TMI Tax Updates - e-Newsletter
February 24, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Refund of the accumulated ITC - formula as provided under Sub Rule (4) of Rule 89 of the Rules - It is not even necessary to now quash and set aside the order passed by the Joint Commissioner (Appeals), as, in fact, the matter should go back to the Assistant Commissioner for the purpose of determination of the refund claim in accordance with the principle / formula, as provided and explained in the reply. But, at the same time, it would be necessary to quash and set aside the order passed by the Joint Commissioner dated 19th July 2021 - HC
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GST:
Zonal jurisdiction of inquiry investigation - transfer of such inquiry/investigatio - The requirement is the application of well-known legal principles involved in each and every matter adverting back the facts of the present case, this Court does not find any material on record which can be stated to be of sterling and impeccable quality warranting invocation of the jurisdiction of this Court under Section 482 Cr.P.C. at this stage of issuance of summons. More so, the defence raised by the petitioners in the petition requires evidence, which cannot be appreciated, evaluated or adjudged in the proceedings under Section 482 of Cr.P.C. - HC
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GST:
Refund of ITC - claim of the petitioner rejected - since there has been no notice issued to the petitioner before passing the order of rejection with regard to the refund either in full or in part, this Court has no hesitation to hold that, the impugned orders insofar as the rejected portion i.e., inadmissible portion of the refund claim made by the petitioner are infirm and vitiated - since the blatant violation of principles of natural justice and also the statutory mandate as contemplated under the Rule referred, these kind of cases are entertainable before this Court by invoking Article 226 of the Constitution of India and in these cases, the two years period cannot be construed as a long delay to invoke the doctrine of latches to reject the claim of the petitioner as canvassed by the learned Standing Counsel appearing for the respondents. - HC
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GST:
Provisional attachment of multiple properties - factory premises - plant and machinery - bank accounts including the fixed deposits - In the case on hand, it is not approved that the provisional attachment of the goods, stock and receivables, more particularly, when the entire stock and receivables have been pledged and a floating charge has been created in favour of the Kalupur Commercial Bank Limited for the purpose of availing the cash credit facility with the provisional attachment of the goods, stock and receivables the entire business will come to a standstill. - HC
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GST:
Valuation - reimbursement of electricity expenses, on actual basis, by the lessee to lessor - forming part of taxable value or not - In the instant case, the applicant had not acted as "pure agent" and invoice/bill/memo/document issued in relation to collect Electricity charges or incidental charges, maintenance charges, are in relation to composite supply of principal service of renting of immovable property as any incidental charges or expenses in respect of supply of service shall form part of value of taxable supply. Since the principal supply provided by the applicant (here Lessor) is of Renting & Leasing of Immovable Property (sac codes- 997212), it will attract GST @ of 18% of the taxable value of supply. - AAR
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GST:
Levy of GST - Valuation - amount paid to the owner of the car and amount incurred for the refurbishment of the said car - the amount paid to the owner of the car and amount incurred for the refurbishment of the said car are not includible in the purchase price so as to deduct the same from the selling price of the old and used refurbished car to arrive as the margin for the purpose of valuation and levy - AAR
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GST:
Classification of goods - Glass-fibre Reinforced Gypsum Board which the Applicant is contemplating to manufacture would qualify as GRG board or not - new variant of gypsum board - the new variant of gypsum board intended to be manufactured by the Applicant as per the specifications mentioned in Exhibit-2 could not be classified as Glass-fibre Reinforced Gypsum Board (GRG Board) and charged to GST at the rate of 12% - AAR
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GST:
Seeking grant of anticipatory bail - In the present case, as has been pointed out, initially, at least, two of the applicants did not respond to summons and now, neither the Directors on record nor several employees are not responding to the summons of the Department. The possibility of investigation being influenced or thwarted cannot therefore, be ruled out. Needless to say, that the alleged evasion of duty has been calculated in several crores. - This is not a fit case for grant of anticipatory bail to the accused person - DSC
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Income Tax:
Addition of Provisions for trade receivable as debited to P&L account under the head "other expenses" - we have to consider substance over the form and the intention of the assessee has to be appreciated and not the nomenclature noted to claim the expenses, it has merely mentioned the term ‘provision’ it does not mean that it becomes provision. Therefore, we direct the assessing officer to delete the addition as it actually pertains to bad debts written off in the books of account. - AT
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Income Tax:
Rectification of mistake - Validity of assessment - As rightly submitted by the learned Standing Counsel, though the assessment order contains a technical issue in the computation statement, that is a matter which can be rectified under section 154 of the Act and hence the same need not be considered under Article 226 . - HC
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Income Tax:
Addition of capital introduced by the appellant as unexplained cash credit u/s. 68 - Mere oral submissions or indication that evidences will be provided if revenue asked at later stage shows that the assessee was not at all dispensed the burden of proving his claim that the said income and expenses were part of agricultural income. As regards the explanation for the personal account and its maintenance, the Ld. A.R. has not set out any case as to why said practice was followed by the assessee. The assessee was not at all maintaining proper books of accounts. - additions confirmed - AT
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Income Tax:
Deduction u/s 48(i) - expenditure incurred wholly and exclusive in connection with the transfer of Long Term Capital Asset - In the facts of the present case, undisputedly, the payment made by the assessee is certainly for removing encumbrance and perfecting the title over the property sold. Otherwise, the transaction would have failed. - Claim u/s 48(i) allowed - AT
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Income Tax:
Penalty u/s 271BA - not filing the report of the accountant as required by section 92E - Based on the adjustments as suggested by TPO, the revised statement of income for the relevant assessment year and form 3CEB was filed before the assessment of the said year and the assessment was completed by the AO on 6th October 2016. No ill intention of MTNL could be attributed of evading tax or non- compliance of the tax laws as the report was filed as required by the authorities. - Provisions of Section 273B can be invoked in the case of the assessee as a reasonable cause for failure could be substantiated. - No penalty - AT
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Income Tax:
Exemption u/s 11 - Charitable activity u/s 2(15) - income earned by the assessee out of commercial exhibitions, auditorium etc. - AO has not disputed the fact that assessee is engaged in the activities of Education and relief to poor. - With the advancement in technology the education can be provided on electronic gadgets also. Therefore, we do not find any reason why assessee should not be treated as engaged for imparting education - Benefit of exemption cannot be denied - AT
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Customs:
Validity of SCN - Time limitation - whether the show cause notice given under Section 124 of the Act after six months of seizure can be sustained under the law? - In the instant case, admittedly there has been no provisional release of the seized goods. Further extension of six months with the reasoned order by the Principal Commissioner of Customs or Commissioner of Customs also is completely missing. - Noticing that the period prescribed under the law has already lapsed long before the show cause notice has been issued, this Court needs to intervene for this being a clear violation of statutory provisions of section 110 and other provisions of Customs Act - HC
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Customs:
Validity of SCN - Jurisdiction - Proper officer to issue SCN - The entire proceedings initiated by officers of DRI in as much as by issuance of show cause notice under Section 28/124 of the Customs Act lacks jurisdiction and are without any authority of law because the present show cause notice is not issued by custom officer but by DRI officer who has not been assigned specific function/power under Section 6 to issue show cause notice U/S 28 of the Act of 1962. - HC
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Customs:
Classification of imported goods - Antenna for base station imported by the appellant - whether classifiable as parts of base station under CTH 85177090 as claimed by the appellant or as machine/equipment for the reception, transmission and conversion of data under CTH 85176290 as claimed by the Revenue? - the antenna imported by the appellant is correctly classifiable under customs 85177090 as parts. - AT
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Indian Laws:
Dishonor of Cheque - insufficiency of funds - Vicarious liability of directors - It is not the case of the petitioner herein that he is a non-executive director. The petitioner is a full-time director. The complaint read as a whole indicates that at the time of cheques being issued by the company and returned by the bank, the son of the petitioner and the petitioner were the only directors of the company and were responsible for the conduct of the business of the company. This Court is, therefore, not inclined to interfere with the order dated 03.02.2021 issuing summons to the petitioner herein - HC
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IBC:
Withdrawal of the CIRP against the Principal Borrower - bar for the Respondent/Lender in initiating fresh CIRP against the Guarantor or not - , this Tribunal holds that mere withdrawal of the CIRP against the Principal Borrower will not be a bar for the Respondent/Lender in initiating fresh CIRP against the ‘Guarantor’ who is the Appellant herein - AT
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Service Tax:
Validity of SCN - There are no merits in the present writ petition as the impugned show cause notice has been issued a competent authority namely The Commissioner, Office of the Commissioner of GST and Central Excise, Chennai Outer Commissionerate under the Finance Act, 1994. The respective noticees can file their reply to the impugned show cause notice and meet out the allegations on merits - HC
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Service Tax:
Levy of service tax - pure agent services or not - implementation of the Information Technology related projects - The appellant was appointed merely as a Nodal Agency to supervise and monitor the overall execution of the projects. Infact, the amount paid by the State Government Department to the appellant are reimbursements which cannot be subjected to levy of service tax and in any view of the matter the appellant was acting as a pure agent as all the conditions stipulated in rule 5(2) of the Valuation Rules are satisfied. - AT
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Service Tax:
Interest on delayed sanction of refund - There is no substance in the submissions made by the learned AR for Revenue that the revised application filed by the Appellant in the year 2017 were to be considered as the relevant date of filing of applications for grant of refund inasmuch as the original authority nowhere in the order dated 12.09.2017 had considered such facts. - AT
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Service Tax:
Valuation of services - Brokerage Charges - whether the brokerage charges paid to the brokers/distributors by the appellants are reimbursable expenses or whether is a consideration - The brokerage charges paid by the appellant is nothing but reimbursable expenses. The period being prior to 2015 (prior to amendment dated 14.05.2015), the demand of Service Tax on such reimbursable expenses cannot sustain - AT
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Central Excise:
Imposition of personal penalty on two Directors - valuation of goods - In any event, excise is a levy on manufacture and it is found that it is not the case of the revenue that the buyer is the manufacturer of the said final products, so as to justify levy of excise duty on the value addition in the hands of the buyer. Rule 6 of the Valuation Rules only provides for inclusion of money value of the additional consideration flowing directly or indirectly from the buyer to the manufacturer and does not authorize recovery of excise duty with reference to the buyer’s selling price. - AT
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Central Excise:
Valuation- inter-connected undertaking - related parties or not - applicability of doctrine of mutuality of interest - The fact that Appellant 1 and Appellant 2 were not related person has been brought out in the cost auditor report received by the department on 31.12.2007, as recorded while recording the submissions of the appellant in the impugned order - this cost auditor report has not been placed on record by either side but if the cost auditor report had concluded that the Appellants were not related then definitely Commissioner should have recorded the reasons for rejecting the said report. - AT
Articles
Notifications
News
Case Laws:
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GST
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2022 (2) TMI 1003
Validity of Conduct of GST officer - Order of Suspension - Seizure and detention of goods - mismatch of documents - tax invoice and the E-way pass for vehicle, not produced - petitioner states that the Officer had every authority to re-assess the matter if he had found that there was some error apparent on the face of the record - HELD THAT:- A perusal of the Section 107 of the U.P. Goods and Services Tax Act, 2017, shows that the appeal could have filed by the assessee. The Court would like to know as to why action could not have been taken under Section 161 when there was definitely an error which was apparently there, namely, the details of the owners which were produced by the drivers were different from the details available on the GST portal - Place this petition as fresh on 25.2.2022.
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2022 (2) TMI 1002
Refund of the accumulated ITC - Constitutional Validity of Sub Rule (48) of Rule 89 of the CGST Rules, 2017 - ultra vires Sections 54 and 164 of the CGST Act, 2017, Section 16 of the IGST Act, 2017 and Articles 14 and 19(1)(g) of the Constitution of India or not - refund claims for unutilized ITC of input transactions attributable to Zero rated supply in the nature of exports under LUT - whether the assertion on the part of the writ applicant that it is entitled to claim the refund in accordance with the formula as provided under Sub Rule (4) of Rule 89 of the Rules is correct? HELD THAT:- The Joint Commissioner (Appeals), although took the view that Sub Rule (4B) of Rule 89 of the Rules would apply, yet it thought fit to remit the matter so that the claim can be determined accordingly. Mr. Dave would submit that now since the principle of input / output ratio is to be applied for the purpose of determining the amount to be refunded, a fresh exercise will have to be undertaken by the Assistant Commissioner. It is not even necessary to now quash and set aside the order passed by the Joint Commissioner (Appeals), as, in fact, the matter should go back to the Assistant Commissioner for the purpose of determination of the refund claim in accordance with the principle / formula, as provided and explained in the reply. But, at the same time, it would be necessary to quash and set aside the order passed by the Joint Commissioner dated 19th July 2021 - Appeal allowed in part.
