TMI Tax Updates - e-Newsletter
February 13, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Input tax credit - GST paid on replacement of existing lift/ elevator at its own premises - When any person speaks of such a building, he also includes the lifts as an integral part of the building, like storage water tanks, etc. - thus, Manufacture, Supply, Installation and Commissioning of Lifts/Elevators is in the nature of Works Contract activity which results in creation of an immovable property - ITC is not available.
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GST:
Maintainability of Advance Ruling application - Exemption from GST - The applicant is recipient of services and not supplier of services, hence their application is not in accordance with the provisions under Section 95 of CGST ACT and is not maintainable - The application for advance ruling is rejected
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GST:
Reopening of portal for uploading of returns - assessees are unable to upload their returns both GSTR-9 and GSTR-9C - HC extended the date till 12.2.2020 - we only stay that part of the order which has extended the deadline for submitting the returns.
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GST:
Levy of penalty and redemption fine in lieu of confiscation of goods - section 130 of CGST Act - Non receipt of order - such order passed in the Form GST MOV-11, is available now on record at page No.45 of the petition - Since the final order has been passed in the Form GST MOV-11, we relegate the writ applicant to avail the remedy of preferring an appeal under Section 107 of the Act before the appellate authority.
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Income Tax:
Unabsorbed depreciation claimed u/s 32(2) - Claim beyond the period of eight years - the assessee is entitled to avail of the unabsorbed depreciation beyond the period of eight years which was prescribed under the unamended Section 32 of the Act.
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Income Tax:
Income from other sources u/s 56 - A Will can be written by anybody. In a Will, anybody can be given a bequeathal. It need not be a relative alone. The fact that the Fourth Proviso refers to relative in Sub-clause (a), and refers to a Will or inheritance in Clause (c) clearly shows that the Will need not be a Will of a relative. Further, a Will is not given any restrictive meaning in the Explanation under the said Proviso either. - No additions.
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Income Tax:
Revision u/s 263 - defective return of income u/s 139(9) - non filing of Audit report with the ITR - setoff of carry forward of loss - the assessee itself has removed the defect without being intimated by the AO - Since the assessee has already filed the audit report, there is no question of AO issuing a defect notice - Revision proceedings are invalid.
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Income Tax:
Exemption u/s 11 and 12 denied - deemed registration u/s 12AA - the benefit of the proviso to section 12A(2) is available not only when the assessment proceedings are pending before the AO but also when an appeal against the assessment order is pending before the ld. CIT(A). It is so for the reason that the appeal proceedings are nothing but continuation of the assessment proceedings.
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Income Tax:
Claim of expenditure in the revised return - Once, the assessee has realized that the claim was wrongly not made, the assessee has every right to revise the return indicating correct taxable income. What is to be examined is whether the claim of the assessee is correct or not but not whether the correct claim is filed with the original return or revised return.
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Income Tax:
Demand on Interest on delayed payment of TDS - The interest u/s. 201(1A) since it is to be calculated from the date on which tax is to be deducted and being mandatory, the Assessing Officer has correctly calculated interest u/s. 201(1A) of the I.T. Act for the amount of TDS outstanding as on 31-03-2004., It is ordered accordingly.
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Income Tax:
Condonation of delay - absence of sufficient cause - the fact that there was lawyer's wrong advice has to be proved by the party seeking condonation of delay; and that the Counsel must disclose the circumstances in which incorrect advice was given and, it is not sufficient to make a perfunctory and general statement that wrong advice was given bonafide.
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Income Tax:
TDS deducted u/s 194J - delay in deposit of the TDS deduction - applicability of section 43B in case of appellant, as the appellant is following cash of accounting u/s 145 - rule of consistency has to be followed by the Revenue - No additions.
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Income Tax:
Revision u/s 263 - whether rental income of House property is assessable under the head “Income from House Property” or under the head “Income from business or profession”? - AO has taken one possible view - hence the order is neither erroneous nor prejudicial to the interest of revenue.
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Income Tax:
Disallowance of expenses as business not set up - the assessee has applied for grant of Direct Broker Licence to the Insurance Regulatory and Development Authority on 01.12.2010 which was granted to the assessee only in February, 2012 - Additions confirmed.
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Income Tax:
Reopening of the assessment u/s 147 - validity of sanction granted u/s 151 - “Yes, I am satisfied, It is a fit case to issue notice under section 148.” - Such an approval is not valid in Law because it would show that approval have been granted without application of mind.
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Income Tax:
Exemption u/s 11 - disallowing of the amount of accumulation made u/s.11(2) & 11(1)(a) - failure to E-filing of Form-10 in time - since admittedly, the exemption of the kind which the petitioner had sought for is granted for the subsequent Assessment Years, the respondent-authorities are not justified in rejecting petitioner’s claim for exemption for the Assessment Year 2015-16 on the grounds purported in the impugned order.
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Income Tax:
Bogus purchases or sales u/s 69C - genuineness of the transaction - Without causing such necessary enquiries in respect of the purchases, it was not open to the Assessing Officer to make the addition u/s 69C.
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Customs:
Illegal export - it is alleged that respondent (Inspector of customs) had connived with the exporters for helping them obtain certificate of export without actual export for fulfilling their export obligation as 100% EOU by issuance of export orders fraudulently - the punishment meted out to them by the disciplinary authority was absolutely justified and should not have been interfered with by the Tribunal.
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Customs:
Import of Beta Napthol under DEEC and Target Plus Scheme - Since, the transaction of the Beta Napthol by the appellant to the job worker does not fall under the term either “sale” or “transferred in other manner”. Therefore, there is no contravention of the condition attached to the N/N. 93/2004-Customs
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Customs:
Valuation of imported goods - undervaluation of Zinc and aluminium scrap imported - The circular only provides for average price difference between the price of prime metal and different grades of scrap as determined on the basis of study of difference in prices of scrap and prime metal. The circular only requires the department staff to check possible under valuation, after ensuring all relevant specifications. However, the said circular cannot have over riding effect on the valuation provisions contained in the customs statute and as such,
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Indian Laws:
Cabinet approves proposal for capital infusion for OICL, NICL and UIICL
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Indian Laws:
Principles of natural justice - This is the basic difference between the nature of the complainant’s evidence and the evidence of the accused in a case of dishonoured cheque. It is, therefore, wrong to equate the defence evidence with the complainant’s evidence and to extend the same option to the accused as well.
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PMLA:
Restoration of appeal - appeal dismissed for non-prosecution - The connected appeals are pending before this Tribunal and if the appeal is not restored to file than it would cause great hardship to the appellant and his family members. - Appeal restored.
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Central Excise:
CENVAT Credit - scope of SCN - while proposing to recover duty, the process of printing was also considered as a process of manufacture. Therefore, denying credit holding that the process of printing does not amount to manufacture, is contrary to the very basis of show cause-cum-demand notice, hence, cannot be sustained.
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VAT:
Levy of purchase tax - Valuation - The Tribunal is justified in imposing the purchase tax on the Assessee Sugar Mill on the entire purchase price including the components of price for the sugar cane, plantation subsidy and transportation charges paid by the Assessee for transportation of sugar cane from the sugarcane fields to the factory premises of the Petitioner
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VAT:
Levy of penalty u/s 10-A read with Section 10(b) of CST Act - Assessee was entitled to purchase the said fuel viz., diesel, for its generator set and even though the same was not separately included in the Registration Certificate of the Assessee, no mens rea can be attributed to the Assessee for purchase of the same at concessional rate against “C” Form
Articles
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (2) TMI 495
Reopening of portal for uploading of returns - assessees are unable to upload their returns both GSTR-9 and GSTR-9C - HC extended the date till 12.2.2020 - Stay of the order which has extended the deadline for submitting the returns - Penal punishments - HELD THAT:- we only stay that part of the order which has extended the deadline for submitting the returns. - This is on the basis of Mr. Tushar Mehta, learned Solicitor General s statement to this Court that only ₹ 200/- per day is being charged for the filing of late returns beyond 12.02.2020. We do not intend by this ad-hoc order to at all interfere with what the High Court may ultimately do on the facts of this case - SLP disposed off.
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2020 (2) TMI 494
Release of confiscated goods alongwith vehicle - section 130 of CGST Act - HELD THAT:- The provisions of section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017, would be clearly applicable for the purpose of the writ petitioner seeking release of his goods and vehicle. Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017, is a complete and comprehensive code by itself which provides the mechanism required to be adopted for the purpose of detention, seizure and release of goods and conveyances in transit. Petition disposed off.
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2020 (2) TMI 493
Levy of penalty and redemption fine in lieu of confiscation of goods - section 130 of CGST Act - requisite amount already paid - validity of SCN - HELD THAT:- Pursuant to the notice issued under Section 129 of the Act determining the amount to be paid towards the tax and liability, the requisite amount has been paid by the writ-applicant and the conveyance and the goods have been released. It appears that later, a show-cause notice came to be issued under Section 130 of the Act calling upon the writ-applicant to show-cause why the goods and conveyance should not be confiscated. As the matter is now at the stage of MOV-10, the writ-applicant shall appear before the authority and file an appropriate reply to make good his case that the notice issued in GST MOV-10 deserves to be discharged - Application disposed off.
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2020 (2) TMI 492
Levy of penalty and redemption fine in lieu of confiscation of goods - section 130 of CGST Act - service of SCN - goods along with truck were already released as per interim-relief- HELD THAT:- Persuing the present writ application, a final order, in the Form GST MOV-11, came to be passed. However, according to the writ applicant, at no point of time such order was served upon him. As on date also, the writ-applicant has not been able to go through the contents of such order, as he has not received the same. However, such order passed in the Form GST MOV-11, is available now on record at page No.45 of the petition - Since the final order has been passed in the Form GST MOV-11, we relegate the writ applicant to avail the remedy of preferring an appeal under Section 107 of the Act before the appellate authority. Application disposed off.
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2020 (2) TMI 497
Input tax credit - GST paid on replacement of existing lift/ elevator at its own premises to the vendor registered under the Goods and Services Tax Act for manufacture, supply, installation and commissioning of lift/ elevator - Maintenance Charges collected from its Members - blocked credits under the Goods and Services Tax Act. HELD THAT:- The lift, after erection and installation is an immovable property because it becomes a part of an immovable property i.e a building. In other words it is to be considered as an integral part of the building itself. It is not a separate part of the building. When any person speaks of such a building, he also includes the lifts as an integral part of the building, like storage water tanks, etc. - thus, Manufacture, Supply, Installation and Commissioning of Lifts/Elevators is in the nature of Works Contract activity which results in creation of an immovable property. Hence in view of the discussions and Explanation to Section 17 of the CGST Act, we are of the opinion that the applicant is not entitled to ITC of GST paid on replacement of existing Lift/Elevator, in its premises. Thus, input tax credit not allowed - the question regarding blocked credit not required to be answered.
