was accepted by the CBDT and instruction No.2/2015 dated 29/01/2015 was issued by CBDT to all its Field Officers to accept the said decision. - Thus we hold that the addition made under the head income from other sources is hereby directed to be deleted. Accordingly, the grounds raised in this regard are allowed. Addition u/s 68 - The assessee cannot be held responsible for enquiries conducted by the Mumbai Investigation Wing at the wrong address. However, the assessee had furnished all the relevant details that were called for by the ld. AO with regard to the said investor company. All the eight entities had filed their income tax returns regularly, which fact had been acknowledged by the ld. AO by himself. The bank statement of all the investors were furnished before the ld. AO wherein it could be seen that the immediate source of credit for those investor companies were not cash deposits and were either mere fund transfers received in their regular course of business or out of their available bank balances. Hence, the creditworthiness of all investor companies is also proved by the assessee. All the transactions had been routed through regular banking channels. The assessee had also furnished the copy of share certificates together with the relevant share application form in respect of all the eight investor companies. Six out of eight investor companies had indeed confirmed the fact of having made investments in the assessee company at a premium of ₹ 350/- per share. We hold that when all the relevant details of the investor companies were indeed furnished by the assessee company, merely because the share subscribers could not be found at the given address when sought to be verified by the revenue at the relevant point in time, it does not mean automatically that adverse inference could be drawn on the assessee and conclude that assessee had indeed routed its undisclosed income in the form of share capital and share premium in the names of the various investor companies. In any case, the nature of receipt being share capital and share premium had not been doubted by the Revenue in the instant case. We find that the assessee duly proved the nature and source of credit being share capital and share premium as contemplated in Section 68 of the Act. The law is very well settled that the receipt of share capital and share premium would only be capital receipt and cannot be brought to tax as income of the assessee - Decided in favour of assessee. Revision u/s 263 - AO has not examined Genuineness of the investment by the Carmel Asia - HELD THAT:- the issue which is sought to be revised by the ld. CIT by invoking revision jurisdiction u/s.263 of the Act in the instant case, was already the subject matter of addition made in the hands of the Caramel Asia Holdings Ltd., (holding company of the assessee). In any case, in the scrutiny assessment order passed in the hands of the assessee company for A.Y.2008-09 u/s.143(3) of the Act dated 31/12/2010, the ld. AO had given a categorical finding on more than one occasion at several places of his order, that the receipt of share capital at par value from the promoters category (which includes the holding company i.e. Caremel Asia) and outsiders category are accepted as genuine and reasonable. This has been admittedly done by the ld. AO after considering all the relevant documents with supporting evidences furnished by the assessee company including the direct confirmations filed by those investor companies before the ld. AO in response to the notices issued u/s.133(6) or summons u/s.131 of the Act. Hence, the ld. AO in the light of these supporting documents had indeed taken a possible view. We find that the ld. CIT by invoking his revisionary powers is only trying to substitute his view in place of the view already taken by the ld. AO. This is not permitted in the light of the decision of the Hon ble Bombay High Court in the case of Gabriel India Ltd.[ 1993 (4) TMI 55 - BOMBAY HIGH COURT] . The main case of the ld. CIT in his revision order is only directing the ld. AO to examine source of source. We hold that the assessee is not bound to establish the source of source of the investor company - we hold that the order of the ld. AO is neither erroneous nor prejudicial to the interest of the Revenue for A.Y.2008-09, warranting revision u/s.263 - Decided in favour of assessee.

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• 2021 (12) TMI 1208
  Correct head of income - earning income from leasing of the properties - income from house property or business income - HELD THAT:- The intention of the assessee can be understood only by its actions. Considering the fact that assessee is an individual and over the years assessee has declaring the income only under the head Income from House Property and it is far-fetched for the assessee to rely on the decision in the case of Chennai Properties Investment Ltd. [ 2015 (5) TMI 46 - SUPREME COURT] with the assessee s case. Therefore, we do not find any reason to entertain the grounds raised by the assessee. Accordingly, it is dismissed. Addition of bad debts - Assessee has earned the property for the purpose of earning interest income and assessee has declared the source of income in the return of income. From the record we observed that the company M/s. Rusam Developer Pvt. Ltd., has gone into liquidation and assessee could not recover anything from them including loan amount and the interest. Since the assessee has already declared the interest income as business income and revenue has accepted the source of income therefore the bad debts incurred by the assessee is certainly an expenditure allowable deduction u/s. 37 of the Act. Therefore, we direct the Assessing Officer to allow the bad debts claimed by the assessee. Accordingly, Ground No. 2 is allowed. Disallowing business loss as incurred by the Assessee due to cancellation of property booked by the Assessee with the Builder - Assessee recovered the cost of the property based on the agreement with the builder and the cost incurred by the assessee for registration are remained as expenditure. Since the property is clearly bought for the purpose of lease and this income will be charged to tax under the head Income from House Property and the cost incurred by the assessee by not recovery of registration charges can be a loss claimable under the head Income from House Property . Accordingly, we direct the Assessing Officer to allow the loss claimed by the assessee.