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2022 (2) TMI 991
Seeking grant of anticipatory bail - Clandestine manufacturing and sale - interim protection granted to the accused is seriously hampering the investigation or not - availment of fake input tax credit - retraction of statements already recorded - Section 132 of GST Act - HELD THAT:- The present case is of clandestine manufacturing and sale which is covered by Section 132 (1) (a). Although, the punishment and the status of the case has cognizable and non bailable is the same, the evidence of both category of cases would necessarily be different. In case of offence under sub Section (1) (b) (c), the evidence would necessarily be documentary and also available in the form of returns submitted as they involve an element of filing of return. Whereas, Section 132 (1) (a), pertains to a situation where there may not be any bills or invoices and evidence would have to be mostly ocular. Considering that such evidence would have to be given by the employees and persons involved in the production, transportation and sale, in cases, it may be possible for the accused persons to yield influence which may hamper the investigation. In the present case, as has been pointed out, initially, at least, two of the applicants did not respond to summons and now, neither the Directors on record nor several employees are not responding to the summons of the Department. The possibility of investigation being influenced or thwarted cannot therefore, be ruled out. Needless to say, that the alleged evasion of duty has been calculated in several crores. This is not a fit case for grant of anticipatory bail to the accused persons - Bail application dismissed.
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2022 (2) TMI 1001
Seeking revision of returns - values were incorrectly shown as zero in the returns and, according to the petitioner, the same arose on account of certain technical issues - HELD THAT:- This writ petition itself can be disposed of directing an expeditious consideration of Ext.P6 - there will be a direction to the competent amongst respondents 1 and 2 to consider and dispose of Ext.P6, as expeditiously as possible, at any rate, within a period of two months from the date of receipt of a copy of this judgment, after granting an opportunity of hearing to the petitioner. The writ petition is disposed of.
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2022 (2) TMI 1000
Zonal jurisdiction of inquiry investigation - transfer of such inquiry/investigation from Ghaziabad Regional Unit to Respondent No. 2 - territorial jurisdiction of the proceedings being carried out by the Respondent No. 3 - fake and fraudulent input tax credit - creation of numerous fake firms - HELD THAT:- It is trite law that at the stage of show cause notice, summons, chargesheet or notice to appear, constitutional courts would not interfere as to interject the proceedings and thereby, prevent the authorities from proceeding with. Perusal of the various provisions of CGST Act which have been discussed in various judgments time and again demonstrate that the summons for appearance issued under Section 70 of the CGST Act and the authorization for arrest issued under Section 69 (1) of the CGST Act, do not fall within the ambit of the definition of Criminal Proceedings , because criminal proceeding commences, only after the launch of prosecution. It is pertinent to mention that Section 132 (1) of CGST Act lists out about twelve different types of offences under Clauses (a) to (l) and five out of these twelve offences are cognizable and non-bailable in view of Section 132 (5) of CGST Act and the remaining seven offences are non-cognizable and bailable in view of Section 132(4) of the CGST Act. Jurisdiction - HELD THAT:- In exercise of its jurisdiction under Section 482 Cr.P.C. cannot go into the truth or otherwise of the allegations made in the complaint or delve into the disputed question of facts. The issues involving facts raised by the petitioner by way of defence is a matter of investigation/inquiry and the same will have to be adjudicated on merits of the case and not by way of invoking jurisdiction under Section 482 Cr.P.C. at this stage - The parameters of the jurisdiction of the High Court in exercising jurisdiction under Section 482 Cr.P.C, are now almost well-settled. Although it has wide amplitude, but a great deal of caution is also required in its exercise. The requirement is the application of well-known legal principles involved in each and every matter adverting back the facts of the present case, this Court does not find any material on record which can be stated to be of sterling and impeccable quality warranting invocation of the jurisdiction of this Court under Section 482 Cr.P.C. at this stage of issuance of summons. More so, the defence raised by the petitioners in the petition requires evidence, which cannot be appreciated, evaluated or adjudged in the proceedings under Section 482 of Cr.P.C. Keeping in view the fact that the investigation is still at a nascent stage and that the present case involves fraud of ₹ 350 crores approximately and around 200 firms are involved in placing fraudulent Input Tax Credit coupled with the fact that one Upender Singh, a bank official at ICICI Bank, Kamla Nagar, has levelled specific allegations against the petitioner and has stated that at the behest of the petitioner and his father, he had opened accounts for these 200 firms without physical verification and further, looking into the conduct of the petitioner, the petitioner is not entitled to any relief from this court - there are no flaw or infirmity in the territorial jurisdiction of the proceedings being carried out by the Respondent No. 3. Petition dismissed.
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2022 (2) TMI 999
Refund of ITC - claim of the petitioner rejected on the ground that, before making this rejection in respect of the alleged inadmissible portion, no notice has been served on the petitioner, no opportunity was given to the petitioner to put forth his case and without even giving any reason as to why the particular amount has been inadmissible - violation of principles of natural justice - HELD THAT:- Insofar as the preliminary objection, which, in fact, is the main objection raised by the respondent side with regard to the latches, this Court feels that, though there is no limitation prescribed under Article 226 for the litigants to approach the High Courts by invoking the extraordinary jurisdiction to issue prerogative writs, it is the self made law or judge made law in various pronouncements of the Hon'ble Supreme Court as well as the various High Courts, that doctrine of latches would definitely be made applicable to cases where Article 226 is invoked belatedly without any plausible reason - what is the time limit which can be construed as a belated one or within the reasonable period, depends upon the facts of each and every case, as in these arena there is no hard and fast rule. Here in the case in hand, the Rule, as referred to above, mandates that, a notice should be issued in a particular format giving 15 days time to the applicant to respond in a particular format and only thereafter order to be passed either to accept or reject the refund claim made by the applicant - When such a mandate is available in the Statute, the same has not been followed by the respondents as there is no whisper to show that, there has been a chance of giving any show cause notice or notice or opportunity to the petitioner as contemplated under sub-rule (3) of Rule 92 of the said Rules. If we look at the impugned order for instance in the first case which facts were dealt with in the earlier paras that, the inadmissible amount of a sum of ₹ 58,233/- has been quoted, where, absolutely no reason has been given by the respondents as to why such amount has been not admitted. Only in order to avoid these kind of orders, the rule contemplates to give an opportunity to the applicant before passing an order to reject or accept. When that being so, in these cases, since there has been no notice issued to the petitioner before passing the order of rejection with regard to the refund either in full or in part, this Court has no hesitation to hold that, the impugned orders insofar as the rejected portion i.e., inadmissible portion of the refund claim made by the petitioner are infirm and vitiated - since the blatant violation of principles of natural justice and also the statutory mandate as contemplated under the Rule referred, these kind of cases are entertainable before this Court by invoking Article 226 of the Constitution of India and in these cases, the two years period cannot be construed as a long delay to invoke the doctrine of latches to reject the claim of the petitioner as canvassed by the learned Standing Counsel appearing for the respondents. In all these writ petitions, the impugned orders, insofar as the rejection made by the second respondent with regard to the refund claim made in respect of each of the cases, are hereby quashed - Petition disposed off.
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2022 (2) TMI 998
Provisional attachment of three individual bank accounts of the writ-applicant - Section 83 of the CGST Act - power to levy a provisional attachment - HELD THAT:- Prima-facie, it appears on plain reading of the three orders of the provisional attachment that the same does not record any satisfaction that it is necessary to provisionally attach the bank accounts so as to protect the interest of the revenue. Mr. Shah would submit that it is not just necessary for the concerned authority to point out such satisfaction from the original file or from the notings. Such satisfaction should be reflected in the very order passed by the authority - second limb of Mr. Shah s submission is that at a point of time, when the powers under section-83 of the Act came to be exercised, the proceedings of the search under Section-67 of the Act had already come to an end. He would submit that as on date, there are no proceedings pending. Mr. Shah says so because till this date, the Department has not even thought fit to issue any show-cause notice. In such circumstances, according to Mr. Shah, the orders of provisional attachment cannot remain in force. Let Notice be issued to the respondents, returnable on 16.02.2022. Direct service to the respondents nos.2 to 5 is permitted. The respondent no.1 shall be served at the earliest by Email.
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2022 (2) TMI 997
Provisional attachment of multiple properties - factory premises - plant and machinery - bank accounts including the fixed deposits - whether the respondent No.3 could have provisionally attached the property owned by Shri Niraj Jaydev Arya (one of the partners of the LLP) in exercise of power under Section 83 of the Act, 2017? - Applicability of Section 90 of GST Act - HELD THAT:- The respondent No.3, having realized that it is only the property belonging to a taxable person that can be provisionally attached under Section 83 of the Act and the partner of an LLP not being a taxable person in the case on hand, thought fit to take the aid of Section 90 and Section 137 resply of the Act for the purpose of provisionally attaching a property owned by the partner of the LLP. Sub-section (84) of Section 2 of the Act, 2017 defines the term person to include an individual, a Hindu Undivided Family, a company, a firm, a limited liability partnership, etc. Therefore, the Act recognizes a firm as a dealer and as a person. The legislature having treated an LLP as a taxable entity, distinct from the individual partners constituting it, it was not open for the respondent No.3 to provisionally attach the immovable property owned by a partner of the firm - This Court is of the view that the respondent No.3 was wholly unjustified in provisionally attaching a personal property owned by a partner of the firm under Section 83 of the Act, 2017. Whether the respondent No.3 was justified in provisionally attaching the stock lying at the factory premises and the attachment of sundry debtors? - HELD THAT:- The authority should ensure that the attachment does not hamper the normal activities of the taxable person. It has been clarified that the raw materials and input required for the production or finished goods should not normally be attached by the department - In the case on hand, it is not approved that the provisional attachment of the goods, stock and receivables, more particularly, when the entire stock and receivables have been pledged and a floating charge has been created in favour of the Kalupur Commercial Bank Limited for the purpose of availing the cash credit facility with the provisional attachment of the goods, stock and receivables the entire business will come to a standstill. The Form GST DRC 22 for attachment of the stock lying at the factory premises dated 25th November 2021, the Form GST DRC 22 for attachment of the sundry debtors (M/s. Utkarsh Bars Private Limited) dated 26th November 2021 and the GST DRC 22 for attachment of the immovable property of Shri Niraj Jaydev Arya (one of the partners of the firm) dated 27th November 2021 are hereby quashed and set aside - this writ application succeeds in part.
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2022 (2) TMI 996
Transition of input tax credit - due to technical glitches in the web site, petitioner could not successfully transition the credit for utilization - HELD THAT:- The amount which is to be transitioned by filing TRAN-I or TRAN-II as per Section 140 of the respective GST enactments read with Rule 117 of the respective GST rules is to be allowed - credit available under the provisions of the erstwhile Central Excise Act, 1944 read with CENVAT Rules, 2004 remaining un-utilized on the date of limitation of GST Act, 2017 for the Central and the State cannot be denied such credit and unless the law permits lapsing of such credit. If there was a successful transition in terms of Section 140 of the respective GST enactments read with relevant rules such credits would have been available for discharging tax liability. Hon'ble Division Bench of this Court recently in the case of COMMISSIONER OF GST AND CENTRAL EXCISE, ASSISTANT COMMISSIONER OF GST AND CENTRAL EXCISE, CENTRAL BOARD OF EXCISE AND CUSTOMS, PRINCIPAL COMMISSIONER VERSUS M/S. BHARAT ELECTRONICS LIMITED [ 2021 (11) TMI 818 - MADRAS HIGH COURT] has granted relief to the dealers who have transitioned credit under the provisions of the GST enactments. This writ petition is disposed off by directing the respondent to consider the petitioner's representation dated 26.11.2019 and the same is disposed off within a period of three months from the date of receipt of a copy of this order and in the light of the observations of the Hon'ble Division Bench of this Court in the above case - petition disposed off.
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2022 (2) TMI 995
Transition of credit - as petitioners failed to file the TRAN I by the due date on 27.12.2017, the credit of the petitioners were blocked by the respondent by the impugned communication - HELD THAT:- The provisions of the Pondicherry GST Act did not prohibit the petitioner from transitioning the input tax credit available in the returns under Pondicherry Value Added Tax Act. However, in view of the impugned communications issued by the respondent, the petitioners failed to file TRAN-1 by the due date on 27.12.2017. Even it, the petitioner had filed TRAN-1 on time, the respondents were not without any power under the provisions of the respective GST enactments to ask the petitioner to reverse the order if it had been wrongly transitioned or utilized under Section 75 and 74 of the respective GST Act. Since the petitioner cannot transition the credit under the provisions of the Act at this distant point of time, the ends of justice will be made if the respondents decides the issue as to whether the petitioners were indeed entitled to the input tax credit during which could not be transitioned under the provisions of the respective GST enactments by 27.12.2017 in view of the impugned communications - the respondents are directed to issue appropriate notice to the respective petitioners within a period of forty five days from the date of receipt of a copy of this order. The writ petition is disposed off.