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2020 (2) TMI 496
Maintainability of Advance Ruling application - Exemption from GST - services provided by VFS global to applicant which are in the nature of collection services - pure service provided to the local authority by way of any activity in relation to any function entrusted to a Municipality under article 243W of the Constitution of India - Benefit of N/N. 12/2017 of CGST Rate) read with N/N. 02/2018 CGST (Rate). HELD THAT:- The question raised in the subject application, is not in relation to supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. From the submissions made by the applicant, we find that in the subject transaction, they are a receiver of supply of services from VFS. The question raised by Applicant does not pertain to supply of goods or services or both being undertaken or proposed by them - in view of the provisions of Section 95 of the GST Act, since the supply in the subject case will not be undertaken/ is not proposed to be undertaken, by the applicant, we are of the opinion that this authority is not allowed to answer the question raised by the applicant, being out of the purview of Sec. 95 of CGST Act. The applicant is recipient of services and not supplier of services, hence their application is not in accordance with the provisions under Section 95 of CGST ACT and is not maintainable - The application for advance ruling is rejected, as being non-maintainable.
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Income Tax
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2020 (2) TMI 469
Carry forward and set off of unabsorbed depreciation of the amalgamating company - set off unabsorbed depreciation prior to A.Y. 1994-95 to 1998-99 beyond 8 years - HELD THAT:- SLP dismissed.
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2020 (2) TMI 460
Disallowance of expenses as business not set up - HELD THAT:- Undisputed facts in the instant case is that the assessee has applied for grant of Direct Broker Licence to the Insurance Regulatory and Development Authority on 01.12.2010 which was granted to the assessee only in February, 2012, therefore in view of RAMARAJU SURGICAL COTTON MILLS LIMITED [ 1966 (10) TMI 41 - SUPREME COURT] we hold that the business of the assessee has been set up only in February, 2012. Accordingly, the order of the CIT(A) holding that the business of the assessee was not set up during the relevant period and, therefore, the entire expenses has to be disallowed as business expenditure is upheld. The various decisions relied on by the ld. Counsel for the assessee are distinguishable and not applicable to the facts of the present case. Accordingly, the grounds raised by the assessee are dismissed.
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2020 (2) TMI 459
Reopening of the assessment u/s 147 - validity of sanction granted u/s 151 - addition on account of share application money u/s 68 - HELD THAT:- The assessee filed copy of the sanction granted by Competent Authority to the reasons recorded for reopening of the assessment. Copy of the same is filed in which Addl. Commissioner of Income Tax has mentioned Yes, I am satisfied . The Commissioner of Income Tax, Ghaziabad noted Yes I am satisfied. It is a fit case to issue notice under section 148. Such an approval is not valid in Law because it would show that approval have been granted without application of mind. Hon ble Delhi High court in the case of United Electrical Co. Pvt. Ltd., vs. Commissioner of Income Tax 2002 (10) TMI 86 - DELHI HIGH COURT in which approval by Addl. Commissioner of Income Tax under section 151 was given in the following terms Yes, I am satisfied that it is a fit case for issue of notice under section 148 of the I.T. Act , similarly worded approval did not approve the same and held that In the present case, there has been no application of mind by Addl. CIT before granting approval. Therefore, we are of the view that reopening of the assessment is bad in Law and that sanction/approval granted by the Competent Authority is also invalid. Considering the totality of the facts and circumstances of the case, we are of the view that reopening of the assessment is illegal, bad in Law and void abinitio. - Decided in favour of assessee.
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2020 (2) TMI 468
Exemption from payment of tax u/s 10B - 100% EOU - Scope of term 'Manufacture' - exemption denied on the ground that products exported were not produced or manufactured in the industrial unit of the assessee's 100 per cent Export Oriented Unit - HELD THAT:- Special leave petition is dismissed on the ground of low tax effect.
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2020 (2) TMI 467
Penalty u/s 271(1)(c) - levied after the expiry of the limitation period u/s 275(1)(a) - Tribunal order served on the CIT (Judicial) - ITAT deleted penalty - HELD THAT:- SLP Dismissed.
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2020 (2) TMI 458
Revision u/s 263 - whether rental income of House property is assessable under the head Income from House Property or under the head Income from business or profession ? - Stand of the ld PCIT is that rental income should be assessable under the head Income from business or profession whereas the stand of the assessee is that it should be assessable under the head Income from House Property - HELD THAT:- We note that the object clause, as contained in the Memorandum and Articles of association of company, would not be the conclusive factor. Matter has to be examined on the facts of each case as held by the Hon ble Supreme Court in the case of Raj Dadarkar Associates vs. ACIT [ 2017 (5) TMI 586 - SUPREME COURT] Assessing Officer has taken one of the possible views that the income should be assessable under the head income from house property , hence the order passed by the Assessing Officer u/s 143(3) dated 07.12.2016 is neither erroneous nor prejudicial to the interest of revenue. Since the order of the Assessing Officer cannot be held to be erroneous as well as prejudicial to the interest of the revenue, in the facts and circumstances narrated above, the usurpation of jurisdiction exercising revisional jurisdiction by the Principal CIT is null in the eyes of law and, therefore, we are inclined to quash the very assumption of jurisdiction to invoke revisional jurisdiction u/s 263 by the Principal CIT. Therefore, we quash the order of the Principal CIT dated 25.03.2019 being ab initio void. - Decided in favour of assessee
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2020 (2) TMI 457
TDS deducted u/s 194J - delay in deposit of the TDS deduction - applicability of section 43B in case of appellant, as the appellant is following cash of accounting under sec 145 - HELD THAT:- No doubt, the assessee is following the cash method of accounting and has made cash payment to various parties after deducting TDS, the portion of which has been allowed by the AO as deductible expenditures, U/s 198 of the Act tax deducted at source by the assessee as per Income Tax Act is deemed to be income received by the recipient of the said income and as such TDS deducted by the assessee is deemed to have been received by the recipient of the income and as such it cannot be held that the assessee has not paid the amount of tax deductible at source on or before the due date. So it cannot be held that the aforesaid amount of TDS has not been paid by the assessee while following the cash system of accounting. Hon ble Delhi High Court in case of Commissioner of Income Tax XIII Vs. Naresh Kumar [ 2013 (9) TMI 275 - DELHI HIGH COURT] and Commissioner of Income Tax Vs. Rajinder Kumar [ 2013 (7) TMI 454 - DELHI HIGH COURT] held that if the statutory liability of depositing the TDS has been fulfilled before the due date of filing of the return u/s 139(1) of the Act, the same are allowable expenses in the year to which it relates. This is also mandate of Section 43B of the Act. Even otherwise identical issue has been decided by the revenue itself in favour of the assessee in its own case in A.Y. 2008-09, 2010-11 and 2011-12, so rule of consistency has to be followed by the Revenue. - Decided in favour of assessee. Addition of partner s salary paid to Mr. U.A. Rana on the ground that partner s salary has been revised just before the few dates of the end of financial years - HELD THAT:- Perusal of the supplementary partnership deed shows that partner s salary has been enhanced with effect from 1st April, 2012 to ₹ 57,00,000/-. Accordingly assessee has claimed partner s salary with effect from 1st April and placed on file the copy of ledger available. When it is undisputed fact that out of two partner namely Mr. R.J.Gagrat and Mr. Ujjwal A. Rana only one partner is active partner and is deriving salary and no salary is being drawn by Mr. R.J. Gagrat, they have mutually agreed to decide the salary of the active partners. When the salary of the partner has been enhanced in accordance with law and has been claimed as such, enhanced amount disallowed by the AO/ Ld. CIT(A) is not sustainable in the eyes of law hence, ordered to be allowed. So the addition made by AO and confirmed by the ld. CIT(A) is ordered to be deleted. Consequently ground no. 4 raised by the assessee is allowed. Disallowance of telephone expenses - HELD THAT:- In view the fact that as against the gross receipt of ₹ 5.93 crore, Assessee has claimed telephone expenses of ₹ 1,93,712/- which is merely 0.32% of the gross receipts, we are of the considered view that Ld. CIT(A) in A.Y. 2011-12 has rightly restricted the personal nature of telephone expenses of the assessee to 8% of the total claim. So the Revenue is required to follow the rule of consistency and as such personal nature of telephone expenses of the assessee is restricted to 8% of the total claim. So Ground No. 5 is partly determined in favour of the assessee.
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2020 (2) TMI 456
Reopening of assessment u/s 147 - addition u/s 68 - HELD THAT:- AO, based on mere suspicion regarding the genuineness of sources of investment, is of the opinion that the said amount has escaped to the assessment. There is no prima-facie reason for the Assessing Officer to come to that line of the reason to believe about the concealed income. In our opinion, it is a case of issuing notice u/s 147 of the Act for conducting roving enquiries and without having any tangible material that works as a live wire . Considering the above decision of the Tribunal [ 2019 (11) TMI 211 - ITAT PUNE] Assessing Officer was not justified in taking recourse to the provisions of section 147 of the Act and therefore, the initiation of reassessment proceedings are not in accordance with law. Therefore, following the rule of consistency, I set-aside the initiation of reassessment proceedings and the consequential assessment. Thus, the legal ground raised by the assessee by way of ground no.1 is allowed.
