TMI Tax Updates - e-Newsletter
March 23, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Renting of immovable property service provided by National Dairy Development Board to an educational institute would be exempted (if NDDB qualifies as ‘governmental authority’).
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GST:
Input Tax Credit (ITC) - National Dairy Development Board (NDDB) can be considered as financial institution for the purpose of availing credit to the extent of fifty percent of input tax credit.
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GST:
Levy of GST - grant/ Donation - activities and work related to sanitation - charitable activities or not - Scope of definition under para 2(r) of the exemption Notification No.12/2017-Central Tax (Rate) - since the activities are relate to preservation of environment, they are charitable in nature - benefit of exemption allowed.
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Income Tax:
Mandation of e-filling of appeal - procedures are meant to advance justice and not to stifle the same. The new system of e-filing of appeals before learned CIT(A) were introduced by Revenue only wef 01.03.2016 and the assessee filed his appeal before learned CIT(A) on 12.04.2016 manually but the said appeal was filed within time limit prescribed u/s 249(2) of the 1961 Act. - Appeal restored before CIT(A)
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Income Tax:
Deemed dividend u/s 2(22)(e) - assessee firm is neither a registered nor beneficial shareholder - advanced received from company - Two partners of firm holding shares in the lender company - Dividend is not taxable in hand of firm u/s 2(22)(e).
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Income Tax:
Powers of CIT(A) u/s 251(1)(a) - CIT(A) deleted addition related to share capital but hold that share premium is taxable u/s 56(2)(viib) - AO in the assessment order has neither discussed this issue nor made any addition u/s 56(2)(viib) - Addition beyond power of CIT(A)
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Income Tax:
Addition of unexplained cash credit u/s 68 - bank account can’t be loosely called as books of account u/s 68 - ITAT can’t covert the addition from section 68 to section 69A - lack of cross examination and violation of principle of natural justice results is total nullity of the entire addition.
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Income Tax:
Entitlement to deduction u/s 80IA/80IB - "Manufacture or production" - conversion of Paddy into Rice - the process of dehusking of Paddy into Rice with the aid of labour and machinery is definitely an industry activity undertaken by the Assessee.
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Income Tax:
Reopening of assessment u/s 147 - repeat (2nd) Notice under Section 148 - two alleged lacunae or irregularities could not be held to be a sufficient reason for issuing a repeat Notice u/s 148
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Income Tax:
Taxability of interest on non-performing assets (NPA) u/s 43D - Interest received during the year - when it accrued, was exempt but interest income was embedded in the profit / loss account - subsequently can't be bring in tax net u/s 43D.
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Income Tax:
Gains arising from transfer of shares held for a period of less than 30 days - buying and selling shares of sizable volume and value - busniss income or capital gain - in totality of the facts and circumstances assessee was not purely an investor in shares - taxable as business income.
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Income Tax:
Compensation received on termination of contract - income u/s 28(ii)(c) - The true character of the relationship from the agreement would have to be gathered from reading the document as a whole - capital receipt in nature.
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Customs:
Renewal of CHA License - The noticed violation on the part of the appellant and the imposed penalty upon him is sufficient for the Principal Commissioner or Commissioner of Customs, whom the application for renewal of licence was made, to reject the same.
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Indian Laws:
Dishonor of cheque - the dishonour of the cheque of the petitioner was not due to any fault on the part of the petitioner. It was an error on the part of the Bank. The petitioner cannot be mulcted with a torturous procedure as was done in this case by the respondents.
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Service Tax:
Demand of service tax miscellaneous income - Scrutiny of Balance Sheet - Revenue failed to identify the services for which the said amount was received and examined other aspects such as abatement and exemption - demand set aside.
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Central Excise:
Interest on delayed refunds - revenue would be obliged to pay under interest for the delayed refund as contemplated u/s 11BB even for the delayed refund of the Unutilized CENVAT credit under Rule 5 of the CENVAT Credit Rules.
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Central Excise:
CENVAT Credit - ISD registration (ISD) - CENVAT credit on input services pertaining to dealer premises and unregistered premises cannot be said in relation to manufacture of final product and CENVAT credit is not available to the appellant as per Rule 2(l) of CCR, 2004.
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Central Excise:
Valuation - inclusion of pre-loaded operational software in assessable value - Central Excise Duty is payable on the assessable value arrived for the computer sets after including the value of software. Any service tax to be paid under ITSS services for Royalty has no connection or bearing with the liability to discharge Excise Duty.
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Central Excise:
Clearances to EOUs and SEZs - Re-warehousing certificates - In the entire chain of events officers’ at the consignees end would certainly be in a position to confirm the receipt of the goods or otherwise from their own records as well as the records of the consignees.
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Central Excise:
CENVAT Credit - denial of credit for the reason that the service provider has not paid the service tax to the Central Government - The cause of the show cause itself is without any legal or factual basis.
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Central Excise:
CENVAT Credit - input services - all the input services in question incurred for the upkeep and maintenance of the colony is an essential business expenditure and accordingly, Cenvat Credit is allowable
Articles
Notifications
Customs-
24/2019 - dated
20-3-2019
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Cus (NT)
Exchange Rates Notification No.24/2019-Custom(NT) dated 20.03.2019
GST - States-
G.O.Ms.No. 17 - dated
13-2-2019
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Telangana SGST
Seeks to amend Notification No. G.O. Ms No. 21, Dated. 22-01-2018
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G.O.Ms.No. 16 - dated
13-2-2019
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Telangana SGST
Waiver of the late fee for late filing of Form GSTR
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6/2019 - dated
12-2-2019
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Telangana SGST
Extension of time limit for furnishing the return in FORM GSTR-7
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G.O.Ms.No. 13 - dated
9-2-2019
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Telangana SGST
Seeks to amend Notification G.O.Ms No. 186, Dated 05-09-2018
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G.O.Ms.No. 11 - dated
7-2-2019
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Telangana SGST
Seeks to amend Notification No. G.O.Ms No. 210 dated 29-09-2018
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5/2019 - dated
3-1-2019
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Telangana SGST
Supercession Notification No. 23/2018-State Tax, dated 30-10-2018
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4/2019 - dated
3-1-2019
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Telangana SGST
Seeks to amend Notification No. 18/2018 – State Tax, Dt. 30-10-2018
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3/2019 - dated
3-1-2019
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Telangana SGST
Seeks to amend Notification No. 14/2017 – State Tax, Dt. 16-08-2018
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2/2019 - dated
3-1-2019
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Telangana SGST
Seeks to amend Notification Nos. 17/2017 – State Tax, Dt. 22-09-2017; and 4/2018 – State Tax, Dt. 29-03-2018
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01/2019 - dated
3-1-2019
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Telangana SGST
Seeks to amends Notification Nos. 7/2017 – State Tax, Dt. 19-08-2017 and notification No. 33/2017 – State Tax, Dt. 17-11-2017
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G.O.Ms.No. 1 - dated
2-1-2019
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Telangana SGST
Telangana Goods and Services Tax (Thirteenth Amendment) Rules, 2018.