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2022 (2) TMI 994
Valuation - reimbursement of electricity expenses, on actual basis, by the lessee to lessor - forming part of taxable value or not - levy of GST on the reimbursement of expenses from the lessee by the lessor at actuals - rate of GST applicable to said reimbursement of expenses - pure agent services or not - HELD THAT:- It is observed that Principal supply of services by the lessor is renting of immovable property . Electricity charges or incidental charges, maintenance charges are in relation to composite supply of principal service of renting of immovable property, any incidental charges or expenses in respect of supply of service shad form part of value of taxable supply in terms of clear provisions of Section 15 of the CGST Act, 2017. The electricity expenses/charges related clause is mentioned in para 8(g) of the agreement - the payment regarding the electricity expenses is collected by the Lessor by issuing invoice for the same. Hence, there is a established fact that supply of service has been made to the lessee for consideration by issuing invoice(s). As far as expression 'Pure Agent' is concern, in the instant case there is no clear authorisation made by the lessee on which the supplier (lessor) acts as a pure agent of the recipient of the supply, when he makes the payment to the third party. The rent agreement itself not become an authorisation as nowhere in the said agreement has the 'reimbursement' term been mentioned. Further applicant (lessor) does not enter into a contractual agreement with the recipient (Lessee) of supply to act as pure agent to incur expenditure or costs in the course of supply services. Hence, the act of working as an 'pure agent' has not been phrased out. Thus, reimbursement of electricity expenses had not been made on actual basis, by the lessee to lessor as it had been collected in advance with rent and further adjusted by raising the invoice/bill/memo/document by the lessor. Therefore, in the instant case, the so called reimbursement of electricity expenses would form part of taxable value in term of clause (c) subsection (2) of section 15 of the CGST Act, 2017. In the instant case, the applicant had not acted as pure agent and invoice/bill/memo/document issued in relation to collect Electricity charges or incidental charges, maintenance charges, are in relation to composite supply of principal service of renting of immovable property as any incidental charges or expenses in respect of supply of service shall form part of value of taxable supply. Since the principal supply provided by the applicant (here Lessor) is of Renting Leasing of Immovable Property (sac codes- 997212), it will attract GST @ of 18% of the taxable value of supply.
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2022 (2) TMI 993
Levy of GST - Valuation - amount paid to the owner of the car and amount incurred for the refurbishment of the said car - includible in the purchase price so as to deduct the same from the selling price of the old and used refurbished car to arrive as the margin, or not - applicability of N/N. 8/2018-CT (Rate) dated 25.01.2018 - HELD THAT:- This notification shall not apply, if the supplier of such goods has availed input tax credit as defined in clause (63) of section 2 of the Central Goods and Services Tax Act. 2017, CENVAT as defined in CENVAT Credit Rules, 2004 or the input tax credit of Value Added Tax or any other taxes paid, on such goods - the Notification exempts the goods specified in column (3) falling under heading/Tariff Item as specified in column 2 from so much of tax as is in excess of amount calculated at the rate specified in the corresponding entry in column 4 of the table to the said notification on the value that represent margin of the supplier on supply of such goods. As per explanation -(ii), margin of supplier shall be the difference between the selling price and the purchase price. From the plain reading of the explanation-(ii) to the aforesaid Notification it is observed that the explanation (ii) undoubtedly/clearly used the word purchase price not the purchase cost of goods. It means only the amount paid by the applicant at the time of purchase of used cars can be considered as purchase price there is no provision in the said notification to include the cost of refurbishment in the purchase price. Therefore, it is found that there is no reason to include cost of refurbishment in the purchase price for calculation of margin - it is settled jurisprudence principle that when the words of a statute are clear, plain and unambiguous, i.e. they are reasonable susceptible to only one meaning, the courts are bound to give effect to that meaning irrespective of consequences. Moreover, if the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense . Thus, the amount paid to the owner of the car and amount incurred for the refurbishment of the said car are not includible in the purchase price so as to deduct the same from the selling price of the old and used refurbished car to arrive as the margin for the purpose of valuation and levy under Notification No. 08/2018-CT(Rate) dated 25.01.2018.
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2022 (2) TMI 992
Classification of goods - Glass-fibre Reinforced Gypsum Board which the Applicant is contemplating to manufacture would qualify as GRG board or not - new variant of gypsum board - Entry No. 92 of Schedule II of the Notification No. 1/2017-Central Tax (Rate) dated 28 June 2017 - manufacture as per BIS standard IS-2095 is necessary' for all GRG board to be covered under the entry Serial No. 92 of Schedule II of Notification No. 1/ 2017- Central Tax (Rate) dated 28 June 2011 or not? HELD THAT:- Serial No. 92 of Schedule II of Notification No. 1/ 2017- Central Tax (Rate) dated 28 June 2017 provides specific rates for GRG board - an explanation (iii) to the said notification provides that Tariff item , sub-heading , heading and Chapter shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). Whether the supply to be made by the appellant would be covered under the term Glass fiber Reinforced Gypsum Board (GRG) or otherwise? - HELD THAT:- The main raw material of Gypsum Plaster board is Gypsum (more than 90%), which is mainly procured from mines and other raw material is paper and additives, whereas, the Glass Fibre Reinforced Gypsum Board is made-up of Phosphogypsum (more than 90%), which is a by product of phosphoric acid plant. Other raw material i.e. Glass fibre and additives is also used in the manufacturing of GRG Board - the raw materials which is used in gypsum board and GRG board are different. The applicant submitted that the proposed new variant of Gypsum Board is made-up of Gypsum, glass fibre and additives, the main raw material is Gypsum which is procured from the mines, whereas, GRG board is made up of Phosphogypsum, which is a by product of phosphoric acid plant therefore, the proposed new variant of Gypsum board to be manufactured by the applicant cannot be called as Glass-fibre Reinforced Gypsum Board (GRG) and cannot be classified in Serial No. 92 of Schedule II of Notification No. 1/2017- Central Tax (Rate) dated 28 June 2017 which provides specific rates for GRG board. Since, the intended product cannot be treated as GRG Board, the second question raised in respect of BIS Standard IS 2095 is not relevant and not required answer. Thus, the new variant of gypsum board intended to be manufactured by the Applicant as per the specifications mentioned in Exhibit-2 could not be classified as Glass-fibre Reinforced Gypsum Board (GRG Board) and charged to GST at the rate of 12%.
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Income Tax
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2022 (2) TMI 983
Rectification of mistake u/s 154 seeking rectification of mistake in the revised return of income - HELD THAT:- There is substance in the claim of the assessee that in his revised return of income the gross total income was wrongly stated at ₹ 40,42,980/- as against income of ₹ 4,04,298/- (as originally returned), which mistake had crept in by wrongly suffixing one Zero to the amount of the income as originally returned. Our aforesaid conviction is supported by the very fact that even in the revised return of income the tax liability on the amount of income so returned i.e. ₹ 40,42,980/- had been reflected at the same amount as shown in the original return of income i.e. ₹ 15,306/- . In our considered view, the aforesaid facts duly lends credence to the claim of the assessee that the income reflected in the revised return of income on account of a mistake which was glaring on the very face of it was therein wrongly mentioned. We are of a strong conviction that the income returned by the assessee in his revised return at ₹ 40,42,980/- suffered from a mistake which was apparent, patent, obvious and glaring from record, which therein rendered the same amenable for rectification u/s.154 of the Act. We, thus, not being able to persuade ourselves to subscribe to the summarily dismissal of the assessee s application u/s.154 of the Act by the Assessing Officer, which thereafter, had been upheld by the CIT(A), therein set-aside the order of the first appellate authority and quash the order passed by the Assessing Officer u/s.154 of the Act dated 26.06.2019. Accordingly, the A.O is directed to rectify the mistake as claimed by the assessee in his application filed u/s 154 of the Act. The Ground of appeal No.1 is allowed in terms of our aforesaid observations.
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2022 (2) TMI 990
Revision u/s 264 - whether Revision petition filed by the Petitioner u/s 264 was arbitrarily dismissed on the ground of limitation? - HELD THAT:- Issue notice. Mr.Sanjay Kumar, Advocate accepts notice on behalf of the Respondent. He refers to the impugned order to contend that the reasoning given by the Petitioner for seeking condonation of delay is untenable in law. In the opinion of this Court, Section 14 of the Limitation Act, 1963 is attracted to the facts of the present case and the Petitioner is entitled to exclusion of time spent in prosecuting the proceeding bona fide in a court without jurisdiction. This Court is of the view that if the time spent by the Petitioner in prosecuting the appeal under Section 248 of the Act is excluded, then the Revision Petition filed under Section 264 would be within time. Consequently, the present writ petition is allowed and the matter is remanded to the CIT(IT) to decide the Revision Petition on merit in accordance with law. This Court clarifies that it has not commented on the merit of the controversy.
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2022 (2) TMI 982
Revision u/s 263 - allowability of claim of assessee that the property sold was an agricultural land - HELD THAT:- Assessee purchased the agricultural land in question on 31.03.2014 for ₹ 34 Lakhs and shown himself as farmer as per the Revenue s Laws in Gujarat stating only farmer can purchase the agricultural land. Same is evident from the purchase deed and sale deed of the land in question. Undisputedly, the permission for Dholi Integrate Spinning Park Limited were sought on 03.05.2013 and assessee was doing cultivation on said land and same is evident from his income tax return wherein he has shown agricultural income. In this case, the assessee had sold the land as agricultural land, if thereafter sold land has been converted into non-agricultural purpose by the buyer of the land, so, in such circumstances, the assessee cannot be held to pay long term capital gain. Hon ble Jurisdiction High Court in the matter of PCIT vs. Heenaben Bhadresh Mehta [ 2018 (8) TMI 987 - GUJARAT HIGH COURT] wherein it is held that profits from sale of agricultural land was claimed as exempt on the ground that said land was not a capital asset within the meaning of Section 2(14). Assessee assessee filed a copy of sale deed, purchase deed alongwith copy of ledger account of Dholi Gram Panchayat specifying the allocation of land and population of village wherein it is mentioned that above said land is not in Municipal area and is used for agricultural purpose only. After going through all above details, we are of the opinion that when already AO has made detailed enquiry, then on same point subsequent enquiry by the PCIT is not enquired under the law - In view of the above facts and respectfully following the Hon ble Gujarat High Court s order, we allow the appeal of the assessee.
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2022 (2) TMI 989
Deduction u/s 80IB(10) - lack of ownership of land on which the project was constructed - HELD THAT:- ITAT has given a finding of fact which is not disputed inasmuch as the ITAT has observed that respondent through, its partner one Liaq Ahmed, has been involved in the project right from the beginning with the signing of the Principal Agreement and primary acquisition of the development rights for the land in question. AO has not even disputed that Intimation of Disapproval ( IOD ) issued by the Municipal Corporation was in the name of assessee. So also the Commencement Certificate (CC). All tax related to the land in question were paid by the assessee from 1998 onwards. It is also noted that assessee has even made payment for the development rights. What the AO has missed out is unless respondent had any role in the development of the project, the joint venture partner would not agree to share 50% profit in the project with the assessee. Therefore, on this issue, we are in agreement with ITAT. Project was approved and commenced before the stipulated date of 01.10.1998 - ITAT has once again come to a finding of fact that the project, as completed, was different from the project for which initial approval had been obtained. It is true that the original Plan which was submitted and for which IOD was granted, was in 1997. The life of the IOD once granted as per the Maharashtra Regional Town Planning Act, 1966 is four years. This finding has not been disputed by Mr.Walve or appellant. The original Lay-out Plan became invalid after 7.01.2001. The assessee applied for IOD for the second time on 22.11.2001 and was granted permission on 21.07.2002. The ITAT has come to a conclusion on facts, which is also not disputed, that the second project proposal was for only three buildings as against the four for which the permission was sought earlier and IOD for different building was granted on different dates. The ITAT has concluded that therefore the project for which permission was granted on 24.07.2002 was not the same as that, for which the IOD has lapsed in 2001. In our view, we do not find that the ITAT has committed any perversity or applied incorrect principles to the given facts
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2022 (2) TMI 981
Addition of capital introduced by the appellant as unexplained cash credit u/s. 68 - HELD THAT:- It is pertinent to note that the assessee has not filed any details regarding the agricultural income and the expenses incurred which is an admitted position as the assessee made submission before the CIT(A) while filing additional evidence that the details relating to agricultural income will be filed when asked by the AO during the remand proceedings. Besides this, the assessee made a plea that inadvertently the agricultural income was not reflected in the details of the return of income. But at no point of time, the assessee with any documents before the AO or before the CIT(A) or before us has shown that the assessee was actually having agricultural income. This shows that the assessee was not having the genuine agricultural income. Mere oral submissions or indication that evidences will be provided if revenue asked at later stage shows that the assessee was not at all dispensed the burden of proving his claim that the said income and expenses were part of agricultural income. As regards the explanation for the personal account and its maintenance, the Ld. A.R. has not set out any case as to why said practice was followed by the assessee. The assessee was not at all maintaining proper books of accounts. Thus, ground No. 1 is dismissed.
