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TMI Tax Updates - e-Newsletter March 15, 2021 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Highlights / Catch Notes GST: Classification of goods - Geo Membrane for Water Proof Lining Fabrics - The product of the applicant namely “Geo Membrane for Waterproof Lining fabrics (also referred to as Pond Liner) is classifiable under Sub-heading No.39269099 of Chapter 39 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) since we do not find the specific mention of this product in any of the other sub-headings of Heading 3926. - AAR Visit to Get Source GST: Exemption from GST - State Examination / Education Board - The applicant is eligible to claim exemption benefit, in respect of services supplied for the exams mentioned at Sr.No.9 to 15 of the list of exams - However, no such exemption is available in respect of services supplied for the exams mentioned at Sr.No.1 to 8 and 16 to 23 of the list - AAR Visit to Get Source GST: Bail application - allegation of issuing fake invoices - there are no instance of the petitioners tampering with documents or trying to influence any witness being brought on record. Merely saying or apprehending that in future they may tamper with evidence or induce any witness as observed by the learned Magistrate cannot be a justification to deny bail - Without expressing any opinion at this stage as to the legality and validity of the initial arrest, the continued detention of the petitioners would not at all be justified - HC Visit to Get Source GST: Confirmation of demand of GST with penalties - Principle of natural justice - E-way bill had expired on account of a clerical error which would not result into any tax liability - this is not considered fit case where we should relegate the petitioner to appeal remedy, more importantly when the order passed by the Inspector of State Tax suffered from gross irregularity of no hearing been granted to the petitioner. - Order set aside - HC Visit to Get Source GST: Rectification of mistake - seeking to rectify the mistake in its GSTR-1 return, wherein it has, instead of the GST number of the purchaser in Andhra Pradesh, mentioned the GST number of the purchaser in Uttar Pradesh - the petitioner should not be mulcted with any liability on account of the bonafide, human error and the petitioner must be permitted to correct the same. - HC Visit to Get Source Income Tax: Computation of deduction u/s 10B - Even in the common parlance, when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well. - HC Visit to Get Source Income Tax: Allowable business expenditure - Revenue is not opposed to the action of the assessee giving incentives to the member banks but is only opposed to the manner in which the incentive has been paid. It is not for the revenue to decide how the incentive has to be paid by the assessee to its member banks and the revenue cannot sit in an armchair of the businessman and to decide as to the manner in which payment has to be made. - HC Visit to Get Source Income Tax: Reopening of assessment u/ 147 - in absence of primary facts with regard to the sources of investment, the assessing officer has rightly recorded that the assessee has not furnished the details with regard to the sources of investment and therefore, there is a cause or justification for him to believe that, the unexplained investment chargeable to tax has escaped assessment - it cannot be said that, there was no tangible material before the assessing officer to re-open the assessment - HC Visit to Get Source Income Tax: Agricultural income - When all the documents have been brought on record by the assessee during assessment proceedings but not examined by the AO assessee cannot put again and again in the same assessment proceedings and all the documents relied upon by the assessee presumed to have been accepted by the AO. Even, at no point of time, assessee has been directed by the AO to produce the concerned persons who have facilitated cultivation of the agricultural land and purchased the agricultural produce from the assessee. - agricultural income shown @ ₹ 11,500/- per bigha per annum is not inflated income. - AT Visit to Get Source Income Tax: Reopening of assessment u/s 147 - Mere intimation received from any authority cannot lead to immediate presumption but it needs to be verified by the AO and to apply his mind. Here in this case, even the documents pertaining to Custom & Central Excise Authorities was not available with the AO at the time of initiation of proceedings which fact has been surfaced before us. Thus, we hold that the reasons recorded by the AO do not give jurisdiction to reopen the assessment u/s 147 read with section 148. - AT Visit to Get Source Indian Laws: Cancellation of licence of the CKP Co-operative Bank Limited to carry on the banking business in India - The RBI has rightly exercised its powers and had complied with its duty u/s 22(4) of the Banking Regulation Act by cancelling the banking licence of the said CKP bank in the facts and circumstances of this case - the power to grant banking licence by the RBI to the banks on the conditions set out in Section 22(3) of the Banking Regulation Act is coupled with duty to cancel such banking licence in case of any breach or violation of such terms and conditions after giving opportunity to such bank to revive and to comply with those conditions and directions as may be issued by the RBI - HC Visit to Get Source Service Tax: Petitioner’s declaration under the scheme (SVLDRS) was rejected on the ground that petitioner had filed the declaration after initiation of enquiry - - The respondent No.4 was not justified in rejecting the declaration of the petitioner dated 26.12.2019 on the ground that petitioner was not eligible to file declaration under the category of voluntary disclosure since enquiry was initiated against the petitioner on 19.12.2019 whereafter petitioner filed declaration - HC Visit to Get Source Service Tax: Condonation of delay in filing appeal before Commissioner (Appeals) - While construing the word 'month', it would mean a month as reckoned according to the British calendar, number of days in a month being immaterial. Therefore, the two months' limitation period was available to the petitioner upto 31.10.2019. If we add the extended period of limitation of further one month, it would mean that delay could be condoned till 31.11.2019 because the total period of three months had commenced from 31.08.2019 and would be available till 31.11.2019 but because there is no 31 days in November, the extended period of limitation would spill over to 01.12.2019. This is more so because the word ‘to’ is not used in section 85(3A) to cap the limitation period on 30.11.2019. - HC Visit to Get Source VAT: 100% EOU - Shortage of stock - The point of levy of excise duty is removal of goods whereas, point of levy under the Act is on sale. Therefore, an order passed by the Excise Authority cannot lead to the conclusion that there was a sale leviable to tax under the Act. It is pertinent to note that transit / handling loss was claimed by the respondent approximately at the rate of 5% for a period of five years, which according to the finding recorded by the authorities under the Act at the rate of 1% per year was reasonable - HC Visit to Get Source Notifications GST - States S.O. 84 - dated 12-3-2021 - Bihar SGST Supersession Notification No. S.O. 112, dated the 06th May, 2020 CCT/26-2/2020-21/69/2668 - dated 11-3-2021 - Goa SGST Amendment in Notification No. CCT/ /26-2/2020-21/68/2319 dated 27th January, 2021 03/2021-State Tax - dated 2-3-2021 - Gujarat SGST Supersession Notification No. 17/2020-State Tax dated 27 March 2020 SO. 20/PGSTR/2017/R.46/2021 - dated 28-1-2021 - Punjab SGST Supersession Notification No. S.O.36/PGSTR/2017/R.46/2020, dated the 25th August, 2020 S.O. 17/P.A.5/2017/S.148/2021 - dated 28-1-2021 - Punjab SGST Notifies registered persons (hereinafter referred to as the erstwhile registered person), who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 SEBI G.S.R. 176 (E) - dated 12-3-2021 - SEBI Securities and Exchange Board of India (Annual Report) Rules, 2021 News Designing new Street Vending Carts to cope with the recent challenges due to COVID-19 Case Laws: GST 2021 (3) TMI 548 Classification of goods - Geo Membrane for Water Proof Lining Fabrics - goods manufactured and supplied by the applicant (also referred to as Pond Liner) which is used for Water Proof Lining of Ponds, Canals and other Water storage places - liability of GST - HELD THAT:- The HDPE fabrics manufactured by the applicant are made by weaving the HDPE tapes into a fabric. These HDPE tapes are manufactured from HDPE Granules which are mixed with additives and then extruded through sheet die to produce solid sheet which is further uniformly slitted into number of tapes. We find that the HDPE granules i.e. High Density Polyethelene(HDPE) granules or High Density Polyethelene (HDPE) tapes are actually nothing but plastics and are covered under Chapter 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). Further, Chapters 50 to 63 of the said schedule covers Textile and Textile articles only. So for the products manufactured by the applicant, to be included under the sub-headings 5903 or 5911, they need to be textile material. The product of the applicant namely Geo Membrane for Waterproof Lining fabrics (also referred to as Pond Liner) is classifiable under Sub-heading No.39269099 of Chapter 39 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) since we do not find the specific mention of this product in any of the other sub-headings of Heading 3926. Classification of the product namely Geo Membrane for Waterproof Lining fabrics(also referred to as Pond Liner) manufactured and supplied by the applicant was covered under Entry No.45 of Schedule-IV of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 (upto 14.11.2017) which read as Other articles of plastics and articles of other materials of headings 3901 to 3914 [other than bangles of plastic, PVC Belt Conveyor, plastic beads and plastic tarpaulins] and during this period, the said product was liable to GST at 28%. However, Entry No.45 of Schedule-IV was omitted with effect from 15.11.2017 and Entry No.111 of Schedule-III of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 which read earlier as PVC Belt Conveyor, Plastic Tarpaulin was amended with effect from 15.11.2017 to read as Other articles of plastics and articles of other materials of headings 3901 to 3914 [other than bangles of plastic, plastic beads and feeding bottles] . Hence, it is concluded that the aforementioned product of the applicant would be covered under the Entry No.111 of Schedule-III of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017(as amended) with effect from 15.11.2017 liable to GST at 18%. 