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• 2021 (12) TMI 1207
  Unexplained investment in closing stock u/s. 69 - difference in the quantity of closing stock as per software - CIT(A) deleted the additions - HELD THAT:- As when there is no difference in the quantity of closing stock as per software, addition cannot be made towards unexplained investment in stock merely because there is difference in price of certain items in Jilaba software, more particularly when assessee has explained such difference in price - CIT(A) in his appellate order for AY 2012-13 had given a categorical finding that all the showrooms of the assessee were subjected to search and all the stock in various showrooms were valued by the departmental value and hence all the stock on the date of search was in the possession of the department and was subjected to valuation by the departmental valuer. Any discrepancy found as a result of this exercise was offered as additional income in its return of income for AY 2015-16 by the assessee. Assessee had also submitted a letter from the Jilaba manufacturer which clarified that the value of purchase/stock cannot be obtained from Jilaba data as purchases were not entered in the Jilaba system. As during the assessment proceedings, the assessee had also submitted a letter from the Jilaba which clarified that if column is used to find the value of stock, then it may be wrong as the is only an approximate value calculated based on the gold rate, wastage/making charges given at the time of tagging. While selling it, there may be a discount on wastage/making charges and also the gold rate may change. So, we cannot consider the column for the calculation of stock value. Apart from that, it is not calculated based on the purchase cost. So, we cannot consider it as stock value. AO had made addition only on the basis of the addition made by the then AO, as the assessee could not give details of stock as per Jilaba software.AO has not brought on record any defects in the books of accounts nor has pointed out any unrecorded sales/purchases. We further, found that during the year under consideration also the assessee has obtained bank loan against the stock and the said stock has been verified by the bank by appointing independent auditors. AR has also pointed out that the AO has misrepresented the fact by mentioning that Assessee Company stated that till implementation of GST, the 'Jilaba' software was in use. - after introduction of GST, the said software was removed from all the systems. We also find force in the argument of AR that once the said software was stopped being used after the search due to its shortcomings and was also removed from all the systems, it was not possible for the assessee to give required details of stock as per Jilaba software - we found that the ld. CIT(A) has passed a well-reasoned and speaking order discussing all the facts and circumstances of the case, therefore, we do not find any reason to interfere or to deviate from the findings so recorded by the ld. CIT(A), accordingly, we uphold the same.- Decided against revenue.

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• 2021 (12) TMI 1206
  Assessment u/s 153A - Addition of interest income - CIT-A deleted the addition - HELD THAT:- We find force in the submissions of the ld. AR that the interest income added by the AO without any incriminating material being found during the search for the FY 2008-09 to 2011-12 are not sustainable. No new facts and circumstances of the case has been put forth by the ld. CIT-DR. The ld. CIT(A) has passed a well speaking order discussing all the material facts and circumstances as well as legal proposition of law, therefore, considering the totality of the facts and circumstances, we do not find any reason to interfere or deviate from the findings so recorded by the ld. CIT(A), accordingly, we uphold the same. - Decided against revenue.

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• 2021 (12) TMI 1205
  Disallowance u/s 14A r.w.r. 8D - Assessee submitted that only exempt yielding investments were to be considered to compute the disallowance - HELD THAT:- It is settled legal position that it was incumbent on the part of Ld. AO to record dissatisfaction, having regards to the accounts of the assessee, as to why the disallowance offered by the assessee was not acceptable. The failure to do so would make the disallowance bad in law. We find that no such dissatisfaction has been recorded by Ld. AO in the assessment order. Secondly, upon perusal of assessee's financial statements for the year ending 31.03.2011 31.03.2012 as placed on record, it could be seen that own funds in the shape of share capital and free reserves far exceed the investments made by the assessee and therefore, unless nexus of borrowed funds vis- -vis investment was established by Ld. AO, a presumption would run in assessee's favor that the investments were sourced out of assessee's own funds. We find that no such nexus has been established by Ld. AO. Thirdly, the disallowance as offered by the assessee is in accordance with the earlier decisions of the Tribunal for AYs 2010-11 2011-12. In fact, these decisions were followed in AY 2013-14 [ 2019 (12) TMI 1567 - ITAT CHENNAI] - The revenue preferred further appeal against the same before Hon'ble High Court of Madras[ 2020 (8) TMI 885 - MADRAS HIGH COURT] wherein Hon'ble Court refused to admit the substantial question of law as raised by the revenue.