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2022 (2) TMI 980
Penalty u/s 271BA - not filing the report of the accountant as required by section 92E - proof of 'reasonable cause' for not filing the report of the accountant - HELD THAT:- MTML is responsible to pay salaries to the deputed employees and the Salary, cost of these employees are a charge on the profits of the Mahanagar Telephone Mauritius Limited (MTML). Also, the employees who are deputed to Mauritius are employees of Mahanagar Telephone Mauritius Limited (MTML) and the said employees are under direct control and supervision of MTML. The staff which was sent on deputation from MTNL was paid salaries in India by MTNL on the behalf of MTML. The said payment was made in India on the account of payment of salary in the bank accounts of the employees sent on deputation to MTML. MTNL was under a bonafide belief that the above transaction is not an international transaction. However, when made aware it was realized that such a transaction would be covered under the ambit of International Transaction. The salary payment made by the MTNL to the employees of MTNL deputed to MTML has been reimbursed by the MTML. It is also a matter on record that the Form No. 3CEB has been filed before the AO. Also considered the issue of loans advances outstanding as on 30.01.2013 between MTNL and MTML. Based on the adjustments as suggested by TPO, the revised statement of income for the relevant assessment year and form 3CEB was filed before the assessment of the said year and the assessment was completed by the AO on 6th October 2016. No ill intention of MTNL could be attributed of evading tax or non- compliance of the tax laws as the report was filed as required by the authorities. From the above mentioned facts and law, it is evident that MTNL was under bonafide belief that it is not required to file form 3CEB but later on realization of the facts and law, MTNL filed the same with the concerned authority. Provisions of Section 273B can be invoked in the case of the assessee as a reasonable cause for failure could be substantiated. In the case of CIT Vs. MP Electricity Board [ 2004 (12) TMI 61 - MADHYA PRADESH HIGH COURT] based on the judgment of Hindustan Steel Ltd. Vs. State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] held that the authority competent to impose the penalty would be justified in refusing to impose the penalty when there is a technical or venial breach of the provision of the Act are where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by statue. The assessee is a public sector undertaking cannot be deemed to have any deliberate inclination to avoid payment of tax or to follow the statutory provisions. Hence, the law laid down and the provisions of the Section 92E, Section 271BA and Section 273B of the Act, we hereby direct that the penalty levied be obliterated. - Decided in favour of assessee.
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2022 (2) TMI 979
TDS u/s 195 - Addition u/s 40(a)(i) - legal and professional charges - disallowance has been confirmed holding the payment to be fee for technical services - Scope of provision of section 9 as well as that of the DTAA between India and USA - HELD THAT:- As submitted before us that these payments are not chargeable to tax and filed all the supporting evidences with respect to such payments before the AO and the same are also placed in the paper book. Copy of certificate given by a Chartered Accountant in form no. 15CB along with the information by the assessee in form no. 15CA as required to be filed before making any foreign currency remittance were furnished before the Assessing Officer and are also placed in the paper book. As submitted that one payment has been made to subscribe for information online for Iron Steel prices from China. The subscription was paid earlier for two years. It is a renewal of subscription and claimed in the A.Y. 2009-10 and A.Y. 2010-11 which was accepted by the revenue. The copy of the party's invoice and payment advice of HDFC bank have been perused. On examination of the facts and evidences before us, we hold that this cannot be treated u/s. 40(a)(ia). With regard to reimbursement of travelling expenses from the Germany based company, the accounts have been reimbursed by the vendor in connection with the visit of the employees with regard to examination of the shipment consisting of rolled coils, non-alloy steel rolls at supplier's premises. CIT(A) held that the amounts have been reimbursed in connection with examination of quality, quantity and weight whether in conformity with the contract or invoice and held that such inspection and examination services are technical services provided. The total amount thus reimbursed - We find that the inspection and examination of the goods before shipment is a common practice and it cannot be treated as a technical service. The inspection with regard to quality, quantity and weight of the product pre-shipment of rolling coils, non-alloy steel rolls cannot be treated as technical and managerial services as per the provisions of the DTAA and Section 9(1) - we hold that decision of the ld. CIT(A) cannot be affirmed on this ground. Disallowance u/s. 14A - HELD THAT:- The assessee company has not earned any exempt income during the year under reference hence keeping in view the judgment in the case Cheminvest Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] no disallowance is called for u/s. 14A
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2022 (2) TMI 978
Addition being 6.5% of the cash payment against the job work on account of glaring discrepancies in the fabrication charges for which cash payments were made - HELD THAT:- We find, identical issue had come up before the Tribunal in assessee's own case for AY 2012-13 [ 2018 (10) TMI 240 - ITAT DELHI ] wherein the Ld. CIT(A) deleted the entire addition which included an amount paid in cash for fabrication work. - Decided in favour of assessee.
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2022 (2) TMI 977
Addition of capital expenditure in the form of intangibles - HELD THAT:- We noticed that the coordinate bench of the Tribunal in the case of Flipkart India Private Ltd. for AY 2015-16 [ 2018 (5) TMI 337 - ITAT BANGALORE] on the identical issue under consideration here held that the action of the Revenue cannot be sustained, as the Revenue has disregarded the book results and has presumed that the assessee had incurred expenditure in creating intangibles assets/brand or goodwill is without any basis. Tribunal held that the loss declared by the assessee in the return of income should be accepted by the AO and action of disallowing the expenses is without any basis. - Appeal of revenue dismissed.
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2022 (2) TMI 976
Disallowing the exempt dividend income and taxing the same as 'Dividend Stripping' u/s. 94(7) - consequent reducing the loss claimed by the Appellant - contention of the assessee before the CIT(Appeals) was that amount was out of the scope of Section 94(7) as the dividend included dividend from mutual funds, which was not covered under the provisions of Section 94(7) - CIT(Appeals) sustained the addition - HELD THAT:- As contention of the assessee is not rebutted by the Revenue. Moreover, the assessee had furnished the details of mutual funds before the learned CIT(Appeals). Hence, the finding of learned CIT(Appeals) that the assessee has not provided break up of dividend is erroneous. Therefore, same cannot be sustained - we hereby direct the Assessing officer to delete the addition. - Decided in favour of assessee.
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2022 (2) TMI 988
Deduction u/s 80IA without setting off the losses / unabsorbed depreciation pertaining to the windmill, which were set off in the earlier year against other business income of the assessee - HELD THAT:- Sub-section (2) that an assessee who is eligible to claim deduction u/s 80IA has the option to choose the initial/ first year from which it may desire the claim of deduction for ten consecutive years, out of a slab of fifteen ( or twenty) years, as prescribed under that sub-section. It is hereby clarified that once such initial assessment year has been opted for by the assessee, he shall be entitled to claim deduction u/s 80IA for ten consecutive years beginning from the year in respect of which he has exercised such option subject to the fulfillment of conditions prescribed in the section. Hence, the term initial assessment year would mean the first year opted for by the assessee for claiming deduction u/s 80IA. However, the total number of years for claiming deduction should not transgress the prescribed slab of fifteen or twenty years, as the case may be and the period of claim should be availed in continuity. AO are, therefore, directed to allow deduction u/s 80IA in accordance with this clarification and after being satisfied that all the prescribed conditions applicable in a particular case are duly satisfied. Pending litigation on allowability of deduction u/s 80 IA shall also not be pursued to the extent it relates to interpreting initial assessment year as mentioned in sub section (5) of that section for which the Standing Counsels/D.R.s be suitably instructed. The above be brought to the notice of all Assessing Officers concerned. See Prabhu Spinning Mills (P) Limited [ 2016 (3) TMI 1309 - MADRAS HIGH COURT] - Decided in favour of assessee.
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2022 (2) TMI 975
Exemption u/s 11 - Charitable activity u/s 2(15) - income earned by the assessee out of commercial exhibitions, auditorium etc., - contention of the revenue is that the object of the trust is only in the nature of advancement of any other object of the general public utility - As per assessee basic objects of the Centre or to inculcate and promote Indian arts, educate children in the field of science, arts, history and social response by Centre not only educates people at large but about astronomy through professional astronomers but also generate interest in physics the Centre also conduct exhibitions to exhibit the art of poor artists, coming from remote parts of India and thus provides relief to the artists in the form of sale of their art as well as promoting their skills - as per revenue object of the assessee will fall in the category of advancement of any other object of the general public utility thus operations carried on by the assessee are in the nature of commerce or business specially looking into the proportion of receipts from such activities therefore, the activities carried on by the assessee are not exempted in view of the section 13(8) HELD THAT:- We observe from the record that assessee was granted 12A registration and continues to enjoy as the trust is established with the object to promote education. It is also fact on record that assessee was treated as an institution to promote the education and cause for promoting the education over the years until the present impugned Assessment year in which Assessing Officer after considering the object and activities of the assessee and came to the conclusion that assessee is hit by the proviso to section 2(15) of the Act and he categorized the assessee under the category of advancement of any other general public utility. We observe from the record that assessee is engaged in the formal form of Certification course of Astronomy and Astrophysics with collaboration with Mumbai University. The Annual Report submitted by the assessee gives detailed discussion of the Education activities carried on by the assessee, it is also found that the assessee is imparting the education in the form of organizing various workshop/lectures/Conferences apart from providing the certificate course. It is also fact on record that assessee is also carrying out activities such as Annual Exhibitions for poor artists and exhibitions held in the hall of Arts, the Nehru Center also organizes programs on Music and Culture etc., it is also submitted that Council of Scientific and Industrial Research has approved the assessee s trust for the purpose of section 35(1) of Clause (ii) of the Act. Assessing Officer has accepted that some of the activities assessee undertakes in the field of education and it spent some income on these activities. Therefore, Assessing Officer has not disputed the fact that assessee is engaged in the activities of Education and relief to poor. We are in agreement with the findings of the Ld.CIT(A) that the term education should be understood in common parlance and should not be mixed up with the mode of giving education. With the advancement in technology the education can be provided on electronic gadgets also. Therefore, we do not find any reason why assessee should not be treated as engaged for imparting education. Through several conventional and modern methods which are in the nature of imparting education. Therefore, we do not see any reason to interfere with the finding of the Ld.CIT(A). AO treated the hiring and planetarium receipts are in the category of business and not for charitable activities - Whether hiring charges and planetarium receipts are in the nature of business or not? - CIT(A) by relying in the case of Institute of Chartered Accountant of India v. DIT(E) [ [ 2013 (7) TMI 205 - DELHI HIGH COURT] held that ICAI does not carry on any business, trade or commerce. The activity of imparting education in the field of accountancy and conducting courses are activities in furtherance of the objects for which the ICAI has been constituted. By relying on the above decision Ld.CIT(A) held that activity of running the planetarium for general public at normal rate and earning revenue from shows does not make the activity as non-charitable. Therefore, we do not find any reason to interfere with such finding of the Ld.CIT(A). CIT(A) observed that education is a very wide term which covers not only the skills and information imparted in schools and colleges but also covers the entire field of any institution which disseminates information and skills not only offline but online as well and that is also not confined to basic education like languages, sciences etc., but also encompasses the entire gamut of universe. We are in agreement with the decision of the Ld.CIT(A) that most of the institutions depends on voluntary donations and contributions and aid from government and income from property held by the trust by way of rent and assessee also depends wholly on the investments from which it derives interest and also income from the property held in trust by way of rent which are ultimately applied to meet the objects of the trust, that is, education and in certain ways to meet the objects of general public utility No reason to interfere in the conclusions reached by the Ld.CIT(A) that assessee was engaged in charitable activity and for the purpose of advancing its objects; it earned income which was incidental to its activities. He also came to the conclusion that it is an institution which imparts education and fulfills the basic condition laid down in section 2(15) of the Act. Therefore, the proviso to section 2(15) of the Act does not arise in the case of the assessee. With the above observations and facts on record we deem it fit and proper to dismiss the grounds raised by the revenue. Accordingly, grounds raised by the revenue are dismissed.