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2020 (2) TMI 455
NP Determination - undisclosed turnover - Survey u/s 133A of the Act was conducted at the business premises of the assessee and statement u/s 133A were recorded - HELD THAT:- Assessee was carrying out its business from 2005 onwards and neither any books of accounts were maintained nor returns were filed. The gross receipts were calculated on the basis of receipts appearing in the bank statement held by the assessee in Axis Bank. Whether the Ld. A.O is justified in applying 8% net profit rate - In the assessment completed u/s 143(3) of the Act for Assessment Yea₹ 2006-07 and 2007-08, we find that on the undisclosed turnover the Ld. A.O has computed net profit @5% and has also not disturbed the profit shown by the assessee @5% on the disclosed turnover. Though the estimation of net profit rate on turnover of the gross receipts of the assessee depends on various facts and circumstances and case to case basis but looking to the Rule of consistency wherein the assessee is carrying out the similar type of business not maintaining any books of accounts and also considering the fact that the Ld. A.O in assessee s own case has accepted the net profit @5%, it will not be justified to apply 8% net profit rate for subsequent assessment years even when the turnover has almost doubled. Net profit rate of 5.24% shown by the assessee for Assessment Year 2008-09 should be accepted and the same should be applied for Assessment Year 2009-10 also. By application of net profit rate of 5.24% for Assessment Yea₹ 2008-09 and 2009.10 on the declared turnover of ₹ 2,72,27,334/- and ₹ 2,14,68,304/-, net profit subject to tax will works out to ₹ 14,26,712/- and ₹ 11,24,940/-. In the result as regards the first common issue, appeal of the assessee for Assessment Year 2008-09 stands allowed Undisclosed income - statement recorded during survey proceedings relied upon - HELD THAT:- we observe that the corroborative evidence found during the course of survey have already been taken into account for computing the net profit of the assessee for Assessment Year 2009- 10. Revenue authorities failed to correlate the addition of ₹ 2,00,000/- with any corroborative evidence. Thus the addition seems to be made purely on the basis of statement given during survey proceedings - Both the lower authorities were not justified in confirming the addition for undisclosed income made on the basis of statement given during the course of survey. The impugned addition thus deserves to be deleted.
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2020 (2) TMI 454
Demand on Interest on delayed payment of TDS - calculation of interest - Orders passed u/s. 201 and 201(1A) - Period of limitation - AY 2004-05 - HELD THAT:- The Hon ble Madras High Court in the case of CIT vs. Chennai Metropolitan Water Supply Sewerage Board [ 2011 (9) TMI 224 - MADRAS HIGH COURT] had held that interest u/s. 201(1A) has to be calculated from the date on which tax should have been deducted to the date on which payee should have filed its return under provisions of the Act. It was further held by Hon ble High Court that interest u/s. 201(1A) of I.T. Act is automatic. As mentioned earlier, the Assessing Officer had only passed order u/s. 201(1A) of I.T. Act for AY 2004-05. The interest u/s. 201(1A) since it is to be calculated from the date on which tax is to be deducted and being mandatory, the Assessing Officer has correctly calculated interest u/s. 201(1A) of the I.T. Act for the amount of TDS outstanding as on 31-03-2004., It is ordered accordingly. Thus, the appeal of the assessee for the assessment year 2004-05 is dismissed. AY 2005-06 - DR submitted that the payment has been made subsequent to the order passed u/s. 201(1) 201(1A) and there is no point in remitting the issue to the file of the Assessing Officer - The impugned order u/s. 201(1) and 201(1A) of the I.T. Act was passed on 04/02/2013. In the said order, balance TDS outstanding as on 31/03/2005 was determined at ₹ 1,50,529/- and interest u/s. 201(1A) of the I.T. Act was calculated up to the date of the order, i.e., 04.02.2013 amounting to ₹ 1,43,002/-. The payment made subsequent to the date of order, i.e., 04.02.2013 gets adjusted to the amount determined in the order dated 04.02.2013. The assessee has taken the plea that payments have been made on 13/03/2013 for the full amount of ₹ 1,50,529/- which is TDS outstanding as on 31/03/2005. The amount paid gets automatically adjusted to the amount determined as per the order passed u/s. 201(1) and 201(1A) of the I.T. Act. Therefore, there is no requirement of remitting the case of the file of the Assessing Officer. AY 2006-07 - Department itself has reduced the liability u/s. 201(1) 201(1A) of the I.T. Act to ₹ 4,430/- for the AY 2006-07 from ₹ 13,019/- originally determined. No other contentions have been raised. Hence, the appeal of the assessee for the assessment year 2006-07 is dismissed. A.Y. 2007-08 - According to the assessee there is no TDS payment outstanding for the A.Y. 2007-08 as per the addendum to the auditor s report dated 11/08/2008. It is to be noted that the assessee has filed rectification application before the Assessing Officer. It is for the assessee to pursue the rectification application filed before the Assessing Officer and prove its case that no TDS payment is outstanding as on 31/03/2007. Thus dismiss the appeal filed by the assessee
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2020 (2) TMI 491
Unabsorbed depreciation claimed u/s 32(2) - Claim beyond the period of eight years - Tribunal deleted the addition - HELD THAT:- ITAT has placed reliance on two decisions, namely the decision of the Gujarat High Court in M/s General Motors India Pvt. Ltd. Vs. DCIT, [ 2012 (8) TMI 714 - GUJARAT HIGH COURT] which has been followed by this Court in Motor General Finance Limited Vs. ITO [ 2017 (5) TMI 637 - DELHI HIGH COURT] this Court has also considered the said issued in PCIT-2 Vs. British Motor Car Co. (1934) Limite d, [ 2018 (1) TMI 547 - DELHI HIGH COURT] thereby holding in favour of the assessee that the assessee is entitled to avail of the unabsorbed depreciation beyond the period of eight years which was prescribed under the unamended Section 32 of the Act. No substantial question of law arises
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2020 (2) TMI 465
Penalty u/s 271(1)(c) - bogus professional fees - HELD THAT:- Mr. Singh fairly submits that in the quantum appeal [ 2019 (2) TMI 178 - BOMBAY HIGH COURT ] this Court by order had dismissed the appeal filed by the revenue upholding the order passed by the Tribunal. Tribunal had deleted the addition made by the Assessing Officer. It may also be stated that penalty was imposed following addition made by the Assessing Officer. Imposition of penalty by the Assessing Officer was interfered in appeal against which the present appeal arises. Quantum appeal by the revenue has been dismissed by this Court, the very foundation for sustaining the present appeal no longer survives.
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2020 (2) TMI 490
TDS u/s 194C - payment of the freight charges to the truck owners - HELD THAT:- To our mind if the AO was not satisfied with the details furnished by the assessee then he should have required the assessee to furnish the details for the entire year. Moreover, we note that the AO in the remand proceeding has not pointed out any defect in the submission filed by the assessee. Accordingly, we note that the assessee was merely acting as an agent. Accordingly, the assessee is not liable to deduct the TDS on the payment made to the truck owners. Tribunal also took support of one of its judgment in the case of ITO Vs. Andhra Roadways [ 2015 (7) TMI 1317 - ITAT AHMEDABAD] . Ultimately, the Tribunal reached to the conclusion that the assessee has duly complied with the provisions of Section 194C of the Act by collecting the requisite 15-I Form and therefore, the assessee was not liable to deduct the TDS, on payment made to the transporters. We are convinced to the line of reasoning, assigned by the Tribunal. None of the two questions, as proposed by the Revenue, could be termed as the substantial questions of law. - Decided against revenue
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2020 (2) TMI 451
Claim of expenditure in the revised return - Expenditure incurred for the proposed new projects - allowable deduction u/s 37 - whether expenditure pertaining to the new projects have to be debited against the income of the new project only which was treated as work in progress earlier? - HELD THAT:- Assessee has incurred the expenses on account of salary, telephone and travelling in order to obtain the business which has been procured in the further years down the lines. The business has to be looked into as a composite activity of the assessee and the receipts and the expenditure have to be taken compositely. The apportion of the expenditure in a consultancy firm like the assessee against each project is not in tune with the standard accounting practices. This is not a case of construction of buildings or townships wherein the expenditure incurred against each project is considered separately depending upon the method of accounting followed by the assessee. The assessee is in the business of providing consultancy and fund management, financial advisory wherein the expenditure and the revenue has to be taken into account in running accounting methods. Revenue has primarily disallowed this expenditure because the assessee has filed a revised return of income which were hitherto claimed under work in progress. Once, the assessee has realized that the claim was wrongly not made, the assessee has every right to revise the return indicating correct taxable income. What is to be examined is whether the claim of the assessee is correct or not but not whether the correct claim is filed with the original return or revised return. Since, the claim of the assessee can be accepted with regard to the expenditure involved as allowable expenditure for the year, we hereby hold that no disallowance on this account is required and the addition made is hereby directed to be deleted. Appeal of the assessee is allowed.
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2020 (2) TMI 450
TP Adjustment - adjustment in value of international transaction (by increasing the margin of comparable companies - comparable selection - HELD THAT:- The taxpayer is engaged in activity defined as technical consultancy of engineering services, which can be classified as technical engineering service provider. The taxpayer in order to benchmark its international transactions qua technical support services provided to the Associated Enterprises (AE) applied Transactional Net Margin Method (TNMM) with Operating Profit/ Total Cost (OP/TC) as Profit Level Indicator (PLI) as the Most Appropriate Method (MAM), arrived at its own margin at 12.28% on cost, thus companies functionally dissimilar with that of assessee need to deselected. Risk adjustment - issue of this year is also required to be restored to TPO/AO to decide afresh after providing an opportunity of being heard to the taxpayer as there is no change in the business model of the taxpayer during the year under assessment. The taxpayer is directed to bring on record evidence to prove the risk adjustment vis- -vis comparables in the light of the decisions of the coordinate Bench of the Tribunal in cases of Mentor Graphics (Noida) Pvt. Ltd. vs. DCIT [ 2007 (11) TMI 339 - ITAT DELHI-H] and DCIT vs. Hellosoft India Pvt. Ltd. [ 2013 (10) TMI 747 - ITAT HYDERABAD] Deduction u/s 10A(1A) - AO/TPO/DRP restricting the deduction at 90% instead of 100% as provided in section 10A(1A) of the Act on the ground that the taxpayer has inadvertently claimed deduction at 90% of the eligible profit of the undertaking instead of 100% of the eligible profit - HELD THAT:- In AY 2010-11, identical issue was also raised by the taxpayer as additional ground which was allowed as per order dated 26.12.2018 and restored the issue back to the AO for passing order afresh in accordance with law. Since this is a mistake apparent on record on the part of the taxpayer, this issue is required to be restored back to the AO to decide afresh keeping in view the provisions contained u/s 10A(1A) of the Act. Consequently, the AO is directed to decide the issue afresh after providing an opportunity of being heard to the taxpayer. So, ground no.2 is determined in favour of the taxpayer for statistical purposes.