2021 (3) TMI 547 Levy of CGST/SGST - composite supply of health care treatment or not - supply of medicines, surgical items, implants, consumables and other allied services items provided by the hospital through their hospital in-house pharmacy, as well as food, room on rent, other services to the in-patients - supply of Occupational Health Check-up service (OHC) by the hospital i.e. nursing staff, Doctors, Paramedical staff on hospital s payroll working in different corporate for providing health check-up service, ambulance facility, and allied medical services to their employees and also the camps conducted for health check-up outside the hospitals - Health care services or not. Whether the supply of medicines, surgical items, implants, consumables and other allied items provided by the hospital through their hospital in house pharmacy, as well as food, room on rent, other services to the in-patients is part of composite supply of health care treatment; and hence not taxable under CGST/SGST? - HELD THAT:- The hospital provides medicines, consumables, implants, etc. to the In-patients in the course of treatment on the directions of medical doctor for which the In-patient is billed together by the hospital. The hospital cannot provide health services including diagnostic, treatment surgery etc. without the help of medicines to be taken during treatment, implants and consumables used during their stay in the hospital. Only on using these medicines, consumable and implants as required and prescribed by the doctors and administered during their stay will the treatment be complete. Hence, supply of medicines, implants and consumables are natural bundled with the supply of health services. In this case, supply of health services is the principal supply as that is the reason the in-patients get admitted to hospital instead of buying the medicines or consumables and using on themselves. Therefore, supply of medicines, consumables and implants to the In-patients in the course of their treatment is a composite supply of health services. The applicant s contention that room rent for patients in hospital is exempted in lieu of Circular No.27/01/2018-GST dated 04.01.2018 and the food supplied to the in-patients, as advised by the doctor/nutritionist, is a part of composite supply of health care and not separately taxable, is also agreed with. Whether the supply of Occupational Health Check-up service (OHC) by the hospital i.e. nursing staff, Doctors, Paramedical staff on hospital s payroll working in different corporate for providing health check-up service, ambulance facility, and allied medical services to their employees and also the camps conducted for health check-up outside the hospitals, to be treated as Health Care service and, hence, not taxable under CGST/SGST? - HELD THAT:- The Applicant s hospital is providing health services to employees of the business entities, in relation to Occupational Health Check-up (OHC) or preventive care along with ambulance facility, and allied medical services. Payment thereof is being made by such business entity directly to the applicant s hospital. In this case, service provider is the hospital of the applicant and the service receiver is the business entity, who have made payments directly to the applicant - With the change in the style of functioning of the business organizations, health check-up is a routine facility provided by the employers to their employees. The main purpose is to ensure that the productivity of the organization is not adversely affected due to ill health of its employees. The activities are by no stretch of imagination covered under the scope of healthcare services as defined - the health care services do not include the services of the Occupational Health Check Up Facilities, which is commonly known as corporate health check-up schemes, provided to business entities by the applicant as same are provided in order to detect any medical indicator or to ensure timely diagnosis of any disease so that prophylactic measures can be taken - services are not covered under exempted Health care services . The applicant will be liable to pay GST @ 18% on the payment received directly from the business entity for health services provided to employees of the business entities in relation to Occupational Health Check-up (OHC) or preventive care along with ambulance facility, and allied medical services under Human health and social care services , in terms of S. No. 31 of the Table of the Notification No.11/2017Central Tax (Rate) dated 28.06.2017. 2021 (3) TMI 546 Exemption from GST - State Examination / Education Board - Eligibility for benefit under Sr.No.5 and Sr.No.66 (a) (aa) of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 - Education Department came into existence as separate secretariat department, which looks after education including primary education, continuous education, literacy education, secondary education, higher education, technical education, pharmacy education - services supplied by applicant are of conducting of examinations - Governmental Authority or not - HELD THAT:- The State Examination Board being one of the sub-divisions of the Education Department of Gujarat, is, therefore, a Board which has been established by the Government of Gujarat itself. Also, as per the submission of the applicant, all the 13 members of the State Examination Board are appointed by the Government of Gujarat and all of them are officers belonging to the State Government or are State Government employees of Gujarat - Besides, on the homepage of the website of State Examination Board, it is seen that the state emblem of India (the adaptation of the Lion Capital of Ashoka) as well as the Swachh Bharat emblem which indicates that the applicant is a Government of Gujarat enterprise or a Government of Gujarat body - Thus, it appears that the State Examination Board is a Board which is fully controlled by the Government of Gujarat through the Members of the said Board who are all appointed by the Government of Gujarat and are all State Government employees and therefore, the said Board appears to be a Government body wholly owned by the State Government of Gujarat. There is an entry at Sr.No.17 of the list of functions entrusted to a Panchayat vide Article 243G of the Constitution which reads as Education, including primary and secondary schools. It is also found that the applicant themselves have referred to the said entry in their submission stating that the services provided by them are in relation of discharge of functions covered under the aforementioned Entry at Sr.No.17 only - As per the definition, Education is the act or process of imparting knowledge, especially at a school, college or university. On comparing the functions of the State Examination with that to the definition of Education , it is found that the function of the applicant does not pertain to imparting of knowledge at school, college or university but pertains to conducting of various types of examinations. However, since the conduct of examinations pertaining to Primary, secondary and higher secondary schools by the applicant would be indirectly related to Education, such type of examinations would get covered under the above entry. Whether the applicant is eligible for exemption as available under Sr.No.5 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017? - HELD THAT:- Since16 of the 23 exams held by the applicant do not get covered under the Entry at Sr.No.17, the services supplied by the applicant in respect of these exams are not eligible for the benefit of exemption available at Sr.No.5 of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 for the simple reason that the services supplied for these exams are not related to any functions entrusted to the Panchayats under Article 243G of the Constitution of India. However, since the exams listed at Sr.No.9 to 15 of para-5 are covered under Entry at Sr.No.17 of the list mentioned, the services supplied by the applicant in respect of these exams are eligible for the benefit of exemption available at Sr.No.5 of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017. Whether the applicant is eligible for exemption as available under Sr.No.66(a) and (aa) of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 as amended? - HELD THAT:- The applicant has stated that the State Examination Board is a State Educational Board and are therefore covered under the above mentioned clause(iv) and would therefore be eligible for the exemption under Entry No.66(a) and 66(aa) of Notification No.12/2017-central Tax(Rate) dated 28.06.2017, as amended. In this regard, we would like to emphasize that the State Examination Board, although established by the Education Department of the Government of Gujarat, is an autonomous body, established for the sole purpose of conducting various types of examinations and cannot, therefore, be considered as a State Education Board as the functions of the State Examination Board are completely different from that of a State Educational Board - the applicant is not eligible for the benefit of exemption of GST available under Sr.No.66(a) and 66(aa) of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 as amended from time to time. 2021 (3) TMI 541 Bail application - allegation of issuing fake invoices - issuing invoices or bills without supply of goods or services or both leading to wrongful availment or utilization of input tax credit or refund of tax and availing input tax credit using such invoices or bills - Constitutional validity of section 132(1)(b) and (c) of the Central Goods and Services Tax Act, 2017 - seeking declaration that power under section 69 can be exercised only upon determination of liability and consequent upon failure of the taxable person to meet such liability - seeking restraint on respondents from lodging any criminal complaint against the petitioners - enlargement of petitioners on bail. HELD THAT:- In the instant case, it is found that both the petitioners taken together had appeared before the respondents on multiple occasions particularly on 20.11.2020, 01.02.2021, 03.02.2021, 09.02.2021, 12.02.2021, 15.02.2021 and 16.02.2021 when their statements were recorded. Not only that a number of employees and officials of the petitioner company as well as independent directors had appeared before the investigating authorities and their statements were also recorded. As a matter of fact in the statement of Mr. Akashnand Karnik, director of the petitioner company recorded on 01.02.2021, he meticulously answered all the queries pertaining to various transactions of the petitioner company with M/s. Wiggins Coretech Equipments Pvt Ltd, M/s. Siddharth Education Services, M/s. HNO Furnishings Ltd, M/s. Creative Business Associates, M/s. Mystique Media Pvt Ltd, M/s. Gradient Infotainment Ltd and M/s. Cannon Ball Trading Pvt Ltd including supply of computers and whatever services were provided by them - there is no instance of the petitioners tampering with documents or trying to influence any witness being brought on record. Merely saying or apprehending that in future they may tamper with evidence or induce any witness as observed by the learned Magistrate cannot be a justification to deny bail. It is already noticed that the maximum sentence that can be imposed upon conviction for the said offence is imprisonment for five years. This brings us to section 167 of the Cr.P.C.. Section 167(2)(a)(ii) makes it clear that a person cannot be kept in detention beyond a total period of sixty days where investigation relates to an offence punishable for imprisonment for a term of not less than ten years and is not completed - there are no instance of the petitioners tampering with documents or trying to influence any witness being brought on record. Merely saying or apprehending that in future they may tamper with evidence or induce any witness as observed by the learned Magistrate cannot be a justification to deny bail. Without expressing any opinion at this stage as to the legality and validity of the initial arrest, the continued detention of the petitioners would not at all be justified - Let formal notice be issued to the respondents. 2021 (3) TMI 540 Confirmation of demand of GST with penalties - Principle of natural justice - Detention of goods - E-way bill had expired on account of a clerical error which would not result into any tax liability - HELD THAT:- As per this Circular dated 14th September, 2018, in case the goods are accompanied by an invoice as also an E-way bill, proceedings under Section 129 of the CGST Act, 2017 should not be initiated if there is a error of one or two digits in a document number mentioned in the E-way bill. In such a situation, at best, penalty of ₹ 500 1000/- under State and Central GST may be collected under Section 125 of the Act. In view of such facts, this is not considered fit case where we should relegate the petitioner to appeal remedy, more importantly when the order passed by the Inspector of State Tax suffered from gross irregularity of no hearing been granted to the petitioner. As noted, the said authority issued a notice of personal hearing making it returnable on 19.11.2018, long before that however, on 05.11.2018 i.e. a date on which he issued the notice, he passed a separate order confirming the demand of tax with penalty. This was wholly impermissible since he does not treat this order as a tentative demand but as a mandatory demand. Petition disposed off. 2021 (3) TMI 536 Maintainability of petition - alternative remedy of appeal - release of detained truck alongwith the goods - HELD THAT:- The writ applicant is relegated to avail the remedy of filing an appeal against the final order of confiscation available to him under Section 107 of the Act in accordance with law. Application disposed off. 2021 (3) TMI 535 Release of seized goods alongwith the truck - Section 130 of CGST Act - HELD THAT:- This Court is not sure whether any final order of confiscation under Section 130 of the Act has been passed or not. If the final order of confiscation under Section 130 of the Act has been passed, then it shall be open for the writ applicant to prefer an appeal before the appellate authority under Section 107 of the Act. If, ultimately, the writ applicant succeeds in appeal, then he would be entitled to the refund of the amount as deposited by him. Application disposed off. 2021 (3) TMI 533 Stay on the operation of the directions - Input tax credit - HELD THAT:- This direction is being passed, for the present, as Mr. Monish Panda, who appears on behalf of the petitioner, says that after 01.07.2017 [when the Central Goods and Services Tax Act, 2017 and the Rules framed there under kicked-in] the petitioner was not required to pass on input tax credit or reduction in tax to those flat buyers with whom negotiated contracts were executed post 01.07.2017. Even qua these contracts, insofar as reduction in taxes are concerned, nothing could have been passed on as there was no reduction in taxes. This aspect of the matter will be examined after returns are filed by the respondents - List the matter on 30.04.2021. 