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• 2021 (12) TMI 1204
  Disallowance u/s 14A r.w.r. 8D - CIT(A) deleted disallowance by stating that there was no exempt income and hence, there cannot be any disallowance - HELD THAT:- Hon ble Supreme Court in the case of Maxopp Investment Ltd vs. CIT, [ 2018 (3) TMI 805 - SUPREME COURT] has held that once there is no exempt income, no disallowance can be made by invoking the provisions of section 14A r.w.r 8D of the Rules. Hence, we find no infirmity in the order of CIT(A) and the same is affirmed. The appeal of Revenue on this issue is dismissed. MAT computation u/s 115JB - disallowance of expenses made invoking the provisions of section 14A r.w.rule 8D of the Rules, while computing book profit u/s.115JB - HELD THAT:- This issue is squarely covered by the decision of Vireet Investment P. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] wherein held that no adjustment of disallowance can be made while making computation u/s.115JB of the Act. We noted that Special Bench of this Tribunal observed while holding that disallowance u/s.14A r.w.rule 8D cannot be added while computing book profits as per section 115JB of the Act, as Explanation to that section does not specifically mention the provisions of section 14A of the Act. Hence, we find no infirmity in the order of CIT(A) and the same is affirmed. This issue of Revenue s appeal is also dismissed.

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• 2021 (12) TMI 1203
  Addition u/s. 56(2)(vii) - difference between the stamp duty guideline value and purchase consideration i.e. 50 percent u/s 56(2)(vii)(b) - HELD THAT:- AO completely ignored the valuation report of the registered valuer submitted by the assessee and submissions made thereon. AO mechanically applied the provisions of section 56(2)(vii) to bring the difference of stamp duty valuation and actual sale consideration paid by the assessee, without making any efforts to find out the actual cost of property, when in fact the assessee stated that the property when purchased was under litigation and pending before the Civil Court, the AO was not bothered about these impediments and straightaway considered the stamp duty valuation for the purpose of making addition u/s. 56(2)(vii) of the Act. In such circumstances, it was very necessary for the AO to refer the matter to the DVO which he failed to do so. DR submitted that referring the matter to the DVO is only with regard to applicability of section 50C in the case of seller and it is not all required to refer the matter to the DVO u/s. 56(2)(vii) of the Act which is totally misconceived - in our opinion, the addition made by the AO is totally unjustified and cannot be sustained - revenue cannot be allowed a second innings by sending the matter back to the AO to refer the matter to the DVO to ascertain the correct fair market value of the property purchased by the assessee, when assessee all along disputed the valuation of property adopted by the AO for the purpose of registration of the same and the AO failed to find out the correct value of the property both at the assessment stage as well as at the first appellate stage. This was considered by the Agra Bench of the Tribunal in the case of Hari Om Garg [ 2019 (5) TMI 1834 - ITAT AGRA] wherein a view was taken that the Department cannot be allowed a second inning by sending the matter back to the Assessing Officer enabling the revenue to fill the lacunae and shortcomings and further putting the assessee to face a re-trail for no fault of him and to prove before the Assessing Officer that the sale consideration was the fair market value of the property purchased by him - We delete the addition made by the AO u/s. 56(2)(vii)(b) of the Act. This ground of the assessee is allowed. Non-granting of deduction u/s. 54F - AO has not allowed the exemption for the reason that on the date of transfer of immovable property the assessee owned two residential properties, one at Jayanagar and other at Basavanagudi as on 01.04.2013 - residential property situated at Jayanagar was gifted by the assessee to his daughter Ms. Rashmi vide registered gift deed executed on 25.07.2013 - HELD THAT:- This property was vested on these four persons vide partition dated 16.8.1991. Originally there was one katha for all these properties and on account of partition, this property was shared between 4 persons. However, this property has been purchased by the assessee by a single Sale Deed as a single property and this property owned by 4 persons cannot constitute distinct and separate properties so as to deny deduction u/s. 54F. For the purpose of convenience on earlier occasion Katha of these properties was in the name of 4 individuals, later after purchasing the above properties the assessee once again got the Katha merged which is kept on record at pages 267 268 of PB. It is observed that the Katha has been transferred in the name of the present assessee and all the properties have been merged to Sy.No.12/1 as a single property. The property though purchased from four Vendors remains as a single property. Being so, the property has to be considered as a single property and deduction u/s. 54F should be granted. See SRI. MAURICE PATRICK DE REBELLO VERSUS THE INCOME TAX OFFICER, WARD 7 (1) , BENGALURU [ 2021 (1) TMI 213 - ITAT BANGALORE] . Being so, the assessee cannot be denied deduction u/s. 54F on the reason that the assessee purchased 4 properties instead of one. DR s objection is that though assessee gifted the property to his daughter on 25.7.2013, the property is still shown in the balance sheet of the assessee as on 31.3.2014. The assessee explained that it is the bona fide mistake by the assessee s CA and the assessee is not well educated on these matters and hence the bona fide mistake committed by the auditor is to be condoned. Admittedly, there is a valid gift deed dated 25.7.2013 in respect of Jayanagar property in favour of assessee s daughter. In the balance sheet prepared by the assessee s CA for the year ending 31.3.2014, the said property has been shown in the name of assessee, which is bona fide error committed by the auditor for which no importance could be given. Appeal of assessee allowed.