Income Tax-
26/2019 - dated
20-3-2019
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IT
Central Government notified the Housing and Urban Development Corporation Ltd. (HUDCO), New Delhi u/s 194A
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25/2019 - dated
19-3-2019
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IT
U/s 10(46) of the Income-tax Act, 1961 Central Government notifies ‘Visakhapatnam Special Economic Zone Authority’, an authority constituted by the Central Government, in respect of the specified income arising to that authority
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24/2019 - dated
19-3-2019
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IT
U/s 10(46) of the Income-tax Act, 1961 Central Government notifies ‘Andhra Pradesh Electricity Regulatory Commission’, a Commission constituted under the Andhra Pradesh Electricity Reforms Act, 1998, in respect of the specified income arising to that Commission
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23/2019 - dated
19-3-2019
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IT
Amendment in Notification No. 17/2012 dated 11th May 2012
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2019 (3) TMI 1121
Levy of GST - provision of service or not - activities and work related to sanitation - charitable activities or not - Services provided to (NGO) Non-profit organization registered as Trust having registration U/s. 12AA of Income Tax Act - grant/ Donation received towards performing specific service towards preservation of environment as specified in N/N. 12/2017 - Held that:- The notification benefit of Nil rate is available to services by an entity registered under Sec.12 AA of Income Tax Act,1961 by way of charitable activities. Though the applicant is registered under Sec.12 AA of Income Tax Act, 1961, the notification benefit would be available only if the applicant s activities fell within the scope of charitable activities as defined in the said Notification - The dictionary meaning of preservation is to keep up; to maintain; to keep safe from injury. Thus preservation of environment would cover both protection of environment (keeping it safe from destruction ) and conservation of environment (optimal use of natural resources and allowing them to regenerate or sustainable consumption of natural resources i.e. meeting the needs of present generation without compromising the needs of the future generations (Brundtland Report)). It is a well known fact that flush toilets waste large quantities of water and that recycling of human excreta would reduces pollution of the environment. Therefore the applicant s activities are covered by the activity specified under Para 2(r)(iv) of the Notification relating to preservation of environment. Applicant is also engaged precisely in activities relating to creation of awareness of sanitation which is an essential ingredient of preventive healthcare. Therefore the applicant s activities are also covered by the activities specified under Para 2(r)(B) of the Notification, though the applicant himself has not raised any argument in this regard. Thus, these activities can be considered as charitable activities and within the scope of Charitable activities as defined in 2 (r) of the exemption Notification No.12/2017-Central Tax (Rate) dated 28/06/2017 of the GST Act.
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2019 (3) TMI 1120
Financial Institution or not - input tax credit - Whether NDDB can be considered as financial institution for the purpose of availing credit to the extent of fifty percent of input tax credit, as prescribed in Section 17 of CGST Act, 2017? - Held that:- The objectives of NDDB include promoting dairy and other agriculture based industries and to fulfill its objectives NDDB undertakes the activities in the form of technical or administrative assistance and financial assistance. Further, NDDB Act, 1987 is found to have specifically authorized NDDB to undertake the activity of financing including lending and borrowing money for diverse purpose. According to Section 16 of the NDDB Act the applicant provides finance/lends money solely to dairy co-operatives in a similar manner as is done by a banking company or a financial institution in general parlance. Section 17(4) of the CGST Act, 2017 says that a banking company or a financial institution including a non-banking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances shall have the option to either comply with the provisions of section 17(2), or avail of, every month, an amount equal to 50% of the eligible input tax credit on inputs, capital goods and input services in that month - It would be seen that as per the activities performed by the applicant, NDDB can be considered as a financial institution as they seem to be satisfying the requirement as provided in Section 45-I(C) of the RBI Act. Besides, NDDB is also declared as a ‘public of financial institution’ under the company Act vide Notification No. SO 219 (E) dated 23.02.2004. Thus, NDDB can be considered as ‘financial institution’ for the purpose of availing credit to the extent of fifty percent of input tax credit, as prescribed in Section 17 of CGST Act.
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2019 (3) TMI 1119
Governmental Authority or not - body set up by an Act of Parliament - condition of holding ninety percent control and to carry out function mentioned under Article 243W - Whether renting of immovable property service provided by NDDB to an educational institute would be exempted under Sl. No. 4 of Notification No. 12/2017-Central Tax (Rate)? Held that:- The exemption shall be available to the applicant if the applicant fulfils the common condition namely with ninety per cent or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution . As it is not submitted by the applicant as to whether it fulfills the said condition, if in the case of the applicant, this condition is fulfilled, then it attract the benefit of the exemption, otherwise not. Renting of immovable property service provided by National Dairy Development Board (24AADCN2029C1Z5) to an educational institute would be exempted under Sr. No. 4 of Notification No. 12/2017-Central Tax (Rate) and corresponding State Tax Notification, if it qualifies as governmental authority .
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Income Tax
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2019 (3) TMI 1127
Reopening of assessment u/s 147 - non furnishing of reasons to believe - denial of natural justice - Allegation that Request for reasons was not made within 30 days - non disposal of objections - seeking extension of time for production of requisite documents ignored - alternative remedies - writ jurisdiction by the High Court - HELD THAT:- Admittedly reasons for re-opening of assessments have not be furnished to the petitioner. Object of furnishing reasons was to enable the petitioner to file objections regarding re-opening and then on filing of objections, the petitioner had the right of hearing before the A.O. Then, A.O. after considering the objections and after hearing the petitioner was to deal with the objections by passing a speaking order, same has not been done. In addition thereto, the petitioner while responding to the Notices under Sections 143(2) and 142(1) of the Act had requested for extending time for production of requisite documents up to 04.03.2019 for the reasons as detailed therein same too has been ignored. While ignoring, to follow statutory requirements, filing objections and hearing, impugned assessment and demand orders have been passed which in turn would suggest that the respondent has not only breached the principles of natural justice but also breached the procedure which was required to be followed for decision (reassessment). There has been a breach of principles of natural justice and also the procedure, required to be adopted for passing assessment orders on reassessment and demand orders, have not been followed. Therefore, an exceptional case for invoking power under Article 226 of the Constitution of India. Both the orders being unsustainable, to ask the petitioner to avail remedies of appeal, matter will unnecessarily get protracted. While holding petitions maintainable, we allow the same and set aside all the impugned assessment and demand orders. A.O. shall furnish reasons for re-opening of assessment of income for the said assessment years so as to enable the petitioner to file objections and after hearing the petitioner, to pass speaking orders then to proceed with the assessment and to pass appropriate orders as shall be warranted. - Decided in favour of assessee
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2019 (3) TMI 1126
Reopening of assessment u/s 147 - original assessment u/s 143(3) - notice issued beyond the period of four years from the end of relevant assessment year - no failure on the part of the assessee to disclose truly and fully all material facts - three grounds of notice, prior period expenses, non recognition of income & warranty provision - HELD THAT:- On both grounds contained in the reasons recorded by the Assessing Officer namely the prior period expenses as well as the provision for warranty became subject matter of the scrutiny during the original assessment. Thus, on both grounds no failure on the part of the assessee to disclose truly and fully all material facts as well as scrutinized grounds, the impugned notice based on these grounds cannot be sustained. Revenue Recognition - Difference between the bill amount and the income reflected in the accounts of the assessee - we may notice that in the books of accounts, the assessee had made full disclosure with respect to the same which also provided the ground for such treatment given by the assessee to the receipts. There was no failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment. Reference to first explanation to Section 147 of the Act in this respect, would not aid the revenue. In the order of assessment, however, there was no addition made on this ground. Clearly, therefore, the Assessing Officer through scrutiny assessment agreed that the assessee on the accounting treatment given by the assessee to such billed amount and on that ground also, the Assessing Officer now cannot press the ground in service to sustain the impugned notice of reassessment. - Decided in favour of assessee.