2021 (3) TMI 532 Profiteering - washing machine - contention is that information/data has been sought qua all goods manufactured and sold by the petitioner although they are not the subject-matter of the notice dated 03.02.2020 - HELD THAT:- Since the impugned communication does not disclose the basis for seeking such information, we are inclined, for the moment, to direct respondent no.3 not to insist on information/data with regard to goods other than the washing machine. List the matter on 28.04.2021. 2021 (3) TMI 524 Rectification of mistake - seeking to rectify the mistake in its GSTR-1 return, wherein it has, instead of the GST number of the purchaser in Andhra Pradesh, mentioned the GST number of the purchaser in Uttar Pradesh - HELD THAT:- Since Forms GSTR-1A and GSTR-2 (erroneously mentioned as GSTR-2A in M/S. SUN DYE CHEM VERSUS THE ASSISTANT COMMISSIONER (ST) , THE COMMISSIONER OF STATE TAX [ 2020 (11) TMI 108 - MADRAS HIGH COURT ]) are yet to be notified, the petitioner should not be mulcted with any liability on account of the bonafide, human error and the petitioner must be permitted to correct the same. Petition allowed. Income Tax 2021 (3) TMI 530 Computation of deduction under Section 10B - excluding telecommunication and other expenses incurred in foreign currency both from export turnover and total turnover? - HELD THAT:- As decided in HCL TECHNOLOGIES LTD. [ 2018 (5) TMI 357 - SUPREME COURT ] if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. Even in the common parlance, when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well. On the issue of expenses on technical services provided outside, we have to follow the same principle of interpretation as followed in the case of expenses of freight, telecommunication etc., otherwise the formula of calculation would be futile. Hence, in the same way, expenses incurred in foreign exchange for providing the technical services outside shall be allowed to exclude from the total turnover - Decided in favour of assessee. 2021 (3) TMI 529 Additions on account of short term capital gains - slump sale - assessee could not produce any documentary evidence - whether Tribunal was right in holding that the disallowance made on account of short term capital gains charged on account of slump sale are not proper even though the assessee could not produce any documentary evidence? - HELD THAT:- Revenue has not specifically doubted the transaction and therefore, the Tribunal has come to the conclusion that the order passed by the Commissioner of Income Tax (Appeals) is proper and that of the Assessing Officer is erroneous. The payments made by Shri Chakkubai and Shri Dhanapal, as part of cost of acquisition, after having found that the entire consideration has been considered in the hands of the assessee company. While passing the assessment order, the Assessing Officer had erroneously left out some of the entires which necessitated the Commissioner of Income Tax (Appeals) to interfere with the assessment order. The order passed by the Cit (Appeals) is just and proper. Considering all these aspects, the Tribunal has rightly confirmed the order passed by the Commissioner of Income Tax (Appeals). Retention money withheld - whether to be allowed even though the liability on account of it had nto crystallized during the present assessment year? - HELD THAT:- In view of the Judgment reported [ 2020 (7) TMI 754 - MADRAS HIGH COURT] the 2nd question of law is decided in favour of the assessee and against the Revenue. 2021 (3) TMI 528 Allowable business expenditure - monetary incentive provided to various District Central Co-operative Banks (DCCB's) and Primary Agricultural Co-operative Societies (PACS) - HELD THAT:- AO as relying on Circular issued by Central Board of Direct Taxes dated 22.08.1973 has already allowed the incentive paid to member bank by the assessee for the Assessment Year 2008-09 as revenue expenditure. The Commissioner of Income Tax (Appeals) has also while placing reliance on the circular issued by the Central Board of Direct Taxes (CBDT) has held that the Assessing Officer has misunderstood the term 'net profit' used in Act, which differs from the expression 'net profit' as used in the context of provisions of Income Tax Act, 1961. It has further been held that the aforesaid circular allows payment which are made in the nature of incentives and since, the payment in question has been made by the assessee to its member banks as incentives, the aforesaid amount is allowable as expenditure. The assessee has incurred the expenditure during the course of the business which was duly approved by the board of the assessee in its meeting. Revenue is not opposed to the action of the assessee giving incentives to the member banks but is only opposed to the manner in which the incentive has been paid. It is not for the revenue to decide how the incentive has to be paid by the assessee to its member banks and the revenue cannot sit in an armchair of the businessman and to decide as to the manner in which payment has to be made. In view of preceding analysis, the substantial question of law framed by a bench of this court is answered in favour of the assessee. 2021 (3) TMI 527 Revision u/s 263 - Eligibility to claim under section 54F - assessee owned more then two residential houses - HELD THAT:- The assessee at the time of the sale of aforesaid two sites had a residential property at Sulthanpalya which was occupied by the assessee for the purposes of residence and another point at High Point which was let out as office space. All the aforesaid facts were noticed by the Assessing Officer during the course of assessment proceedings. Thus, at the time of sale of property, the assessee owned only one residential property as the usage of the property has to be considered whether the property is a residential property or a commercial property. Assessing Officer therefore, held that the assessee has fulfilled the conditions laid down in section 54F of the Act and is eligible for deduction. The tribunal in its order dated 31.07.2015 has held that the Assessing Officer had all the information and had made enquiries with regard to claim of exemption under Section 54F of the Act. It was further held that the Assessing Officer was of the view that one of the properties was let out for commercial purposes. Therefore, the assessee was eligible for deduction under Section 54F of the Act was one of the possible views which cannot be termed as unlawful or illegal. The aforesaid finding in our view does not suffer from any infirmity warranting interference of this court in exercise of powers under Section 263 - Decided in favour of the assessee. 2021 (3) TMI 526 Reopening of assessment u/ 147 - assessment beyond a period of four years - unexplained investment towards share application money - HELD THAT:- Company having surplus funds at the beginning of the year represented by share capital and advances receivable and the same was the source of investment in the alleged company. Therefore, in our view, it is the omission on the part of the assessee company not to point out this specific particular items of the balance-sheet to show that, the surplus funds was being utilized for the investment. Therefore, failure to highlight specifically the relevant items of the account books or the particular portion of the balance-sheet to the respondent could be said to be an omission on the part of the assessee to disclose fully and truly all the material facts necessary for its assessment. Thus, we hold that, the assessee has failed to disclose the primary facts with regard to the sources of investment. It is an admitted fact that, the original return was processed under Section 143 (1) of the Act without scrutiny assessment. It is pertinent to note that, the explanation 1 to Section 147 of the Act clearly says that, the production before the assessing officer of account books or other evidence could with due diligence have been discovered by the assessing officer will not amount to disclosure. In view of the aforesaid discussions and considering the facts and circumstances of the case, we hold that, in absence of primary facts with regard to the sources of investment, the assessing officer has rightly recorded that the assessee has not furnished the details with regard to the sources of investment and therefore, there is a cause or justification for him to believe that, the unexplained investment chargeable to tax has escaped assessment. Thus, in the overall view of the matter, it cannot be said that, there was no tangible material before the assessing officer to re-open the assessment and that he has proceeded mechanically based only on the information received from the Investigation DDIT (Inv.) I, Ahmedabad and therefore, the impugned notice is without jurisdiction and contrary to Section 147 of the Act. - Decided in favour of assessee. 2021 (3) TMI 522 Disallowance u/s 43B(b) - belated remittance of employees contribution towards PF and ESI to the Government account beyond the dates prescribed in the respective laws - whether tribunal was right in allowing the deduction when matter is pending before Supreme Court to decide whether 43B includes both employers and employees contribution? - Held that:- When the matter was taken up today, learned counsel for the assessee submitted that the issue involved in this appeal is squarely covered by a decision of this Court in M/s.Essae Teraoka P. Ltd., Vs. DCIT, [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] The aforesaid submission made on behalf of learned counsel for the assessee could not be disputed by learned counsel for the revenue. - Decided against revenue. 2021 (3) TMI 520 Exemption u/s 11 - registration u/s 12AA cancelled already granted - HELD THAT:- In the instant case, the registration was already granted by the Ld.CIT vide order dated 20.03.2008 w.e.f. 01.04.2002. There is no dispute with regard to genuineness of the activities and there is no finding of the Ld.CIT with regard to not carrying on the activities as per the objects of the trust. Therefore, as per Circular No.21/2016, there is no case for cancellation of registration. Though the Circular was issued on 27.05.2016, the same is clarificatory circular which has retrospective effect. In the circular, itself, it is mentioned that it has retrospective effect. By Finance Act, 2012, by inserting new sub section 8 in section 13, it has provided sufficient care not to get benefit of exemption in such year in which its receipts or commercial activities exceeds the threshold limit. Though the assessee continued to have the registration, the AO is not barred in examining the benefits of exemption claimed by the assessee u/s 11 and 12 as provided to u/s 13(8) or section 2(15) of the Act. Thus, the cancellation of registration is not mandatory as envisaged in Circular No.21/2016. Thus we hold that cancellation of registration u/s 12AA(3) by the Ld,CIT is bad in law, hence, we set aside the order of the Ld.CIT and restore the registration already granted to the assessee - Appeal filed by the assessee is allowed. 