TMI Tax Updates - e-Newsletter
March 20, 2020
Case Laws in this Newsletter:
GST
Income Tax
Corporate Laws
Insolvency & Bankruptcy
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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GST:
Clarification in respect of appeal in regard to non-constitution of Appellate Tribunal - CGST - Circular
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GST:
Filing of FORM TRAN-1 - this Court while deciding the writ petitions filed by the petitioners had laid down the specific parameters for grant of relief to the petitioners and it has been found by the respondents as a fact that there was no evidences of error or submission/filing of Form GST Tran-1 by the petitioners, the petitioners apparently are bound by the said outcome and, as such, are not entitled to any relief. - HC
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GST:
Transitional Input tax credit - GST TRAN-I - respondents directed to allow the petitioner to file Form GST TRAN-I either electronically or manually on or before 31.03.2020. - HC
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GST:
Liability of the tenants to pay GST when the rents exceed ₹ 20 Lakhs per annum - There shall be a direction to the respondents/tenants to pay every month to the Competent Authority under the GST Act, 2017, tax @ 18% on the rent, payable every month to petitioners. - HC
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GST:
Invocation of proceedings u/s 129 of the CGST/HPGST Act - vehicle number was written wrong in E-way Bill and rightly on invoice issued by the appellant - the mistake of two digits while entering vehicle no. in invoice and E-way Bill is a typographic error and may be treated as a minor one. - Amount of GST with penalty as deposited to be refunded - Commissioner
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Income Tax:
Admittedly, the research done by ITAT in the form of Google study was not put either to the appellant/assessee Company or to the said Revenue. As already pointed out by this Court in the earlier paragraphs, in the absence of any specific rule including the applicability of the natural justice, it is a well settled position of law that adherence to the principles of natural justice, is implied in any legislation. - HC
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Income Tax:
Penalty u/s 271E - repayment of the loans in question in cash - default u/s 269SS - reasonable cause - the repayment of advances from regular parties are identifiable and the assessee has explained the circumstances in which it was constrained to make the repayment of the loans in question in cash - No penalty - AT
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Income Tax:
Unexplained cash credit under section 68 - Creditworthiness of MD cannot be doubted merely on the ground that the assessee failed to furnish the financial statement. As such, MD has declared the income in its income tax return as evident from the preceding paragraph which is running into crores of rupees and there was no defect of whatsoever was pointed out by the authorities below - AT
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Income Tax:
Disallowance of interest expenses - assessee has made contradictory submissions before the learned CIT (A) and has not furnished the required details of the interest expenses to justify that the interest cost was incurred in the course of the business. Thus in the absence of sufficient documentary evidence about the interest expenses on the borrowed fund whether the same was utilized for the purpose of business, claim of assessee cannot be allowed- AT
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Income Tax:
LTCG - FMV determination - Computation of cost inflation index in reverse manner while computing long term capital gain on transfer of tenancy rights - reverse indexation method applied by the assessee being contrary to the statutory provisions cannot be accepted. - AT
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Income Tax:
Disallowance of royalty expenses - allowable revenue expenses - It is only in Assessment Year 2005-06, the said payment of royalty has not been allowed in the hands of the assessee. In all the later years, starting from Assessment Year 2007-08, the royalty has been allowed as revenue expenditure in the hands of the assessee - Even the TPO had not made any adverse reference in his order u/s 92CA(3) - Claim of the assessee allowed - AT
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Central Excise:
Refund of Excise Duty - excess collection on account of freight cannot form part of the assessable value of the goods unless the Revenue produces evidence to show that value of the goods was collected in the garb of the freight charges - whatever excise duty paid by the appellant on account of profit earned is not duty and the same is to be refunded to the appellant. - AT
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Central Excise:
Refund of excise duty - the appellants were not required to pay duty at the enhanced rate during the relevant periods and therefore, any excess duty which they paid was refundable. - The order of the lower authority sanctioning the refunds was correct and it was incorrectly set aside by the first appellate authority - AT
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VAT:
Valuation - freight and pumping charges on the ready mix cement concrete sold by the assessee, billed separately - to be included in taxable turnover or not - Since the imposition of tax itself has been set aside by the tribunal and has been upheld, consequential penalty imposed on the assessee has been rightly deleted by the tribunal. - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (3) TMI 729
Detention of goods alongwith the vehicle - error in the E-way bill - demand under section 129(3) of CGST/HP GST Act, 2017 - HELD THAT:- The only mistake the e-way bill part-B was that the number of the vehicle in which the goods were transshipped had not been entered at the time of inspection of the vehicle. The appellant updated the e-way bill and the number of the second vehicle was updated in the part-B of the e-way bill. Despite the updation of the part-B of EWB the Ld. Respondent detained the vehicle and imposed tax/penalty to the tune of ₹ 1,43,432/-. As there is no doubt that the taxpayer has made procedural lapse and violated the provisions of the CGST/HPGST Act, 2017 and HPGST Rules 138(10) which says as Provided further that where, under circumstances of an exceptional nature, including trans-shipment, the goods cannot be transported within validity period of e-way bill, the transporter may extend the validity period after uploading the detail in part B of the FORM GST EWB-01, if required'. Therefore appellant should have updated the part B of EWB before resuming his journey further. So keeping in view the above facts the appellant is liable to pay miner penalty. The instant appeal is accepted and the order passed by Assistant Commissioner State Taxes Excise-cum- Proper Officer, Central Enforcement Zone Una dated 06.11.2018 is set aside. The tax and penalty deposited by the appellant under section 129(3) may be refunded and a penalty of Rs Ten Thousand only (₹ 10,000/-) is imposed on the taxpayer under section 122(xiv) of the Act.
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2020 (3) TMI 728
Filing of FORM TRAN-1 - denial of transactional credit of central excise paid on goods - Rule 117 of the Central Goods and Service Tax Rules, 2017 - HELD THAT:- In view of the fact that this Court while deciding the writ petitions filed by the petitioners had laid down the specific parameters for grant of relief to the petitioners and it has been found by the respondents as a fact that there was no evidences of error or submission/filing of Form GST Tran-1 by the petitioners, the petitioners apparently are bound by the said outcome and, as such, are not entitled to any relief. So far as the submissions made pertaining to the vested right and the fact that as the petitioners have admittedly paid the taxes and are, therefore, entitled for the relief, suffice it to notice that the petitioners had questioned the validity of provisions of Section 140 of the CGST Act and Rule 117 of the CGST Rules in the earlier writ petition, which plea was negated. No case for interference as sought by the petitioners is made out in the present writ petitions - Petition dismissed.