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• 2021 (12) TMI 1202
  Addition u/s.40A(2)(b) - disallowance of computer and other equipments - hire charges paid by the assessee is unreasonable and excessive when compared to market rates - HELD THAT:- As gone through orders of the authorities below. In order to invoke provisions of section 40A(2)(b) AO has to bring on record some comparable cases of similar nature to allege that hire charges paid by the assessee is unreasonable and excessive, when compared to market rates - on perusal of details filed by the assessee, third party service providers rate is more than rate charged by service provider to the assessee - cost incurred by the lessor of the asset does not relevant to decide whether hire charges fixed for said equipment is excessive or unreasonable. The only way to compare rate paid by the assessee is with reference to third party service providers. In this case, rate charged by third party service providers is more than rate paid by the assessee and thus, we are of the considered view that the AO as well as learned CIT(A) were erred in disallowing computer and other equipments hire charges u/s.40A(2)(b) - Hence, we direct the Assessing Officer to delete additions made towards disallowance of system hire charges u/s.40A(2)(b). Ad-hoc disallowance of consultancy charges paid to Mr. V.C.Kartik, Director of the assessee company u/s.40A(2)(b) - . Admittedly, except board resolution passed by the company authorizing its Board of Directors to pay consultancy charges to Mr. V.C.Kartik, no other credible evidence has been placed on record before the AO or CIT(A), including before us to justify payment of consultancy charges to Mr.V.C.Kartik. The board resolution copy filed by the assessee may be an evidence which suggest availing need based services from consultant. But what is required to support case of the assessee is evidences which suggest actual rendering of services. In this case, the assessee has neither furnished necessary evidence to prove rendering of services by service provider nor placed on record any evidence to prove kind of service obtained from Mr. V.C.Kartik. CIT(A) after considering relevant facts and has also taken note of association of Mr. V.C.Kartik with the assessee company has allowed 50% relief and directed the AO to restrict disallowance of consultancy charges to 50% of total claim. The assessee has failed to controvert findings of fact recorded by the learned CIT(A) with any evidence, hence, we are inclined to uphold findings of the learned CIT(A) and reject grounds taken by the assessee.

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• 2021 (12) TMI 1201
  Addition being 40% of cash balance shown in the balance sheet as income of the assessee - HELD THAT:- Assessee is maintaining the books of accounts and the same were audited u/s. 44-AB - turnover of the assessee for the year under consideration as submitted by the assessee before the Ld. CIT(A) is at ₹ 2.5 crores and the major sales are cash sales only and obviously generates cash in hand. When the assessee has submitted the same before the A.O as well as Ld. CIT(A) they have not pointed out any defect in the books of accounts and only says that the cash in hand shown by the assessee is excessive. A.O without any basis, simply says that the cash in hand is excessive and therefore, estimated 40% of the cash in hand as an income and subsequently, partial relief granted by the Ld. CIT(A) and when the assessee is explaining in detail without considering the same estimation made by the A.O without giving any reasons, in my opinion, it is not correct. Even, the Ld. CIT(A) has granted partial relief without giving any reasons why entire addition cannot be deleted. Further, the Ld. CIT(A) also failed to consider the explanation of the assessee. In view of the above, the addition made by the A.O cannot be survived. Accordingly, the addition made by the A.O is deleted. - Decided in favour of assessee.