2021 (3) TMI 518 Assessment u/s 153A - Addition u/s 68 - HELD THAT:- Since no incriminating material was found in the assessee s case, no addition can be made in the present case. Besides this, the assessee has made investment in prior period and sold the said investment in this particular year which was clearly set out from the submissions and the evidences produced before the Assessing Officer and the CIT(A). Therefore, the appeal of the assessee allowed. Disallowance u/s 40A(3) - assessee had purchased land and made part payment in cash - disallowance made by the Assessing Officer, confirmed by the CIT(A) was deleted by accepting the plea of assessee since assessee has neither debited the amount of cost of land in Profit and Loss account nor claimed any deduction in respect of cost of land through computation - HELD THAT:- Assessee has received reimbursement of all amounts paid related to transaction of purchase of land, stamp duty, Registration Charges as per Clause 3(b) of Collaboration Agreement. Bases on the agreement the assessee showed the income by way of fees at ₹ 35,000/- per acre in the year in which license on said land was received. While making the addition the Assessing Officer has totally ignored para 3.3 (b) of the Collaboration Agreement which clearly shows that Countrywide Promoters Pvt. Ltd. shall reimbursement of cost and expenses incurred by the assessee with respect to acquisition of land. The assessee has maintained proper books of accounts and all these transactions along with expenses were thoroughly shows in the books of accounts specially that of reimbursement as well. AO at no point of time rejected the books of accounts of the assessee. Though the finding of the Assessing Officer as well as CIT(A) is that the assessee was carrying business of development of real estate. From the perusal of record, it can be seen that these facts are not correct. The assessee is only carrying out acquisition of land and he expenses incurred on transactions of purchase of lands. As decided in WESTLAND DEVELOPERS PVT. LTD. VERSUS ACIT, CENTRAL CIRCLE-23, NEW DELHI [ 2014 (12) TMI 254 - ITAT DELHI] Tribunal has dealt this issue and allowed the similar issue relating to reimbursement made by the Country Wide Promoters Pvt. Ltd. The Ld. DR could not point out the distinguishing facts. Thus, the facts of the present case are also identical. Therefore, Ground No. 4 4.1 are allowed. Disallowance u/s 37 on account of additional payments for the purchase of land - assessee had challenged before the CIT(A) that the deduction of the purchase of land having not been claimed by the appellant, no disallowance could be made- HELD THAT:- As payments/transactions which were duly recorded in books of account. As the facts of the present assessee are identical to that of the group of companies in case of Westland Developers Pvt. Ltd [ 2014 (12) TMI 254 - ITAT DELHI] and M/s Vasundhara Promoters Pvt. Ltd. [ 2018 (6) TMI 74 - DELHI HIGH COURT] the issue is allowed. The DR could not distinguish any facts for the present assessment year. In fact, the assessee having not claimed the expenditure, the same cannot be disallowed under Section 37 of the Act on account of additional payment for the purchase of land. - Decided in favour of assessee. 2021 (3) TMI 517 Validity of assessment - proceedings and consequential Asstt. is barred by limitation for not serving the statutory notice u/s. 143 (2) within the time allowed as per proviso to Sec. 143 (2) - HELD THAT:- The said notice contains; signature of the assessee; date mentioned is 30.9.2011; time 2 pm; and telephone number 01147059177. Apparently, there is some overwriting in the date, but it cannot be established that the date has been interpolated to 30.9.2011 from 1.11.2011 unless some forensic report is obtained from expert. In the notice, the date of receiving is clearly mentioned below the signature of the assessee which is 30.09.2011, though there is overwriting. But to allege that it was done by AO or any staff and to establish it as matter a fact that any interpolation or mischief has been done is difficult to accept. If the assessee is making any charge of interpolation then he should have then asked for forensic examination. Under these circumstances, the benefit of doubt cannot be given to the assessee. Accordingly, we hold that notice was served on to the assessee on 30.9.2011. Accordingly ground No. 1 is dismissed. Addition u/s 68 - difference between the purchase consideration and circle rate as unexplained investment/credit - HELD THAT:- It is an undisputed fact that the purchase consideration as per the registered sale deed is ₹ 41,80,000/- and for the purpose of stamp duty valuation the circle rate of the property was at ₹ 1,30,77,000/-. First of all, provision of section 50C as was prevalent at the time of registration of sale deed i.e., 11.1.2009, it was applicable only in the case of the seller and not in the hands of the purchaser; and that to be it was for calculating the capital gain in the hands of the seller. The deeming fiction for taxing such transaction in the hands of the purchaser came w.e.f. 1.10.2009 u/s 56(2)(vii) (b), wherein it has been provided that if any property has been received for a consideration which is less than the stamp duty valuation the same valuation is to be treated as income in the hands of purchaser or receiver. Without any evidence on material on record to show that the assessee had paid over and above the sale consideration price, it cannot be deemed or presumed that assessee must have paid the price over and above the purchase consideration. In any case, section 68 would not be applicable in the present case, since no sum has been found to be credited in the books of accounts of the assessee. These additions can be made only under the deeming provision u/s 50C or u/s 56 (2) (vii) (b), which we have already held that it is not applicable in the case of the assessee. Accordingly, there is no ground to sustain the addition. Hence, same is directed to be deleted. Accepting or non accepting the real estate business and treating the transaction of purchase and sale of Indirapuram property as short term capital gain - HELD THAT:- Neither in the original return of income nor in the initial stage there was any claim nor any mention that assessee had purchased the property which has been declared or shown as stock-in-trade. The said claim was only made during the course of assessment proceedings after getting the fresh audit and the audited balance sheet and computation of income of real estate business was filed before the AO. Neither the intention nor the conduct of the assessee reflects that the assessee was doing or intended to do any real estate business nor it has been demonstrated that in the subsequent years the assessee has been carrying out any real estate business. The assessee might have incurred expenditure on the improvement of the property before the sale but that does not mean it is some kind of business expenditure related to the property business. At the most it could be treated as an improvement after the acquisition of the capital asset for which benefit of indexation can be given while computing the capital gain. Accordingly, we confirm the finding of the AO and Ld. CIT (A) that the purchase and sale of property has to be treated as short term capital gain. Benefit of improvement has not been given - This issue has not been discussed by the AO. Therefore, AO needs to verify and examine the cost of improvement. Accordingly, we hold that sale of Indirapuram property is to be taxed under the head short term capital gain and not under the head business income. Claim of loss of forfeiture of advance given for purchase of property of Panipat - HELD THAT:- In order to prove that the amount was received and still with them they have also filed their bank statements. In so far as the personal presence by both the ladies, they have specifically communicated to the AO to give further time due to their preoccupation. This cannot be the ground for disbelieving the entire transaction of forfeiture. If the confirmation of cancellation of agreement and forfeiture of the said amount stood confirmed, then certainly there is a loss incurred to the assessee. Said loss cannot be said to be a business loss as we have already held above that assessee was not into the business of dealing in property. But certainly this loss is on account of capital loss, because the money was advanced for purchase of a capital asset and as per the agreement, the assessee got a vested right on the said property after the payment of advance. Further, there was a stipulation that if the entire amount is not paid then the advance amount would be forfeited. Right to acquire property is a capital asset and when the said right got extinguished due to cancellation of agreement and amount got forfeited, and then certainly it is a capital loss. In such a case, short term capital loss is to be set off against short term capital gain within the same year in terms of section 70(2) of the Act and accordingly, we direct the AO to allow the loss from short term capital gain as directed above. Net profit by presuming the net profit at 10.60% on sale - HELD THAT:- AO on presumptive basis has applied a net profit rate of 10.60% on the declared sales as was there in assessment year 2009-10. First of all, neither there any discrepancy has been found nor there is any material that the assessee has sold the stock at a higher price. Apart from that, the net profit earned for the entire year when the business is full- fledged run, cannot be applied when the business has been closed down and the existing stock has been disposed of at whatever best available price. Hence, under these circumstances such an estimation of net profit is not warranted and the same is directed to be deleted. 2021 (3) TMI 516 Agricultural income - income from land measuring 250 bighas taken on lease situated at Village Ahmadpur, District Haridwar -HELD THAT:- Perusal of fasli khasra brought on record by the assessee got duly corroborated with evidence in the form of affidavits filed by the persons who have purchased the agricultural produce from the assessee and the fact that since the very beginning assessee has been requesting the Revenue Authorities to conduct physical inspection of land in question so as to actually assess its quality and production capacity. AO has not even preferred to examine the persons who were engaged in the agricultural production by the assessee and also not examine the persons who have purchased the agricultural produce from him during the year under consideration. When all the documents have been brought on record by the assessee during assessment proceedings but not examined by the AO assessee cannot put again and again in the same assessment proceedings and all the documents relied upon by the assessee presumed to have been accepted by the AO. Even, at no point of time, assessee has been directed by the AO to produce the concerned persons who have facilitated cultivation of the agricultural land and purchased the agricultural produce from the assessee. When we examine all these facts in the light of the fact that Addl.CIT during assessment proceedings of Assessment Year 2014-15 directed the AO to estimate the agricultural income from the land taken on lease @ ₹ 8,000/- per bigha as per letter dated 09.12.2016, this fact goes to prove that without examining the documentary evidence brought on record by the assessee, Revenue authorities are estimating the agricultural income at their whims and fancies. Assessee has duly brought on record the entire evidences to prove agricultural income @ ₹ 11,500/- per bigha per annum and has not inflated its income. All the documents have gone unrebutted on the part of the Revenue authorities. Consequently, both the appeals for AYs 2013-14 2014-15 filed by the assessee are allowed. 2021 (3) TMI 515 Non issue of notice u/s.143(2) - AO did not issue the mandatory statutory notice u/s. 143(2) of the Act before framing the assessment order u/s 143(3) - HELD THAT:- The issuance of notice u/s. 143(2) is mandatory for framing scrutiny notice u/s. 143(3) of the Act as held in the case of CIT V Hotel Blue Moon [ 2010 (2) TMI 1 - SUPREME COURT] wherein held that issue of a legally valid notice u/s. 143(2) is mandatory for usurping jurisdiction to frame scrutiny assessment u/s. 143(3) of the Act and in the absence of a valid notice u/s 143(2) the scrutiny assessment u/s 143(3) cannot be framed and omission to issue notice u/s 143(2) of the Act is not a curable defect. Since the assessee has been able to demonstrate before us that there has been no notice issued u/s. 143(2) of the Act by the AO (DCIT Circle-3(1), Kolkata before he framed to scrutiny assessment u/s. 143(3) of the Act dated 17.03.2015, the assessment order is null in the eyes of law and the assessee succeeds on the legal issue raised before us. Since the AO (DCIT, Circle-3(1), Kolkata did not issue the mandatory notice u/s 143(2) of the Act, he did not enjoy the jurisdiction to frame the assessment u/s. 143(3) of the Act. Therefore, the order passed by the AO (DCIT, Circle-3(1), Kolkata is null in the eyes of law and it has to be quashed. - Decided in favour of assessee. 