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2022 (2) TMI 974
Addition of Provisions for trade receivable as debited to P L account under the head other expenses - HELD THAT:- Trade receivables which stood as on 31/03/2014 is substantially reduced as on 31/03/2015 which clearly indicates that assessee should have received the payment from the trade receivables or assessee must have written off the above said balances. From the P L Account, the details submitted under the head Other expenses which carried narration Provision for trade receivables . When compared with the balance-sheet figure of trade receivables, it clearly indicate that assessee has actually wrote off the trade receivables and claimed bad debt. Just because the narration used by the assessee as provision for trade receivables, but in fact, it is only actual loss / expenditure claimed by the assessee which can be classified under the head bad debts as per section 36(1)(vii) of the Act, we have to consider substance over the form and the intention of the assessee has to be appreciated and not the nomenclature noted to claim the expenses, it has merely mentioned the term provision it does not mean that it becomes provision. Therefore, we direct the assessing officer to delete the addition as it actually pertains to bad debts written off in the books of account. - Decided in favour of assessee.
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2022 (2) TMI 973
Deduction u/s 48(i) - expenditure incurred wholly and exclusive in connection with the transfer of Long Term Capital Asset - Payment necessary to clear the encumbrance and perfect the title over the property - HELD THAT:- Any amount paid for removing encumbrance without which the sale or transfer could not be effected, is allowable as deduction u/s 48(i) of the Act. Similar is the view expressed by the Hon ble Madras High Court in case of V Laxmi Reddy vs ITO [ 2010 (11) TMI 367 - MADRAS HIGH COURT] . In fact, the Hon ble jurisdictional High Court in case of CIT VS Abrar Alvi [ 2000 (3) TMI 20 - BOMBAY HIGH COURT] while dealing with similar issue relating to payment by the father to his son to remove the encumbrance, held that the payment made is allowable under section 48(i) of the Act. In the facts of the present case, undisputedly, the payment made by the assessee to M/s Colo Colour Pvt Ltd is certainly for removing encumbrance and perfecting the title over the property sold. Otherwise, the transaction would have failed. Thus, considered in the light of the ratio laid down in the decisions cited before us, we are of the view that the amount paid by the assessee to M/s Colo Colour Pvt Ltd is an expenditure in connection with transfer of a capital asset as per section 48(i) of the Act; hence allowable.
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2022 (2) TMI 972
Addition u/s 68 - Unexplained cash deposit - AO did not accept the explanation of source of cash from Shri. Narayan Iyengar HUF - HELD THAT:- AO disbelieved receipt of cash from the HUF on the ground that the income of HUF declared for Assessment Years 2016-17 and 2017-18 was not sufficient to prove the gift given by the HUF - AO also mentioned that the HUF did not respond to the notice by the AO u/s 133(6) which is not correct and a reply was filed by the HUF on 13.09.2019 reiterating the fact that the HUF has given cash as gratis. AO and CIT(A) in our opinion proceeded on the basis that the current year s income should have been more than ₹ 3 lakhs and only then the payment of cash to the assessee can be justified. In coming to this conclusion, they have ignored the fact that the HUF had declared income in the past and did not doubt the availability of accumulated cash from past savings - Addition of ₹ 3 lakhs being cash received from HUF cannot be sustained and the same is directed to be deleted. Upendranath has acknowledged having paid a sum of ₹ 5 lakhs to the assessee on 10.11.2016 by cash. Upendranath has been filing his Return of Income and the copy of Return of Income filed by him for Assessment Years 2016-17 to 2019-20 have been filed before the lower authorities. These facts have been overlooked by the Revenue authorities. Identity of Upendranath cannot be disputed because even in the ground of appeal raised by the assessee before the CIT(A), specific assertion was made by the assessee in reply to the notice issued by the AO u/s 142(1), the assessee has given all the details of Upendranath including his address and PAN number. These facts have not been considered by the AO or the CIT(A). Assessee has sufficiently established the identity, capacity and genuineness of the transactions and in the circumstances, the addition made cannot be sustained. The same is directed to be deleted. - Decided in favour of assessee.
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2022 (2) TMI 971
Revision u/s 263 by CIT - claim of deduction made u/s. 35(2AB) - HELD THAT:- As during the course of assessment, the Assessing Officer has made detailed enquiries and raised different queries on the issue of claim of goodwill and claim of deduction u/s. 35(2AB) of the act. In this regard the assessee has made detailed submission along with copies of the relevant documents to substantiate its claim of depreciation on goodwill as well as claim of deduction u/s. 35(2AB). During the course of 263 proceedings before the Pr. CIT, the assessee has submitted the information about the detailed inquiry already made by the AO at the time of original assessment and copies of documents and relevant material which the assessee has submitted before the AO. In this regard, we observed that ld. Pr. CIT has not controverted the supporting and relevant evidences put up before him during the course of proceeding u/s. 263 that Assessing Officer has already made detailed inquiry on the issue of claim of goodwill and deduction claimed u/s. 35(2AB). As prior 1-7-2016 form 3CL had not legal sanctity and it is only w.e.f. with the amendment to rule 6(7a)(b) that quantification of the weighted deduction u/s. 35(2AB) of the act has significance. Similarly, ITAT Bangalore in the case of Provici Animal Nutrition India Pvt. Ltd. [ 2020 (12) TMI 177 - ITAT BANGALORE ] has held that prior 11-06-2016 form 3CL granting approval by prescribed authority in relation to quantification of weighted deduction u/s. 35(2AB) had no legal sanctity and it was only w.e.f. 1-7-2016 with amendment to rule 6(7a)(b) that quantification of weighted deduction u/s. 35(2AB) has significance. After perusal of the material on record made by the AO submission of the assessee and judicial finding, we observed that the above said judicial finding was available when the impugned revision order was passed u/s. 263 of the act, meaning there was possible views with regard to the question as to whether furnishing of form 3CL is mandatory or not for claiming deduction u/s. 35(2AB) of the act and the AO has followed one of the possible views in which case, the impugned assessment order cannot be framed as prejudicial to the interest of revenue. Depreciation of goodwill on WDV on the basis of claim of amalgamation of the amalgamating company Troika Pharmaceutical Ltd. with Troika Export Pvt. Ltd. amalgamated company and also claimed deduction u/s. 35(2AB) in respect of R D expenditure - During the course of assessment proceedings for A.Y. 2017-18, Assessing Officer has made detailed enquires and raised different queries similar to the assessment year 2016-17 on the issue of claim of goodwill and claim of deduction u/s. 35(2AB) of the Act. As per material on record placed in the paper book, the assessee has also made detailed submission along with copies of the relevant documents similar to A.Y. 2016-17 to substantiate its claim of depreciation on goodwill and claim of deduction u/s. 35(2AB). We consider that ld. CIT(A) is not justified in treating the order passed u/s. 143(3) of the act dated 30th March, 2019 by the Assessing Officer as erroneous and prejudicial to the interest of the revenue in spite of the information and related document with the Pr. CIT. He could not demonstrate that what kind of inquiry and examination was not made by the AO. AO rightly held in accordance to the amended provision as supra that the weighted deduction is available in respect of expenditure on scientific nature as approved in Form No. 3CL w.e.f. 1.7.2016. If a query was raised during the course of scrutiny by the AO which was answered to the satisfaction of the AO, but neither the query nor the answer was reflected in the assessment order that would not by itself, lead to the conclusion that the order of the Assessing Officer called for interference and revision.
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2022 (2) TMI 987
Rectification of mistake - Validity of assessment - Petitioner alleges that the order of assessment is bad in law since no notices other than the one under section 142(1) of the Act was ever served upon it and hence there is a clear violation of the principles of natural justice - HELD THAT:- This is not a fit case to invoke the discretionary jurisdiction of this Court under Article 226 of the Constitution of India, for more reasons than one. The assessment order under challenge was issued after granting sufficient opportunity to the petitioner including various notices issued under sections 143 and 142 of the Act. Petitioner had not replied to any of those notices. Petitioner cannot thereafter, turn around and contend that it was not granted an opportunity or that there was any violation of principles of natural justice. Though the last notice issued to the petitioner was on 12.03.2021, requiring it to reply on 14.03.2021, which in strict senso may not appear to be a reasonable or sufficient period to submit a reply, considering the background of the case and the repeated failure of the petitioner to respond to any of the six prior notices issued on 28.09.2019, 24.12.2019, 04.03.2020, 28.07.2020, 17.12.2020 and 18.02.2021, petitioner cannot claim the benefit of violation of principles of natural justice. Petitioner's conduct reveals its adamant approach to refrain from responding to notices. The absence of pleading about the five notices issued to the petitioner and the omission to reveal in the writ petition, the receipt of notices is singularly detrimental to the petitioner. In the writ petition, petitioner asserted that it had not received any notice other than the notice dated 24.12.2019. Petitioner failed to divulge the receipt of five other notices. This conduct also must deprive the petitioner of the benefit of exercise of the discretionary jurisdiction under Article 226 of the Constitution of India. As rightly submitted by the learned Standing Counsel, though the assessment order contains a technical issue in the computation statement, that is a matter which can be rectified under section 154 of the Act and hence the same need not be considered under Article 226 .
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2022 (2) TMI 986
Validity of assessment order u/s 143(3) v/s assessment u/s 144C - petitioner states that the impugned assessment order has been passed by the respondents by wrongfully assuming jurisdiction under section 143(3) as it ought to have been exercised under section 144C - HELD THAT:- In view of several judgments of this court on this issue including ESPN Star Sports Mauritius S. N. C. ET Compagnie v. Union of India [ 2016 (4) TMI 45 - DELHI HIGH COURT] , he admits that the Assessing Officer in the present case, could have passed a draft assessment order only with a right to the assessee to file objections with the Dispute Resolution Panel. Keeping in view the aforesaid, the impugned assessment order dated September 22, 2021 is directed to be treated as a draft assessment order and not an assessment order passed under section 143(3) - The petitioner is given liberty to file objections against the said draft assessment order with the Dispute Resolution Panel within thirty days from today and on receipt of objections, the Dispute Resolution Panel is directed to decide the same in accordance with law.
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2022 (2) TMI 985
Benefit of the DTVSTV Scheme - there was an Appeal which Department had filed and was pending in this Court in which the Department has impugned the same order passed by the Income Tax Appellate Tribunal which Petitioner had impugned in its Appeal - according to Respondent, if a declarant wishes to avail the benefit of DTVSV Act and if there is more than one issue pending at Appellate Forum and both the Appeals are against the same Order of ITAT, Petitioner does not have a choice only to offer to settle the Appeal filed by Petitioner but Petitioner has to settle both the Appeals - HELD THAT:- It is clear from the answer to Question No. 40 that Petitioner has an option to settle only the Appeal filed by Petitioner or Appeal filed by the department or both. Only requirement is that the declaration form has to be filed Assessment Year wise and for different Assessment Years separate declarations have to be filed. This is further clarified in the answer because it states the declarant in the declaration Form No.1 needs to specify whether he wants to settle his appeal, or department s appeal or both for a particular assessment year . Therefore, option is available to the declarant to decide which matter the declarant wants to settle. Nowhere does the Circular mention or even indicate the interpretation given in the Affidavit-in-Reply to the Question No. 40 and Answer thereto. We have also to note that in the rejoinder Petitioner has annexed a copy of Order dated 21st July, 2019 passed by Prothonotary and Senior Master by which the department s Appeal has been rejected under Rule 986. Mr. Walve has no instructions as to whether any restoration application has been filed. At the same time, we would hasten to add that even if department s Appeal was pending, our view expressed above will not be any different. We are, therefore, of the view that Petitioner is entitled to file declaration in respect of his appeal and avail of the benefit of the DTVSTV Scheme without being obliged to include the Department s appeal on the same issue. In the circumstances, this Court s interference is called for. Form 3 issued by designated authority is set aside. The Designated Authority is directed to consider the Declaration made by Petitioner in Form 1 and to issue and upload revised Form No.3 in terms of this Order within a period of two weeks from the date of uploading of this order and within two weeks thereafter Petitioner shall pay the amount as mentioned in the revised Form No.3.The Designated Authority shall issue revised Form No.3 for Assessment Years 2007-2008 and 2010-2011 also in view of the order passed above.
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2022 (2) TMI 984
Validity of faceless assessment order u/s 144B - Denial of natural justice - Petitioner did not get a personal hearing - HELD THAT:- This Court is of the view that as the option to opt for personal hearing was not enabled, the petitioner due to technical glitches could not request for personal hearing on the e-portal. Consequently, it cannot be said that the petitioner did not opt for personal hearing in the present case. Keeping in view the aforesaid, the impugned assessment order dated 22nd April, 2021 along with the consequential demand and penalty notice is set aside and the matter is remanded back to the Assessing Officer, who shall grant an opportunity of personal hearing to the petitioner by way of Video Conferencing and thereafter pass a reasoned order in accordance with law.