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2020 (2) TMI 464
Bogus purchases or sales u/s 69C - genuineness of the transaction is not explained or explanation offered by the assessee is not satisfactory - tribunal deleted the addition - HELD THAT:- Tribunal had returned a finding of fact that the assessee had fled copies of purchase bills, copies of purchase/ sale invoices, challan cum tax invoices in respect of the purchases, extracts of stock ledger showing entry/exit of the materials purchased, copies of bank statements to show that payment for such purchases were made through regular banking channels, etc., to establish the genuineness of the purchases. Tribunal held that AO could not bring on record any material evidence to show that the purchases were bogus. Mere reliance by the Assessing Officer on information obtained from the Sales Tax Department or the statements of two persons made before the Sales Tax Department would not be sufficient to treat the purchases as bogus and thereafter to make addition under Section 69C. Tribunal has also held that if the Assessing Officer had doubted the genuineness of the purchases, it was incumbent upon the AO to have caused further enquiries in the matter to ascertain genuineness or otherwise of the transaction and to have given an opportunity to the assessee to examine/cross-examine those two parties vis-a-vis the statements made by them before the Sales Tax Department. Without causing such further enquiries in respect of the purchases, it was not open to the Assessing Officer to make the addition under Section 69C of the Act. We are in agreement with the view expressed by the Tribunal. In fact, Tribunal has only affirmed the finding of the first appellate authority. Thus, there is concurrent finding of fact by the two lower appellate authorities. As relying on M/S NIKUNJ EXIMP ENTERPRISES PVT LTD. [ 2013 (1) TMI 88 - BOMBAY HIGH COURT ] held that merely because the suppliers had not appeared before the Assessing Officer, no conclusion could be arrived at that the purchases were not made by the assessee. - Decided against revenue
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2020 (2) TMI 463
Levy of surcharge in the case of block assessment - HELD THAT:- In view of this, the matter deserves to be sent back to the learned Tribunal for deciding the appeal again, in the light of the latest decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax, Bangalore Vs. K.Raheja Hotels Estate (P.) Ltd. [2014 (11) TMI 357 - SUPREME COURT] . In view of this, the matter deserves to be sent back to the learned Tribunal for deciding the appeal again, in the light of the latest decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax, Bangalore Vs. K.Raheja Hotels Estate (P.) Ltd .
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2020 (2) TMI 489
Disallowance u/s 14A - stand of the department is that the expression 'includible' appearing in heading of Section 14A would mean that it is not necessary that exempt income should be included in the particular year's income for deduction to be allowed - HELD THAT:- This Court in the case of Commissioner of Income Tax Vs. M/s. Delite Enterprises [ 2009 (2) TMI 498 - BOMBAY HIGH COURT] answering a similar question held that since there was no profit in the relevant assessment year, question of disallowance under Section 14A would not arise. Again Delhi High Court in case of Pr. Commissioner of Income Tax -4 Vs. IL FS Energy Development Company Ltd [ 2017 (8) TMI 732 - DELHI HIGH COURT] held that CBDT circular referred to herein above cannot override the statutory provisions and declined to admit the related appeal raising similar question. Adverting to the facts of the present case, admittedly, there is no exempt income of the assessee in the year under consideration. Consequently, the questions proposed do not arise.
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2020 (2) TMI 488
Condoning of delay of 1305 days - Assessee submits that appellant was pursuing his remedy of rectification of the appellate order passed by the Commissioner of Income Tax (Appeals) under Section 154 of the Act and that was the reason for the delay - HELD THAT:- On due consideration and taking an overall view of the matter, we feel that it would meet the ends of justice if the matter is decided afresh by the Tribunal after giving due opportunity to the appellant to explain the delay in preferring the related appeal. Ordered accordingly. Needless to say, no opinion is expressed on merit and all contentions are kept open.
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2020 (2) TMI 461
Exemption u/s 11 - disallowing of the amount of accumulation made u/s.11(2) 11(1)(a) - E-filing of Form-10 - Petitioner-Trust not e-filed despite the shift from manual to e-filing and that the application for condonation of delay was made belatedly i.e., long after filing of Form-10 - HELD THAT:- Form-10 seeking exemption under Section 11(2) of the Income Tax Act, 1961 was filed on 31.03.2016 and the application seeking condonation of delay was filed on 06.09.2018; it is a settled principle of law that when the claim is made belatedly, it is open to the claimant to offer explanation for the delay so brooked, subsequent to making the claim also vide Division Bench decision of this Court in the case of STATE OF KARNATAKA Vs. NAGAPPA [ 1985 (6) TMI 199 - KARNATAKA HIGH COURT] in the absence of statutory intent to the contrary; although, a proceeding arising under a Tax Statute is bit different from the Court proceedings, that difference does not come in the way of treating the ratio of the said decision as a general norm to be followed by quasi-judicial authorities as well, as long as there is a provision for condoning the delay; b) the purported ground mentioned in the impugned order for rejecting petitioner s claim for exemption u/s.11(2) of the Act that he had not uploaded Form 10 by e-filing is fault some inasmuch as, the claim related to the Assessment Year 2015-16 when e-filing was not yet prescribed; even otherwise, the answering respondent could have instructed the petitioner to make e-filing of the claim so that the petitioner would have had a fair treatment at the hands of the respondent-authorities; thus, there is an error apparent on the face of the record; and, c) since admittedly, the exemption of the kind which the petitioner had sought for is granted for the subsequent Assessment Years, the respondent-authorities are not justified in rejecting petitioner s claim for exemption for the Assessment Year 2015-16 on the grounds purported in the impugned order. In the above circumstances, this writ petition succeeds in part; the impugned order having been quashed, the matter is remitted back to the answering respondents for consideration afresh, within a period of three months in accordance with law.
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2020 (2) TMI 448
Exemption u/s 11 and 12 denied - deemed registration u/s 12AA - registration granted to the assessee u/s.12AA during the pendency of proceedings before the ld. CIT(A) - In the interim, the assessee had applied for fresh registration before the CIT(E) and CIT(E) has granted registration - HELD THAT:- As decided in SHRI KRISHNABAI GHAT TRUST VERSUS ITO (EXEMPTIONS) , WARD-1, PUNE [ 2019 (5) TMI 618 - ITAT PUNE] what AO can do, can be done by CIT(A) in an appeal before him. Even what the AO could have done but failed to do, can also be done by him. It shows that the powers of a CIT(A) in an appeal against an assessment order are almost similar to those of an AO. If extend this analogy to the provisions of section 12A(2), an irresistible conclusion which follows is that the benefit of the proviso is available not only when the assessment proceedings are pending before the AO but also when an appeal against the assessment order is pending before the ld. CIT(A). It is so for the reason that the appeal proceedings are nothing but continuation of the assessment proceedings. As at the time of granting registration by the ld. CIT (Exemptions) to the assessee, the appeal of the assessee was pending before the ld. CIT(A), in my considered opinion, the benefit of first proviso to section 12A(2) ought to have been granted. Ground thus raised is allowed by holding that the assessee would be entitled to exemption u/ss. 11 and 12 of the Act for the year under consideration on the reason that the registration was, in fact, granted to the assessee u/s.12AA during the pendency of proceedings before the ld. CIT(A). - Decided in favour of assessee.
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2020 (2) TMI 447
Undisclosed contract receipts - claim of deduction of remuneration / salary to partners from the estimated income i.e net profit @ 8% - HELD THAT:- Since the assessee itself is showing net profit on contractual receipts before allowing salary and interest on capital to partners ranging between 7-8% in most of the subsequent years, therefore, the modification made by Pr. CIT that the net profit of the assessee should be estimated at 8% on accounted contractual receipts is correct and sustainable. However, we direct the AO to allow salary and interest on capital to the partners out of said estimated net profit. Whether the Pr. CIT was right in modifying the assessment order and directing the AO to add the entire undisclosed receipts as income of the assessee? - HELD THAT:- We are compelled to hold that in view of the proposition rendered by Hon ble M.P. High Court in the case of Balchand Ajit Kumar [ 2003 (4) TMI 76 - MADHYA PRADESH HIGH COURT] the entire amount of contract receipts cannot be taxed in the hands of the assessee, only the profit embedded therein can be taxed in the hands of the assessee. Since, in the earlier part of this order, we have confirmed the action of the Ld Pr. CIT to estimate net profit @ 8% of the total contract receipts, but this percentage cannot be completely applied for estimation of net profit embedded in the unaccounted contract receipts. Therefore, explanation of the assessee and the modification order of ld. Pr. CIT, to cover the possible leakage of revenue, we direct the AO to estimate the net profit @ 16% of unaccounted contractual receipts, which would meet the ends of justice. Accordingly, appeal of the assessee is partly allowed.
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2020 (2) TMI 446
Rectification u/s 154 - whether fees paid to ROC on expansion of share capital is capital or revenue? - HELD THAT:- The decision of the Hon ble Supreme Court in the case of Punjab State Industrial Development Corporation Ltd., [ 1996 (12) TMI 6 - SUPREME COURT] clearly settles the law on the question whether fees paid to ROC on expansion of share capital is capital or revenue and has laid down that the expenditure is capital expenditure. While concluding the assessment, the AO overlooked the aspect of disallowance of fees paid to ROC which was evident from the record. Therefore the AO initiated proceedings u/s.154. No infirmity in the action of the AO. It is no doubt true that the proceedings u/s154 of the IT Act, cannot be initiated on debatable issue, but it is equally true that if the ultimate answer to the question which is subject matter of the proceedings u/s 154 of the Act, can only be one, then the proceedings u/s 154 of the Act can be initiated and cannot be cancelled on the ground that the issue that was subject matter of proceeding u/s 154 of the Act were debatable involving long drawn process of reasoning. With the decision of the Hon ble Supreme Court in the case of Punjab Industrial Development Corporation Ltd., (supra), which decision was available when the AO passed the order of Assessment, it cannot be said that there can be different views on the question whether fees paid to ROC on expansion of capital base is capital expenditure or revenue expenditure. We are therefore, of the view that there is no merit in this appeal and accordingly, the same is dismissed.