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2019 (3) TMI 1125
Reopening of assessment u/s 147 - original assessment u/s 143(3) - unexplained investment made by a Mauritius based Company towards share allocation money in Compulsory Convertible Cumulative Preference Shares - genuineness and creditworthiness of the foreign entity - information received from the investigation wing - beyond limitation - no failure on the part of the assessee to declare fully and truly all material facts - no new or additional material - desire to carry out enquiries - HELD THAT:- The reasons only refer to a simple piece of information supplied to the Assessing Officer by the Investigation Wing, stating that the assessee-company had received share application money of ₹ 49.99 Crores from Firstland. To reiterate, this information is nothing which the Assessing Officer did not have at his command when the Assessment was framed. The reasons do not specify that the information supplied to the AO by the Investigation Wing, suggested that such investment was non-genuine. AO refers to the requirement of verifying the genuineness of investor and requirement of further investigation. These observations in para 3 of the reasons, would not further the case of the Revenue, these being no information with the Assessing Officer, prima facie, indicating that the investments were not genuine. The investigation into the source of genuineness and creditworthiness of the investor company would fall within the relam of fishing enquiries, which is wholly impermissible in law in the context of the reopening of the assessment. For such reasons, impugned notice is set aside. - Decided in favour of assessee.
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2019 (3) TMI 1124
Revision u/s 263 by CIT - possible view - Benefit of exemption u/s 54F - LTCG - investment in two residential flats - whether subject flats form a single residential unit? - arriving at possible view - HELD THAT:- Tribunal had, after discussing three aspects namely, whether the subject flats formed one single residential unit and with respect to the claim of the respondent that he had invested in the Capital Gains Account Scheme, and the further claim of the respondent that he had invested money in the Alibaug property had confined the remand only to the last two aspects. The claim under Section 54F was not remanded for re-consideration as it had already been considered for AY 2008-2009. This is evident from perusing paragraph 12 of the Tribunal's order. Consequently, the Tribunal did not entertain the appeal of the Revenue, with respect to the challenge relating to the flats and the claim for deduction under Section 54F. The learned Single Judge also correctly held that the view taken by the Assessing Officer in the order dated 31.03.2014, was a possible view and therefore cannot be categorized as a erroneous view. In the present case, the Assessing Officer in the order dated 31.03.2014, had only, as rightly pointed out by the learned Single Judge taken a possible view and this cannot be projected or categorized as an erroneous view. The learned Single Judge had observed that the respondent was unnecessarily burdened by the fact that the subject flats were purchased by two separate sale deeds and had separate electricity meter connections. The issue at hand, before the Assessing Officer, in my opinion, was whether or not the subject flats form a single residential unit. It must be emphasised that in reaching such conclusion the Assessing Officer not only had the benefit of examining the survey report, but also all other connected documents, particularly, the materials provided by the Housing Society. The documents convincingly point to the fact that flats Nos.607 and 612 were conjoined into one single residential unit. In view of the reasons stated above, we find no reason to interfere with the order of the learned Single Judge. The issues raised on facts have been finally decided. A possible view had been arrived at stating that there was only one single residential unit. The appellant herein had not provided any additional material for us to hold a contrary view to the view held by the learned Single Judge. - Decided against revenue
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2019 (3) TMI 1123
Reopening of assessment u/s 147 - repeat (2nd) Notice under Section 148 - period of limitation - any fresh material in possession of the AO suggesting escapement of the income at the time of issuance of fresh notice - reasons for issuing fresh or subsequent reassessment Notice - sale of land claimed by to be agricultural land located at Muthukadu Village which is beyond 8 km from city limits - HELD THAT:- The reassessment notice said to have been issued on 16.08.2002 for the Assessment Years 1997-98 and 1998-1999 and the alleged reason given by the successor-in-office viz., K.Rajaram is said to be that the brochure of M/s.Shoreline (P) Ltd., came on the record of the Assessing Authority only on 19.03.2001 when the Assessee appeared pursuant to the first notice under Section 147 of the Act which is said to be issued on 25.01.2001. But, since the earlier recorded reasons referred to such Brochure it was a defective notice and which defect could be cured according to the subsequent authority and there was thus a need to issue a fresh notice under Section 147 of the Act. Second reason recorded in the computer sheet was recorded after the issuance of the notice itself, though the Assessee had already filed its return in the same Circle on 28.11.1997 and assessment under Section 143 of the Act was completed on 29.01.1998 and therefore the said second reason was recorded after issuing notice under Section 148 of the Act which was not valid. Having regard to the submission of Revenue, we are rather dismayed with the manner in which the two authorities, of the Department have acted while invoking their substantive powers of re-assessment under Sections 147/148 of the Act. The said powers under the said Act are invoked only subject to the legal restrictions and limitations prescribed in those provisions and at the core of such power of reassessment lies the reason to believe that the income has escaped assessment in the hands of the Assessee for the assessment year in question. These two alleged lacunae or irregularities could not be held to be a sufficient reason for issuing a repeat Notice under Section 148 of the Act. Such repeat and subsequent Notice indicates that either the previous officer Mr. S.Ganapathy did not even actually record any reason prior to or on 25.01.2001 or the Successor-in-office Mr.Rajaram was only trying to cover up the so called lacunae or defects. Both are impermissible situations in law, for invoking powers under Sections 147 and 148 of the Act. We are constrained to observe that the reassessment powers were invoked by assessing officers very casually and lightly not adhereing to the legal restrictions for exercise of such powers under Section 147/148 of the Act. The Assessee, in these circumstances, when served with the repeat or second notice for the same Assessment years, was compelled to approach the Court of law and seek protection against the the second reassessment Notice for the very same Assessment Year 1997- 1998. The learned single Judge in our opinion was absolutely justified in quashing the notice under Section 147 and 148 of the Act for Assessment Year 1997-1998.- Decided in favour of assessee.
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2019 (3) TMI 1122
Assessment u/s 153A - Unexplained investment - property purchased with joint owners - presumption under section 132(4A) read with section 292C - property transaction was executed with portion paid in cheque and rest in cash - Seized document was found at a place other than the place where the search on the assessee has been carried out - HELD THAT:- The assessee, along with Mrs. Aroma Jain, has purchased a property from M/s Chawla Buildwell Pvt. Ltd. Thus, there can indeed be an inference as to that what is recorded in the seized document may be relatable to property purchased. However, to reach such a conclusion, one needs to undertake verification, which, unfortunately, has not been done in this case. We also note from this document that it is not clear as to how the AO worked out the figure of ₹ 2,60,00,000/- as being the value of total consideration. It is equally surprising that the AO did not make any enquiry from the seller. Nor any action apparently has been taken against the seller. We are also in agreement with alternative contention of the AR that this property has been purchased in joint-names and, therefore,e the entire addition cannot be made in the hands of the assessee unless the AO is able to bring on record any material to substatntiate that the entire ‘money’ was paid by the assessee. All these issues were required to be examined by the lower authorities which both the AO and the Ld. CIT (A) has failed to consider. At the same time, we also note that the contention of the Ld. AR that the presumption under section 132(4A) read with section 292C is available only against the person from whose possession or control such document is found is also correct. From the facts stated hereinabove, apparently, it appears that the seized document was found at a place other than the place where the search on the assessee has been carried out. Thus, in these circumstances, it cannot be said that this document was found in possession or control of the assessee. If that be so, then the presumption under section 132(4A) will not be available In case such document was not found in the course of the search on the assessee then the same cannot be the subject matter for addition in assessment proceeding under section 153A of the Act. Since, the facts on record are not clear and all the issues as stated hereinabove have not been taken into due consideration by the lower authorities, we deem it fit to set aside the order passed by the authorities below to the file of the AO with a direction to examine each of the above issues - Appeal of the Revenue stands allowed for statistical purposes.