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• 2021 (12) TMI 1200
  Disallowance of deduction claimed u/s 10AA after claiming deduction / exemption u/s 10A - SEZ unit - HELD THAT:- The assessee company was incorporated in February 2000 in Tambaram, MEPZ, Chennai, which was later converted into SEZ and commenced the production in December, 2000. The company had claimed deduction of 100% for the assessment years 2001-02 to 2005- 06 (five years) u/s 10A of the Act as well as 50% from 2006-07 to 2010-11 (5 years). The Special Economic Zones Act, 2005 inserted section 10AA of the Act effective from 01.04.2006 and as per proviso to section 10AA of the Act, 50% deduction was claimed by the assessee from assessment year 2006-07 till 2010-11 (5 years) and 50% from assessment years 2011-2012 for five years. Explanation to section 10A of the Act states that for the removal of doubts, it is hereby declared that an undertaking, being the unit, which had already availed, before the commencement of the Special Economic Zones Act, 2005, the deductions referred to in section 10A for ten consecutive years, such unit shall not be eligible for deduction from income under this section. In view of the above provisions it was the submissions of the assessee that the period of ten consecutive assessment years needs to be seen only as before commencement of the Special Economic Zone Act, 2005. As on the commencement of assessment year 2006-07, which is the effective date of operation of section 10AA, the unit has just claimed deduction under section 10A only for five assessment years and therefore, the assessee has submitted that the assessee company is entitled for deduction under section 10AA. Tribunal in assessee s own case for the assessment year 2011-12 [ 2019 (12) TMI 536 - ITAT CHENNAI] may be followed for the assessment year under consideration as while deciding the appellate order for the assessment years 2012-13 and 2013-14 the ld. CIT(A) followed the Tribunal s order for the assessment year 2011-12 and decided the appeals in favour of the assessee.

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• 2021 (12) TMI 1199
  Delay in deposit of Employees contribution to PF and ESI - Payment deposited before the due date of filing IT Return U/s 139(1) - AR submitted that the assessee-company deposited employee s contribution of PF/ESI though with a delay of few days from the due dates mentioned in the respective Acts, however the same was deposited well before the due date of filing of return of income - HELD THAT: - Admittedly and undisputedly, the employees contribution to ESI and PF collected by the assessee from its employees have been deposited well before the due date of filing of return of income u/s 139(1) - it is noted that the ld CIT(A) has referred to the explanation to section 36(1)(va) and section 43B introduced by the Finance Act, 2021 and has also referred to the rationale of the amendment as explained by the Memorandum in the Finance bill, 2021, however, he has simply failed to consider the express wordings in the said memorandum which says these amendments will take effect from 1st April, 2021 and will accordingly apply to assessment year 2021-22 and subsequent assessment years . The impugned assessment year is assessment year 2019-20 and therefore, the said amendment cannot be applied in the instant case. The addition by way of adjustment while processing the return of income u/s 143(1) so made by the CPC towards the deposit of the employees s contribution towards ESI and PF though paid before the due date of filing of return of income u/s 139(1) of the Act is hereby directed to be deleted. - Decided in favour of assessee.

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• 2021 (12) TMI 1198
  Delayed employees contribution of ESI and Provident Fund - payment remitted before due date of filing of return - HELD THAT:- In the present case, the assessee has remitted the employees contribution in respect of PF ESI beyond due date for payment but within due date of filing of return of income. Thus, we respectfully following the decision of Hon ble Jurisdictional High Court in the case of CIT vs. M/s. Industrial Security Intelligence India Pvt. Ltd.,[ 2014 (10) TMI 1049 - ITAT CHENNAI] we allow the appeal filed by the assessee.

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• 2021 (12) TMI 1197
  Business loss claim - disallowance of loss as there was no sales and purchase - distinction between the commencement and setting up of the business - case of the assessee is that the assessee-company is ready for the commencement of the business and placed the order for raw material and advance also paid therefore, the loss claimed by the assessee has to be allowed - HELD THAT:- It is found that when the assessee has set up an industry by obtaining all necessary permissions and advance paid for the purpose of obtaining the raw material, the same is accepted by the A.O therefore, the raw material not reached the place of the assessee, it cannot be said that the assessee has not commenced the business. Once the assessee is setup entire business activity and waiting for the raw material, it has not reached because of various reasons therefore, it cannot be said that the assessee is not commenced his business. Hon ble Delhi High court in the case of CIT v. LG Electronic (India) Ltd. [ 2005 (5) TMI 30 - DELHI HIGH COURT] has observed that there is a distinction between the commencement and setting up of the business beyond two dates need not necessarily overlap and section 3 refers to date of setting up of the business and as such it is only thereafter, that previous years of newly set up business would commence and, therefore, expenses incurred prior thereto could be taken into account for the purpose of determining profits of a newly set up business. In the present case, the assessee has already set up the business and it commences only once raw material reaches. The assessee has already paid advance for supply of raw materials and therefore, the loss claimed by the assessee during the year under consideration cannot be disallowed on the ground that the assessee is not commenced the business. Appeal filed by the assessee is allowed.