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2020 (3) TMI 727
Input tax credit - GST TRAN-I - purchases of goods and utilized the same towards payment of VAT payable on sale of goods upto 30.06.2017 - migration to GST regime - HELD THAT:- Any credit, which is admittedly due to the petitioners, cannot be denied to them on account of procedural wrangles as well as on account of system failure glitches in the system without their being any fault on the part of the petitioners. In view of the factual position, which is not disputed by learned Advocate General, the present writ petition is disposed of by directing the respondents to allow the petitioner to file Form GST TRAN-I either electronically or manually on or before 31.03.2020.
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2020 (3) TMI 726
Grant of regular bail - offence under Sections 132(1)(b),(c),(f), (k), (l) of the Gujarat Goods and Service Tax Act, 2017 and Central Goods and Services Act, 2017 read with Section 120-B of the Indian Penal Code - HELD THAT:- Having heard the learned advocates for the parties and perusing the material placed on record and taking into consideration the facts of the case, nature of allegations, gravity of offences, role attributed to the accused, without discussing the evidence in detail, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail. Bail is granted with certain conditions imposed.
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2020 (3) TMI 725
Levy of IGST on Ocean Freight - HELD THAT:- The issue is covered by the decision in the case of MOHIT MINERALS PVT LTD VERSUS UNION OF INDIA 1 OTHER [ 2020 (1) TMI 974 - GUJARAT HIGH COURT] where it was held that No tax is leviable under the Integrated Goods and Services Tax Act, 2007, on the ocean freight for the services provided by a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India upto the customs station of clearance in India and the levy and collection of tax of such ocean freight under the impugned Notifications is not permissible in law. Also, impugned Notification No.8/2017 Integrated Tax (Rate) dated 28th June 2017 and the Entry 10 of the N/N.10/2017 Integrated Tax (Rate) dated 28th June 2017 are declared as ultra vires the Integrated Goods and Services Tax Act, 2017, as they lack legislative competency. Petition allowed.
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2020 (3) TMI 724
Liability of the tenants to pay GST when the rents exceed ₹ 20 Lakhs per annum - Order 15A of the Civil Procedure Code - HELD THAT:- The liability of the tenants to pay GST when the rents exceed ₹ 20 Lakhs per annum is settled law and it cannot be disputed that when the admitted monthly rent is ₹ 3,50,462/-, the total annual rent would exceed the said figure of ₹ 20 Lakhs and that the said liability is fastened by the provisions of the GST Act, 2017 on the tenant only. There shall be a direction to the respondents/tenants to pay every month to the Competent Authority under the GST Act, 2017, tax @ 18% on the rent of ₹ 3,50,462/- payable every month to petitioners. The arrears of GST on the rent for the period from November 2018 till date shall be deposited to the credit of OS.No.230 of 2019 by the respondents within four (4) weeks from the date of receipt of a copy of this order along with the rent for the month of November 2018. Petition allowed.
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2020 (3) TMI 723
Grant of Regular Bail - offence under Section 132(1)(c) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Having heard the learned advocates for the parties and perusing the material placed on record and taking into consideration the facts of the case, nature of allegations, gravity of offences, role attributed to the accused, without discussing the evidence in detail, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail. Bail granted with certain conditions imposed.
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2020 (3) TMI 722
Invocation of proceedings u/s 129 of the CGST/HPGST Act - vehicle number was written wrong in E-way Bill and rightly on invoice issued by the appellant - HELD THAT:- It is revealed that due to a typographic error by the consignee while issuing tax invoice and generating E-way Bill, the Vehicle No. HP-17B1790 has been mentioned instead of the Vehicle No. HP-17B-4290 on both tax invoice and as well as in E-way Bill. Apart from this there is no dispute on quantity/quality of goods in question and validity of E-way Bill. The consignment was intercepted on dated 4th Dec., 2018 and thereby a tax/ penalty has been imposed under Section 129(3) of HPGST/CGST Act, 2017 for contravention of HPGST Rule, 138. As per the facts in hand it appears that the mistake of two digits while entering vehicle no. in invoice and E-way Bill is a typographic error and may be treated as a minor one. Therefore, the appeal of the appellant is accepted and the order of the Assistant Commissioner State Taxes Excise-Cum proper officer Paonta Circle-Il is set aside. The additional demand of ₹ 57,708/- deposited by the appellant may be refunded and the penalty of ₹ 500/- under SGST and ₹ 500/- under CGST u/s. 125 of CGST/HPGST Act, 2017 is imposed on the Appellant in accordance to CBIC Circular No. 64/38/2018-GST, dated 14th Sep., 2018 and the state Circular No. 12-25/2018-19-EXN-GST-(575)6009-6026, dated 13th March, 2019. The judgment in this case was reserved on 21-1-2020 and is released.