2021 (3) TMI 513 Penalty levied u/s. 271(1)(c) - Estimation of income on bogus purchases - HELD THAT:- It is a settled position of law that penalty cannot be levied when an adhoc estimation is made. In this case an adhoc estimation was made by the Ld.CIT(A) restricting the profit element in the purchases @25%. See SHRI DEEPAK GOGRI VERSUS THE INCOME TAX OFFICER, WARD 25 (3) (2) , MUMBAI [ 2017 (11) TMI 1857 - ITAT MUMBAI. As decided in AERO TRADERS (P) LTD. [ 2010 (1) TMI 32 - DELHI HIGH COURT] estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars. In the case on hand the Assessing Officer treated purchases as non-genuine. Ld.CIT(A) considering the evidences restricted the disallowance to an extent of 25% on the non-genuine purchases - Ld.CIT(A) following various judicial pronouncements deleted the penalty levied by the Assessing Officer. Thus, we do not observe any infirmity in the order passed by the Ld.CIT(A) in deleting the penalty u/s. 271(1)(c) of the Act levied by the Assessing Officer for the Assessment Year - Decided in favour of assessee. 2021 (3) TMI 512 Assessment made u/s 158BD read with Section 158BC - whether no incriminating documents and undisclosed assets belonging to assessee were found during the course of search and seizure operations conducted by Revenue against Shri Munna Lal, husband of the assessee? - assessee had contended before ld. CIT(A) that all investments in properties were disclosed in wealth tax returns filed by assessee, and hence proceedings u/s 158BD are bad in law - Whether search warrants were issued by Revenue on a deceased person namely Mr. Munna Lal Verma who expired on 06.10.1999 and the search having taken place on 08.12.2009? - HELD THAT:- The assessee in the instant case before us, participated and co-operated in proceedings before the lower authorities as detailed and never raised this issue of invalidity of search on the grounds that the search warrant was issued in the name of deceased person. The Revenue has claimed that it has unearthed incriminating material and undisclosed assets pertaining to assessee during the course of search operations conducted by it on the husband of the assessee namely Shri Munna Lal Verma , on 08.12.1999. Thus, the proceedings conducted u/s 158BD cannot be held to be bad in law in the instant case, which is in consonance with ratio of decision of Hon ble Apex Court in the case of Gunjan Girishbhai Mehta [ 2017 (3) TMI 1529 - SUPREME COURT] . 2021 (3) TMI 511 Disallowance of loss - non genuine transactions in shares - HELD THAT:- Since the delivery of shares were taken place in the name of the assessee on the date of transfer and there was no involvement of any agent in order to complete the transaction, the physical delivery of shares were carried out and the proof of which is properly submitted in the paper book. It is normal in case of closely held companies like this to borrow funds from the sister concern in order to complete the transaction or internal settlements. It is important to note that all the settlement of shares were carried out only through banking channel. We do not understand the findings of Commissioner (Appeals) that it is only book entries, how they can create book entries when the settlements were carried out by bank transfers. There is no improper way of settlement and it is one of the legal ways of completing the contract. With regard to sale of shares to PFMS, the assessee has submitted clearly proper payment challan to support that the assessee has actually received ₹ 1.75 crore from PFMS before handing over of the physical shares to them at the market price prevailing on the date of sale i.e., ₹ 48.10 per share. Since there is a loss incurred by the assessee in these transactions, the learned Commissioner (Appeals) doubts the whole transaction merely because there is a loss. Otherwise in case the transaction was carried out with any third party, the doubt would not have arisen. In our considered view, merely because the assessee has taken advances from its sister concern to settle purchase consideration, it does not make the transaction a bogus transaction. Speculative transaction or not - As per the definition of speculation transaction which means a transaction in which a contract for the purchase or sale of any commodity including stocks and shares is periodically or ultimately settled otherwise than by actual delivery or transfer of the commodity or scrips. From the above definition, it is clear that the transaction can be considered as speculative only when the transaction is settled otherwise than by actual delivery. In the given case both purchase and sale transactions were carried out with actual delivery of shares on the specific dates and at the specific rate prevailing on the date of transfer. Therefore, this transaction can never be classified as speculation transaction. Whether the business of the assessee falls under the category specified in Explanation 2 to section 73? - Companies which falls under exclusion which are the company mainly consist of income which is chargeable under the head interest on securities, income from house property, capital gain and income from other sources are companies the principal business of which is the business of banking or granting of loans and advances. It is brought to our notice by the learned Authorized Representative that the majority of the business of the assessee is lending of loans and advances, it is evident from the Balance sheet. In the year 31st March 2000 the loans and advances stood at ₹ 3,70,42,439, whereas at the similar period as on 31st March 2001, the loans and advances stood at ₹ 7,74,20,916. Therefore, 75% of the total assets consist of loans and advances. Therefore, it clearly falls under category of the principal business of granting of loans and advances under exclusion category in the Expalanation-2 to Section 73. Therefore, Explanation 2 to section 73 of the Act will attract to the facts of the present case. Accordingly, the grounds raised by the assessee are allowed. 2021 (3) TMI 510 Reopening of assessment u/s 147 - reassessment proceedings were initiated beyond the four years - approval granted under section 151 - HELD THAT:- The reason to believe has to be that of the AO who is initiating the proceedings and in absence of any independent application of mind and satisfaction of the AO the reason to believe falls in the realm of conjectures. AO has to have tangible material with him and even if the information has come from Investigation wing, the AO must perused the material which has been referred in the said information and examine what is the income which has escaped assessment. Recommendation may come from any person or authority but it is the AO who has to entertain reason to believe based on material before him that income chargeable to tax has escaped assessment. The most crucial material here in this case is that assessee has removed goods without payment of duty and there were invoices which were later shown to be cancelled but nowhere there is any whisper about the invoices nor they have been produced. AO simply appears to have reopened to examine the claim of section 10B and what was the basis and premise before him as to how the claim on examine u/s 10B has incorrect is not coming fore. Mere intimation received from any authority cannot lead to immediate presumption but it needs to be verified by the AO and to apply his mind. Here in this case, even the documents pertaining to Custom Central Excise Authorities was not available with the AO at the time of initiation of proceedings which fact has been surfaced before us. Thus, we hold that the reasons recorded by the AO do not give jurisdiction to reopen the assessment u/s 147 read with section 148. Sanction not been taken from the appropriate authority as provided u/s 151 - It is seen that in the case of CIT vs. SPL s Siddhartha Ltd [ 2011 (9) TMI 640 - DELHI HIGH COURT] wherein approval was taken by the AO from superior authority i.e. CIT, whereas the under the statutory provision, approval was to be taken from JCIT/Addl CIT, it was held that notice issued u/s 148 of the Act is invalid. The issue is squarely covered in favour of the assessee as for reopening of the assessment for the AY 2003-04 and 2004-05 the sanction has been taken from the learned Addl. CIT instead of CIT, as such sanction granted for assumption of jurisdiction is not in accordance with the provisions of section 151 of the Act. Hence, respectfully following the decision of the honourable Delhi High Court, we hold that the notice issued by the AO u/s 148 of the Act for the AY 2003-04 and 2004-05 is bad in law on this ground also. Since we have already quashed the assessment being without jurisdiction under section 147 on the ground that approval granted is mechanical and also for the AY 2003-04 and 2004-05, even the so called approval is not from the competent authority, therefore, other grounds raised by the assessee challenging the assumption of jurisdiction. 2021 (3) TMI 509 Revision u/s 254 - obvious and patent mistake as apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points - HELD THAT:- Assessee through the miscellaneous application has tried to re-argue the case and grounds raised in Miscellaneous Application are nothing but seeking before the Tribunal to review its own order which is not permissible within the purview of the Miscellaneous Application filed u/s.254(2) Assessee is seeking review of the order of Tribunal, which is beyond the scope of powers as envisaged u/s. 254(2) of the Act. In view of the above and as per the Miscellaneous Application filed before us, we do not find any mistake, much less any apparent mistake that warrants rectification in the order of Tribunal dated 25.08.2020. The Tribunal in its own wisdom had adjudicated the appeal of the assessee on merits. Therefore, we are of the considered view that the Tribunal has rightly adjudicated the issue after considering all the documents placed on record. Accordingly, Miscellaneous Application filed by assessee is dismissed being devoid of any merit.Miscellaneous Application filed by assessee is dismissed. 2021 (3) TMI 508 Reopening of assessment u/s 147 - recording of reasons by non jurisdictional AO - HELD THAT:- Reasons have been recorded by non jurisdictional Assessing Officer but notice was issued by jurisdictional Assessing Officer. Here in this case, jurisdictional Assessing Officer has not recorded the reasons as mandated in Section 148 (2). Thus, it can be clearly inferred that the notice u/s. 148(1) has been issued without recording the reasons, because reason recorded by non jurisdictional Assessing Officer cannot give jurisdiction to the present Assessing Officer. The same principle of the Hon ble High Court [ 2019 (6) TMI 799 - GUJARAT HIGH COURT] will apply in the present case also. Hence, on this ground alone, we hold that the proceeding u/s.147/148 is void ab initio and without jurisdiction and same is quashed - Decided in favour of assessee. 2021 (3) TMI 506 Addition u/s 68 - unexplained share application money received - HELD THAT:- During the course of assessment proceedings, assessee has filed various evidences such as confirmations from these parties, income tax returns, annual accounts and bank statements to prove the genuineness of the transactions and identity and creditworthiness of the investors, however, the Assessing Officer has not conducted any further inquiry to bring on record evidences to the contrary or to disprove the evidences as filed by the assessee. We note that though the Assessing Officer has issued show cause notices under Section 133(6) of the Act, which was returned unserved, the assessee has filed confirmations along with evidences of three of the investors before the Assessing Officer. We have perused the order of the learned CIT(A) carefully and find that the learned CIT(A) has dealt with each and every relevant aspect of the matter in detail and as such the learned CIT(A) has rightly deleted the addition on the ground that the Assessing Officer has relied upon the statement of Shri Pravin Kumar Jain which has been retracted later and, therefore, the same cannot be the basis for addition under Section 68 - Decided against revenue. 2021 (3) TMI 505 Estimation of income - bogus purchases - CIT-A confirmed the addition to to 12.5%- HELD THAT:- In different trade items, there may be different rate of profit. Whenever any profit is being estimated, the element of guesswork would always be involved. In the case Simit P. Sheth [ 2013 (10) TMI 1028 - GUJARAT HIGH COURT ]on an analysis of the material, Tribunal drew an inference that in the trade of steel profit at the rate of 12.5% may be reasonable profit when the assessee has procured material from different sources and bills from different sources. This formation of opinion was not disturbed by the Hon ble High Court. Therefore, no infirmity in the order passed by the Ld.CIT(A) in restricting the addition to 12.5% as against the entire bogus purchases disallowed by the Assessing Officer. Grounds raised by the revenue are dismissed. 