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• 2021 (12) TMI 1196
  Penalty u/s. 271(1)(c) - unexplained loan creditors - HELD THAT:- As submitted by the assessee that the assessee has borrowed funds from the various creditors therefore, there is difference in confirmations given by the financiers and submitted that it is neither concealment nor filing of inaccurate particulars of income - A.O and CIT(A) has not accepted the explanation of the assessee and penalty is levied. We have considered the entire facts of the case, it is a fact that the assessee has borrowed money from various creditors nearly about 175 and there is a difference in confirmations when compared to books of accounts of the assessee - as explained by the assessee that said difference is due to reconciliation of year end entries between assessee and his creditors. In our opinion, this cannot be considered as neither concealment nor filing of inaccurate particulars of income. Levying of penalty on this count is not justified therefore, the same is deleted. Disallowance of interest - The claiming of the interest expenditure is neither concealment nor filing of inaccurate particulars of income. We find that the assessee borrowed certain amounts from various creditors and as per the books of accounts of the assessee, he has to pay interest - AO has asked the assessee to produce confirmation letters, the assessee is not able to produce the same. At the best, the A.O can make an addition in respect of loan borrowed is not explained by the assessee and also interest claimed by the assessee. In our opinion, the disallowance of interest claimed by the assessee cannot be considered neither concealment nor by filing of inaccurate particulars of income simply because the assessee was not able to file confirmation letters. We find that the A.O is not justified in levying the penalty on this count confirmed by the Ld. CIT(A). Amount was refunded to distributors debited to profit and loss account under the head administrative expenses - We find that the assessee is in the business of film making and sometimes it is necessary to refund money to the distributors whenever there is a huge loss but it is depend upon the understanding between the parties and also agreement between parties. The assessee is not able to file any details however, taking into consideration of the nature of the business of the assessee, simply because the assessee is not able to file details of expenses debited to profit and loss account cannot be considered neither concealment of income nor filing of inaccurate particulars of income and therefore, we are of the opinion that the A.O and Ld. CIT(A) is not correct in levying the penalty on this count and the same is deleted. Difference in opening balance - When the assessee himself has admitted before the A.O that there is a difference in opening balance and the same is offered for taxation. In our opinion, it cannot be neither concealment nor filing of inaccurate particulars of income and therefore, the difference in opening balance cannot be considered the penalty levied u/s. 271(1)(c) of the Act. We are of the opinion that the A.O as well as Ld. CIT(A) not justified in levying the penalty. - Decided in favour of assessee.

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• 2021 (12) TMI 1195
  Rectification of application u/s 154 rejected - what the assessee has done is being aggrieved with the rejection of rectification petition by the AO he has filed another rectification petition before the Pr. CIT which is not permitted within the framework of the Income-tax Act - HELD THAT:- As totality of the facts and circumstances that against the rejection of the rectification application of the assessee by the AO, as correctly pointed out by the ld. D/R, the proper recourse available to the assessee is to file an appeal before the ld. CIT(A). That filing another rectification application before the Pr. CIT against the rejection of rectification application u/s 154 of the Act by the AO is not the proper procedure within the framework of the Act. This appeal preferred by the assessee before us is directed against the order passed by the Pr. CIT wherein the assessee has filed a rectification application before him against the order of the rectification passed by the AO. This action of the assessee is legally not maintainable within the purview of the Act and only remedy available to them is to file an appeal before the first appellate authority. In view thereof we do not find any infirmity with the findings of the Pr. CIT which is upheld. Appeal of the assessee is dismissed.