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2020 (2) TMI 487
Addition u/s 68 - unexplained cash credit - creditor did not appear before the authorities below inspite of notice under Section 133(6) - HELD THAT:- Additions cannot be made in the hands of the assessee, particularly when the assessee has extended all co-operation to the Revenue by providing the required documents as asked for time to time even before the appellate authority by way of additional evidence in order to justify the genuineness of the transactions. Merely because the creditor namely Smt. Kalpanaben Thakkar did not appear before the authorities below inspite of notice under Section 133(6) being sent, raising doubts on the genuineness of the loan is not warranted. With these observations, respectfully relying upon the judgments as discussed above, we are of the considered view that the addition made by the Learned Assessing Officer, confirmed by the First Appellate Authority, is not permissible in the eye of law. Hence, we delete the addition. - Decided in favour of assessee
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2020 (2) TMI 486
Income from other sources u/s 56 - amount received by the assessee as a legacy through the Will - HELD THAT:- A perusal of the provisions of Section 56(2)(vii) shows that any amount received by an individual without consideration and the aggregate value exceeds 50,000, the whole of the aggregate value is liable to be treated as income under the head income from other sources . The Fourth Proviso thereunder provides for the exemptions. Clause (a) talks of any amount received from a relative, Clause (c) talks of any amount under the Will or by way of inheritance. For the purpose of Clause (a) of the Fourth Proviso, relative has been defined in explanation (e) to the Proviso. A Will can be written by anybody. In a Will, anybody can be given a bequeathal. It need not be a relative alone. The fact that the Fourth Proviso refers to relative in Sub-clause (a), and refers to a Will or inheritance in Clause (c) clearly shows that the Will need not be a Will of a relative. Further, a Will is not given any restrictive meaning in the Explanation under the said Proviso either. We are of the view that the amount received by the assessee as a legacy through the Will of Mrs. Eva Maria Schnelder-Boog of an amount of 50,000 Swiss Francs, under no circumstances, can be brought to tax under the head income from other sources as the same is exempted by Clause (c) of the Fourth Proviso to Section 56(2)(vii) - Decided in favour of assessee.
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2020 (2) TMI 485
Revision u/s 263 - defective return of income - non filing of Audit report with the ITR - Loss claimed to be carried forward as per section 139(3) r.w.s. 80 - whether the return of income filed originally is to be treated as defective return of income so as to deny the benefit of carry forward of loss to the assessee in terms of section 139(1) r/w sections 139(3) and 80 of the Act. ? - HELD THAT:- In the facts of the present case, the assessee itself has removed the defect without being intimated by the Assessing Officer. Therefore, the original return of income cannot be treated as invalid as there is no failure on the part of the assessee to remove the defect within the time limit permitted by the Assessing Officer. In fact, the provisions of section 139(9) of the Act have never been pressed into action in the instant case Since the assessee has already filed the audit report, there is no question of Assessing Officer issuing a defect notice now in terms of section 139(9) of the Act for non filing of audit report. Therefore, exercise of power under section 263 of the Act to revise the assessment order simply for the purpose of going through the process of complying with the provisions of section 139(9) in our view, is a futile exercise. Non-filing of the audit report along with the original return of income is a technical error which is subject to rectification in terms of section 139(9) of the Act. Since, the defect has already been rectified, there is no purpose of again restoring the issue to the Assessing Officer for fresh adjudication considering the fact that the only issue on which the learned Commissioner held the assessment order to be erroneous and prejudicial to the interests of Revenue is inadmissibility of claim of carry forward of loss due to non filing of audit report, which allegedly, made the return of income of income filed under section 139(1) defective. Therefore, in our view, the exercise of power under section 263 of the Act in the present case is without justification, hence, invalid. - Decided in favour of assessee.
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2020 (2) TMI 484
Revision u/s 263 - CIT finds fault with the action of AO while calculating the fair market value of shares applying Rule 11U and 11UA, the price of share is only ₹ 27 and therefore, there is revenue loss of ₹ 123 per share, therefore, the order of the AO is erroneous - HELD THAT:- The certificate of Chartered Accountant of assessee is found placed and the calculation sheet as to how the value of shares has been arrived at ₹ 150/- is reproduced at page (4) (supra). So, it can be seen that AO during assessment proceedings had in fact enquired about the fair market value of shares issued by the assessee at ₹ 150/- per share and assessee had submitted the aforesaid documents before the AO to substantiate the fair market value of shares to the satisfaction of AO, so he accepted the same. We do not countenance this action of the Ld. Pr. CIT for the simple reason that the view taken by the AO after enquiry on the issue is a plausible view and cannot be held to be unsustainable in law. As per sec. 56(2)(viib) of the Act, fair market value can be computed by two ways. (i) By Rule 11U and 11UA of Income Tax Rules 1962. (ii) By assessee company to the satisfaction of the AO. And as per the said provision, the value whichever is higher can be adopted. So, in this case when Rule 11U and 11UA is applied, the fair market value of shares is at ₹ 27 and the fair market value according to assessee company is at ₹ 150/-, so the higher value has been adopted, which is a plausible view. However, if the Ld. Pr. CIT has to hold the view of the AO to be erroneous as well as prejudicial to revenue he has to conduct enquiries and record a finding that assessee's calculation of fair market value of ₹ 150/- is unsustainable in law, which the Ld. Pr. CIT has not done in this case, though all facts were furnished before him. The action of AO, who has conducted enquiry on the issue and called for documents and after examination has not drawn any adverse view against the assessee, cannot be held to be erroneous as well as prejudicial to the revenue since the assessment order cannot be found to be erroneous as well as prejudicial on the fair market value of shares, the condition precedent to invoke revisional jurisdiction u/s. 263 is absent and, therefore, the usurpation of jurisdiction by Ld. Pr. CIT is bad in law and so quashed. - Decided in favour of assessee.
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2020 (2) TMI 442
Condonation of delay - absence of sufficient cause - delay of more than 300 days - HELD THAT:- A pleader's gross carelessness affords no ground for condonation of delay; that a legal advisor's mistake, in order to justify condonation of delay must be a bonafide mistake; that mistaken advice given by a lawyer negligently and without due care is not sufficient cause; that the mistake should be such, which even a skilled legal advisor, well-versed and experienced in law might make that mistake; that, the fact that there was lawyer's wrong advice has to be proved by the party seeking condonation of delay; and that the Counsel must disclose the circumstances in which incorrect advice was given and, it is not sufficient to make a perfunctory and general statement that wrong advice was given bonafide. In any case, as noted by us in foregoing paragraph (B.2.1) of this order, the affidavit filed from the assessee's side in support of request for condonation of delay in filing of this appeal, lacks credibility. Hence, the assessee's appeal is held to be barred by Limitation, having regard to Section 253(3) read with Section 253(5) of I. T. Act. Accordingly, the appeal is not admitted, and is dismissed in limine - Appeal of the assessee is dismissed.
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Customs
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2020 (2) TMI 481
Import of Beta Napthol under DEEC and Target Plus Scheme - Benefit of N/N. 93/2004-Customs dated 10.09.2004 and N/N. 32/2005-Customs dated 08.04.2005 - Sale of imported goods or not - allegation of the department is that since the appellant have transferred the goods imported under DEEC and Target Plus Scheme to their job-worker, they have contravened the condition of the Notifications - HELD THAT:- The job worker has considered the total value including the value of Beta Napthol but since the Beta Napthol was given by the appellant to the job worker free of cost the value of the said Beta Napthol has been reduced from the total value and their final sale value does not include the value of Beta Napthol, therefore even as per the invoice of the job worker there is no sale of Beta Napthol to the appellant. It is obvious that when the appellant have not sold the Beta Napthol to the job worker there is no transfer of right in the property i.e. Beta Napthol from the appellant to the job worker. Consequently question of sale by the job worker to the appellant does not arise. Since, the transaction of the Beta Napthol by the appellant to the job worker does not fall under the term either sale or transferred in other manner . Therefore, there is no contravention of the condition attached to the N/N. 93/2004-Customs dated 10.09.2004 and N/N. 32/2005-Customs dated 08.04.2005. In an identical case of TETRA PAK (I) LTD. VERSUS COMMISSIONER OF CUSTOMS, NHAVA SHEVA [ 2005 (4) TMI 182 - CESTAT, MUMBAI] dealing with the duty free imported goods under DEEC scheme the Tribunal-Mumbai Clearly held that advance license holder cannot be prohibited from out sourcing goods imported duty free for manufacturing to other persons even in the said case the goods imported duty free under DEEC scheme was sold to job worker on cost basis and returned as sale by Job Worker after processing/conversion of cost of other material and labour basis. The tribunal held that this was not violative of the prohibition of selling/transferring such goods - The present case is on a better footing as admittedly the appellant has neither sold Beta Napthol to the job worker nor purchased back the same from job worker. The appellant have not contravened the condition of Notification nos. 93/2004-Cus 32-2005-Cus. Hence, the demand of duty, interest and consequential penalties are not sustainable - appeal allowed - decided in favor of appellant.
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2020 (2) TMI 480
Valuation of imported goods - undervaluation of Zinc and aluminium scrap imported - rejection of declared value - re-determination of the value of scrap items based on the fact that the import price of the said items were much lower than the prevailing prices contained in the bulletin published by the London Metal Exchange (LME) - admissibility of evidence - imposition of penalty u/s 112(a) of CA. HELD THAT:- In the case in hand, the appellant M/s Sunland Alloys had entered into contract with the overseas suppliers for importation of the scrap items in question. Pursuant to the contractual norms, the goods were supplied by the overseas entities under the cover of commercial invoices, bearing the reference of description of goods, quantity, price etc. On the basis of the import documents, the appellant had filed the Bills of Entry before the jurisdictional Customs Authorities for duty assessment and for clearance of the imported consignments for home consumption. It is not the case of Revenue that over and above the contractual amount, the appellant had paid any other amount either to the overseas supplier or any other person in context with importation of the subject goods. Further, Revenue has also not alleged that the appellant had any interest in the business of the overseas suppliers and vice-versa. The assessment has to be made under Section 14 ibid read with Rule 4(1) of the Customs Valuation Rules, 1988 and the provisions of Rule 3(ii) ibid should not be applicable for re-determination of the declared value. In this context, the Hon ble Supreme Court in the case of EICHER TRACTORS LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [ 2000 (11) TMI 139 - SUPREME COURT] have held that when the transaction value under Rule 4 is rejected, then under Rule 3(ii), the value shall be determined by proceeding sequentially through Rule 5 to 8 of the Rules; conversely, if the transaction value can be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), then there is no question of determining the value under the subsequent rules - the department has not made any valid case for rejection of the declared transaction value. Admissibility of evidence - HELD THAT:- The learned counsel for the appellants has challenged the validity of the printouts taken from the Laptop of Shri Jhingon on the point that mandatory provisions and conditions of Section 138C of Customs Act, 1962 have not been complied with. We find that the Panchnama dated 25/04/2006 simply mentions that the DRI officers also searched one Laptop of Shri Tarun Jhingon and one CPU for further investigation. Details of seized documents and laptop and CPU were given in the Annexure to Panchnama. It is evident from the Panchnama that the seizure of the Laptop was not in terms of Section 138C ibid. Moreover, we find that such evidence was declared to be not admissible On perusal of the relevant contents of the certificate dated 29.10.2008, it transpires that ISRI has not prescribed any specific discount band on the price fixed by the LME for consideration of transaction value of the scrap items in question. Further, the impugned order has also relied upon the Alert Circular No. 14/2005 dated 16.12.2005 issued by Director General of Valuation for re-determination and enhancing the declared value. The said circular only provides for average price difference between the price of prime metal and different grades of scrap as determined on the basis of study of difference in prices of scrap and prime metal. The circular only requires the department staff to check possible under valuation, after ensuring all relevant specifications. However, the said circular cannot have over riding effect on the valuation provisions contained in the customs statute and as such, the transaction/declared value cannot be rejected merely on the basis of specifications provided in the DGOV Circular dated 16.12.2005. Revenue has concluded on the basis of stray third party evidences as above have alleged undervaluation on the basis of the statements of the concerned persons alone, which are not corroborated by any documentary evidence and therefore, their reliability, is not free from doubt. The allegation of undervaluation is not sustained. Consequentially, the seizure, demand of differential duty, fine and penalty on M/s. Sunland Alloys do not survive - the seizure and duty demand are not sustainable and as a corollary, the penalties also are liable to be set aside. Appeal allowed - decided in favor of appellant.