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Income Tax
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2020 (3) TMI 721
TP Adjustment - ALP of international transaction involving AMP expenses - HELD THAT:- This Court has in similar circumstances in a series of decisions including Maruti Suzuki Ltd. [ 2015 (12) TMI 634 - DELHI HIGH COURT] Bausch Lomb Eye care (India) Pvt. Ltd. v. Additional CIT [ 2015 (12) TMI 1332 - DELHI HIGH COURT] and Honda Siel Power Products Ltd. v. Dy. CIT [ 2015 (12) TMI 1333 - DELHI HIGH COURT] emphasized the importance of the Revenue having to first discharge the initial burden upon it with regard to showing the existence of an international transaction between the Assessee and the AE. This Court is of the view that the ITAT was not justified in remanding the matter to the AO/TPO for determining the ALP of the alleged international transaction involving AMP expenses, when in fact, the Revenue was unable to show that there existed an international transaction between the Assessee and its AE in the first place. The question framed by this Court is, accordingly, answered in the negative, i.e., in favour of the Assessee
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2020 (3) TMI 720
Depreciation on electronic meters/energy meters - HELD THAT:- As decided in BSES RAJDHANI POWER LTD. [ 2020 (1) TMI 464 - DELHI HIGH COURT] set aside the matter to the file of the Assessing Officer to verify and allow the claimed depreciation at the rate of 80% on electronic meters/energy meters only after affording opportunity of being heard to the assessee. Higher depreciation on the bus bar chamber - AR submitted that these are devices through which connection from overhead line/underground cable is provided to the meters and the said device forms integral/inextricable part of the meters without which the meter cannot function. The authorities below have denied the claimed higher depreciation on this instrument on the basis that these are not energy saving device - HELD THAT:- We set aside this matter to the file of the Assessing Officer to verify the above claim of the assessee that 'bus bar chamber' forms integral/inextricable part of the meters without which a meter cannot function and allow the depreciation thereupon accordingly after affording opportunity of being heard to the assessee. The ground No.1 of the appeal preferred by the assessee is accordingly allowed for statistical purposes
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2020 (3) TMI 719
Additions made on account of de-recognised revenue - recognition of the revenue is on account of efficiency gain - HELD THAT:- Tribunal after considering the facts of the case have applied the ratio of the decision of the Supreme Court in Poona Electric Supply Company Limited vs. CIT [ 1965 (4) TMI 20 - SUPREME COURT] wherein the Apex Court has deliberated upon the concept of commercial profits viz-a-viz clear profits. On the basis of this principle, the Court has held that the amount transferable for the benefit of the consumers do not form part of the assesee s real profit and for the purpose of calculating the taxable income, such amount has to be deducted from its total income. On the strength of this reasoning, the Tribunal has relied upon the decision of the Coordinate Bench in Assessment Year 200607 and held that since the Respondent-assessee has no right to appropriate the efficiency gain amount and that such amount is at the disposal of DERC, the amount has to be reduced from the profits and loss account. The approach adopted by the Tribunal in applying the ratio of the decision of the Supreme Court in Poona Electric Supply Company Limited vs. CIT (supra) is wholly justified and does not call for any interference. Accordingly the ground of challenge urged by the revenue on this aspect is rejected. Disallowance deduction made u/s 80 IA - Tribunal has observed that the issue has become redundant and academic in nature - HELD THAT:- We do not find any perversity in the view taken by the Tribunal. The circular of CBDT has been issued in view of the decisions of various High Courts that find mention therein. The issue is no longer res integra. The Board has accepted the settled position that the disallowances made under Section 32, 40(a)(ia), 40A(3), 43B, etc. of the Act and other specific disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible business, and that deduction under Chapter VI-A is admissible on the profits so enhanced by the disallowance
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2020 (3) TMI 718
Production of additional evidence before the Tribunal - Mode of taking additional evidence - HELD THAT:- Reaching the conclusion to confirm the order of the Assessing Officer, has also done its part by doing some research on Google Study. Admittedly, the research done by ITAT in the form of Google study was not put either to the appellant/assessee Company or to the said Revenue. As already pointed out by this Court in the earlier paragraphs, in the absence of any specific rule including the applicability of the natural justice, it is a well settled position of law that adherence to the principles of natural justice, is implied in any legislation. As rightly pointed out by the learned counsel for the appellant/assessee with regard to the study or research done by ITAT, the appellant/assessee was not put on notice. Hence, on this sole ground, the impugned common order warrants interference. The Substantial Questions of Law Nos.1 and 2 are answered in affirmative and in favour of the appellant/assessee Company.
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2020 (3) TMI 717
Undisclosed purchase - Unexplained expenditure allegedly by way of commission paid - HELD THAT:- In the instant case, the assessee in its books of accounts, have shown purchases from the above-mentioned three parties amounting to ₹ 38.99 lakhs. In view of the information in the possession of the Assessing Officer, that the assessee has obtained only accommodation entries bills in the form of the purchases without any actual purchase of the goods, the Assessing Officer asked the assessee to substantiate the purchases. From the orders of the lower authorities, we find that the assessee not only failed in produce confirmation from those parties but also failed to substantiate transport of goods mentioned in those bills from Mumbai i.e. the place of purchase to the factory located at Gurgaon i.e. the place of consumption of goods. Even before us, the assessee has not filed any such evidence to rebut the finding of the Assessing Officer as well as the CIT(Appeals). Mere filing of copy of purchase bills, goods received notes or payment by cheque was not sufficient to establish the purchases. The assessee was required to discharge its onus of substantiating the purchases with deliveries of goods. The responsibility of the assessee to substantiate purchases was further increased in view of the statement of Shri Rakesh Kumar Gupta that he had provided accommodation entry bills without supplying the goods physically. But in view of the failure on the part of the assessee in discharging its onus, we do not find any infirmity in the order of the lower authorities on the issue in dispute and accordingly we uphold the same. The ground No. 2 and 3 of the appeal of the assessee are accordingly dismissed.
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2020 (3) TMI 716
Penalty u/s 271E - repayment of the loans in question in cash - default u/s 269SS - reasonable cause - HELD THAT:- Provision of section 269T of the Act, which is in seriatim to section 269SS of the Act, was introduced to eliminate the proliferation of black money in the society at large and not otherwise. As per CBDT circular, noted above, the assessee should explain the reasonable cause. In the instant case, the assessee has explained the reasonable cause stating that the entire transactions took place within the relatives and friends of the family and he had made repayment of the money to the persons who were in dire need of funds on those days, in order to enable them to carry on their business. These transactions have been recorded in the books of the assessee as well as in the books of the person to whom the payment was made. This is bona fide and genuine transaction to help the relatives and friends in needy hours and there was no intention to deceive the Revenue. Provisions, of Section 273B provide that notwithstanding anything contained in the provisions of 271E of the Act, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision if he proves that there was reasonable cause for such failure and if the assessee proves that there was reasonable cause for failure to take a loan otherwise than by account-payee cheque or accountpayee demand draft, then the penalty may not be levied. If there was a genuine and bona fide transaction and if for any reason the tax payer could not get a loan or deposit by account- payee cheque or demand draft for some bona fide reasons, the authority vested with the power to impose penalty has got discretionary power. In the instant case, the Ld. Assessing Officer ought to have considered that the payment of loan of ₹ 5,80,000/- by the assessee were undisputedly genuine and bona fide as they were reflected in the books of the recipients as well as those of the assessee. The assessee has explained the circumstances in which it was constrained to make the repayment of the loans in question in cash, therefore penalty should not be levied. Provisions of section 271E lays down conditions for imposition of penalty for repayments of loans and deposits in cash, where the amount exceeds ₹ 20,000/- in violation of section 269SS of the Act. Considering the fact that this provision is brought in for identification of source for repayment, there should not be any levy of penalty where the persons are otherwise properly identified and the transactions are genuine, because there can be no attempt to evade tax, where the identities of the persons dealt with are known. In the instant case, the repayment of advances from regular parties are identifiable and the assessee has explained the circumstances in which it was constrained to make the repayment of the loans in question in cash. That being so, the penalty imposed on repayment of advances from two persons should be deleted, hence we delete the penalty - Decided in favour of assessee.