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Customs
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2022 (2) TMI 970
Validity of SCN - Time limitation - whether the show cause notice given under Section 124 of the Act after six months of seizure can be sustained under the law? - HELD THAT:- The mode of service of notice prior to the amendment by Finance Act, 2018 included the summons or notice issued under Section 153 of the Act. This Court in case of DEEPAK NATVARLAL SONI VERSUS UNION OF INDIA [ 2018 (9) TMI 1912 - GUJARAT HIGH COURT ] was considering the similar issue and addressed this question of issuance of the notice as envisaged under Section 110(2) vis-a-vis Section 124 and Section 153 which is no longer res integra - it had held that the action of respondents-authority in not returning the goods seized upon failure to comply with Sections 110(2), 124 and 153 of the Act, is illegal and the writ petition was allowed by directing the respondents to return all gold ornaments/gold items and two apple IPage phones seized under panchnama to the petitioner within a specified period unconditionally subject to adjudication process to be carried out afresh in accordance with law. In case of KORE KONCEPTS VERSUS DEPUTY COMMISSIONER OF CUSTOMS (SIIB) AND ORS [ 2013 (5) TMI 876 - DELHI HIGH COURT ] where the show cause notice was not issued within stipulated period according to the Court, the seizure order would not sustain and the goods which were released earlier provisionally were held to have been released unconditionally and the Bank Guarantee furnished at the time of provisional release would cease to operate, the same also was required to be returned - Reverting to the facts on hands, M/s. Amira Impex of Maharashtra engaged in the business of various items is alleged to have indulged in gross over valuation and mis-declaration of the export goods with an intent to wrongfully avail IGST refund in various other export related incentives. A search was conducted at the office premise of the proprietor of JBM Textiles Shri Amit Harishankar Doctor and also of Shri Mihir Mahesh Chevli and Shri Aazam Sabuwala at Surat. The statements were recorded of the authorized signatory of about eight firms, which were also operating independently from the same premise - the notice for confiscation and penalty also was given under the Act on 27.11.2020. Admittedly, the search proceedings had been carried out as per the panchnama drawn and placed before this Court on 03.04.2019. The statements have also been recorded on 04.04.2019 and a show cause notice had been issued on 27.11.2020 for the alleged illegal export attempted by M/s.Ameera Impex by the Additional Director of Revenue Intelligence-respondent No.4, served upon the petitioner on 14.12.2020. Admittedly, this notice of confiscation is issued beyond the prescribed statutory period of six months. In the instant case, admittedly there has been no provisional release of the seized goods. Further extension of six months with the reasoned order by the Principal Commissioner of Customs or Commissioner of Customs also is completely missing. The period of six months from the date of signature expired on 03.10.2019 - even further period of six months as provided in the first proviso to Section 110(2) also got over on 03.04.2020. Of course, in absence of any order, much less reasoned order by prescribed authority, extension would need to be disregarded yet, the respondents chose not to return the seized currency or mobile phones and the request of the petitioner has not been addressed nor replied to. Noticing that the period prescribed under the law has already lapsed long before the show cause notice has been issued, this Court needs to intervene for this being a clear violation of statutory provisions of section 110 and other provisions of Customs Act, these items are required to be returned to the petitioner - the Court notices that nothing has been explained in the entire reply of 27 paragraphs with regard to the non compliance of the statutory mandate under Section 110(1)(2) read with Section 124 of the Act. It is quite unfathomable as to why the time limit is not adhered to and issuance of the show cause notice has been delayed beyond the statutory time period and hence, intervention will be necessary at the end of this Court by keeping open the rights of the respondents to initiate adjudication process afresh in accordance with law. The present petition is allowed - the respondents shall return the cash and articles/goods to the petitioner not later than period of eight weeks seized from the petitioner.
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2022 (2) TMI 967
Classification of imported goods - Antenna for base station imported by the appellant - whether classifiable as parts of base station under CTH 85177090 as claimed by the appellant or as machine/equipment for the reception, transmission and conversion of data under CTH 85176290 as claimed by the Revenue? - HELD THAT:- The very same issue in the appellant s own case has been decided by this tribunal s Mumbai Bench in COMMISSIONER OF CUSTOMS (IMPORT) MUMBAI VERSUS M/S RELIANCE JIO INFOCOM LTD [ 2019 (11) TMI 451 - CESTAT MUMBAI] where it was held that the correct classification of the Antenna for base station is under Sub-heading 85177090 as parts . Since, the main issue of classification has been addressed, the other ancillary/alternative submission/issues on the eligibility of various exemption notifications issued in support of the classification of the said goods, becomes more of academic, hence not analysed. The identical issue in the appellant s own case has been decided by tribunal Mumbai Bench wherein it was held that the antenna imported by the appellant is correctly classifiable under customs 85177090 as parts. Following this tribunal, it is held that the impugned order is not sustainable. The appeal is allowed - decided in favor of appellant.
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2022 (2) TMI 969
Rejection of permission to clear the goods said to have been imported from Abu Dhabi (Saudi Arabia) from the bonded warehouse - the case of the Department is that there are reasons to believe that the goods have not been imported from Saudi Arabia but those have been imported from Pakistan - HELD THAT:- It is not in dispute that till this stage, there has been no seizure of the goods under Section 110 of the Customs Act. If there would have been a seizure under Section 110 of the Customs Act, then probably the writ applicant could also have moved an application for provisional release of the goods under Section 110-A of the Customs Act. Regulation 2 of the Regulations 1963 referred to above would come into play when the proper officer on account of any of the grounds specified in Sub-section 1 of Section 18 of the Customs Act is not able to make a final assessment of the duty on the issue of imported goods. There are many judgments of different High Courts which have been placed by Mr. Nayak for our consideration. One of the judgment of Delhi High Court in the case of SPIROTECH HEAT EXCHANGERS PVT LTD VERSUS UNION OF INDIA [ 2016 (3) TMI 37 - DELHI HIGH COURT] takes the view that the provisional release of seized goods on the condition of payment of 100% of differential duty along with bank guarantee equivalent to 25% of differential duty and bond for 100% of value of the goods would be termed as very harsh condition and contrary to the judgments of the High Courts and Supreme Court. In the said case, the Delhi High Court directed to release the goods subject to the petitioner executing a bond in a sum equivalent to 100% value of the goods and further furnishing security in the form of bank guarantee for a sum equivalent to 30% of the differential duty. If something is found credible in the report on basis it could be said that the apprehension expressed by the Department as regards import of the goods from Pakistan is well founded, then we may put the writ applicant to certain terms and conditions for the purpose of release of the goods. Otherwise the provisional release is ordered subject to the writ applicant herein furnishing a bond of the amount equivalent to 200% of the duty which is leviable on such goods. Post this matter for further hearing on 03.03.2022 of top of the Board.
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2022 (2) TMI 968
Maintainability of petition - availability of remedy of appeal or not - Validity of SCN - right to cross-examination not granted - violation of principles of natural justice - Jurisdiction - Proper officer to issue SCN - DRI are proper officers to initiate proceedings by way of issuance of show cause notice, raising demand/confiscation under Section 28 and 124 of the Act of 1962 and the subsequent proceedings thereto, or not - HELD THAT:- It has been held in WHIRLPOOL CORPORATION VERSUS REGISTRAR OF TRADE MARKS, MUMBAI ORS. [ 1998 (10) TMI 510 - SUPREME COURT ] that entertaining writ petition under Article 226 of the Constitution of India is a self imposed restriction if the petitioner is aggrieved and is not having efficacious and effective remedy, the same can be invoked but in the circumstance, when there is violation of fundamental rights or the action of the respondent is without jurisdiction and there is violation of principles of natural justice, the writ courts/constitutional courts have a bounden duty to entertain the writ petition. In the case in hand, it is an admitted fact that a show cause notice was issued, order in original was passed, appeal was preferred but the issue whether DRI Officers are proper officers under the Act of 1962 and have power to issue a show cause notice was not analyzed and ignored though the said controversy was no more res integra. T he petitioner has also raised the said issue before the learned Adjudicating Authority and placed reliance on the judgment of Canon India [ 2021 (3) TMI 384 - SUPREME COURT ], COMMISSIONER OF CUSTOMS VERSUS SAYED ALI [ 2011 (2) TMI 5 - SUPREME COURT ] M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 2016 (5) TMI 225 - DELHI HIGH COURT ]. It is also to be taken note of that the judgment of Cannon India Private Ltd was pronounced on 09.03.2021 and the OIO was passed on 15.03.2021 but the same was ignored - In the compelling circumstances, when the entire proceedings were initiated by way of show cause notice which was issued by DRI Officers who lacked jurisdiction to issue show cause notices as held by Apex Court, it is deemed appropriate to entertain the present writ petition overruling the argument on alternative remedy as raised by respondent counsel. The entire proceedings initiated by officers of DRI in as much as by issuance of show cause notice under Section 28/124 of the Customs Act lacks jurisdiction and are without any authority of law because the present show cause notice is not issued by custom officer but by DRI officer who has not been assigned specific function/power under Section 6 to issue show cause notice U/S 28 of the Act of 1962. DRI officer is not Competent Authority to issue show cause notice and adjudicate the same as proper officer . The Act, the notification relied upon do not define and bring the DRI officers within four corners of proper officers having functions and powers to act under Section 28 of the Act of 1962 - Thus there is a lack of jurisdiction. It is also noteworthy to mention that learned counsel for the respondent has raised further argument that the present show cause notice in the connected matters is issued U/S 124 of the Customs Act qua the confiscation of the goods and therefore the judgment of Canon India is not applicable - the said contention of the respondent is also not tenable as it is held that DRI Officers lacks jurisdiction qua the functions to be executed under the Act of 1962, the proceedings under Section 124 is also illegal, void ab initio and nullity. The proceedings issued by show cause notice and subsequent demands confirmed by OIO are set aside, as prayed in the writ petitions - petition allowed.
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Insolvency & Bankruptcy
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2022 (2) TMI 966
Withdrawal of the CIRP against the Principal Borrower - bar for the Respondent/Lender in initiating fresh CIRP against the Guarantor or not - HELD THAT:- It is a well settled preposition in Law that the creditor is not bound to exhaust his/its remedy against the Principal Borrower before invoking the Guarantor or suing the Guarantor for payment of outstanding sum(s), (unless otherwise agreed to in the Guarantee Deed). A suit can be maintained against the Guarantor for payment of outstanding sums in connection with the Loan extended to the Borrower even if the Borrower itself has not been sued by the Lender. This Tribunal is of the considered opinion that the Lender has an independent access to the Guarantor issued by the Principal Borrowers. Therefore, this Tribunal holds that withdrawal of Section 7 Petition filed under the IBC Code, 2016 against the Principal Borrower is not a fetter in initiating CIRP against the Guarantor in accordance with Law. This Tribunal finds force in the contention of the Learned Counsel for the Respondent that the withdrawal of the proceedings was brought to the notice of the Adjudicating Authority as the Order copies are part of the record before the Learned Adjudicating Authority. It is not in dispute that the Principal Borrower had committed default in repayment of the outstanding Financial Debt and the Tripartite Guarantee Agreement executed by the Appellant/Corporate Debtor in favour of the Respondent evidences the liability of the Appellant herein to pay the amounts due and payable - A Perusal of the Sanction Letters to the Principal Borrowers establishes that the credit facilities was executed towards meeting working capital requirements and it cannot be said that Respondent/Lender has only a security interest towards the Corporate Debtor. At the cost of repetition, the Appellant herein stood as a Guarantor and stepped into the shoes of the Principal Debtor and viewed from any angle it cannot be construed that Lender has only a security interest over the assets of the Corporate Debtor. This Tribunal comes to an irresistible and inescapable conclusion that the Appellant being the Corporate Guarantor of the two Principal Borrowers viz. M/s. Roshni Jewellers Pvt. Ltd. and M/s. J.B. Gold Pvt. Ltd., is liable to pay the amounts in question. Accordingly, this Tribunal holds that mere withdrawal of the CIRP against the Principal Borrower will not be a bar for the Respondent/Lender in initiating fresh CIRP against the Guarantor who is the Appellant herein - Appeal dismissed.