2021 (3) TMI 504 Nature of receipt - revenue or capital receipt - subsidies given in the form of sales tax subsidy and refund of interest on term loan - HELD THAT:- Package Scheme of Incentives (PSI) introduced by the Government of Maharashtra was for the purpose of encouraging entrepreneurs set up/expansion units in the developing region of the State. Further PSI was revised for intensifying and accelerating the process of dispersal of industries to the less developed areas of the State coupled with the objects of generating mass employment opportunities. Since the object of the subsidy was setting up of Industrial units in backward areas the same has been held to be capital in the earlier year by the ld. CIT (A) as well as by the Tribunal by following the principle laid down by the Hon ble Supreme Court in the case of Ponni Sugars and Chemicals Ltd., [ 2008 (9) TMI 14 - SUPREME COURT] Similarly, the relevant finding on the issue of interest subsidy on term loan for technical upgradation fund scheme by the Central Government. As relying on INDOCOUNT INDUSTRIES LTD. [ 2018 (2) TMI 2024 - ITAT DELHI] subsidy received by the assessee is capital in nature. Appeal of the revenue is dismissed. Customs 2021 (3) TMI 544 Revocation of suspension of clearance of its consignment - bearings imported by petitioner - respondent No.6 had filed complaint with respondent Nos. 2 to 5 raising a system alert that the goods imported by petitioner No.1 are suspected to be goods infringing Intellectual Property Rights and such import is in contravention of the provisions of Rule 7 of the IPR Rules enacted under the Customs Act, 1962 and the Trade Marks Act, 1999 - HELD THAT:- By notification bearing Notification No. 56/2018Customs dated 22.06.2018, Government of India in exercise of its powers conferred by sub-section (1) of section 156 of the Customs Act, 1962 read with clauses (n) and (u) of subsection (2) of section 11 of the said Act effected an amendment to the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 dated 08.05.2007 (IPR Rules) - It is seen that condition(d) has been inserted which states that in the event of any amendment, cancellation, suspension or revocation of the Intellectual Property Right by the authorities under the Intellectual Property Law or by any Court of law or Appellate Board, Commissioner of Customs may accordingly amend, suspend or cancel the notice and the corresponding protection. In the present case it is an admitted position that petitioners and respondent No.6 are litigating against each other to establish their respective right, title and entitlement to the ownership of TR brand. Both counsels have fairly argued and submitted across the bar that both parties have been unsuccessful in obtaining any interim order of injunction / restraint against the other party from using the TR trademark. As alluded to hereinabove though various proceedings are pending in courts, neither the petitioners nor respondent No.6 have been in a position to obtain any order from the civil court and produce the same before the customs authorities to take benefit of the statutory provisions. That apart if respondent No.6 succeeds in the suit proceedings filed in the Delhi High Court in proving that respondent No.6 is the owner and proprietor of the trademark TR and that the petitioners are infringing copyright in the artwork of trademark / label TR , it is only then that respondent No. 2 to 5 can confiscate / dispose of the goods in accordance with the statutory provisions and/or continue suspension of clearance of goods imported by the petitioners. In the absence of any interim order / order from the civil court from being placed on record by respondent No.6 it will therefore not be appropriate for respondent Nos. 2 to 5 to withhold / detain the consignments imported by the petitioners beyond the prescribed period of 14 days - In the present case, it has been clarified and is an admitted position that both parties i.e. petitioners and respondent No.6 have appeared before the customs officers / authorities i.e. respondent Nos. 2 to 5 and have presented documentary evidence, interalia, pertaining to their respective entitlement to the TR mark; the lis in respect of establishing ownership to the TR is admittedly pending before the Delhi High Court and the Bombay High Court. Unless there is finality to the suit proceedings between the petitioners and respondent No.6 pending in the civil courts i.e. Delhi High Court and Bombay High Court or any interim order is passed by the said courts, both the parties having referred to and relied upon several documents which cannot be adjudicated or veracity of which cannot be gone into in the present writ proceeding, such documents produced by both the parties will have to be accepted as prima-facie evidence supporting the case of each party by this Court. Further in the absence of a court order as contemplated under sub-section (4) of section 53 of the Customs Act, 1962 would not be justified for respondent Nos. 2 to 5 to withhold the consignment imported by the petitioners until respondent No.6 i.e. owner of the copyright obtains an order / interim order from the civil court declaring respondent No.6 as the owner of the mark TR brand and places the same before the customs authorities. There are merit in the submissions made on behalf of the petitioners. Since there has been no finality to the proceedings which are pending between the petitioners and respondent No.6 in the Delhi High Court and Bombay High Court in respect of ownership of TR brand, the imported goods vide Bills of Entry Nos. 2220018, 2221281, 2224083, 2224577, 2224920, 2225033 all dated 04.01.2021 suspended from clearance will have to be released to the petitioners subject to the petitioners executing such bond with such surety or security and such conditions as may be specified in the bond in accordance with law - petition disposed off. 2021 (3) TMI 539 Seeking return of bank guarantee and bond executed at the time of provisional release of the goods as well as for refund of pre-deposit made - Respondents in their reply affidavit have taken the stand that department has filed civil appeal before the Supreme Court against the order of CESTAT and that it has got a good case on merit. Therefore, it would not be appropriate to return bond and bank guarantee to the petitioner at this stage - Petitioner has filed rejoinder affidavit refuting the contention of the respondents and contending that mere filing of the civil appeal in the Supreme Court cannot be a ground for not returning the bond and bank guarantee. HELD THAT:- The respondents should return the bonds and bank guarantees of the petitioner within a period of three months from the date of receipt of a copy of this order. Petition disposed off. 2021 (3) TMI 537 Seeking to grant the extension of six months to implement the oral judgment - HELD THAT:- The main matter came to be disposed of by a Coordinate Bench in M/S. PETRONET LNG LIMITED VERSUS ASSISTANT COMMISSIONER OF CUSTOMS CUSTOMS DIVISION [ 2020 (1) TMI 176 - GUJARAT HIGH COURT ] where it was held that the petitioner is entitled to receive refund as per his claim contained in his application dated 8.8.2015 in accordance with law and the same shall be granted to the petitioner within a period of four (4) months from the date of receipt of writ of this Court. The applicant herein was granted four (4) months time to refund the amount as prayed for to the original petitioner - Application disposed off. 2021 (3) TMI 534 Seeking further time to file an affidavit in terms of the order - HELD THAT:- We fail to understand this expression as this Court has been functioning throughout the lockdown imposed due to the pandemic. The filing could have been effectuated, much earlier, via the e-filing Management System of this Court. However, one last opportunity is granted to the respondent nos.2 and 3, to file affidavit(s) in terms of the order dated 05.03.2020, subject to payment of cost of ₹ 20,000/- to the petitioner. The cost will be remitted within 10 days from today. Mr. Ramakant Gaur, Advocate, who appears for the petitioner, will furnish the bank details of the petitioner to Mr. Aggarwala - List the matter on 3rd May, 2021. 2021 (3) TMI 531 Validity of continuation of the suspension of the license issue to the petitioner - license was originally suspended vide order dated 8.1.2018 - Regulation 19 (2) of the Customs Broker Licensing Regulation, 2013 - HELD THAT:- In the light of the interim order, the petitioner has been allowed to continue to operate as a Customs Broker for last 2 years. Therefore, this writ petition is disposed off by directing the 1 st respondent to complete the proceedings in the show cause notice dated 7.2.2018 within a reasonable time, in accordance with law. Corporate Laws 2021 (3) TMI 514 Seeking restoration of name of the company in the Register maintained by the Registrar of Companies, Mumbai (RoC) - Section 252 (1) of the Companies Act, 1956 - HELD THAT:- On perusing the report of the Registrar of Companies, Maharashtra, Mumbai and the documents filed, it is clear that the Company has failed to file its statutory returns for the Financial year 2016-2017 till 2018-2019 (for 3 years) contrary to the provisions of the Companies Act, 2013 and the Company is not carrying on business or operation as defined u/s 248 (1)(c) of the Companies Act 2013. Further, at the time of hearing the Bench had posed query to the Petitioner to show any proof whether the Company has any existing Business but the Appellant was unable to show any proof of existing or prospective business in the Company and also the Company had no turnover for past five years. This Bench is of the view that the Company is not carrying on any business or operations and there is no infirmity in the order of the Respondent for striking off the name of the Company from the Register of Companies maintained by it. Hence this appeal is liable to be rejected. The name cannot be restored - application dismissed. Insolvency & Bankruptcy 2021 (3) TMI 503 Approval of Resolution Plan - sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) read with regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) - HELD THAT:- The resolution professional has examined the resolution plan and has found it to be in compliance with section 30(2) of the IBC read with regulation 38 of the CIRP Regulations - The resolution plan approved by the committee of creditors meets the requirements laid down in various clauses of section 29A and section 30(2). As per the list of the company as mentioned in information memorandum of the company, total claims filed by the financial creditors of the company amount to INR 126.57 crores out of which claims aggregating to INR 126.57 crores have been verified and admitted for the purpose of CIRP by the resolution professional - This Bench directs the RP to act as the monitoring agency and thus appointed RP as monitoring agency to monitor and supervise the implementation of the resolution plan and the remuneration of the monitoring agency shall be on ₹ 1,50,000 plus taxes and out of pocket expenses at actual. The resolution applicant is allowed to remove and/or substitute the monitoring agency with prior approval of this Adjudicating Authority if the monitoring agency is unable to satisfactorily perform its responsibilities or breaches terms of its appointment - the resolution plan submitted by M/s. Marinaindia Traexim P. Ltd. is found in conformity of section 30(2) of the Code and the same is approved. Resolution plan approved. 2021 (3) TMI 502 Whether to continue this Appeal or withdraw this Appeal? - the grievance of the Appellant that the Adjudicating Authority dismissed the claim on the ground of extortionate and fraudulent transaction - HELD THAT:- Shri Gurucharan Singh, Advocate submits that in these Appeals hearing should be deferred till the decision of the Appeals in which Judgment is reserved by the Hon ble Supreme Court. Let these matters be fixed For Hearing on 16th March, 2021. 