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2019 (3) TMI 1118
Addition of unexplained cash credit u/s 68 - return was selected for scrutiny under CASS - applicability of section 68 to share sale proceeds on mere basis of stated investigation wing inputs to AO and without books being available before AO and Ld CIT(A) qua share sale transaction - serious violation of principle of natural justice - HELD THAT:- Credit in bank account simply or any other raw information available to AO can t be loosely called as books of account u/s 68 of the Act. After the detailed analysis of various ingredients of section 68 no hesitation to accept the jurisdictional plea raised that invocation of section 68 in extant facts sans valid and proper books of account of assessee is invalid and accordingly addition made by AO as sustained by Ld CIT(A) is held to be incorrect and reversed. Signification of correct assumption of jurisdiction is must. ITAT at this belated stage can t improve the order of AO and covert the addition from section 68 to section 69A etc. Even otherwise provisions of section 68 of the Act has been held can t be applicable to mere share sale which is not akin to receipt of gift, loan, share capital, advance etc AO directed to delete the additions made in captioned appeals in so far as it relates to share sale proceeds and alleged commission portion is concerned. Impact of cross examination - denial of natural justice - HELD THAT:- We strongly rely on the following string of decisions of various courts to hold that when revenue strongly relies on statements of certain persons to implicate an assessee, principle of cross examination has to invariably followed if truth and justice needs to be found out. Thus on the issue of lack of cross examination and violation of principle of natural justice, we have no hesitation to accept the plea of Ld AR that lack of cross examination and violation of principle of natural justice results is total nullity of the entire addition, hence, the additions in dispute is hereby deleted. - Decided in favour of assessee.
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2019 (3) TMI 1117
Assessment u/s 153A - Addition u/s 68 - as argued during the course of search no incriminating material/documents was found regarding the share application money - as per assessee all the necessary documents from the stated investors were filed before the Assessing Officer in order to prove the identity, genuineness and the creditworthiness of the investors - HELD THAT:- No infirmity in the order of the CIT(A) in deleting the addition made by the Assessing Officer in the absence of any incriminating material found during the course of search. Even though the Revenue has filed an appeal, the grounds of which are already reproduced in the preceding paragraphs, however, the Revenue has not challenged the order of the CIT(A) deleting the addition in absence of any incriminating material found during the course of search. Therefore, the order of the CIT(A) is upheld on the legal ground. Since the order of the CIT(A) deleting the addition on legal ground is upheld, therefore, the grounds raised by the Revenue on merit become infructuous being merely academic in nature. - Decided in favour of assessee. Scope of CIT's powers u/s 251(1)(a) - Addition u/s 56(2)(viib)- AO made addition in respect of share capital including share premium u/s 68 - CIT(A) deleted addition related to share capital but hold that share premium is taxable u/s 56(2)(viib) - HELD THAT:- Assessing Officer in the body of the assessment order has neither discussed this issue nor made any addition on this account. Under these circumstances, it has to be seen as to whether the ld.CIT(A) has jurisdiction to make such addition on an issue which was never considered by the Assessing Officer. Considering all AO in the assessment order has neither discussed this issue nor made any addition u/s 56(2)(viib), therefore, respectfully following CIT VERSUS SARDARI LAL & CO [2001 (9) TMI 1130 - DELHI HIGH COURT] and SH. VIKRANT PURI VERSUS ACIT, CENTRAL CIRCLE-13 NEW DELHI [2016 (4) TMI 419 - ITAT DELHI] we are of the considered opinion that the ld.CIT(A) has no power to adjudicate the issue by introducing a new source of income and his order has to be confined to those items of income which is subject matter of original assessment. We accordingly set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition. Although the powers of the CIT(A) are co-terminus with that of the powers of the Assessing Officer, yet, he has jurisdiction only on those items which have been considered by the Assessing Officer irrespective of the fact whether the issue is subject matter of appeal or not. However, in our opinion, he does not have any jurisdiction over an issue which has not been considered by the Assessing Officer. In case it is accepted that the CIT(A) has power to consider an issue which was not considered by the Assessing Officer, then, the provisions of section 263 or 147 will become otiose. - decided in favour of assessee.
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2019 (3) TMI 1116
TP adjustment - Comparable selection criteria - functional similarity - company as infected by the merge - extraordinary activities - HELD THAT:- Sasken Communication Technologies Ltd. is to be rejected as comparable for the same assessment year i.e. assessment year 2007-08 on the basis that it undertook significant merger and acquisition activity. Accordingly, we direct the exclusion of this company. See GLOBAL LOGIC INDIA PVT. LTD. VERSUS ACIT, CIRCLE-12 (1) , NEW DELHI. [2015 (5) TMI 637 - ITAT DELHI] Companies functionally dissimilar with that of assessee, a captive software service provider, need to be deselected from final list. Companies showing significant related party transactions equivalent to 27.66% of sales also need to be deselected from final list. Incorrect margin computation - Operating Profit Margin computation - HELD THAT:- This issue needs verification at the stage of AO/TPO on the premise whether the royalty paid by the Geometric Software Solutions Ltd. was the routine expenditure or not. In case, it is found to be the routine expenditure of the company, the same shall be considered as an item of operating expenditure. Regarding the provision for doubtful debts, we find that it is an item of operating expenditure as held in the case of Sony India Pvt. Ltd [2008 (9) TMI 420 - ITAT DELHI-H]. Regarding provision for advances, we find that the provision for advances cannot be considered in the instant case as an item of operating expenditure, as the assessee could not prove that such advances were not made for purchase of capital asset or for any other non-business purpose. The decisions relied by the assessee do not pertain to the provision for advance. We, therefore, direct the TPO/AO to compute the Operating Profit Margin accordingly. Risk Adjustment - HELD THAT:- We reject the claim of the assessee towards risk adjustment due to lack of appropriate data and quantification of risk adjustment. Payment for License of computed software - revenue or capital expenditure - HELD THAT:- The above expenses are to be regarded as incurred on revenue field as per the test laid down by the Special Bench of Tribunal in the case of Amway India Enterprises[2008 (2) TMI 454 - ITAT DELHI-C] in as much as (i) such computer software does not have utility for long duration and hence do not result in enduring benefit and (ii) such software does not constitute a profit earning apparatus and merely enable the appellant to efficiently conduct its business. The aforesaid decision has been affirmed by the Hon’ble Delhi High Court in the case of CIT vs Asahi India Safety Glass Ltd [2011 (11) TMI 2 - DELHI HIGH COURT]. Thus as decided in assessee's own case [2011 (6) TMI 682 - ITAT DELHI] license fee paid by the appellant is to be treated as revenue in nature. Interest u/s. 234A & 234B of the Act is consequential in nature and the AO is directed to give consequential effect.
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2019 (3) TMI 1115
Revision u/s 263 by CIT-A - assessee had set off the speculative loss against the business income - in response to the notice, the assessee filed explanation stating that the assessee did not claim any set off of speculation loss against the business income and the AO also did not allow the set off of speculation loss against the business income - HELD THAT:- Though the loss assessed including the speculation loss was ₹ 9,43,161/-, the AO allowed the business loss of ₹ 9,39,162/- for carry forward excluding the speculation loss of ₹ 4000/- (9,43,161-4000=9,39,162). Similarly the AO allowed the carry forward of speculation business loss separately for an amount of ₹ 37,13,336/- which is including current year speculation loss of ₹ 4000/-. Therefore, it is observed that the AO did not allow the speculation loss against business income or income from other sources and has not committed any error in the assessment order and determined the business loss and speculation loss correctly, hence, the assessment order passed by the AO was neither erroneous nor prejudicial to the interest of the revenue. Therefore, we set aside the order of the Ld.Pr.CIT passed u/s 263 - Decided in favour of assessee.