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• 2021 (12) TMI 1194
  Assessment u/s 153A - Disallowance of interest expenditure u/s.37 - assessment of income from other sources u/s.68 r.w.s. 115BBE - HELD THAT:- There is no reference to any seized material / incriminating material in respect of assessment of income from other sources u/s.68 r.w.s 115BBE of the Act. It is well settled principles of law by the decisions of various Courts, including decision of the Hon'ble Supreme Court in the case of PCIT Vs. Meeta Gutgutia Prop. M/s. Ferns N Petals [ 2017 (5) TMI 1224 - DELHI HIGH COURT] that in absence of incriminating material found as a result of search u/s.132 or requisition u/s.153A of the Act, completed assessments cannot be disturbed in the assessment framed u/s.153A. Also see CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD., ALL CARGO GLOBAL LOGISTICS LTD. [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] and KABUL CHAWLA [ 2015 (9) TMI 80 - DELHI HIGH COURT] . The sum and substance of ratios laid down by various High Courts is that unabated/completed assessments cannot be disturbed in absence of any incriminating material found as a result of search. As assessments for assessment years 2011-12 to 2014-15 are unabated / completed. Further, no reference of any incriminating material found as result of search in respect of additions made by the Assessing Officer towards disallowance of interest u/s.37 of the Act and for assessment of income from other sources u/s.68 r.w.s 115BBE of the Income Tax Act, 1961 - we direct the Assessing Officer to delete additions made towards interest u/s.37 of the Act and assessment of income from other sources u/s.68 r.w.s. 115BBE of the Act for all assessment years. - Decided in favour of assessee.

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• 2021 (12) TMI 1193
  Estimation of income - Bogus purchases u/s 69C - HELD THAT:- Since the issue is squarely covered by the order of Co-ordinate Bench of this Tribunal in the case of Pankaj K. Choudhary,[ 2021 (10) TMI 653 - ITAT SURAT] . Hence,respectfully following the above binding precedent we disallow 6% of the impugned purchases.

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• 2021 (12) TMI 1192
  Disallowance u/s 40A(3) - payment in cash of more than ₹ 20,000/- in a day - HELD THAT:- Assessee has not disclosed the fact as to when the consignment reached at the destination and when the deliveries of goods were received by assessee. No such expediencies are disclosed by the assessee that either transporter insisted for cash payment or the assessee was unable to prepare the cheque against such delivery immediately - it is not the case of assessee that the assessee was maintaining the bank account in co-operative Bank and realisation of cheque from their banker take a longer time - assessee in Anupam Tele Services [ 2014 (2) TMI 30 - GUJARAT HIGH COURT] is not applicable on the facts of the present case - the principal company insisted that payment by cheque which was drawn a co-operative bank takes longer time in realization and they insisted for payment - the said case law relates to assessment year 2006-07. The Rule 6DD has been amended in the year 2008 by making significant changes with effect from assessment year 2009-10, which is subject assessment year in the present case. We find one more reason as recorded by ld CIT(A) that during the first round of appeal before the Tribunal, of the assessee took his stand that assessee has not made payment exceeding of ₹ 20,000/- or aggregate of exceed of ₹ 20,000/- in order to attract the provision of section 40A(3) - The assessee instead of substantiating that submission raised a new plea by taking the excuse of alleged conditions No.6 and 17, allegedly printed on back side of bill of transporter. No such copy of bill is produced for our perusal. In aforesaid circumstances, we do not find any justification to interfere with the order of Ld. CIT(A). In the result, the ground of appeal raised by the assessee is dismissed. Disallowance of deduction u/s 80P(2)(a)(iii) - No new facts are required to adjudicate the additional grounds of appeal. The assessee in facts seeking deduction under different clauses of section 80P(2)(a) only. In our view, the assessee has right to raise new claim in additional ground of appeal before the appellate authority as has been held by series of decisions of superior courts. Therefore, the additional grounds of appeal raised by the assessee are admitted. However, considering the fact that the assessee has raised alternative plea for claiming the deduction under different subclause of clause-(a) and sub-section 80P, for the first time before the Tribunal. Therefore, we deem it appropriate to restore the issue back to the file of Ld. CIT(A) who shall examine the alternative plea of assessee and pass the order in accordance with law. CIT(A) would be at liberty to seek the remand report from the Assessing Officer on the alternative claim of assessee. The assessee is also directed to provide complete details and evidence before Ld. CIT(A) as and when called for and not to take any adjournment without any valid reason as the case relates to assessment year 2009-10. In the result the additional ground of appeal is allowed for statistical purpose.

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• 2021 (12) TMI 1185
  Assessment u/s 153A - Non issue of the notice u/s 143(2) - HELD THAT:- There is no issuance of the 143(2) notice. Even, if we go through the assessment order, assessee filed his return of income on 7th December, 2011 in response to the notice u/s 142(1) dated 26/10/2010, whereas, notices u/s 143(2) 142(1) were issued on 18th November, 2011, the date of which is before filing of the return of income, how is it possible to issue a notices before filing of return of income. Even if we correlate the notice u/s 143(2) with the assessment order, the issue of notice is time barred. This is a search year, in which, assessment has been framed u/s 143(3) of the Act, but, the assessment has not been framed u/s 153A. Therefore, even if notice issued u/s 143(2) is time barred or not issued at all or notice u/s 143(2) is invalid in the eye of law, the assessment framed u/s 143(3) will not survive. As in the present case, assessment has been framed u/s 143(3), therefore, as per the statute notice u/s 143(2) is mandatory to be issued by the jurisdictional AO, which is absent in this case. Therefore, non-issuance of a valid notice u/s 143(2) of the Act, the entire assessment framed by the AO is void-ab-initio. - Decided in favour of assessee.