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2020 (3) TMI 715
Penalty u/s 271 (1) (c) - Eligibility of Notice u/s 274 - vague notice - HELD THAT:- We find that in the notice issued by the AO under section 274, the AO is alleging that the assessee has concealed the particulars of his income or has furnished inaccurate particulars of such income. Hence it is seen that the allegation is vague Notice u/s 274 of I T Act should specifically state the grounds mentioned in section 271 (1) (c) i.e. whether it is for concealment of income or for furnishing of inaccurate particulars of income and clause q) specifically states that Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. Clause r) specifically states that the assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee as relying on MANJUNATHA COTTON AND GINNING FACTORY OTHS., M/S. V.S. LAD SONS, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2020 (3) TMI 714
Disallowance of interest expenses - HELD THAT:- Admittedly, the onus lies on the assessee to justify based on documentary evidence that the interest expenses was incurred on the money borrowed from the bank and other parties for the purpose of the business. But the assessee, in the present case has failed to do so. Assessee claimed to have received interest-free loan from M/s Master developers in the submission made before the learned CIT (A). However, the assessee to establish the genuineness of loan from M/s Master Developers has contended before the learned CIT (A) that it has paid interest on the money borrowed from MD. The relevant submission of the assessee before the learned CIT (A) that A.O. has disallowed the outstanding amount along with interest paid to Master Developers u/s. 41(1) - Thus, from the above it is transpired that the assessee has made contradictory submissions before the learned CIT (A) and has not furnished the required details of the interest expenses to justify that the interest cost was incurred in the course of the business. Thus in the absence of sufficient documentary evidence about the interest expenses on the borrowed fund whether the same was utilized for the purpose of business, we do not find any reason to interfere in the order of the authorities below. Hence the ground of Appeal of the assessee is dismissed. Unexplained cash credit under section 68 - liability on the assessee to provide the identity of the lenders, establish the genuineness of the transactions and creditworthiness of the lenders - HELD THAT:- The provision of section 68 of the Act fastens the liability on the assessee to provide the identity of the lenders, establish the genuineness of the transactions and creditworthiness of the lenders. These liabilities on the assessee were imposed to justify the cash credit entries under section 68 in the case of CIT Vs. Precision finance (p) Ltd [ 1993 (6) TMI 17 - CALCUTTA HIGH COURT] Admittedly the assessee has discharged its onus by furnishing the necessary details such as a copy of ledgers, confirmation, bank details, etc. in support of identity of the parties. There is also no doubt that the transaction for the loan received from M/s Master Developers was carried out through the banking channel as evident from the submission of the assessee before the ld. CIT-A - we find the assessee has discharged his onus regarding the identity and genuineness of the transactions. Thus, the ledger copies filed by the assessee without signature cannot be the basis of treating the impugned transaction of loan as unexplained cash credit under section 68 of the Act after ignoring the bank statement and confirmation filed by the assessee. Thus there is no doubt that the transaction of the loan was carried out through the banking channel. Therefore there cannot be any doubt about the genuineness of the transactions. Coming to the 3rd condition, i.e. creditworthiness of the parties, regarding this it is also pertinent to note that M/s Master Developers did not file the income tax returns for the assessment years 2008-09 to AY 2010-11 under section 139 (1) of the Act. But M/s Master Developers has filed the returns of income in response to the notice issued under section 148 of the Act, declaring the income which has been elaborated in the preceding paragraph. Indeed the returns were filed by the M/s Master Developers subsequent to the assessment order dated 30-03-2015 declaring the income which has been elaborated in the preceding paragraph. As such the income declared by the M/s Master Developers in its income tax returns were duly accepted by the Revenue. Though, these returns were filed by MD subsequent to the assessment in the hands of the assessee, but these returns in our considered view are crucial for determining the net worth of MD. These returns were filed before the learned CIT (A) and no doubt was raised on these returns. Assessee in respect of source of fund in the hands of the lender i.e. MD has furnished the sufficient documentary pieces of evidence such as bank statement, ledger copy of MD and Shri Rajnibhai Desai in the books of each other including the details of the income of MD which has been elaborated in the preceding paragraph. Therefore in our considered view, the assessee has discharged its onus imposed under section 68 of the Act. The assessee in the present case has duly explained the source of money received in its hands. The assessee is not answerable to justify the source of the source of the money received by it. Assessee has furnished the basic details about the loan taken from MD such as, confirmation, bank statement, source of money received by MD i.e. Rajni bhai Desai but the AO has not made any verification from such parties. As such, the case of the entire group was centralized and all the relevant documents of MD and Rajni bhai Desai were available befor the AO. But the AO has not made any reference to such documents and arrived at the conclusion that the impugned amount represents unexplained cash credit under section 68 of the Act. Assessee before the learned CIT (A) has furnished the copies of the income tax return filed by MD but the learned CIT (A) without considering the same insisted for financial statements of MD. If the assessee has not furnished the details of MD, then the CIT (A) could have easily collected the same from the office of the income tax Department. But he has not done so. Once the assessee has discharged primary onus by proving the identity of lender, genuineness of transaction and capacity to advance the loan then it is the burden of the revenue to prove it otherwise. Creditworthiness of MD cannot be doubted merely on the ground that the assessee failed to furnish the financial statement. As such, MD has declared the income in its income tax return as evident from the preceding paragraph which is running into crores of rupees and there was no defect of whatsoever was pointed out by the authorities below. - Decided in favour of assessee.