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2020 (2) TMI 462
Maintainability of appeal - time limitation - HELD THAT:- Both the appellate authorities, did not decide the merits of the case against the adjudication order, but dismissed the appeal as time barred. The order of the Commissioner of Customs (Appeals-II), Chennai dated 02.02.2010 is on record. The matter deserves to be remanded to Commissioner of Customs (Appeals-II), Chennai for deciding the appeal on merits - Appeal allowed by way of remand.
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2020 (2) TMI 483
Illegal export - it is alleged that respondent (Inspector of customs) had connived with the exporters for helping them obtain certificate of export without actual export for fulfilling their export obligation as 100% EOU by issuance of export orders fraudulently - contravention of Rule 3(I)(II)(III) of the CCS Conduct Rules 1964 - HELD THAT:- The enquiry officer completely failed to appreciate that in a departmental enquiry, rule of strict evidence does not apply and the evidence so collected is to be appreciated on the principle of preponderance of probabilities. When paper transaction with respect to transport of goods was established, it matters not if specific names did not crop-up as to with whom the respondent collaborated or connived. The disagreement note of the disciplinary authority clearly reveals that it took note of the evidence that there was no export of goods in case of M/s Suvidha Polyesters Pvt. Ltd. and that M/s Jai Mata Di Transport Company was a nonexistent and fake company. The evidence which was taken note of by the disciplinary authority was that there was no evidence of any physical verification of the goods except for endorsement in the crossing register and the signature of the crossing officer on the bills of export. The invoices mentioned in the bills of export were in different formats which were signed by different authorized representatives of the exporter within a short period of time. No evidence was found by the disciplinary authority to establish the local custom of using tyre carts to export goods. The disciplinary authority also found that the enquiry officer blindly accepted the contentions of the respondent and submitted a report which was not at all fair, proper and acceptable. The fact that the respondents at the relevant time was Inspector of Customs posted at Jogbani Land Custom Station, who were responsible for issuing export orders, it was incumbent upon them to have verified the contents of the commodities before issuing any such export order. The non-existent transportation firms whose services are stated to have been utilized for transporting goods and the other irregularities found during the course of investigation and enquiry do make out a case against the respondents and therefore, the punishment meted out to them by the disciplinary authority was absolutely justified and should not have been interfered with by the Tribunal. The order of the disciplinary authority is restored - Petition allowed.
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2020 (2) TMI 482
Imposition of Anti-Dumping duty - determination of the rates thereof - import of melamine - Notification F. No.14/35/2010-DGAD dated 01.06.2012 and from China as per Notification No.15/17/2014-DADD dated 05.12.2015 - principles of natural justice - HELD THAT:- The intervener GSFC had not filed the bills of entry for home consumption but had filed it for the purpose of warehousing and that the bills of entry for home consumption were directly filed by its small customers, who are referred as consumers, the designated authority by exercising its discretionary power had arrived at a conclusion that even though the intervener GSFC had imported and sold the subject articles, its focus had not turned to imports and the company is not behaving like an importer trader and its focus continues to be that of a producer engaged in its own production - Accordingly a conclusion was arrived that the intervener GSFC is a domestic industry within the meaning of Rule 2(b) of the ADR Rules 1995. The said conclusion of the designated authority can be found from paragraph 15 to paragraph 20 of the Notification dated 01.02.2012. As regards the determination of normal value of melamine in China as per the notification dated 05.12.2015, the designated authority arrived at its conclusion that China being a non-market economy, the export price and the normal value were determined in terms of the 2nd proviso of paragraph-7 of Annexure-1 to the ADR 1995. In paragraph-32 of the said notification, it has been stated that the constructed normal value of melamine in China at ex-factory level was determined as USD*** per MT (Rs.*** per MT) and that the export price from China was determined as USD*** per MT(Rs.***per MT) - it is determinable that the designated authority had followed a procedure for determining the normal value of melamine in the exporting country China, as well as the non-injurious price of melamine for the domestic industry in India, but the procedure so adopted and also the normal value and non-injurious price would remain confidential and would not be made available. The reason for keeping the normal value and the non-injurious price confidential is that they were arrived at on the basis of the information provided by the domestic industry and therefore, it is confidential under Rule-7 of the ADR 1995. Whether the information provided by the intervener GSFC in their application under Rule 5(1) of ADR 1995 and at other stages would be held to be confidential under Rule 7 to the extent that even the normal value, export price and non injurious price determined by the designated authority would not be disclosed in the course of the proceedings held by it as well as in the final findings? - HELD THAT:- Reading the whole of the provisions of Rule 7 including Rule 7(3) and the provisions of Rule 16 of the ADR 1995, we are of the view that the stand taken by the designated authority as well as by the respondents that the normal value, export price, margin of dumping and the non injurious price arrived at in the final findings are confidential in nature and that it cannot be disclosed to anyone at any stage, are unacceptable. Whether the principles of natural justice had been violated by the designated authority? - HELD THAT:- As the normal value, export price, margin of dumping and the non injurious price as determined by the Designated Authority which formed the basis for the decision to impose the ADD and determine the rates thereof, was not informed to the petitioners prior to the opportunity of hearing being given, we are of the view that in the instant case, the principles of natural justice had been violated. Whether the procedure adopted by the designated authority in arriving at a decision to impose ADD and to determine the rates thereof conform to the procedure prescribed under the ADR 1995? - HELD THAT:- On a conjoint reading of Rule 6(8) and 8 of ADR 1995, the inference thereof would be that if any information is provided by the interested parties, the designated authority is required to arrive at its satisfaction as regards the accuracy of such information and only upon arriving at such satisfaction, it may either accept or reject by providing its own reasons. But without undertaking such exercise to satisfy itself as regards its accuracy, it would be incorrect on the part of the designated authority to discard such information without even making an attempt to consider it and satisfy itself as regards its accuracy. - Only upon such information provided by the interested party being rejected on being not satisfied, the designated authority may record its findings on the basis of other facts available before it. Whether the procedure adopted by the designated authority in arriving at the final findings is discriminatory and arbitrary? - HELD THAT:- Considering the procedure adopted by the designated authority in not making all the possible efforts to arrive at a correct determination as regards the normal value, export price and the margin of dumping as well as the non-injurious price, more particularly, in discarding such information that may be provided by the interested parties without even arriving at a satisfaction as to its correctness, we are of the view that the procedure adopted would not only be contrary to the provisions of Rules 6(8) and 8 of the ADR 1995, but would also be discriminatory and arbitrary. Whether the intervener GSFC in view of its imports of melamine can still be considered to be a domestic industry? - HELD THAT:- In the facts and circumstance of the present case whether the intervener GSFC would continue to remain a domestic industry in spite of being indulging in import to a certain extent, in our view a discretion is required to be exercised by the designated authority and in doing so such discretion should neither lead to arbitrariness nor it violate the provisions of Article 14 of the Constitution of India. Whether the evaluations of the ADD in terms of USD at an exchange rate as it prevailed in the year 2012 from countries under the European Union, Iran, Indonesia and Japan and at an exchange rate as it prevailed in the year 2015 from the Peoples Republic of China, as well as the determination of the normal value, export price, margin of dumping and the non-injurious price in terms of USD at its exchange rate as indicated above had brought in a situation which would be inconsistent with the factual situation that may be caused due to subsequent fluctuations in the exchange rate? - HELD THAT:- Without going much deeper into the question whether the determinations and evaluations made in terms of USD at an exchange rate as it prevailed in the year 2012 for imports from countries under European Union, Iran, Indonesia and Japan and at an exchange rate, as it prevailed in the year 2015 from China had created any inconsistent situation because of the subsequent fluctuations in the exchange rate, we merely express our concern that what would be the effect of such fluctuation on the evaluation of the landed price of the imported article in India and also on the amount of ADD imposed, if the evaluation of the landed price and the determination of the ADD is made in terms of USD pegged at an exchange rate in the given years when it was so evaluated and determined, in a situation where the landed price of the imported article as well as the total amount of ADD imposed in terms of INR keeps on fluctuating with every fluctuation of the exchange rate of USD - A simple analysis would indicate that if there is an increase in the exchange rate of USD, the landed price of the imported article would increase in terms of INR, which may reduce the margin of dumping requiring a lower imposition of ADD. But at the same time instead of the ADD being lowered, it being determined in terms of USD its total imposition in terms of INR would increase. The designated authority may take a closer look at the aforesaid aspect and take its own decision so as to render the imposition of the ADD in consistent with the provisions of Section 9A(1) of the CTA 1975. Maintainability of writ petition - HELD THAT:- The propositions as regards the maintainability of the writ petition in a situation where an alternative remedy is available in the form of an appeal had been culled out. Amongst the relevant circumstances whose presence may justify the entertainment of a writ petition under Article 226 of the Constitution of India in spite of the existence the provision for an appeal, are violation of the principles of natural justice, procedure adopted by the authorities is discriminatory and arbitrary, the question of law requires an interpretation, a constitutional issue is also involved and the pleadings are complete and the issues raised can be decided on the basis of affidavits, etc. - the procedure adopted by the respondent authorities including the designated authority did also include the question of violation of the principles of natural justice, it being discriminatory and arbitrary, there is also a question of violation of Article 14 of the Constitution, as well as interpretation of the relevant provisions of Rules 7, 6(8), 8 and 16 of the ADR 1995, which are questions of law. Further, the pleadings of the parties were complete and the issues raised can be determined even on the basis of affidavits without there being the requirement of any determination of fact. The writ petition would be maintainable in spite of the provisions of Section 9C of CTA 1975. Petition disposed off.