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• Customs

• 2021 (12) TMI 1191
  Refund claim of Special Additional Duty (SAD), which is in lieu of sales tax - rejection on the ground of time limitation - HELD THAT:- The facts are not in dispute and admittedly, the appellant importer has filed refund claim after more than one year or may be by few days more from the date of payment of SAD. Hon ble Delhi High Court judgement in SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS [ 2014 (4) TMI 870 - DELHI HIGH COURT] where it was held that In the absence of specific provision of Section 27 being made applicable in the said notification, the time-limit prescribed in this section would not be automatically applicable to refunds under the notification. The Hon ble Delhi High Court has also held that in the matters which deal with substantive rights, such as imposition of penalties and other provisions, that adversely affect statutory rights, the parent enactment must clearly impose such obligations; subordinate legislation or Rules cannot prevail, or be made in such case. The appeal filed by the appellant is allowed - decided in favor of assessee.

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• 2021 (12) TMI 1190
  Delayed refund - Levy of Interest - interest on excess amount of customs duty deposited under protest at the time of passing of the Bill of Entry on provisional basis, till the date of refund of the excess amount deposited - HELD THAT:- A wrong section has been considered by the Commissioner (Appeals) in the impugned order. The amount deposited provisionally is an amount deposited under protest and partakes the character of pre-deposit from the date of such deposit, as the matter was sub-judice. Further, Section 129 EE of the Customs Act read with ruling of Hon ble Supreme Court in the case of SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [ 2006 (1) TMI 55 - SUPREME COURT] provides for grant of interest on the amount of pre-deposit from the date of deposit till the date of grant of refund. The appellant is entitled to interest from the date of deposit of duty till the date of grant of refund @ 6% P.A. (at the prescribed rate) - Appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2021 (12) TMI 1189
  Sanction of Scheme of Amalgamation - Section 230(1) read with Section 232(1) of the Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed.

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• Insolvency & Bankruptcy

• 2021 (12) TMI 1186
  Approval of Resolution Plan - powers and jurisdiction of the Adjudicating Authority while dealing with the resolution plan approved by the Committee of Creditors - HELD THAT:- In light of the decision of JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE ASSOCIATION ORS. VERSUS NBCC (INDIA) LTD. ORS. [ 2021 (3) TMI 1143 - SUPREME COURT] , nothing more is required is to be in this petition and the same is disposed of. Application disposed off.

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• Service Tax

• 2021 (12) TMI 1188
  Time Limitation - CENVAT Credit availed under wrong category - maintenance of proper records or not - penalty - HELD THAT:- Admittedly the appellant have maintained proper books of accounts and there is no allegation that they have filed incomplete statutory return or have left any relevant column of the return blank, which they are required to fill. Extended period of limitation is not invokable in the facts and circumstances of the case. Further, as substantial proposed demand have been dropped by the Adjudicating Authority and also a large amount have been reversed and not contested, prior to the issuance of the show cause notice. Penalty also set aside. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2021 (12) TMI 1187
  Principles of Natural Justice - CST assessment Orders for the Financial Year 2016-17 and Financial Year 2017-18 - opportunity of personal hearing was not provided to the petitioner - HELD THAT:- The court does not find the present case to be one of such nature where the High Court should straightaway interfere, as there is an efficacious statutory remedy of appeal available to the petitioner. In the considered opinion of the court, the petitioner should first avail the statutory remedy and whatever points have been argued before this Court can very well be argued and appreciated before the Appellate Authority. There has been lapse on the part of the petitioner which now is sought to be explained as a mistake and error committed by the petitioner. Once the petitioner itself admits that there were lapses and error on its part, it cannot be termed that there has been gross miscarriage of justice by the authorities requiring interference by the High Court at the very first instance. Moreover, at the cost of repetition, all the points available to the petitioner which have also been argued before the Court can very well to be raised and appreciated by the Appellate Authority. The writ petition stands disposed of giving liberty to the petitioner to approach respondent no.3/Appellate Authority against the order impugned.

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