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2022 (2) TMI 965
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Application rejected on the ground of time limitation - HELD THAT:-Having regard to the facts and circumstances of the case on hand and that the Section 7 Application has been dismissed solely on the ground of Limitation, the subject matter needs to be adjudicated on the touchstone of the principles laid down by the Hon ble Supreme Court in Asset Reconstruction Company (India) Limited Vs. Bishal Jaiswal Anr. AIR [ 2021 (4) TMI 753 - SUPREME COURT ] and in Dena Bank (Now Bank of Baroda) Vs. C. Shivkumar Reddy Anr. [ 2021 (8) TMI 315 - SUPREME COURT ], in which the Hon ble Supreme Court has discussed in detail, the applicability of Sections 18 and 19 of the Limitation Act, 1963. In the instant case, the loan was sanctioned on 11/09/2006; was declared as NPA on 05.04.2008; attempts were made to restructure the debt; Notice under Section 13(2) of SARFAESI Act, 2002 demanding an outstanding amount of ₹ 7,64,52,372.57/- was issued on 28/10/2010, in response to which, the Learned Counsel for the Respondent offered ₹ 740 Lakhs/- for settlement of the loan amount - The material on record evidences that O.A. No. 461 of 2015 filed by the Appellant against the Respondent Company and Guarantors was allowed vide Order dated 02/07/2019, directing the Respondent Company to pay a sum of ₹ 14,68,17,342.58/- together with penal interest. It is not in dispute that the Respondent Company failed to make the payments in compliance of the Order dated 02/07/2019. It is seen from the record that the Section 7 Application was preferred by the Appellant on 18/11/2019. The Appellant Bank was thus entitled to initiate proceedings under Section 7 within three years from the date of issuance of the Recovery Certificate and the ratio of Hon ble Apex Court in Dena Bank (Now Bank of Baroda) [ 2021 (8) TMI 315 - SUPREME COURT ] is squarely applicable to the facts of this case, as Recovery Certificate was issued on 02.07.2019 and the Application was filed on 18/11/2019 well within three years from the date of cause of action. The Application is well within the Limitation - the Adjudicating Authority is directed to proceed in accordance with law and decide the Admission under the provisions of the Code, as expeditiously as practicable but not later than 6 weeks from 10/03/2022, on which date, both parties are directed to appear before the Adjudicating Authority - appeal allowed - decided in favor of appellant.
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2022 (2) TMI 964
Liquidation of the Corporate Debtor - section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The submission by the applicant that the Statutory filing had not been done since 2014 and that the previous filings had been done using illegible copies and that the physical records of the Corporate Debtor were still lying with the Directors of the suspended Board which they are not providing after repeated directions were the reasons why the COC had decided to liquidate the Corporate Debtor as well the realization by the COC that the suspended directors were only making submissions for OTS to gain time and delay the CIR Process are sufficient grounds for commencing liquidation proceedings against the Corporate Debtor. The sub-section (2) of section 33 of the Insolvency Bankruptcy Code, 2016 is clear in that the COC is fully empowered to decide on liquidation at any stage of CIRP, (however before the confirmation of the Resolution Plan), therefore in the present case the COC which consisted of a sole COC member, in its 6th COC meeting held on 21.06.2021 with 100% vote share approved the liquidation of the Corporate Debtor after having explored all the possibilities of reviving the Corporate Debtor. This Tribunal under the circumstances, taking into consideration the provisions of law and since the Insolvency Resolution Process Period has expired, passes an order for liquidation of the corporate debtor 'M/s. Paramex Transformers Limited', and the incidence of liquidation will follow from the date of this order in terms of the provisions of the IBC, 2016 and more particularly as given in Chapter - III of IBC, 2016 - application allowed.
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2022 (2) TMI 963
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - pre-existing dispute between the parties or not - HELD THAT:- It is seen that Operational Creditor has issued notice under section 8 of the Code on 6.5.2019 and the said notice has been duly replied by Corporate Debtor on 15.5.2019, and the present Application has been filed on 18.10.2019. While replying to the said notice, Corporate Debtor has referred to its earlier mail dated 22.2.2019 wherein certain quality issues/deficiencies on part of the Operational Creditor have been highlighted. Relying upon the said e-mail dated 22.2.2019, the Corporate Debtor has denied its liability towards Operational Creditor. The Corporate Debtor has further stated that it has duly paid an amount of ₹ 46,05,375/- (being Base Value including Tax (GST) subject to TDS) and settled various invoices raised by the Operational Creditor - from the analysis it is convincing that Corporate Debtor has been able to establish existence of preexisting dispute between it and the Operational Creditor. The present Application filed under section 9 of the Code by Operational Creditor seeking initiation of Corporate Insolvency Resolution Proceedings against the Corporate Debtor is hereby dismissed.
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2022 (2) TMI 962
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- As per Section 8(1) of IBC, 2016, the Applicant is required to deliver the Demand Notice before filing an application under Section 9 of IBC, 2016. Since, the Applicant has failed to deliver the demand notice to the Respondent before filing the Application under Section 9 of IBC, 2016, therefore, the present application is not maintainable. Application dismissed, being not maintainable.
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2022 (2) TMI 961
Liquidation of the Corporate Debtor - Section 33(2) and 34(1) of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Since the CoC in its commercial wisdom has decided to take the Corporate Debtor in liquidation, the decision of CoC should not be interfered. The present application seeking liquidation of the Corporate Debtor M/s. Nizamiya Construction Private Limited, in the manner laid down in Chapter III of Part II of the Code is allowed.
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PMLA
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2022 (2) TMI 960
Money Laundering - schedule offences - siphoning off of funds - constitutional validity of twin conditions prescribed for release on bail as per Section 45(1) of the PML Act, 2002 - HELD THAT:- It reveals that two other co-accused persons, namely, Pradeep Kumar Sethy and Jyoti Prakash Jay Prakash, whose release on bail has been referred by the Petitioner were granted on bail upon reliance of the decision of the Supreme Court in the case of NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. [ 2017 (11) TMI 1336 - SUPREME COURT] , wherein the Supreme Court held the twin conditions prescribed for release on bail as per Section 45(1) of the PML Act, 2002 to be unconstitutional as violative of Articles 14 and 21 of the Constitution of India. The present Petitioner is inside custody since 30.5.2013 relating to Kharavela Nagar P.S. Case No.44 of 2013 and in respect of the present case since 16.10.2017. It is admitted by the parties that despite such long detention of the Petitioner inside custody, the trial has not commenced yet. Thus keeping in view the period of detention of the Petitioner inside custody, the delay in trial, release of other two co-accused persons, namely, Pradeep Kumar Sethy and Jyoti Prakash Jay Prakash as well as the observations rendered by this Court and other High Courts with regard to applicability of the provisions of Section 45 of the PML Act, 2002, it is directed to release the Petitioner on bail - Bail application dismissed.
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2022 (2) TMI 949
Interpretation of statute - constitutional validity of section 45 of PMLA - Effect of post-amended section 45 of the Prevention of Money-Laundering Act, 2002 (PML Act) in terms of amendment introduced w.e.f. 19.04.2018 - situation post decision of the Supreme Court in the case of NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. [ 2017 (11) TMI 1336 - SUPREME COURT] - HELD THAT:- The Legislative competence of introducing Amending Act has not been disputed, nor countered on any count. Certainly the legislature cannot by way of amendment undo the decision of Courts. However, the Legislature has power to rectify through amendment the defect noticed or highlighted by the decision of the Court. The purpose behind amendment is not to over rule the decision of the Court but simply to correct it and to remove the basis on which the provision has been declared as unconstitutional - when the Prevention of Money Laundering Bill, 1999 was tabled before the Parliament, the twin conditions for release on bail would apply only insofar as offence under the PML Act itself. The Amending Act has changed the entire complexion. Notably section 45 of the Act has not been repelled from the statute book. Therefore, in our view, the section as it stood after amendment has to be read as it stands. It is not found necessary that the entire section has to be resurrected afresh. The very effect of the amendment has changed the periphery of its applicability. The section which stands after amendment has to be read as a whole - Absence of reference in notification dated 29.03.2018 thereby amending section 45(1) of the Act about its retrospective applicability does not take away the force and impact of amendment. It is for the Legislature to give effect to the amending provisions prospectively or retrospectively. However, that cannot be reason for ineffecting the amending provisions of the Act. The reference arose out of statutory jurisdiction and not constitutional jurisdiction of this Court. Unless there is proper challenge and pleadings, the issue of constitutional validity cannot be undertaken. Undoubtedly, the Legislature has power and competence to amend the provisions of the Act. Unless the amended provision is struck down by the Courts, it cannot be watered down. Since after the amendment the entire complexion of section 45 has been changed, the contention that the entire section has to be reenacted by way of amendment after decision in the case of Nikesh Shah, not agreed. Therefore, the twin conditions would revive and operate by virtue of Amendment Act, which is on date in force. The twin conditions in section 45(1) of the 2002 Act, which was declared unconstitutional by the judgment of the Apex Court in Nikesh T.Shah Vs. Union of India, stand revived in view of the Legislative intervention vide Amendment Act 13 of 2018 - Registry shall place the bail application before the concerned Court for further consideration.
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Service Tax
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2022 (2) TMI 958
Levy of Service Tax - Construction of Commercial Complex Services - period both prior to 01.07.2010 and thereafter - HELD THAT:- The issue is squarely covered by the decision of Hon ble Supreme Court in COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] , wherein it has been held that demand would not legally sustain in case the same is not raised in the category of Works Contract Service. Since the issue is no longer res integra and stands decided by the Hon ble Supreme Court, it is not considered necessary to deal with the other grounds raised in the appeal - appeal allowed - decided in favor of appellant.
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2022 (2) TMI 957
Valuation of services - Brokerage Charges - whether the brokerage charges paid to the brokers/distributors by the appellants are reimbursable expenses or whether is a consideration that has to be included in the taxable value of the appellant? - reverse charge mechanism - suppression of facts - extended period of limitation - HELD THAT:- The brokerage charges have already suffered Service Tax on reverse charge basis. To make the same amount subject to Service Tax on forward basis under Asset Management Services would be levying Service Tax on the same amount twice. The appellants have consistently contended that the said brokerage charges were recovered from M/s. SMF and these are nothing but reimbursable expenses - as per Regulation 52 ibid., the appellants are entitled to charge such expenses incurred on brokerage on the mutual fund. Needless to say that the appellant, being an Asset Management Company, is bound by the SEBI Regulations. They have accounted the brokerage charges paid by them and reimbursed by M/s. SMF so as to make it practical for them to comply with the SEBI Regulations. The brokerage charges paid by the appellant is nothing but reimbursable expenses. The period being prior to 2015 (prior to amendment dated 14.05.2015), the demand of Service Tax on such reimbursable expenses cannot sustain as settled by the Hon ble Supreme Court in the case of M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. [ 2018 (3) TMI 357 - SUPREME COURT] . Time Limitation - HELD THAT:- This Show Cause Notice has been issued alleging suppression of facts and invoking the extended period. There is no evidence put forward by the Department to establish that there is any element of fraud, wilful suppression or mis-statement of facts on the part of the appellant. Since the entire transactions were under discussion between the Department and the appellant and also considering the fact that there were other litigations with regard to the credit availed on Service Tax paid on brokerage charges, it is found that there is no factual or legal basis for invoking the extended period. Appeal allowed - decided in favor of appellant.
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2022 (2) TMI 956
Lev of service tax - Maintenance, Management or repair Service - maintenance and repair of streets, street lights, water supply, drainage etc. - collection from the lessees of the plots, an annual fee for providing such services, calling it as service charge - HELD THAT:- Hon ble Bombay High Court has considered the issue in the case of the appellant COMMISSIONER OF CENTRAL EXCISE, NASHIK VERSUS MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION [ 2018 (2) TMI 1498 - BOMBAY HIGH COURT] has held that MIDC is a statutory Corporation which is virtually a wing of the State Government. It discharges several sovereign functions - the Revenue ought not to have compelled MIDC to prefer Appeals before Appellate Tribunal - The said order of Hon ble Bombay High Court has been accepted by the Board as per letter F No. 276/203/2017-CX.8A dated 15.02.2018. Since the issue is squarely covered in favour of the appellant in their own case, the impugned order cannot be sustained - appeal allowed - decided in favor of appellant.
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2022 (2) TMI 955
Levy of service tax - implementation of the Information Technology related projects - amount received from the Departments of the State Government and which has been paid to the vendors - mount collected by the appellant from vendors on account of breach of agreement - pure agent services or not - HELD THAT:- As a nodal agency appointed by the various State Government Departments, the primary responsibility of the appellant was to supervise and monitor the overall execution of projects; computation of estimate of cost; issuance of notice inviting tenders; and appointment of vendors. The vendors so appointed by the appellant then entered into the contracts with the appellant on behalf of the State Government. The vendors performed their obligations stipulated in the contracts for execution of the projects and upon completion of the projects, a working report with utilization certificates and invoices were furnished by the appellant to the concerned Departments, which thereafter released the sanctioned amount to be paid to the vendors through the appellant. All the conditions of rule 5(2) of the Valuation Rules are satisfied, the appellant acted as a pure agent as a result of which the amount collected by the appellant from the State Government for payment to the vendors cannot be subjected to service tax - the amount received by the appellant from the State Government for payment to vendors is not a consideration for any service said to be rendered by the appellant to the State Government and, therefore, no service tax could be levied. This is for the reason that the amount which the appellant has received is not a consideration for provision of any service. The appellant was appointed merely as a Nodal Agency to supervise and monitor the overall execution of the projects. Infact, the amount paid by the State Government Department to the appellant are reimbursements which cannot be subjected to levy of service tax and in any view of the matter the appellant was acting as a pure agent as all the conditions stipulated in rule 5(2) of the Valuation Rules are satisfied. Levy of service tax - amount collected by the appellant from vendors on account of breach of agreement - HELD THAT:- This amount, which is called liquidated damages, has been held to be susceptible to service tax under section 66E(e) of the Finance Act by the Commissioner as an amount received for tolerating an act. According to the appellant, the liquidated damages recovered on account of breach or non-performance of a contract is not a consideration in lieu of any service. It is infact, in the nature of a deterrent so that such a breach is not repeated - a service conceived in an agreement where one person, for a consideration, agrees to an obligation to refrain from an act, would be a declared service under section 66E(e) read with section 65B(44) of the Finance Act and would be taxable under section 68 at the rate specified in section 66B. Likewise, there can be services conceived in agreements in relation to the other two activities referred to in section 66E(e) of the Finance Act - service tax could not have been levied on the amount recovered as liquidated damages. Appeal disposed off.