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2020 (3) TMI 713
Disallowance made u/s. 14A - assessee has not incurred any expenditure for earning tax free income - HELD THAT:- As relying on MAXOPP INVESTMENT LTD. [ 2018 (3) TMI 805 - SUPREME COURT] and STATE BANK OF PATIALA [ 2017 (2) TMI 125 - PUNJAB AND HARYANA HIGH COURT] No disallowance u/s. 14A is permissible in terms of Rule 8D where the assessee s are engaged in banking business. Since, the assessee is engaged in the business of banking, therefore, following the above decisions we hold that no disallowance can be made u/s. 14A and hence allow the assessee s appeal. The corresponding grounds of the assessee are allowed. Disallowance of claim u/s. 36(1(vii) - method of computation adopted by the assessee for claiming the deduction u/s. 36(1)(viia) - CIT(A) enhancing the disallowance of the assessee s claim u/s. 36(1)(vii) by substituting the computation of income from eligible business without pointing out any defects in method adopted by the assessee - HELD THAT:- A O while finalising the assessment did not agree with the method of computation adopted by the assessee for claiming the deduction u/s. 36(1)(viia) and he adopted a different method of computation. On appeal, the Ld. CIT(A) held that by adopting the different method, the AO arrived at the same figure of ₹ 90.08 crores as an allowable amount. Therefore, he held that the asseesee s appeal is purely academic having no tax impact. He also held that the computation of average aggregate advances made by the assessee bank s Rural Branches have not been properly computed in as much as some of the branches claimed as Rural Branch do not clearly fall within the definition of Rural Branch given in Explanation (ia) to section 36(1)(viia) - it was found that even after the advances made to such non Rural Branches are excluded from the average advances made by the Rural Branches claimed by the assessee, the claim of the assessee at ₹ 19,08,77,607/- would still be admissible. CIT(A) has not decided the issue on merits. Aggrieved against that decision, the assessee is on appeal before us. In the facts and circumstances, since the matter has been not dealt by the Ld. CIT(A), we remit this issue back to the Ld. CIT(A). The assessee shall lay all relevant material on which it relies in support of its contentions before the Ld. CIT(A) and shall comply with his requirements in accordance with law - CIT (A) after giving effective opportunity to the assessee /A O , as the case may be, decide the issue in accordance with law. Thus, the corresponding grounds of the assessee as well as Revenue are treated as partly allowed. Provision on leave encashment - HELD THAT:- CIT(A) apart from relying on the Supreme Court order in the case of M/s. Exide Industries Ltd. [ 2008 (9) TMI 921 - SC ORDER] held that the assessee s original claim was correct in as much as it had on its own disallowed the provision for leave encashment on retirement to the extent of ₹ 6,81,00,000/- and had claimed deduction on actual payment basis. Therefore, the Ld. CIT(A) held that there is no merit in the assessee s claim of additional sum - Therefore, we do not find any reason to interfere with the order of the Ld. CIT(A) and hence the corresponding grounds of the assessee are dismissed. Disallowance on stale draft account - Depositor Education and Awareness Fund Scheme, 2014 of the RBI guideline - HELD THAT:- AR correctly supported the order of the Ld. CIT(A) and relied on this tribunal decision in its case in THE KARUR VYSYA BANK LTD. VERSUS ADDL. COMMISSIONER OF INCOME TAX (VICE-VERSA) [ 2019 (3) TMI 1002 - ITAT CHENNAI] - Decided against revenue. Disallowance of ex-gratia payment - HELD THAT:- As relying on KARUR VYSYA BANK LTD. VERSUS ADDL. COMMISSIONER OF INCOME TAX (VICE-VERSA) [ 2019 (3) TMI 1002 - ITAT CHENNAI] we do not find merit in the Revenue s appeal, therefore, the corresponding grounds are dismissed . Disallowance on interest accrued on NPAs - HELD THAT:- As relying on M/S. VASISTH CHAY VYAPAR LTD. [ 2018 (3) TMI 56 - SUPREME COURT] and THE KARUR VYSYA BANK LTD. [ 2017 (4) TMI 566 - ITAT CHENNAI] held that interest income cannot be said to have been accrued to the assessee on the NPA accounts. Accordingly, we direct the AO to delete the addition
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2020 (3) TMI 712
Deduction u/s 80P - CIT(A) rejected the objections raised by the assessee and passed orders u/s 154 disallowing the claim of the assessee u/s 80P(2) - HELD THAT:- CIT(A) had initially allowed the appeals of the assessee and granted deduction u/s 80P(2) of the I.T.Act. Subsequently, the CIT(A) passed orders u/s 154 wherein the claim of deduction u/s 80P was denied, by relying on the judgment of The Mavilayi Service Co-operative Bank Ltd. v. CIT [ 2019 (3) TMI 1580 - KERALA HIGH COURT] The CIT(A) ought not to have rejected the claim of deduction u/s 80P(2) of the I.T.Act without examining the activities of the assesseesociety. The Full Bench of the Hon ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. V. CIT (supra) had held that the A.O. has to conduct an inquiry into the factual situation as to the activities of the assessee society to determine the eligibility of deduction u/s 80P of the I.T.Act. In view of the dictum laid we restore the issue of deduction u/s 80P(2) to the files of the Assessing Officer to examine the activities of the assessee and determine whether the activities are in compliance with the activities of a co-operative society functioning under the Kerala Co-operative Societies Act, 1969 and accordingly grant deduction u/s 80P(2) of the I.T.Act. Interest on the investments with Co-operative Banks and other Banks - Tribunal in the case of Kizhathadiyoor Service Co-operative Bank Limited [ 2016 (7) TMI 1405 - ITAT COCHIN] had held that interest income earned from investments with treasuries and banks is part of banking activity of the assessee, and therefore, the said interest income was eligible to be assessed as `income from business instead of `income from other sources . However, as regards the grant of deduction u/s 80P of the I.T.Act on such interest income, the Assessing Officer shall follow the law laid down by the Larger Bench of the Hon ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. V. CIT (supra) and examine the activities of the assessee-society before granting deduction u/s 80P of the I.T.Act on such interest income. Appeals filed by the assessee are partly allowed for statistical purposes.