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Corporate Laws
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2020 (2) TMI 479
Whether respondent No.3-Mr. Himanshu Patwa, director of Nak Engineering Company Private Limited, knowingly and intentionally had sworn false affidavits in Notices of Motion so as to say that respondent No.2-Company was the successor of respondent No.1Firm under Part IX of the Companies Act, 1956 which tantamounts to giving or fabricating false evidence at any stage of judicial proceedings? HELD THAT:- The answer is in the affirmative for the reasons to follow. It is quite clear that after having gone through the entire material on record, prima facie opinion can be formed that an inquiry needs to be initiated into an offence/s referred to in clause (b) of sub section (i) of section 195 Cr. P.C. It must be noted that an inquiry contemplated in sub section (i) is not for finding whether the respondents are guilty or not but it is restricted only to the extent as to whether it is expedient in the interest of justice to inquire into the offence which appears to have been committed. The learned trial Judge has erred not only in fact but also in law to take into consideration the true scope and ambit of Part IX of the Companies Act, 1956 as well as clause (b) of sub section (i) of Section 565 of the said Act by reaching an erroneous conclusion in the impugned order. The impugned order, therefore needs to be quashed and set aside and as such, it stands quashed and set aside. Thus, there is a prima facie case and deliberate falsehood on a matter of substance. There is an adequate foundation for framing a charge. It is, therefore, expedient in the interest of justice that there should be a complaint - impugned order set aside - appeal allowed.
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Insolvency & Bankruptcy
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2020 (2) TMI 477
Approval of Resolution Plan - section 31(1) of I B Code - HELD THAT:- The Resolution Plan in hand satisfies the minimum threshold of approval by 66% majority of the Coc. Hence, as per the Coc, the plan stands the requirement of being viable and feasible for revival of the Corporate Debtor. By and large, all the compliances have been done by the RP and the Resolution Applicant for making the plan effective after approval by this Bench - It is observed by this Bench that since this Resolution Plan is approved and Order is pronounced, the issue regarding the validity of the Plan for a period of 12 months from the submission date becomes redundant. The Resolution Plan is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the Moratorium imposed under section 14 shall cease to have any effect henceforth. The Resolution Professional shall submit the records collected during the commencement of the Proceedings to the Insolvency Bankruptcy Board of India for their record and also return to the Resolution Applicant or New Promoters. Certified copy of this Order be issued on demand to the concerned parties, upon due compliance. That liberty is hereby granted for moving any Miscellaneous Application if required in connection with implementation of this Resolution Plan. In respect of stepping by the New Promoters/Resolution Applicant into the shoes of the erstwhile Company and taking over the business, the provisions of Companies Act, 2013 shall be applicable and because of this reason a copy of this Order is to be submitted in the Office of the Registrar of Companies, Mumbai.
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2020 (2) TMI 478
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - time limitation - HELD THAT:- Considering the fact that the Appellant/ Corporate Debtor had made a payment of three Lakhs through Cheque on 18.03.2015 and that the said payment was made after the issuance of Loan Recall notice dated 06.05.2014 and later a demand notice dated 17.08.2017 was issued by the Respondent to the Appellant / Corporate Debtor and co-borrower in respect of the loan agreement dated 28.03.2018 where the Corporate Debtor had agreed to pay ₹ 1,08,755/- per month beginning from 30.03.2013 to 30.03.2016 and also this Tribunal keeping in mind that the application u/s 7 of the I B Code was filed by the Respondent / Applicant before the Adjudicating Authority on 16.12.2017, this Tribunal comes to a consequent conclusion that the claim of the Respondent / Applicant is not barred by the plea of Limitation. The present Appeal fails and the same is dismissed but without costs.
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2020 (2) TMI 444
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of debt - existence of dispute prior to issuance of Demand Notice by the 2nd Respondent or not - HELD THAT:- It is clear that there is pre-existence dispute with regard to quality and service prior to issuance of Demand Notice - In view of the decision of the Hon ble Supreme Court and this Appellate Tribunal in the matter of R.S Cottmark (India) Pvt. Ltd. Vs. Rajvir Industries Ltd. [2019 (8) TMI 329 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI] the appeal needs to be allowed. Hence the appeal is allowed and order passed by the Adjudicating Authority dated 28th May, 2019 is quashed and set aside. Steps taken in consequence of Impugned Order and further Orders passed during Corporate Insolvency Resolution Process are all quashed and set aside. Appeal disposed off.
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2020 (2) TMI 443
Grant of stay on the reconstituted 'Committee of Creditors' as notified by the 'Resolution Professional' - appellant challenged the impugned order on the ground that the Mahal Hotel Private Limited is not a 'Financial Creditor' and there were proceedings under Prevention of Money Laundering Act, 2002 initiated against it - HELD THAT:- There is a dispute as to whether Mahal Hotel Private Limited comes within the meaning of 'Financial Creditor' or not, we hold that after constitution of the 'Committee of Creditors', without its permission, the 'Resolution Professional' was not competent to entertain more applications after three months to include one or other person as 'Financial Creditor'. Further, once a decision was taken by the 'Committee of Creditors' to call for a meeting for removal of Mr. Koteswara Rao Karuchola as an 'Resolution Professional', it was improper for him to include Mahal Hotel Private Limited as 'Financial Creditor' of the Member of the 'Committee of Creditors'. Further, money laundering case having been initiated against Mahal Hotel Private Limited, the said Hotel cannot be allowed to be the Member of the 'Committee of Creditors' - The Adjudicating Authority has failed to notice the aforesaid facts and circumstances and without going into the question of delay in inclusion of Mahal Hotel Private Limited as 'Financial Creditor', has decided the claim, though a petition was filed by Mahal Hotel Private Limited for the directions in its favour. Application allowed.
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2020 (2) TMI 440
Maintainability of application - initiation of CIRP - Corporate Debtor failed to repay its debt - debt due and payable - HELD THAT:- The present application is complete and the Operational Creditor is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfillment of requirements under section 9(5) of the Code. Hence, the present application is admitted - The registered office of respondent is situated in New Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. As a consequence of the application being admitted in terms of Section 9(5) of IBC, 2016 moratorium as envisaged under the provisions of Section 14(1) shall follow in relation to the Respondent prohibiting the respondent as per proviso (a) to (d) of section 14(1) of the Code. However, during the pendency of the moratorium period, terms of Section 14(2) to 14(3) of the Code shall come in force - Application admitted - moratorium declared.
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2020 (2) TMI 439
Liquidation order - initiation of liquidation before this Adjudicating Authority due to non-receipt of any resolution plan from any prospective applicant - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- This Adjudicating Authority is of the considered view to pass an order for liquidation in respect of the Corporate Debtor viz. Asis Logistics Limited and direct the Liquidator to issue a public announcement stating that the Corporate Debtor is in liquidation. However, this Adjudicating Authority would like the Liquidator to make sincere efforts to sell the liquidating unit as a going concern since this would entail realisation of higher value by the creditors and would also save the employment of many workers and employees whose daily bread is dependent on the Corporate Debtor. This Adjudicating Authority hereby appoints the Resolution Professional as Liquidator under Section 34(1) of the IBC. The Liquidator shall send intimation to the Registrar of Companies with which the Corporate Debtor is registered - The Liquidator shall act as per Section 35 of the Insolvency and Bankruptcy Code, 2016 subject to directions of this Adjudicating Authority. Application disposed off.
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PMLA
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2020 (2) TMI 453
Restoration of appeal - appeal dismissed for non-prosecution - service of order - no notice for hearing was served upon the Appellant - HELD THAT:- The facts that as emerged from the pleadings, record and oral submission, the appellant has advanced the reasons of non-filing of the applications for condonation of delay. One of the ground is that he could not know about the passing of the order dated 27.11.2019 as the said order was not uploaded in the website. Section 26(5) of the Prevention of Money Laundering Act, 2002 cast a mandatory duty on the Appellate Tribunal to send a copy of the every order made by it to the parties to the appeal. There is nothing on record to show that copy of the order dated 27.11.2019 has been sent to the appellant. That being so, in fact, there is no delay in filing the appeal. The grounds of restoration advanced by the appellant is considered. The connected appeals are pending before this Tribunal and if the appeal is not restored to file than it would cause great hardship to the appellant and his family members. The prejudice which is likely to cause if the application is allowed can be compensated in terms of money. The applicant has agreed to compensate the Respondent with appropriate cost - the application for restoration of appeal is allowed subject to payment of cost of ₹ 20,000/- to the Respondent within eight weeks. Appeal restored.
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Service Tax
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2020 (2) TMI 452
Storage and warehousing services - demand of differential tax - HELD THAT:- There is no dispute that near Renting Godown Space was not taxable during the period or that storage for warehousing agricultural produce was not taxable - Both sides agree that these facts need to be determined and for this purpose, the matter could be remanded to the Original Authority for examination of the documents. Matter remanded to the Original Authority for Denovo Adjudication for examining the Revenue contracts and invoices - appeal allowed by way of remand.
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2020 (2) TMI 449
Maintainability of appeal - appropriate forum - Rebate claim - HELD THAT:- The assertion of the Ld. Departmental Representative for the Revenue to be correct since there is no dispute, even by the assessee, that what it claimed was rebate, for which the Tribunal lacks jurisdiction. Moreover, most of the judgements relied on by the appellant are decided by the Appropriate/Revisional Authority and this also indicates that the only course is to approach Revisional Authority and not appellate route. Accordingly, the appeals are directed to be returned as not maintainable. Appeal dismissed as not maintainable.
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2020 (2) TMI 445
Rectification of mistake - section 35C of Central Excise Act, 1944 - contention of the Learned Counsel that the order of the Tribunal has erred in recording that only four appeals were disposed off and that four should be read as five , in conformity with the narration of the appeals on the title page, is tenable - HELD THAT:- Any decision on our part on the correctness of the de novo order of the original authority or any direction to handle it any other manner would circumvent the appellate hierarchy and predispose the first appellate authority one way or the other. We, therefore, limit ourselves to the error noted by us in the order and amend the sentence to read as: We take up five appeals of M/s Kasegaon Education Society for disposal by this common order. Application disposed off.