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2022 (2) TMI 954
Interest on delayed sanction of refund - rejection on the ground that there was no delay on the part of the department in sanctioning the refund amount inasmuch as the refund applications were processed after submission of all the relevant documents by the appellant - Section 11BB of the Central Excise Act, 1944 - HELD THAT:- The learned Assistant Commissioner in the original order dated 12.09.2017 had considered the refund application filed by the appellant during the year, 2009 and thereafter, sanctioned the refund amount in question to the Appellant in the year 2017. On plain reading of the statutory provisions of Section 11BB of the Central Excise Act, 1944, it transpires that if the refund amount is not paid within the stipulated time frame of three months from the date of filing of the application, then the department is exposed to the interest liability for the period of expiry of three months till the date of actual sanction of the refund amount. Considering the Revenue loss on account of payments of interest for delayed sanction of refund, the Central Board of Excise and Customs (CBEC) vide Circular dated 30.05.1995 had clarified that if any defect in refund application is observed by the department, then the same had to be communicated to the party/claimant within 48 hours from the time of receipt of the refund application. It is an admitted fact on record that the department had not observed the guidelines provided in the Circular dated 30.05.1995. Since, the refund applications filed by the Appellant in 2009 were ultimately considered for grant of refund in the year 2017, admittedly there is delay and as such, the provisions of Section 11BB ibid are automatically attracted for payment of interest on the delayed sanction of the refund amount. There is no substance in the submissions made by the learned AR for Revenue that the revised application filed by the Appellant in the year 2017 were to be considered as the relevant date of filing of applications for grant of refund inasmuch as the original authority nowhere in the order dated 12.09.2017 had considered such facts. Rather, in the first paragraph of the original order, it had specifically been recorded that the refund application filed on 29.06.2009 was considered for grant of the refund amount. On examination of the records available in the case file vis-a-vis the statutory provisions, it can be concluded that the fact that there is in fact delay in grant of refund amount to the appellant and therefore, for such delayed sanction of refund, the appellant should be compensated by way of payment of interest. There are no merits in the impugned orders passed by the learned Commissioner (Appeals), in denying the benefit of interest to the Appellant - appeal allowed - decided in favor of appellant.
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2022 (2) TMI 959
Validity of SCN - SCN was issued to five different persons merely on the ground that the registered premises of each of the co-noticees are having common directors and partners and that it has been issued without pre-consultation - CBEC Water Circular Dated 10.03.2017 - HELD THAT:- The aforementioned Master Circular is intended to only facilitate the parties to come forward to pay the amount so that the department is not burdened with show cause proceedings. However, by that itself would not impugned show cause proceedings initiated against the petitioner would be either illegal or without jurisdiction. The show cause proceedings initiated under Section 73 of the Finance Act, 1994 seeking to demand tax which was allegedly not paid, show cause proceedings cannot be allowed to be scuttled in the light of the above circular. In any event circulars are not binding on the Courts as per the decision of the Hon'ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE, BOLPUR VERSUS M/S RATAN MELTING WIRE INDUSTRIES [ 2008 (10) TMI 5 - SUPREME COURT] . There are no merits in the present writ petition as the impugned show cause notice has been issued a competent authority namely The Commissioner, Office of the Commissioner of GST and Central Excise, Chennai Outer Commissionerate under the Finance Act, 1994. The respective noticees can file their reply to the impugned show cause notice and meet out the allegations on merits - petition dismissed.
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Central Excise
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2022 (2) TMI 953
Imposition of personal penalty on two Directors - valuation of goods manufactured by the Appellant bearing the brand name of the buyer - additional consideration under Rule 6 of the Valuation Rules - burden to prove - allegation based on statement from the Key Managerial Personnel (KMP) of the Appellant Company confirming the receipt of the product specifications/formulations free of cost from the buyer - demand also based on the ground of factum of the buyer having incurred expenses on building brand name and R D as forthcoming from the financial statements of the buyer for the period 2003-04 to 2006-07 - suppression of material facts regarding receipt of the specifications/formulations etc. free of cost from the buyer - extended period of limitation - HELD THAT:- The burden of proving under valuation of goods in the hands of the Appellant manufacturer was upon the revenue and the same had to be discharged through cogent evidences. The learned Commissioner has sought to discharge the said burden by merely relying upon extracts of statements of the KMPs of the Appellant manufacturer confirming receipt of specifications, formulations and brand name from the buyer. We find that these statements were just a reiteration of the understanding between the Appellant and the buyer, as per the said agreement. Moreover, the statements of Binita Agarwal, Manager Accounts and RanjitNath, Accounts Assistant relied upon by the revenue also confirms that the raw material and packaging material required for manufacture of the final products were directly procured by the Appellant; the art work and design work on the packaging material was only approved by the buyer but the cost thereof was incurred by the Appellant; the transaction was on a principal-toprincipal basis and the price charged was the sole consideration for sale - the submission of the Appellant that revenue could not have done a pick and choose from the statement of the same very person, instead of accepting or rejecting the statement in totality, appears plausible. There is also no allegation or evidence of any flow back or extra-commercial consideration from the buyer to the Appellant aside of the negotiated price so as to discard the transaction value. In any event, excise is a levy on manufacture and it is found that it is not the case of the revenue that the buyer is the manufacturer of the said final products, so as to justify levy of excise duty on the value addition in the hands of the buyer. Rule 6 of the Valuation Rules only provides for inclusion of money value of the additional consideration flowing directly or indirectly from the buyer to the manufacturer and does not authorize recovery of excise duty with reference to the buyer s selling price. There is considerable force in the submissions of the Appellant that levy of excise duty with reference to the buyer s selling price is permissible only in terms of Rule 9 of the Valuation Rules, for which essential pre-requisite is that the Appellant manufacturer and the brand name owner should be related, which is not at all an allegation in this proceeding. Extended period of limitation - HELD THAT:- The Ld. Commissioner has rejected the plea of revenue neutrality on a superfluous ground. It is well settled by the decision of the Hon ble Supreme Court in the case of NIRLON LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI [ 2015 (5) TMI 101 - SUPREME COURT] that when the entire exercises was revenue neutral vis- -vis the Appellant himself, no intention to evade could be attributed on the part of the Appellant. It is also found that the copy of the agreement dated 3 December 1999 was shared with the jurisdictional authorities on 6 April 2000 itself and the records of the Appellant were also audited from time to time besides the refunds being sanctioned to the Appellant on a month-on-month basis. Therefore, the allegation of suppression so as to invoke the extended period does not hold ground. Since the main appeal is allowed the other connected appeals filed by the Directors of the Appellant Company against the imposition of personal penalty are also allowed - Appeal allowed - decided in favor of appellant.
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2022 (2) TMI 952
Valuation- inter-connected undertaking - related parties or not - applicability of doctrine of mutuality of interest - Section 4 (3)(b)(iv) of the Central Excise Act, 1944 read with Section 2(g) of the Monopolies and Restrictive Trade Practices Act, 1969 - extended period of limitation - HELD THAT:- Appellants do not dispute that they are inter connected undertaking as defined by the MRTP Act and Central Excise Act, 1944 but they state that they being not holding and subsidiary companies cannot be said to related in terms of Section 4, ibid as they do not have mutuality of interest in the business of each other - for the reason common director and 50 % share holding of the Appellant 2 in the Appellant 1 cannot be reason for establishing the appellants as related person. The fact that Appellant 1 and Appellant 2 were not related person has been brought out in the cost auditor report received by the department on 31.12.2007, as recorded while recording the submissions of the appellant in the impugned order - this cost auditor report has not been placed on record by either side but if the cost auditor report had concluded that the Appellants were not related then definitely Commissioner should have recorded the reasons for rejecting the said report. Since the appeal are decided on merits, the issue on limitation and imposition of penalties need not be discussed. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2022 (2) TMI 951
Levy of entry tax - tax on quantities of damaged/lost cement which could not have been consumed, used or sold inside the local area - inclusion of cost of packing of loose cement carried out within the local area after receipt of loose cement from outside in the assessable value - HELD THAT:- The liability to pay entry tax arises not on the consumption, use or sale of any goods inside a local area but on the entry of such goods for the purpose of consumption, use or sale therein. Therefore, the levy attracts at the point of goods entering the local area and not at the later stage. In that view, it was never enough for the assessee to allege that the goods that were received by it inside the local area could not be consumed, used or sold because they got damaged or were lost. What the assessee was obligated to establish to avoid the liability of tax was the fact that such goods did not enter the local area in a fit state as may have rendered them capable of consumption, use or sale therein. In the present facts, the assessee only claimed, the goods inside the local area stood lost or were damaged. The point of time when such loss and/or damage was caused was neither pleaded nor proven. Therefore, it cannot be ascertained if the loss and/or damage to the goods (claimed by the assessee) was suffered before the goods entered the local area of Allahabad or thereafter - the liability of Entry Tax is not shown to have ceased. There is no other provision in the U.P. Value Added Tax Act, 2008 (hereinafter referred to as the Act), as may allow for remission of the liability of tax on goods lost or destroyed after their receipt into the local area. Accordingly, the question is answered in favour of the revenue and against the assessee. Inclusion of cost of packing of loose cement carried out within the local area after receipt of loose cement from outside in the value of goods for the purpose of levy of entry tax - HELD THAT:- It is observed, the assessee had set up the claim of having received 146252.72 tonnes of loose cement inside the local area. It claimed to have packed 146252.72 tonnes of cement the same inside the local area of Allahabad. That claim was disbelieved by the Assessing Officer by a single observation that the assessee could not substantiate the claim. In appeal, the appeal authority rejected the claim on principle of it not being allowable. The Tribunal has not offered any independent reasoning. Under the fourth proviso to Section 2(h) of the Act read with the Explanation thereto, the value of goods to be assumed or estimated (in certain cases) on the basis goods of like kind or like quality. Further, in view of that Explanation, the value addition of the goods may not arise upon things done to those goods after their receipt inside the local area - on principle, the decision of the Tribunal is found to be incorrect. To that extent, the question of law is answered in favour of the assessee and against the revenue. The present revision is partly allowed.
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Indian Laws
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2022 (2) TMI 950
Dishonor of Cheque - insufficiency of funds - Vicarious liability of directors - whether the company was being only run by the Accused No.2 i.e. son of the petitioner herein or whether the Petitioner herein is also involved in the affairs of the company? - HELD THAT:- Admittedly, there are only two directors of the company. As laid down by the Apex Court, specific averments have been made that accused, who are the Directors of the company and are responsible for the day-to-day affairs and acts of the company and had been conducting the same by being present and actively controlling all the operations on site at the office on a day-to-day basis from the start of the operation of the channel. It is not the case of the petitioner herein that he is a non-executive director. The petitioner is a full-time director. The complaint read as a whole indicates that at the time of cheques being issued by the company and returned by the bank, the son of the petitioner and the petitioner were the only directors of the company and were responsible for the conduct of the business of the company. This Court is, therefore, not inclined to interfere with the order dated 03.02.2021 issuing summons to the petitioner herein - Supreme Court in ASHUTOSH ASHOK PARASRAMPURIYA ANR. VERSUS M/S. GHARRKUL INDUSTRIES PVT. LTD. ORS. [ 2021 (10) TMI 431 - SUPREME COURT] , squarely covers the present case. It is for the petitioner to establish in trial that he was not responsible for the conduct of the business of the company owing to his age and the mere ipse dixit of the petitioner that he is 80 years of age and is unable to manage the affairs of the company cannot be accepted at this stage and the complaint cannot be quashed on that basis. The observations made by this Court is limited to the issue as to whether the complaint should be quashed or not because of the fact that the complaint does not state the exact role of the petitioner in the conduct of the business of the company - Petition dismissed.
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