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2020 (3) TMI 711
Capital gain computation - FMV determination - Computation of cost inflation index in reverse manner while computing long term capital gain on transfer of tenancy rights - HELD THAT:- Assessee himself has furnished a valuation report of a registered valuer determining the FMV of the tenancy right as on 1st April 1981. That being the case, the cost of acquisition for indexation benefit has to be given as per the statutory provision contained under section 48 r/w section 49 and section 55(2)(a) and section 55(2)(b) - Commissioner (Appeals) has allowed indexation benefit of the assessee in relation to the cost of acquisition in terms of the aforesaid statutory provisions. Assessee should not have any grievance against the aforesaid decision of learned Commissioner (Appeals). As regards assessee s claim of reverse indexation benefit, it is to be noted that no such method has been provided under the relevant statutory provisions. Therefore, reverse indexation method applied by the assessee being contrary to the statutory provisions cannot be accepted. As regards the decision of the Hon ble Gujarat High Court in Shantadevi Gaikwad (Dec.) [ 2012 (5) TMI 149 - GUJARAT HIGH COURT] relied upon by the learned Authorised Representative, the facts of the case clearly reveal that applicability of the reverse indexation in the facts of that case was accepted by both the assessee and the Revenue which is not the fact in the present case. In case of Jahanganj Cold Storage [ 2010 (4) TMI 765 - ITAT, AGRA] the facts would so that the FMV of the asset as on 1st April 1981, was not available. Therefore, reverse indexation method was applied. In any case of the matter, the Tribunal, Ahmedabad Special Bench, in Vijay R. Rathore v/s ITO [ 2006 (10) TMI 174 - ITAT AHMEDABAD] held that FMV as on 1st April 1981, has to be taken as cost of acquisition after allowing benefit of indexation. In the facts of the present case, the FMV of the asset transferred as on 1st April 1981 is available as per the valuation report of the registered valuer of the assessee. Therefore, when the FMV of the tenancy right as on 1st April 1981 is available, there is no valid reason to discard it and adopt the cost of acquisition as per reverse indexation method merely because it is more beneficial to the assessee. In view of the aforesaid, we do not find any merit in the ground raised by the assessee. This ground is dismissed. Disallowance of expenditure under section 14A of the Act r/w rule 8D - HELD THAT:- assessee is a professional and his main source of income is from carrying out legal profession. From the assessment stage itself it is the claim of the assessee that the entire expenditure debited to the Profit Loss Account is integrally connected to the professional activity and no part of it is attributable to the investments on which he has earned exempt income. It is seen, the Assessing Officer has rejected the aforesaid submission of the assessee in a mechanical manner. As per section 14A(2), the Assessing Officer has to record a satisfaction that the claim of the assessee with regard to the expenditure incurred for earning exempt income is incorrect having regard to the books of account. In the facts of the present case, the Assessing Officer has not made any discussion as to which part of the expenditure can be attributed towards earning of exempt income. Considering the fact that the assessee is engaged in full time profession and out of the income earned has made some investment in exempt income earning assets, it cannot be said that the assessee is carrying on his investment activity in an organized manner by employing men and infrastructure. Unless the Assessing Officer refutes assessee s claim of non incurring of any expenditure for investment activity with cogent reasoning, no disallowance under section 14A r/w rule 8D(2)(iii) can be made - We delete the disallowance made under section 14A r/w rule 8D. This ground is allowed.
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2020 (3) TMI 710
Penalty u/s 271 (1 )(b) - assessment was completed under Section 143(3) by the AO - HELD THAT:- The fact that the assessment has been competed under Section 143(3) of the Act is not in dispute. The Tribunal in the case of Logicladder Tech Pvt. Ltd. [ 1771379 ] has cancelled the penalty under section 271(1)(b) of the Act on the ground that the assessment was completed under Section 143(3). In the case of Globus Infocom Ltd [2016 (6) TMI 1304 - ITAT DELHI ] also, the penalty laid u/s 271(1)(b) of the Act has been deleted, where assessment is completed under Section 143(3) - Decided in favour of assessee.
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2020 (3) TMI 709
Disallowance of royalty expenses - allowable revenue expenses - HELD THAT:- We find merit in the plea of the assessee that under which one document which was available with the assessee was signed by the assessee but the original copy of agreement, which was available with the licensor bore the signatures of both the parties and was even dated 01.04.2005 - the said agreement needs to be considered for deciding the issue arising in the present appeal. The assessee had used the technical information by way of technical assistance rendered by the licensor to the assessee in India and consequently, the payment of royalty was for the purpose of carrying on the business of the assessee - claim of the assessee on sales of ₹ 17 crores as against the total sales of the year of ₹ 28 crores. The assessee had entered into the said agreement after the liberlisation by the RBI w.e.f. 24.06.2003 under the automatic route and accordingly, we hold that the said royalty has to be allowed as revenue expenditure in the hands of the assessee. It is only in Assessment Year 2005-06, the said payment of royalty has not been allowed in the hands of the assessee. In all the later years, starting from Assessment Year 2007-08, the royalty has been allowed as revenue expenditure in the hands of the assessee by the CIT(A) upto Assessment Year 2011-12. In Assessment Year 2012-13, the Assessing Officer vide order passed u/s 143(3) r.w.s 144C of the Act dated 09.03.2016 has allowed the payment of royalty as revenue expenditure. Even the TPO had not made any adverse reference in his order u/s 92CA(3) - appellate orders have been filed before us and following the principal of consistency also, the issue needs to be decided in favour of the assessee.
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Corporate Laws
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2020 (3) TMI 708
Oppression and mismanagement - Disqualification of 2nd to 28th Respondents (Appellants herein) for acting in an oppressive manner prejudicial to the interest of the public and the appointment of government nominees on the Board of '63 Moons Technologies Limited' 1st Respondent Company - HELD THAT:- The Respondent No. 1- '63 Moons Technologies Limited' and Respondent No. 2-Mr. Jignesh Prakash Shah or other Respondents who were functioning against one or other post in '63 Moons Technologies Limited' cannot say that they had no knowledge about 'National Spot Exchange Limited' who has 100% shareholding in NSEL. The report of the forensic audit conducted on 21st September, 2013 shows the damning facts and figures as to the real operations of 'National Spot Exchange Limited' (29th Respondent). It shows that they are not a commodity exchange, but an illegal financing scheme, and that no commodities were really in stock - thus, it cannot be stated that the Tribunal has not formed opinion that the action of the Company and particularly its subsidiary Company 'National Spot Exchange Limited' (29th Respondent) has been conducted in a manner prejudicial to the public interest. As there is a dispute about the dates of their appointment functioning as Directors of the Company as given by the Appellants and as recorded by the Tribunal, we are of the view that their matter should be reconsidered by the Tribunal to find out whether they were engaged after 31st July, 2013 or prior to the same. Appeal disposed off.
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Insolvency & Bankruptcy
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2020 (3) TMI 707
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- To prove that no disciplinary enquiry proceeding is pending against the proposed Insolvency Resolution Professional produced Form-2 with written communication as Annexure P-3. It proves that no disciplinary enquiry proceeding is pending against the proposed Insolvency Professional. To prove that the operational creditor is entitled to claim interest Ld. Counsel relied upon the copy of the invoices. It demonstrates that in case of default, the Corporate Debtor is liable for interest @ 18% per annum. In compliance of section 9(3)(b) of the code, an affidavit seen produced by way of supplementary affidavit and also produced copy of statement of Bank account in compliance of section 9(3)(c) of the Code. The copy of statement of Bank account, is marked as Annexure - P11. It proves that unpaid amount has not been paid as demanded by the Operational Creditor. This Application is fit for admission and accordingly is admitted - Application is admitted and moratorium is declared.
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2020 (3) TMI 706
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and default or not - HELD THAT:- The Applicant has established the existence of debt and default on the part of the Respondent. Since, the Respondent has nothing to offer as reply, this Tribunal initiates CIRP on the Respondent with immediate effect. Application admitted - moratorium declared.