2021 (3) TMI 501 Sanction of resolution plan - Section 31(1) of IBC Code - HELD THAT:- The requirements under Section 31(1) of the Code are satisfied in the present case. In para No.4 of Form H the RP has certified that the resolution plan complies with all the provisions of the Code and Regulations and does not contravene any of the provisions of the law for the time being in force. The RP has also certified that the resolution applicant namely Akums Drugs Pharmaceuticals Ltd. has submitted affidavit pursuant to Section 30(1) of the Code confirming its eligibility under Section 29A of the Code to submit the resolution plan and the contents of the said affidavit are in order. The RP has submitted that the resolution plan has been approved by the CoC with 71.67% voting share in accordance with the provisions of the Code and CIRP Regulations made thereunder and after considering the feasibility and viability and other requirements specified by the CIRP Regulations. The resolution plan submitted by M/s. Akums Drugs Pharmaceuticals Ltd. as approved by the CoC under Section 30 (4) of the Code is approved and the resolution plan so approved shall be binding on the corporate debtor and its employees, members, creditors including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan. Resolution plan approved - moratorium shall cease to have effect. Service Tax 2021 (3) TMI 545 Declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Petitioner s declaration under the scheme was rejected on 29.01.2020 on the ground that petitioner had filed the declaration after initiation of enquiry - HELD THAT:- It is found that the date 30.06.2019 is quite significant. We have already noticed the definition of enquiry or investigation as per section 121(m). Coming to section 123 of the Finance (No.2) Act, 2019 which deals with tax dues for the purposes of the scheme, as per clause (c) thereof where an enquiry or investigation or audit is pending against the declarant, the tax dues would mean the amount of duty payable which had been quantified on or before 30.06.2019. Even in the context of eligibility under section 125(1), we find that clause (e) thereof clarifies that any person subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit had not been quantified on or before 30.06.2019 would not be eligible to make a declaration. Therefore, whenever and wherever the scheme talks about an enquiry or investigation or audit, the date 30.06.2019 carries considerable significance and becomes relevant. The enquiry or investigation or audit should commence prior to 30.06.2019. Though clause (f) of sub-section (1) of section 125 does not mention the date 30.06.2019 by simply saying that a person making a voluntary disclosure after being subjected to any enquiry or investigation or audit would not be eligible to make a declaration, the said provision if read and understood in the proper context would mean making of a voluntary disclosure after being subjected to an enquiry or investigation or audit on or before 30.06.2019. Such a view if taken would be a reasonable construct consistent with the objective of the scheme. The respondent No.4 was not justified in rejecting the declaration of the petitioner dated 26.12.2019 on the ground that petitioner was not eligible to file declaration under the category of voluntary disclosure since enquiry was initiated against the petitioner on 19.12.2019 whereafter petitioner filed declaration - the respondent No.4 was not justified in rejecting the declaration of the petitioner, it would not be necessary for us to examine the other points raised by the petitioner particularly relating to the nature of the summons dated 19.12.2019 issued under section 70 of the CGST Act. Matter remanded back to respondent No.4 for taking a fresh decision on the declaration filed by the petitioner on 26.12.2019 treating the same as a valid declaration under the voluntary disclosure category and thereafter grant the admissible relief to the petitioner - petition allowed by way of remand. 2021 (3) TMI 542 Condonation of delay in filing appeal before Commissioner (Appeals) - Scope of the term 'Month' - Short payment of service tax - non-inclusion of amount of TDS and the amount of R D cess in payment of royalty - period from April, 2016 to March, 2017 - appeal filed beyond the period of one month after the normal period of limitation of two months - extended period of limitation - HELD THAT:- A careful analysis of sub-section (3A) of section 85 would go to show that the appeal has to be presented within two months from the date of receipt of the decision or order of the adjudicating authority. However, the said limitation period of two months can be extended for a further period of one month if the appellate authority is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of two months - presentation of appeal has to be within two months from the date of receipt of the order or decision appealed against. Therefore, the date of receipt of the order or decision appealed against becomes very relevant. Limitation period of two months can be extended for a further period of one month if the appellate authority is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the limitation period of two months. While there is no dispute to the proposition that section 5 of the Limitation Act, 1963 would stand excluded when the statute itself provides the limitation period for filing of appeal as well as the period beyond the limitation period within which the delay in filing the appeal can be condoned. But the observation of respondent No.1 that the provisions of section 85 of the Finance Act, 1994 and section 35 of the Central Excise Act, 1944 are pari-materia may not be correct - From a comparison of section 35 of the Central Excise Act, 1944 and section 85(3A) of the Finance Act, 1994, as amended, we have already noticed the subtle difference in language in the two provisions which may have a considerable significance in the facts of the present case. While under section 35 the period of limitation is 60 days plus 30 days that is at the most 90 days, under sub-section (3A) of section 85, the period of limitation is two months plus one month i.e., total three months at the maximum. While construing the word 'month', it would mean a month as reckoned according to the British calendar, number of days in a month being immaterial. Therefore, the two months' limitation period was available to the petitioner upto 31.10.2019. If we add the extended period of limitation of further one month, it would mean that delay could be condoned till 31.11.2019 because the total period of three months had commenced from 31.08.2019 and would be available till 31.11.2019 but because there is no 31 days in November, the extended period of limitation would spill over to 01.12.2019. This is more so because the word to is not used in section 85(3A) to cap the limitation period on 30.11.2019. Therefore, the appeal was required to have been dispatched by 01.12.2019. But it was dispatched on 02.12.2019 - it is found that 01.12.2019 was a Sunday. Therefore, benefit of this public holiday would be available to the petitioner in terms of section 10 of the General Clauses Act. Accordingly, the appeal presented on 02.12.2019 would be construed to be within the extended period of limitation, 01.12.2019 being a public holiday. Whether the benefit of the extended period of limitation of one month is to be granted to the petitioner or not is however within the discretion of respondent No.1. The dispatch of the appeal by the petitioner on 02.12.2019 was within the extended period of limitation of one month and, therefore, without considering the prayer for condonation of delay of the petitioner, respondent No.1 ought not to have rejected the appeal as being time barred by taking the ground that he had no jurisdiction to condone the delay beyond the extended limitation period of one month - matter remanded back to respondent No.1 to consider afresh the application of the petitioner for condonation of delay in filing the related appeal. Appeal allowed by way of remand. 2021 (3) TMI 519 Recovery of Differential Service Tax - cargo handling service - supply of river sand - transportation of limestone from mines - commercial and industrial construction service - Revenue is of the view that proper amount of service tax not paid by assessee in respect of disputed service. Commercial and Industrial Construction Service - demand made on an activity which admittedly involved both supply of goods and rendering services - HELD THAT:- It has now been well settled by the Hon ble Supreme Court in the case of Larsen Toubro Ltd. [ 2015 (8) TMI 749 - SUPREME COURT ] that works contract service is separate specie of contract known to commerce and it cannot be equated either with a contract for sale of goods or a contract for supply of services simplicitor. Service tax can only be demanded on Works Contract services after the introduction of a charge on works contract service and not under any other head either before the introduction of the service or thereafter - Even if they had not fulfilled the conditions, there is no case for the Department to charge service tax on this service under any other head - the demand of service tax under the head of Commercial and Industrial Construction Service needs to be set aside. Cargo handling service - supply of river sand - HELD THAT:- The first contract is supply of river sand; it is not for loading or unloading any cargo. Needless to say that if somebody has to supply river sand it has to loaded into the truck and unloaded it at the customer s destination. The nature of the contract remains to be one of supply of river sand and it cannot change into a contract for some other service. Cargo handling service - transportation of limestone from mines - HELD THAT:- The contract is evidently for transportation of goods and the appellant has been discharging service tax under Goods Transport Agency service. Merely because transportation also requires the appellant to load and unload goods, it cannot be said that the appellant has performed cargo handling service - This view with respect to the demand for an earlier period for these services was already taken by this Bench in M/S SHREE MOHANGARH CONSTRUCTION CO. JAISALMER VERSUS COMMISSIONER OF CENTRAL EXCISE JAIPUR II [ 2019 (3) TMI 112 - CESTAT NEW DELHI ] where it was held that The purchase order clearly shows that the contract was for supply of material and can by no stretch of imagination, be considered as for providing Cargo Handling Service and no service tax is payable for this activity under the category of Cargo Handling Service - thus the demand is set aside. Supply of tangible goods service - HELD THAT:- The appellant is not contesting this amount and it needs to be upheld. Interest, if any, payable under Section 75 of the Finance Act, 1994 also needs to be paid on this amount. As bulk of the demands have already been set aside, invoking the powers under Section 80, the penalty imposed under Section 76 is set aside. Appeal allowed in part. Central Excise 2021 (3) TMI 507 CENVAT Credit - input services - Outward Transit Insurance in respect of Excisable Goods sold - credit denied on the ground that no document such as sale contract was submitted therefore, it cannot be said that the sale is on FOR basis - HELD THAT:- There is no dispute that original authority has gone through the document such as sale invoices, LR copies CA Certificate and allowed the credit considering the sale is on FOR basis. On careful perusal of the invoices, it is found that invoices clearly mentioned a condition that the sale is on FOR basis and risk upto the destination is covered. It is also not the case of the department that outward transit insurance was paid by the consignee. In this case it is clear that the sale is on FOR basis and sale invoices itself is a kind of contract and no further contract is required to ascertain that whether the sale is on FOR basis or not. Therefore, there is no dispute that sale is on FOR basis and hence credit is admissible. The appellant is entitle for the Cenvat Credit on the services of Outward Transit Insurance - Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2021 (3) TMI 538 Levy of tax on sale of apartments - works contract or not - whether petitioner is liable for pending under Section 72(2) of the Karnataka Value Added Tax Act, 2003? - HELD THAT:- In the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] it has been held that the activity of construction undertaken by the developer would be worst contract only from the stage the developer enters into a contract with purchaser of the flat and the value addition made to the goods transferred after the agreement is entered into with purchaser of the flat can only be made chargeable to tax by the State Government. Thus the decision of the Supreme Court by which parameters have been fixed with regard to levy of value Added Tax on Works contract was laid down after the tribunal had passed the order on 24.06.2011. The tribunal therefore has taken into account the law as prevailing prior to the decision of the three judge bench of the Supreme Court in L T supra. The machinery provisions exist in the Act and the Rules viz., Section 3(1) 4(1) and Rules 3 (2) (l) (m) of the Rules. The effect of the aforesaid machinery provisions has to be considered in the light of the decision of the larger bench of the Supreme Court in L T supra and the liability of the petitioner has to be assed to pay the Value Added Tax afresh. Petition disposed off. 2021 (3) TMI 525 100% EOU - Shortage of stock - transit/handling losses of iron ore amounting to 5% of its total export clearances - whether it is within reasonable limits, despite there being no evidence submitted by the respondent to show the actual transit/handling losses? - validity of restriction of claim of transit/handling losses or iron ore to 0.92% and 1% of the Respondent's total export clearances, respectively based on the average transit/handling losses of iron ore claimed by leading mining companies such NMDC Ltd., and MSPL Ltd.? HELD THAT:- From perusal of the order passed by the prescribed authority and the First Appellate Authority, it is clear that both the authorities have recorded a finding that transit / handling loss is inevitable while transportation of iron ore fines and lumps. It is well settled legal proposition that an order passed by an authority under one enactment cannot be basis for levying tax under another enactment specially when event and point of levy are different under those enactments. The point of levy of excise duty is removal of goods whereas, point of levy under the Act is on sale. Therefore, an order passed by the Excise Authority cannot lead to the conclusion that there was a sale leviable to tax under the Act. It is pertinent to note that transit / handling loss was claimed by the respondent approximately at the rate of 5% for a period of five years, which according to the finding recorded by the authorities under the Act at the rate of 1% per year was reasonable - there are no ground to interfere with the order passed by the tribunal. The substantial questions of law are answered against the petitioner and in favour of the respondent - Petition dismissed. 