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2019 (3) TMI 1114
Estimation of cost of project - consequential application of Accounting Standard-7 for recognition of the project revenue, project cost and project income - as per AO cost of the project should be at ₹ 200 crores whereas the assessee estimate comes to ₹ 305 crores - HELD THAT:- AO's estimate is not based on any material on record whereas the assessee has submitted a certificate from the Architect. During the year, significant construction has not taken place as it appears from the expenses incurred. Therefore, the claim of the AO that the project is complete and the assessee has allotted the flats to the buyers is not acceptable. Hence, the cost of the project as estimated by the architect appears to be correct. The flats were not handed over the buyers as the assessee was not allowed to do so by NOIDA. The assessee could sell only 44% of the total project area and the assessee had entered into individual contracts with the buyers which are legally enforceable. The significant performance w.r.t. the remaining component of the project is pending and the revenue in respect of such individual contract cannot be recognized until the remaining components are completed. Estimated cost of the project as per the architect, the assessee had only incurred 16.42% of the expenditure on the construction. CIT(A) has rightly allowed the claim of the assessee and reject the estimate of cost of the project by the AO and accordingly deleted the addition which does not need any interference on our part, therefore, we uphold the action of the CIT(A) on the issue in dispute and reject the ground raised by the Revenue. Adisallowance of development expenses, commission expenses, and traveling expenses - HELD THAT:- As per the Assessing Officer these expenses are not allowable as these have not been estimated by the appellant in its project cost. Infact these expenses are not part of the project cost but are in the nature of overhead expenses. AO also has not declared these expenses to be unjustified or bogus and hence, CIT(A) has rightly allowed these expenses totaling to ₹ 16,53,396/- u/s 37(1) and deleted the addition in dispute and rightly directed the AO to allow the carry forward of losses of previous year, which does not need any interference on our part, therefore, we uphold the action of the CIT(A) on the issue in dispute and reject the ground raised by the Revenue. - Decided against revenue.
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2019 (3) TMI 1113
Mandation of e-filling of appeal - appeal manually filed by the assessee though he was supposed to e-file the appeal even though period for filing the appeal electronically before learned CIT(A) till 15th June, 2016 extended - HELD THAT:- There is no quarrel that the tax-payers are bound to follow procedures prescribed by authorities in fulfilling their obligations under the 1961 Act read with 1962 Rules otherwise there will be breakdown of Rule of Law. It is well settled that Rule of Law is engrained in basic structure of our constitution. But at the same time procedures are meant to advance justice and not to stifle the same. The new system of e-filing of appeals before learned CIT(A) were introduced by Revenue only wef 01.03.2016 and the assessee filed his appeal before learned CIT(A) on 12.04.2016 manually but the said appeal was filed within time limit prescribed u/s 249(2) of the 1961 Act. The CBDT extended deadline for efiling of appeal before learned CIT(A) to 15.06.2016 , vide circular 20 of 2016 dated 26.05.2016. The assessee still did not e-filed its appeal before learned CIT(A). It is claimed that the assessee was not aware of the amended procedure for e-filing of appeals. CIT(A) dismissed assessee’s appeal on this short ground of not filing of appeal electronically . CIT(A) did not decide any issue raised by the assessee in his appeals on merits. Under these facts and circumstances of the case , we are of the considered view that liberal approach is required to be taken to advance justice as the procedure are handmade to advance justice. When technicalities are pitted against justice, the courts will lean towards advancement of justice. It could not be shown by Revenue that the assessee acted in defiance of law deliberately . Thus, we are setting aside all the issue’s arising in this appeal to the file of the Ld. CIT(A) to adjudicate all the issue’s raised by assessee on merits in accordance with law. - Appeal of the assessee is allowed for statistical purposes
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2019 (3) TMI 1112
Exemption u/s 10(23G) - exemption u/s 10(23G) has to be on the net and not on the gross interest receipt - AO held that such exemption would be available on net income and not on the gross interest receipt - assessee raised foreign loan from which infrastructure projects were funded - As per assessee he had sufficient interest free funds and therefore, the AO was not correct in disallowing interest expenditure on local borrowings - HELD THAT:- Tribunal noted that the assessee is not a Banking Company as defined under the Banking Regulations Act, 1949. It is also not a company registered under the Companies Act 1956. In fact, the assessee was a public finance institution constituted under the Act. The Tribunal also noted that the assessee had substantial own funds which were deployed in bonds and securities which yielded receipts exempt under Section 10(23G) of the Act. In our opinion, the Tribunal, therefore, correctly applied the decision of this Court in the case of Reliance Utilities & Power Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT]. Revenue had not been able to establish any direct co-relation between the assessee's local borrowings and its investments in infrastructure development projects. For such reasons, no question of law arises. Hence, this question is not entertained. - decided against revenue Exemption under Section 10(33) - HELD THAT:- The Tribunal relying on the same principle as in the previous question and applying the decision of this Court in the case of Reliance Utilities and Power Ltd (supra), ruled in favour of the assessee. We do not see need to give separate reasons for confirming this decision of the Tribunal. - decided against revenue Taxability of interest on non-performing assets ("NPA") u/s 43D - Interest received during the year - when it accrued, was exempt and the assessee was not even required to file return, however, the assessee had maintained accounts clearly establishing the accrual of income and section 43D would not apply to the assessee - HELD THAT:- Section 43D of the Act makes special provisions in case of income of public financial institutions, public companies etc and provides that notwithstanding anything to the contrary contained in any other provision of the Act, in the case of a public financial institution or a scheduled bank or a co-operative bank, the income by way of interest in relation to specified bad or doubtful debts shall be chargeable to tax in previous year in which it is credited by such institution to its profit and loss account or the year in which it is actually received whichever is earlier. This provision, thus, makes a receipt of specified NPAs taxable on receipts or crediting in the account whichever is earlier. In this context, the Tribunal correctly observed that though the assessee was not required to or even eligible to file return, it had maintained accounts and the interest income was embedded in the profit / loss. This was during the period which such income was exempt from tax. - decided against revenue
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2019 (3) TMI 1111
Grant renewal for approval U/s. 80G(5) denied - trust has not carried out activities which entitle it's for recognition U/s. 80G(5) as per object of the trust - charitable activity or not? - exclusive religious activities - HELD THAT:- The assessee cannot get the benefit of registration under section 80G(5) of the Act if it’s activities wholly or substantially the wholly are of religious nature. However, in this regard, we note that the Ld. CIT has not brought any specific instances suggesting that the activities of the assessee are religious in nature. We also note that the assessee has been getting the registration under section 80G(5) of the Act right from the year 1993 to the year 31st March 2006 on the same kind of activities. It is also an undisputed fact that there was no change in the objects and the activities of the trust. Therefore we are of the opinion that the assessee deserves the registration under section 80G(5) of the Act as per the rule of consistency in view of the judgment of Hon’ble. Supreme Court in the case of Radhasoami satsang [1991 (11) TMI 2 - SUPREME COURT] - Decided in favour of assessee.