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Central Excise
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2020 (2) TMI 441
CENVAT Credit - scope of SCN - process amounting to manufacture - allegation that the Appellants had not paid additional excise duty at each stage of manufacture of fabrics i.e. bleaching, dyeing and printing, which then subjected to captive consumption - HELD THAT:- This Tribunal, while remanding the matter to the learned Commissioner (Appeals), directed him to consider the benefit of MODVAT Credit and export benefit admissible to them. In the remand proceedings, the learned Commissioner (Appeals), though allowed MODVAT benefit relating to the process of bleaching and dyeing, but denied credit to the process of printing, observing that no further process thereafter being carried out, hence the Appellants are not eligible. The demand has been calculated alleging that the Appellant had failed to discharge the duty at each stage of manufacture i.e. bleaching, dyeing and printing. In other words, while proposing to recover duty, the process of printing was also considered as a process of manufacture. Therefore, denying credit holding that the process of printing does not amount to manufacture, is contrary to the very basis of show cause-cum-demand notice, hence, cannot be sustained. Credit allowed - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2020 (2) TMI 476
Validity of order of enhancement of tax - revisionist's activity is under PDS Schemes of the Govt. - exemption under the Provisions of UP VAT Act - HELD THAT:- The controversy before the authorities was only with regard to the rate and price of wheat and rice. The Adjudicating Authority, the First Appellate Authority and the Commercial Tax Tribunal had accepted the rate fixed by Government of India. No evidence or material was produced by the revisionist before either of the authorities while adjudicating the said rate. Even before this Court no material or evidence has been placed for this Court to come to any other finding in favour of the revisionist. Revision dismissed - decided against revisionist.
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2020 (2) TMI 475
Attachment of property/land of the petitioner - removal of charge of the sales tax department on the land/property - Section 49(2) of the Gujarat Sales Tax Act, 1969 - HELD THAT:- It is accepted in the affidavit- in- reply that the requisite amount for the assessment year 2001 -2002 has been paid by the writ applicant. In the same manner, it has been accepted that the requisite amount for the year 2007 -2008 has also been paid by the writ applicant. If we go by the prayer clause, there is a reference of two notices i.e. for the year 2001- 2002 and 2007 -2008. Pursuant to the impugned notices, an order of attachment came to be passed with respect to the land bearing survey Nos.3341/1/2/3/4/5, 3346/1/4, 3126, 3127, 3335, 3336/1/2/3, 3121, 3122, 3223, 3124, 3342 and 3343. Since the attachment of the aforesaid parcels of land owned by the writ applicant is directly connected with the two notices dated 18th January 2012 and 2nd February 2012 respectively and as the payment has been made, the attachment should go. There should not be any difficulty in quashing and setting aside the two impugned notices. Once the impugned notices are quashed, the attachment as per such notices would no longer survive and once the attachment goes, the charge, which has been created over the property pursuant to such notices, would also not survive - application allowed.
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2020 (2) TMI 474
Levy of purchase tax - Valuation - freight charges or delivery charges paid by the Sugar Mills, Assessee to the Lorry Owners for getting the sugar cane from the fields of the sugar cane growers to the factory gate - TNGST Act - HELD THAT:- The controversy is no longer res integra as this very controversy came to be decided by a Full Bench of this court in the case of CHENGALVARAYAN CO-OPERATIVE SUGAR MILLS LTD. OTHER VERSUS STATE OF TAMIL NADU OTHER [ 1996 (7) TMI 522 - MADRAS HIGH COURT] which came to be affirmed by the Hon'ble Supreme Court in the case of EID. PARRY (I) LTD. OTHERS VERSUS ASSISTANT COMMISSIONER OF COMMERCIAL TAXES AND ANOTHER [ 1999 (12) TMI 708 - SUPREME COURT] and later on followed by the Hon'ble Supreme Court in the case of PONNI SUGARS (ERODE) LTD. VERSUS DEPUTY COMMERCIAL TAX OFFICER [ 2005 (11) TMI 247 - SUPREME COURT] where it was held that transport subsidy was a part of the consideration for which sugarcane was sold by the sugarcane growers to the appellants. Though the agreements between the parties provided for delivery by the sugarcane growers at the factory gate and though the transport charges paid by the appellants were not to the sugarcane growers but to third party lorry owners , they were made for securing regular supply of sugarcane as per the requirements. Since the view of the learned Sales Tax Appellate Tribunal is in consonance with the decision of the Full Bench of this Court and that of the Hon'ble Supreme Court, we have no reason to take a different view as there is no distinction on facts in the present case and the purchase of sugar cane by the Assessee Sugar Mill during the period in question also happened in a similar way and therefore, the mere bifurcation of prices in the invoices to the extent of transport charges or plantation subsidy will not materially affect the aforesaid prevailing legal position. The Tribunal is justified in imposing the purchase tax on the Assessee Sugar Mill on the entire purchase price including the components of price for the sugar cane, plantation subsidy and transportation charges paid by the Assessee for transportation of sugar cane from the sugarcane fields to the factory premises of the Petitioner - Appeal dismissed - decided against assessee.
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2020 (2) TMI 473
Levy of penalty u/s 10-A read with Section 10(b) of CST Act - purchase of diesel and fuel for generator set against the C forms at concessional rates - said items were not separately mentioned in the Registration Certificate of the Assessee under the CST (Registration and Turnover) Rules - HELD THAT:- The learned Appellate Tribunal was justified in holding that the Assessee was entitled to purchase the said fuel viz., diesel, for its generator set and even though the same was not separately included in the Registration Certificate of the Assessee, no mens rea can be attributed to the Assessee for purchase of the same at concessional rate against C Form and therefore, the question of imposition of penalty under Section 10(b) of the Act read with Section 10-A of the Act does not arise. Petition dismissed - decided against Revenue.
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2020 (2) TMI 472
Demand of tax - goods manufactured and sold by the petitioner - inter-state sale - Residuary Entry No. 69, Part C to the 1st Schedule of the Tamil Nadu VAT Act, 2006 - HELD THAT:- Presence of Entry 25 to Part B to the 1st Schedule to Tamil Nadu Vat Act, 2006 can be explained and only justified for the above reasons as otherwise the said entry is of no relevance except for payment of tax at higher rate for it to be availed as an input tax credit for use in the factory for manufacture within the state. In case of sale in the course of an inter-state sale or commerce to a registered dealer in another state, a registered dealer has to pay tax at the lower of the two rates whereas in the case of sale in the course of inter-state trade and commerce to a person who is not a registered dealer, CST is payable at the rate applicable to the goods within State - During the period in dispute, goods falling under Part B of the 1st Schedule of the Tamil Nadu Vat Act, 2006 were liable to tax at 4%. It is the contention of the petitioner that it sold capital goods as defined in section 2 (11) of the Tamil Nadu Vat Act, 2006 and therefore was liable to pay tax at the lower rate under Entry 25, Part B of the 1st Schedule of the Tamil Nadu Vat Act, 2006. In the present case, neither the petitioner nor the respondent have clearly explained as to whether the goods traded and sold by the petitioner in the course of Inter-state sale fall under Sectioin 2(11) (a) or under Section 2(11) (b) to (g) of the Tamil Nadu Vat Act, 2006. Matter remanded back to respondent for re-examination - appeal allowed by way of remand.
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Indian Laws
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2020 (2) TMI 466
Dishonor of Cheque - section 138 of NI Act - complainant had not clarified in his cross examination about exact date of cheque when handed over to him nor he succeeded to prove service of notice as per the provisions established in the Negotiable Instruments Act - HELD THAT:- The applicant has shown his bonafides by depositing in all total ₹ 1, lac. Issue requires consideration - Rule returnable on 3rd March 2020.
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2020 (2) TMI 471
Payment of death-cum-retiral dues of the deceased employee - being the minor children from the first wife - apportionment of other retiral benefits - HELD THAT:- The writ petitions stand disposed off with a direction to the authorities concerned to pay 50% of family pension of the deceased employee to the petitioners, through Mr. Umakant Tiwary, who is their maternal grandfather. The rest 50% shall be paid to the petitioner. Payment of family pension would be with up-to-date arrears. Similarly, 1/3rd of the other death-cum-retiral benefits would be paid to the petitioners through Mr. Umakant Tiwary, their maternal grandfather. The remaining 2/3rd amount shall be paid to the petitioner for herself and her three children. The Court has been assured by learned counsel for the State that all formalities required to be performed shall be got done by the authorities and at best the petitioners may be called to the office to sign, but they shall not be liable for any missing records of the authorities, including the service book of the deceased employee. Petition disposed off.
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2020 (2) TMI 470
Principles of natural justice - Dishonor of Cheque - section 138 of NI Act - opportunity to cross-examine the witness - right to move an application under Section 145(2) NI Act was already closed - HELD THAT:- Section 145(2) Negotiable Instruments Act, 1881 mandates that once an application by the accused is filed, the court is obliged to summon the person who has given evidence on affidavit in terms of Section 145(1) N.I. Act, 1881. Reliance placed in the case of MANDVI CO-OP. BANK LTD. VERSUS NIMESH B. THAKORE [ 2010 (1) TMI 570 - SUPREME COURT] where it was held that The case of the complainant in a complaint under section 138 of the Act would be based largely on documentary evidence. The accused, on the other hand, in a large number of cases, may not lead any evidence at all and let the prosecution stand or fall on its own evidence. In case the defence does lead any evidence, the nature of its evidence may not be necessarily documentary; in all likelihood the defence would lead other kinds of evidences to rebut the presumption that the issuance of the cheque was not in the discharge of any debt or liability. This is the basic difference between the nature of the complainant s evidence and the evidence of the accused in a case of dishonoured cheque. It is, therefore, wrong to equate the defence evidence with the complainant s evidence and to extend the same option to the accused as well. The trial court ought to have allowed the petitioner s application filed under Section 145(2) N.I. Act - the present petition is allowed, subject to payment of costs of ₹ 10,000/- by the petitioner out of which ₹ 5,000/- shall be paid to the complainant and ₹ 5,000/- shall be deposited with the Delhi High Court Legal Services Committee within a period of two weeks from the passing of the order - application allowed.
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