2021 (3) TMI 523 Levy of enhanced checkpost penalty - Section 53(2)(b) of KVAT Act - Section 53(2)(c) and (d) of KVAT Act - penalty in respect of 12 goods vehicles, when the required documents were furnished for verification at the time of check of the goods vehicles and accepted by the three Commercial Tax Officers, Bangalore - HELD THAT:- The provisions of Section 53(2)(d) of the Act are not applicable to the fact situation of the case as the same applies in case of an interstate sale - Similarly, it is also pertinent to mention here that the assessee had admitted the order passed by the Commercial Tax Officers under Section 53(2)(c) of the Act which was made in respect of 6 vehicles and had not preferred any appeal. While applying the provisions of Section 53(2)(b) of the Act in imposing the penalty, the Commercial Tax Officers had accepted the submission made by the appellant that the vehicles were stationed at Hebbagodi for weighment and further transportation to the end purchasers based on the sale invoices raised on the end purchasers dated 04.09.2008 and 05.09.2008 and have levied the penalty only in respect of 6 vehicles which had not reported at the entry check post and obtained the seal for violation of Section 53(2)(c) of the Act - so far as the applicability of the penalty under Section 53(2)(b) of the act is concerned, on the facts of the case, two views were possible. Therefore, in the fact situation of the case, it was not possible for the Additional Commissioner of Commercial Taxes namely the second Appellate Authority to invoke the provisions of Section 64(1) of the Act as the order passed by the Commercial Tax Officers could neither be said to be erroneous nor prejudicial to the interest of the revenue. The substantial questions of law filed in this appeal are answered against the respondents - Appeal allowed - decided in favor of appellant. 2021 (3) TMI 521 Recomputation of appellant s total and taxable turnovers - suppressed turnover as allocated on a pro-rata basis in the ratio of declared taxable turnovers for the respective tax periods - tax periods from April 2005 to October 2006 - correctness to pass a single seizure order in respect of the documents seized from two different premises belonging to two different persons who are not directly connected with each other without mentioning which document is seized from which place - correctness to treat the transactions recorded in the documents seized from a third party as the transactions of the appellant without there being any indication to such effect in such seized documents against such of the entries relating to such transactions. HELD THAT:- The Tribunal recorded a finding that the Assessment Authority is not justified in passing the assessment order in respect of the documents seized from two different premises belonging to two different persons who are not directly connected with each other without mentioning which document is seized from which place and further recorded a finding that it is not reasonable and justified on the facts and circumstances of these cases to treat the transactions recorded in the documents seized from a third party (Sri Santosh Jha) as the transactions of the assessee without there being any indication to such effect in such seized documents against such of the entries relating to such transactions and further recorded a finding that though the large number of purchase transactions reflected in the seized documents have been treated as the assessee s suppressed turnover and simultaneously when a large number of sales turnovers reflected in such documents have also been considered as suppressed turnover without treating any part of such suppressed sales turnover to be from out of the suppressed purchase turnovers and held that even a small percentage of the suppressed sales are from out of the suppressed purchases. There is no justifiable reason for the FAA to have considered 40 percent of the transactions relating to Sri Santosh Jha with his other clients as the appellant s transactions based on the documents seized from the premises of Sri Santosh Jha. In the documents seized from Santosh Jha s premises, there were some entries relating to the appellant s transactions also and against such transactions appellant s code name is Mentioned as S/M . Such transactions have been considered separately in the impugned appeal order as the appellant s transactions and dealt with. The Tribunal modified the order passed by the 1st Appellate Authority holding that the appellant/assessee s suppressed turnover for the aforesaid period cumulatively came to be refixed at ₹ 1,20,98,891/- - revision petition dismissed. Indian Laws 2021 (3) TMI 543 Cancellation of licence of the CKP Co-operative Bank Limited to carry on the banking business in India - whether in the facts and circumstances of the case, the Reserve Bank of India was justified in exercising powers under section 22 read with section 56 of the Banking Regulation Act to cancel the banking licence of the CKP Bank and was further justified in directing the Registrar of Co-operative Societies to take steps to wind up the said CKP Bank or not? HELD THAT:- There is no substance in the submission made by the learned counsel for the petitioner that the Reserve Bank of India could not have passed an order of cancellation of banking licence of the said CKP Bank and ought to have given a fresh show cause notice. The Reserve Bank of India had given liberty to the members of the said CKP Bank for its revival and also asked the said CKP Bank to submit an option for merger. The said CKP Bank did not take any steps to improve the financial condition and on the contrary made the financial condition of the said CKP Bank in miserable state of affairs. In these circumstances, the Reserve Bank of India was not required to wait indefinitely having waited for about ten years for revival of the CKP Bank. There was no further requirement of issuance of any fresh show cause notice after issuance of second show cause notice on 23rd August, 2017 and before passing the impugned order dated 28th April, 2020. The Reserve Bank of India had postponed the action in view of the request made by the CKP Bank as and by way of last indulgence. The Reserve Bank of India was not required to give any hearing to the depositors before passing the order of suspension of the banking licence of the said CKP Bank. It is not the case of the said CKP Bank that principles of natural justice were violated by the Reserve Bank of India at any sage from 2009 onwards - there is no merit in the submission of the learned counsel for the petitioner that since no action was taken by the Reserve Bank of India pursuant to the show cause notices dated 11th June, 2015 and 23rd August, 2017 for substantial period, the alleged deficiencies on the part of the said CKP Bank in not complying with the requisition directed in those two show cause notices were deemed to have been waived. The financial condition of the said CKP Bank became worst day to day and thus the Reserve Bank of India complied with its duty to cancel the banking licence and in simultaneously directing the Registrar, Co-operative Societies to wind up its affairs so as to obviate further deterioration and erosion of all the deposits and the assets of the said CKP Bank. The Reserve Bank of India for various reasons recorded in the impugned orders which are in public interest has passed the said order of cancellation of the banking licence of the said CKP Bank and was right in not exercising such powers under section 45 of the Banking Regulation Act. The Registrar of Co-operative Societies while passing an order of winding up of the said CKP Bank rightly did not exercise the powers under Section 102 of the MCS Act but had complied with the mandatory directions issued by the Reserve Bank of India under Section 102 of the MCS Act. The Registrar of Co-operative Societies has no discretion to either issue a show cause notice or to give any hearing to the said CKP Bank or to any of the depositors - the order passed by the Registrar, Co-operative Societies thereby winding up the affairs of the CKP Bank is not a quasi-judicial order but is executive order, passing of which order neither contemplate any show-cause notice nor any personal hearing. It is duty of the Reserve Bank of India to act as the strongest watchdog into the affairs of a bank having granted banking licence and to continuously supervise mandatorily whether the conditions for granting such banking licence have been complied with from time to time by such banks or not. It is duty of the Reserve Bank of India to safeguard the public interest and more particularly the interest of depositors and members of such bank and to cancel the banking licence, if in spite of granting opportunity to take the necessary steps for complying with or fulfilling the conditions of Banking Regulation Act, such bank does not comply with the conditions and there would be no possibility of its revival - the Reserve Bank of India had granted sufficient indulgence to the said CKP Bank to revive the said CKP Bank and its financial position by permitting to take steps to merge the said CKP Bank with any other co-operative bank and to take various steps for its revival. The said CKP Bank however did not take any steps to comply with those directions issued by the Reserve Bank of India giving ample opportunity under Section 22(3) of the Banking Regulation Act. The statement of objects and reasons of the Amendment Act 52 of 1953 of the Banking Regulation Act clearly indicates that the Banking Companies Act was passed to ensure proper administration of the Banking Companies in India. The Reserve Bank of India has rightly exercised its powers and had complied with its duty under Section 22(4) of the Banking Regulation Act by cancelling the banking licence of the said CKP bank in the facts and circumstances of this case - the power to grant banking licence by the Reserve Bank of India to the banks on the conditions set out in Section 22(3) of the Banking Regulation Act is coupled with duty to cancel such banking licence in case of any breach or violation of such terms and conditions after giving opportunity to such bank to revive and to comply with those conditions and directions as may be issued by the Reserve Bank of India. The Reserve Bank of India once having exercised such powers and duty in compliance with Section 22(4) of the Banking Regulation Act and if such order is in public interest and in the interest of bank and its depositors, Court cannot interfere with such decision making process of the Reserve Bank of India. The Reserve Bank of India has complied with its duties and obligations in public interest. No case is thus made out by any of the petitioners to interfere with the impugned orders passed by the Reserve Bank of India or the Department of Co-operation Marketing and Textile - Petition dismissed.
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