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2019 (3) TMI 1110
Compensation received on termination of contract - income u/s 28(ii)(c) - termination of agreement with US based company - nature of receipt - revenue or capital receipt - relationship between the assessee and the US based company one in the nature of the agency? - CIT (A) hold that there was no principal agent relationship between the parties and the contract was on principal to principal basis and therefore section 28(ii)(c) would not apply also confirmed by Tribunal - HELD THAT:- Any such reference or the expression in the agreement, by itself would not be conclusive or determinative of relationship between the parties. The true character of the relationship from the agreement would have to be gathered from reading the document as a whole. This Court in case of Daruvala Bros. (P). Ltd. Vs. CIT [1970 (1) TMI 18 - BOMBAY HIGH COURT]had found that the agreement made between the parties, was of sole distribution and the agent was acting on his behalf and not on behalf of the principal. In that background, it was held that the agreement in question was not one of agency, though the document may have used such term to describe the relationship between the two sides. No error in view of the tribunal. - decided against revenue
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2019 (3) TMI 1109
Claim of liability rejected - subsequent year liability written back and offer for tax - claim of outstanding liability of ₹ 17.50 lacs on accrual basis for which payment was to be made - The assessee claimed an outstanding liability of ₹ 17.50 lacs on accrual basis for which payment was to be made. Such claim was cross verified by the Assessing Officer that Mr. Abhishek Bachchan whose representative stated that he had received sum of ₹ 31.35 lacs and 4.72 lacs and that no further amount was payable. This falsified the assessee's claim of pending liability. On this basis, the AO as well as the CIT(A) and the Tribunal rejected the assessee's claim - HELD THAT:- we find that the additions sustained by the Tribunal are based on material on record and on the basis of assessment of such material. When it was established that the liability of ₹ 17.50 lacs did not exist, as claimed by the assessee and that sum of ₹ 4.50 lacs was never paid to Mr. Amitabh Bachchan, we do not find that the Tribunal's view requires any interference. Voluntarily offered to tax the liabilities due to Mr. Abhishek Bachchan and Mr. Amitabh Bachchan in assessment year 2004-05 when the liabilities became time barred - Tribunal, while confirming above addition had given directions for not taxing the same income twice. HELD THAT:- we record the contention of the learned counsel for the assessee that despite the repeated requests, the Revenue has not refunded the tax in relation to these receipts for the assessment year 2004-05. One possibility could be that the assessee was in the appeal disputing the addition in the current year. Be that as it may, now that we are disposing of this appeal accepting the additions in this year, the Revenue is directed to act according to the Tribunal's direction in this respect for the assessment year 2004-05. The same may be done latest by 30.4.2019.
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2019 (3) TMI 1108
Gains arising from transfer of shares held for a period of less than 30 days - classification of income - correct head of income - busniss income or capital gain - buying and selling shares of sizable volume and value - Tribunal treated it as business income and not as capital gains - whether mere demarcation of holding shares for less than 30 days or more cannot be conclusive or even in a given case the determinative factor? - HELD THAT:- The facts on record would suggest that during the period relevant to assessment year 2007-08, which is under consideration, the assessee had executed as many as 106 transactions of buying and selling shares within less than 30 days. The total value of sale transactions was ₹ 7.11 crores. The assessee had also engaged in buying and selling shares of sizable volume and value after holding them for a period ranging between two months to upto 200 days. It was also noticed that the assessee was indulging intra-day transactions without taking delivery of the shares which gave rise to the assessee’s speculative income. When seen in totality of the facts and circumstances of the case, one cannot find fault to the Tribunal’s conclusion that the assessee was not purely an investor in shares. The Tribunal introducing the demarcation line of holding of shares of less than 30 days and more than 30 days for giving different treatment for receipts arising out in sale of such shares would not vitiate the very foundation of the Tribunal’s finding. No question of law arises
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2019 (3) TMI 1107
Long term capital gain - deduction of expenditure related to sale of assets - Exemption u/s.54F - After claiming certain expenditure of sale, i.e. development of land, commission expenses and after indexation of cost of land and further claiming exemption u/s.54F etc., the assessee claimed total long term capital gain at Nil - AR contended that the assessee was not having good terms with these two persons to whom payment of commission was made through banking channel - HELD THAT:- It was explained that the amount was genuinely paid to these two persons. It is seen as an admitted position that the assessee could not produce these two persons before the AO despite request made by him in this regard. In view of the fact that the ld. AR has claimed that these two persons can be now made available, we are of the considered opinion that the ends of justice would meet adequately if the impugned order on this score is set aside and the matter is restored to the file of AO. We order accordingly and direct him to examine the claim of the assessee in respect of commission paid to these two persons at ₹ 8.00 lakh which is shared by both the assessees in question. Development cost of land claimed by the assessee - AO disallowed 10% of total expenses incurred by the assessee and computed capital gains accordingly - HELD THAT:- It is apparent from the report of the Inspector that the claim of the assessee stood verified and vouched that he carried out development of land by constructing boundary wall, borewells, installation of electrical pump sets etc. When the report of the Inspector was given to the AO fortifying the claim of the assessee, there could have been no reason to disallow 10% of the expenditure incurred by the assessee in this regard. Such an ad hoc addition, in our considered opinion, cannot be sustained. We, therefore, order to delete the addition. Exemption claimed u/s.54F - HELD THAT:- As evident from the above extracted portion of the assessment order that the limited scrutiny was qua exemption, inter alia, u/s.54 etc. and capital gain consideration. All the issues taken note by the AO in the case of both the assesses are qua the computation of the ultimate amount of capital gains from the transfer of the same property. It is not as if the AO, after initiating limited scrutiny for examination of capital gains, proceeded to make some other addition under some other heads etc. As such, no fault can be found in the action of the AO in examining different facets of the computation of capital gain. We, therefore, dismiss the additional ground raised in both the appeals.
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2019 (3) TMI 1106
Deemed dividend addition u/s 2(22)(e) - assessee is neither a registered nor beneficial shareholder - advanced received from company - Two partners of the assessee firm Kishore S Golani and Ravi S. Golani were holding shares in the lender company i.e. M/s. Golani Construction India Pvt. Ltd. to the extent 15% & 16.67% - HELD THAT:- This is also undisputed that these shareholders have bought the shares in the lender company on their own absolute right and not on behalf of the firm. Now the issue before us whether the loan advanced by the M/s. Golani Construction India Pvt. Ltd. of ₹ 2.10 crores to the assessee firm could be considered as deemed dividend under section 2(22)(e) to the extent the lender company has accumulated reserved and surpluses. It is clear from the above that the firm M/s. Golani Brothers is neither a registered shareholder nor a beneficial shareholder in the M/s. Golani Construction India Pvt. Ltd. - we are of the opinion that the provisions of section 2(22)(e) of the Act are not applicable to the assessee and accordingly AO is directed to delete the addition
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2019 (3) TMI 1105
Assessments on percentage basis - N.P. determination - assessee has raised the additional grounds contending therein that income may be determined on project completion basis which the AO has accepted in subsequent assessment years - HELD THAT:- AO should only taxed the correct taxable income as per law and relied upon Board Circular dated 11/04/1955 in which it was emphasized that Department should not take advantage of an assessee’s ignorance to collect more tax out of him than is legitimately due from him. CIT(A) before deciding the additional grounds of appeal should have called for the remand report from the AO and before adjudicating the same should pass the order, whether, he admits the additional grounds of appeal or not and then after giving opportunity of being heard to the assessee as well as AO should decide the additional grounds on merits. CIT(A) without admitting the additional grounds of appeal and without passing any order thereon and without calling the remand report from the AO straightway dismissed the additional grounds of appeals. CIT(A) did not consider the subsequent orders passed by the AO on percentage basis. It is well settled law though principles of resjudicata do not apply to Income tax proceedings but rule of consistency do apply to the Income tax proceedings. - Appeal of assessee is allowed for statistical purposes.