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2020 (3) TMI 705
Directions sought for keeping the mortgaged assets out of liquidation of the 'Corporate Debtor' - section 60(5)(c) of the 'Insolvency and Bankruptcy Code, 2016' - whether the Appellant, who is a 'Secured Financial Creditor', while opting out of liquidation process under section 52(1)(b) of the 'I B Code' is barred from selling the secured assets to the 'Promoters' or its related party or the persons who are ineligible in terms of section 29A of the I B Code? HELD THAT:- It is clear that a Member, Shareholder/Promoter whoever is ineligible under section 29A cannot take over the 'Corporate Debtor' by way of arrangement and scheme under sections 230-232 of the Companies Act - From sub-section (4) of section 52, it is clear that secured creditor is entitled to enforce, realise, settle, compromise or deal with the secured assets in accordance with such law as applicable to the security interest being realised and to the secured creditor and apply the proceeds to recover the debts due to it. In terms of 'I B Code' the secured assets and the interest of the secured creditor to recover the proceeds of debts due to it has not been specifically prescribed, it does not make that the procedure prescribed under the 'SARFAESI Act, 2002' will be applicable to secured creditor to sale the proceeds. Even if section 52(4) is silent relating to sale of secured assets to one or other persons, the Explanation below section 35(1)(f) makes it clear that the assets cannot be sold who are ineligible under section 29A - If during the liquidation process assets cannot be sold to a person who is ineligible under section 29A, the said provision only applicable to the 'Liquidator' but also to the 'secured creditor', who opt out of section 53 to realise the claim in terms of section 52(1)(b) read with section 52(4) of the 'I B Code'. Section 52 does not create any right in favour of one or other 'secured creditor' to realise its security interest in the manner specified in the said section where the 'secured creditor' realises security interest under clause (b) of section 52 is required to inform the liquidator of such security interest and identify the assets subject to such security interest (section 52(2) of the I B Code). Before security interest is realised by the 'secured creditor' under section 52, the 'Liquidator' is required to verify security interest and permit the secured creditor to realise only such security interest, the existence of which may be proved either by the records of such security interest maintained by an information utility or by such other means as may be specified by the Board (See section 52(3) of the I B Code). If it comes to the notice of the 'Liquidator' that a secured creditor intends to sale the assets, the person who are ineligible person in terms of section 29A, it is always open to reject the application under section 52(1)(b) read with section 52(2) and (3) of the 'I B Code'. There are no merits in the appeal - appeal dismissed.
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2020 (3) TMI 704
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - time limitation as applicable to Right to Sue - HELD THAT:- While going through the documents Tribunal observed that based on the balance sheet of corporate debtor as on 31.12.2006 filed an application under section 15(1) of Sick Industrial Companies Act, 1985 before BIFR in January 2007 which was admitted as case no. 09/2007 and was pending before BIFR till the SICA Act,1985, was repealed and in view of this the applicant could not take any steps against the corporate debtor for recovery. Further SICA has been repealed by way of a notification dated 25.11.2016 published by the Government of India with effect from 01.12.2016 and thus the BIFR established under the provisions of the SICA was also abolished. As per section 22(5) of SICA (since repealed), period from 15.01.2007 to 30.11.2016 is to be excluded for the purpose of limitation. Between 2004 to 2007 it is also seen that dispute settlement was arrived, however the same stood withdrawn subsequently. Thus Right to Sue Survives and the present petition being filed in December 2018 is within limitation, being within three years from the date, the cause of action for recovery proceedings arose. This Tribunal is inclined to admit this petition and initiate CIRP of the Respondent - application admitted - moratorium is declared.
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2020 (3) TMI 703
Maintainability of application - initiation of CIRP - corporate debtor committed default in repayment of debt - existence of debt and dispute or not - HELD THAT:- According to the Ld. Counsel for the financial creditor the loan sanction letter also issued to the corporate debtor on 23-11-2013 and to prove that produced Annexure F, to prove that the debt due to the financial creditor. The information utility certificate not at all produced however, produced statement of bank account. So also produced the Form 26AS of corporate debtor to show that TDS has been deducted which shows that the corporate debtor has deducted tax for the financial years 2013, 2014 and 2018 - The above said evidence led on the side of the financial creditor proves that the amount of ₹ 25,99,296.85 is due as claimed by the financial creditor and the corporate debtor does not dispute the liability and there is no challenge as to the confirmation of account relied upon by the financial creditor. Nothing shows that the claim is barred by limitation and being satisfied that there is no disciplinary proceedings pending against the proposed resolution professional. The application filed under section 7 of the Code is otherwise complete and it is liable to be admitted. Application admitted - moratorium declared.
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Central Excise
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2020 (3) TMI 702
Cash refund of unutilized CENVAT Credit - closure of factory - period April 2011 to October, 2011 - main argument of the appellant is that during the period April, 2011 to October, 2011, since they defaulted in making monthly payment of duty, consequently, Range Superintendent directed them to discharge duty through PLA without utilization of CENVAT Credit. Hence, the entire duty amount was later paid through cash in compliance with the Rule 8(3A) of the Central Excise Rules, 2002. HELD THAT:- There are no merit in the contention of the appellant inasmuch as the present refund claim arose four years after the compliance of the Rule 8(3A) of the Central Excise Rules, 2002 by discharging the duty in cash for which a separate proceeding has been initiated by claiming refund in cash before the adjudicating authority, which on rejection, appeal is pending before the learned Commissioner (Appeals) as claimed by the appellant. The present refund claim in cash arose as the CENVAT Credit amount was lying in balance as on date of closure of the factory. Appeal dismissed.
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2020 (3) TMI 701
Refund of Excise Duty - differential freight charges collected from buyers during the period 01.04.2008 to 18.12.2008 - HELD THAT:- The place of removal is the factory gate and any profit earned by the appellant on account of transportation charges cannot form part of assessable value, therefore whatever excise duty paid by the appellant on account of profit earned is not duty and the same is to be refunded to the appellant. Similar view taken in the case of COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, TIRUPATI VERSUS MANCHUKONDA PRAKASHAM CO. (NOW M/S. MANCHUKONDA PRAKASHAM INDUSTRIES INDIA PVT. LTD.) [ 2015 (5) TMI 1002 - CESTAT BANGALORE] where it was held that There is plethora of decisions of the Tribunal holding that such excess collection on account of freight cannot form part of the assessable value of the goods unless the Revenue produces evidence to show that value of the goods was collected in the garb of the freight charges. There is no such evidence available much less any allegation in the present appeal. Appeal allowed - decided in favor of appellant.