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2019 (3) TMI 1104
Entitlement to deduction u/s 80IA/80IB - Manufacture or production or not? - conversion of Paddy into Rice treated as a manufacturing activity - HELD THAT:- definition of the word Manufacture though was not available in the Assessment Years before us upto 2003-2004, but the said definition embodies the concept of transformation of object or article into different commercial article as was discussed in several judicial pronouncements from time to time. If a different commercial article comes into existence as understood by the persons who deal with those things, a different approach need not be taken by the Courts of law to hold otherwise. The dehusked Paddy and Rice obviously are not sold on the same rate nor can they be consumed for same purpose in the same form. Therefore, the process of dehusking of Paddy into Rice with the aid of labour and machinery is definitely an industry activity undertaken by the Assessee. It would depend upon the context in which the words Manufacture or production have to be interpreted by the Court of law. In the present case, the context is whether the industrial activity in the form of dehusking of Paddy into Rice amounts to Industrial undertaking engaged in the 'Manufacture or production' of Rice or not. In the said context, in view of the aforesaid cases, we find no reason to hold that the activity of dehusking of Paddy into Rice will not amount to manufacture or production . We do not find justification to give a narrower meaning to these terms, which, by themselves independently or jointly as employed in the said provisions of Section 80IA are wide enough to cover the industrial activity undergone by the Assessee - the Assessee is entitled to the benefit of deduction under Section 80 IA - Decided against revenue.
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Customs
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2019 (3) TMI 1103
Validity of detention order and attachment order - case of petitioner is that on the date of passing impugned orders by the 2nd respondent, the Export Obligation Discharge Certificate was not available with him and it was before the 1st respondent, and therefore the matter should be reconsidered - Held that:- Considering the fact that the Export Obligation Discharge Certificate, dated 9-3-2009, was not available with the petitioner before the impugned orders and since the same has not been produced by the petitioner, the impugned orders came to be passed and now the petitioner is ready to produce the said certificate before the 2nd respondent, this Court is inclined to set aside the impugned orders and accordingly, the impugned orders are set aside and the the matter is remanded to the file of the 2nd respondent - petition allowed by way of remand.
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2019 (3) TMI 1102
Validity of Best Judgement Valuation - enhancement of assessable value - branded goods - identical/similar goods - Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Held that:- The imported goods are said to be unbranded and, therefore, devoid of any scope for comparison with prices of identical or similar goods. The lower authorities have also held, without being controverted by the importer, that the goods in question were ordered by, and belong to, the present appellant whereas the documents were filed by another entity. In these circumstances, the declared value is undoubtedly in breach of the parameters that govern acceptance of transaction value in section 14 of Customs Act, 1962 mandating recourse to Customs Valuation (Determination of Value of Imported Goods) Rules 2007. It is also clear that the absence of any comparable data is also beyond question. The appellant has also not brought forth any evidence of existence of such data. The appellants had not made out a case for discarding of the best judgment value adopted in the order of the lower authority and accepted by the first appellate authority. A challenge in that direction at the second appeal stage is not tenable - appeal dismissed.
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2019 (3) TMI 1101
Renewal of CHA License - Regulation 9(1) of CBLR 2013/2018 - Export of prohibited item - Red sanders - Held that:- Actually lapse was noticed on the part of the M/s Vinayak Cargo appellant, it is merely due to the benefit of his long existence as CHA and that the lapse being first that the licence was not revoked. Hence to our opinion these finding cannot be made the basis to extend benefit to the favour of the appellant with reference to present adjudication. The fact remains is that appellant/CHA has once been imposed with penalty, his licence remained suspended in case of export of prohibited red sanders vide consignment of M/s Bhavya Exports. For seeking renewal the performance of the licensee has to be found satisfactory with reference, inter alia, to the obligations specified in the Regulations including, the absence of instances of any complain of misconduct. The time limit of one month from the date of receipt of application is only with respect of any other complaint of misconduct then the violation of the obligations specified in this Regulation. Hence, the argument of the appellant about the order penalising him with the penalty of rupees Twenty Five Thousand is beyond the one month, is not sustainable - The penalty has been imposed under Regulation 11 (a) (d) and (m) for CBLR 2013 same is sufficient to hold the CHA had not satisfactorily observed the obligations of the impugned Regulations the same is a definite basis for the competent authority to arrive at a satisfaction for the application to be entitled for renewal of CHA licence. The above noticed violation on the part of the appellant and the imposed penalty upon him, to our opinion, is sufficient for the Principal Commissioner or Commissioner of Customs, whom the application for renewal of licence was made, to reject the same. Proviso 2 Rule 9 of CBLR 2018 mentions that renewal procedure of the license CHA shall be in accordance with the procedure specified in sub Regulation 2 thereof. Perusal of said sub Regulation 2, makes it clear that there is no specific procedure of the application except that while granting the license the competent authority has to be satisfied about the performance of the CHA during the period of his previous license for properly observing the obligations specified in this Regulations. Thus, irrespective of Regulation 9 being silent about the applicability of Regulation 5 CBLR as far as the conditions to be fulfilled by the applicants for the licensee to act as a Customs Broker in a Custom conditions are concerned. Appeal dismissed - decided against appellant.
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Service Tax
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2019 (3) TMI 1100
Levy of service tax on leasing/hire purchase transactions - Operating lease or Finance Lease? - Banking and other Financial Services - vires the provisions of Articles 14, 19(1)(g), 265, 366, (29A), Entry 54, List-II, Schedule VII of the Constitution of India - Scope of legislative competence of Parliament - Held that:- After determination of the lease in an Operating Lease, the lessee has to return the equipment/vehicle to the lessor. The lessee is not entitled to own or does not have an option to own the asset at the end of the lease period, which is the distinguishing feature between an Operating Lease and a Financial Lease - Ld. Counsel for the appellant has also produced the financial statements of the appellant-company during the period 2010-11. As per Accounting Standards (AS-19), the Financial Lease is shown as current assets. Further, the Operating Lease is shown under the category of fixed assets. This is because, the equipment which are given on lease under the category of Operating Lease always remain in the ownership of the lessor (appellant-company). As per the documents, the transactions fall under the category of Operating Lease only. The allegation of the Department that the agreements are actually Financial Lease and that Operating Lease is only a misnomer, is factually wrong. The issue as to whether Operating Lease is subject to levy of service tax has been analyzed by the Tribunal in the case of M/s. Lease Plan India Ltd. [2018 (1) TMI 717 - CESTAT NEW DELHI], where it was held that the lease arrangements on which the respondent–assessee discharged VAT are operating leases and are not liable to service tax - Following the said decision, it can be held that the lease agreements are in the nature of Financial Leasing, is incorrect and hence, the demand cannot sustain - impugned Order is set aside - appeal allowed - decided in favor of appellant.