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2020 (3) TMI 700
Refund of excise duty - duty paid at enhanced rates as per Notification No. 24/2014 dt.02.12.2014 - subsequent amendment in the notification - HELD THAT:- Both the conditions mentioned in section 5A(5) have to be fulfilled for any notification to come into force. In this case, the second condition was not fulfilled during the relevant period and therefore, the exemption notifications had not come into force. Consequently, the appellants were not required to pay duty at the enhanced rate during the relevant periods and therefore, any excess duty which they paid was refundable. The order of the lower authority sanctioning the refunds was correct and it was incorrectly set aside by the first appellate authority - Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2020 (3) TMI 699
Vires of Notification dated 15th February, 2010 - sub-section (1A) of section 3 of the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001 - in the impugned notification, State Government while amending the schedule added Entry 9 pertaining to stainless steel plates, flats, sheets and coils and specified the maximum rate of tax as four percent. It is the case of the petitioners that while the State Government reduced the applicable rate of tax under the VAT Act on stainless steel flats and sheets to 1% it did not correspondingly reduce the rate of entry tax applicable to the same goods and thus, while the rate of tax under the VAT Act for stainless steel flats and sheets is reduced to 1%, the rate of entry tax on the same goods continues to be four percent. HELD THAT:- The validity of the Entry Tax Act was challenged before this court in the case of EAGLE CORPORATION PVT. LTD. VERSUS STATE OF GUJARAT AND OTHERS [ 2006 (10) TMI 395 - GUJARAT HIGH COURT] , on which heavy reliance has been placed by the learned advocate for the petitioners. In the said case, this court considered as to whether by enacting the Entry Tax Act, is there any discriminatory treatment and/or such levy is discriminatory? In the said context, this court while upholding the validity of the Entry Tax Act held that considering the Statement of Objects and Reasons in juxtaposition with the provisions of the Entry Tax Act, it cannot be said that the provisions of the Entry Tax Act and consequent levy of the entry tax on the specified goods are violative of Article 304 of the Constitution of India. This court further held that entry tax is not discriminatory between the goods so imported and goods so manufactured, produced in a local areas and the challenge to the constitutional validity of the Entry Tax Act and the levy of entry tax thereof fails - While upholding the validity of the provisions of the Entry Tax Act, it has been held by this court that when there is a reduction in the effective rate of sales tax under the erstwhile Gujarat Sales Tax Act, there will automatically be a corresponding reduction in the maximum rate of entry tax prescribed in the schedule so that the goods brought from out side the State are not discriminated against the goods manufactured within the State, from the point of view of ultimate burden of tax. Thus, in absence of any special circumstances pointed out by the State Government either in its affidavit or during the course of the submissions made by the learned Assistant Government Pleader, it can be safely concluded that neither there exist any circumstances for redressal of an inequitable situation nor was there any sufficient and reasonable cause which weighed with the State Government for removing the discrimination between the goods entering into the local areas from any place outside the State. Clearly, as is discernible from the aforesaid well established principles, the Entry Tax Act is aimed at achieving a level playing field so as to obviate any chance of discrimination. Further, considering the provisions of the Entry Tax Act, in juxtaposition with the provisions of the VAT Act further read with the provisions of Article 304(a) of the Constitution of India, it is abundantly clear that if rates of a specified goods are reduced by the State Government in exercise of the powers conferred under the VAT Act, there has to be a corresponding reduction of the rates of entry tax by the State Government by issuing a notification under the Entry Tax Act; proportionately reducing the rate of tax. Not doing so and continuing with the notification specifying the rate of entry tax on the higher side as compared to the rates specified by the State Government in the notification under the VAT Act, would be in the teeth of the aforesaid well established principles enunciated by this court in the aforesaid judgment. The continuation of the notification dated 15th February, 2010 prescribing the rate of tax as 4%, after the issuance of the notification dated 3rd October, 2012 is discriminatory and is directly hit by the provisions of Article 304(a) of the Constitution of India and thus, cannot be sustained. Thus, the notification dated 15th February, 2010 insofar as it prescribes the rate of tax as 4% is illegal and not in sync with the provisions of the Entry Tax Act so also the VAT Act and hence, it is impermissible to the State Government to charge tax in excess of the rate of tax prescribed under the notification dated 3rd October, 2012. Since the notification dated 15th February, 2010, has been held to be illegal and bad in law insofar as it prescribes a higher rate of entry tax vis- -vis the rate of tax provided in the notification dated 3rd October, 2012 issued under the provisions of the VAT Act, the consequential notices dated 23rd January, 2017 (Annexure 'B' collectively) also cannot be sustained. The impugned notification dated 15th February, 2010 (Annexure A) to the extent it prescribes a higher rate of entry tax vis- -vis the rate of tax provided in the notification dated 3rd October, 2012 issued under the provisions of the VAT Act is hereby held to be illegal and bad in law - petition allowed.
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2020 (3) TMI 698
Valuation - freight and pumping charges on the ready mix cement concrete sold by the assessee, billed separately - to be included in taxable turnover or not - HELD THAT:- Reliance can be placed in the case of M/S. LARSEN TOUBRO LIMITED VERSUS STATE OF TAMIL NADU REP. BY THE JOINT COMMISSIONER (CT) [ 2019 (1) TMI 711 - MADRAS HIGH COURT] where the Tribunal committed a serious error in deciding the questions against the assessee - the issue decided in favor of assessee. Sale in the course of import exempted under section 5(2) of the Central Sales Tax Act, 1956 - HELD THAT:- The issue is covered by the decision of the Supreme Court in the case of INDURE LTD. AND ANOTHER VERSUS COMMERCIAL TAX OFFICER AND OTHERS [ 2010 (9) TMI 883 - SUPREME COURT] where it was held that appellant-company was entitled to claim the benefit of section 5(2) of the act in relation to the import of ms pipes from south korea - thus, the issue is covered in favour of the assessee, because the sales in course of import taken place in the course of import and was inextricably related to the import itself and therefore the same has been rightly exempted by the tribunal. Imposition of penalty under section 9(2-A) of the Central Sales Tax Act, 1956 - HELD THAT:- Since the imposition of tax itself has been set aside by the tribunal and has been upheld, consequential penalty imposed on the assessee has been rightly deleted by the tribunal. There are no merit in the present case filed by the Revenue Department - appeal dismissed.
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