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2019 (3) TMI 1099
Time limitation - Rent-a-cab operator service - appellant has been contending that their activity would not fall within the levy of service tax net as they were charging the customers on per kilometre basis and there was no renting of the vehicle involved - Held that:- This issue has been mired in litigation for a long time and there are conflicting decisions also. Taking into account the fact that there are conflicting decisions on the issue as also the same being interpretational, the appellant cannot be saddled with the allegation of suppression of facts with intention to evade payment of service tax. Moreover, the Department has not produced any cogent evidence to show that there was a positive act of suppression on the part of the appellant. The entire demand has been raised on verification of accounts of the appellant. This shows that nothing was suppressed with any intent to evade payment of service tax - the Show Cause Notice is time-barred - appellant succeeds on the ground of limitation. Appeal allowed - decided in favor of appellant.
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2019 (3) TMI 1098
Classification of services - Cargo handling service or GTA Service? - handling soya seeds, DOC, coal, etc. in the factory premises and for local transport from the factory to Mandideep Railway Station for loading in the racks - whether the entire amount received by the appellant is for the alleged cargo handling service only? Held that:- The contract is for transportation and loading of cargo from factory at Mandideep to railway goods shed. The contract has 13 terms therein. Cumulative reading and the apparent interpretation, to our opinion for these terms is that the contract was entered into with an intention for the products of M/s Bhaskar Exxoils Pvt. Ltd. to be transported from their factory to the railway shed. It is also apparent from the contract that in fact the goods were loaded from the factory into the trucks of the appellant and were directly transferred to the railway wagons except in case of delay where an additional charge of ₹ 1 per bag has been agreed to be paid for the labour charges - Though Ld. DR has laid emphasis on para 9 thereof which reads that the agreed value per metric ton is inclusive of transportation while emphasizing that transportation is not the main activity but we are not convinced with the said submission in the light of the remaining other 12 terms and conditions. Use of word inclusive of transportation is opined to be a mere language error. The main activity of the appellant appears to be that of the transportation - thus, the services rendered by the appellant do not amount to cargo handling service. Whether the entire amount received by the appellant is for the alleged cargo handling service only? - Held that:- Apparently and admittedly, the value relied upon by the Department does not merely include the transport/ freight charges rather in addition includes charges as that of freight on DOC (rate), freight on soya seed purchased (agricultural produce). Further, it is observed that these freights are for the movement of the soya seed, produced, within the factory premises. The law has already been settled that the movement of goods within the factory premises cannot be classified as the service of cargo handling. Inclusion of all such prices in the impugned demand is therefore highly unjustified on the part of the adjudicating authorities. Time Limitation - Held that:- The demand is otherwise observed as being barred by time except for the one year thereof, period of demand being 2007-08 to 2011-12 and SCN being of October 2012 0 There is no apparent evasion on the part of the appellant. The taxable service stands already been paid under reverse charge mechanism by M/s. Bhaskar Exxoils Pvt. Ltd., the recipient of transport service - Seeing from this angle as well, the demand confirmed is not sustainable. Appeal allowed - decided in favor of appellant.
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2019 (3) TMI 1097
Demand of service tax miscellaneous income - Scrutiny of Balance Sheet - It appeared to Revenue that miscellaneous income shown in the books of account by the appellant for the period 2008-09 to 2009-10 was required to be added to the taxable value - Held that:- Revenue could not establish that the said amount collected was for providing any specific service - Just because some income is reflected in the books of account, it cannot be concluded that the said amount was received for providing services. Revenue is required to examine the reasons for which such income was received by the appellant, identify the services for which the said amount was received and examined other aspects such as abatement and exemption and then arrive at a decision as to whether the service tax worked out on the said receipts is liable to be demanded or not. No such exercise was carried out and the show cause notice was issued under presumption that the miscellaneous income was for providing taxable services - SCN not sustainable - appeal allowed.
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Central Excise
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2019 (3) TMI 1096
Interest on delayed refunds - time period for calculation of interest - section 11BB of the Central excise Act - Held that:- The High Court of Gujarat in the case of Commissioner, Central Excise vs Reliance Industries Limited [2010 (10) TMI 190 - GUJARAT HIGH COURT], while considering a similar canvas against the payment of interest on delayed refunds under Section 11BB of the Central Excise Act, in terms of the obligation to refund under Rule 5 of the CENVET Credit Rules Notification dated 18.6.2012, did not accept the canvas on behalf of the revenue that the scheme for refund of unutilized CENVAT Credit is a special beneficial scheme with self contained procedure providing for the manner and method of its implementation, and hence any refund claimed under the Rules would be governed only by the provisions of the Scheme and the general provisions of Section 11BB of the Central Excise Act cannot be resorted to - the High Court of Gujarath held that when there is delay in sanctioning the refund under Rule 5 of the CENVAT Credit Rules Notification dated 18.6.2012, the provisions of Section 11BB of the Central Excise Act would be clearly attracted. The learned counsel for the appellant revenue is unable to persuade this court to hold that the obligation to refund unutilized CEVANT Credit under Rule 5 of the CENVAT Credit Rules Notification dated 18.6.2012 is distinct and separate from the obligation under Section 11B of the Act. This Court concurs with the reasons assigned in the aforesaid decisions to hold that the revenue would be obliged to pay under interest for the delayed refund as contemplated under Section 11BB of the Act even for the delayed refund of the Unutilized CENVAT credit under Rule 5 of the CENVAT Credit Rules Notification dated 18.6.2012. This court is of the considered opinion that no substantial questions arise for consideration - appeal dismissed.
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2019 (3) TMI 1095
Method of Valuation - clearance of physician samples - section 4 of Central Excise Act, 1944 - scope of SCN - Held that:- Admittedly, that which is now brought forth in arguments are new facts that were not placed before the lower authorities. On behalf of Revenue, it is submitted that Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 bars the Tribunal from taking up and determining an issue on facts that were not available to the lower authorities. We are in full agreement with the contention of Learned Authorised Representative. The Tribunal does not entertain fresh facts in determining a dispute. There is no gainsaying that the Rules exist for furthering the provisions of the statute in the interests of delivery of justice and that the purpose for which the Tribunal was established is not in vain. The original authority is directed to dispose off the matter after considering the facts - appeal allowed by way of remand.
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2019 (3) TMI 1094
CENVAT Credit - ISD registration - credit related to dealer premises - credits were availed on the basis of Input Service Distributor (ISD) invoices issued by the head-office of the appellant - Rule 7(c) of CCR, 2004 - Held that:- The Commissioner (A) has rightly held that the appellant has violated Rule 7(c) of CCR, 2004 which provides that input service distributor can distribute the CENVAT credit in respect of Service Tax paid on input services to its unit subject to the condition that the credit of Service Tax attributable to service used wholly by a unit shall be distributed only to that unit whereas the services utilized exclusively by dealer premises and the unregistered premises were distributed solely to the manufacturing unit in violation of Rule 7(c) of the CCR, 2004. Further, the Commissioner (A) has rightly held that the CENVAT credit on input services pertaining to dealer premises and unregistered premises cannot be said in relation to manufacture of final product and CENVAT credit is not available to the appellant as per Rule 2(l) of CCR, 2004. Appeal dismissed - decided against appellant.
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2019 (3) TMI 1093
Concessional rate of duty - Clearance of watches on specific order given by some industrial organizations to be given for free distribution to the employees of such industrial organizations - contract price less than ₹ 500/- per watch or not - Section 4A of the Central Excise Act, 1944 - N/N. 10/2003-CE dated 01.03.2003 - Held that:- Section 4A deals with ‘Valuation of excisable goods with reference to retail sale price’. Sub-Rule (1) of Section 4A provides that the Central Government may, by Notification in the Official Gazette, specify any goods in relation to which it is required under the provisions of the Legal Metrology Act, 2009 (Standards of Weights and Measures Act, 1976) or the rules made thereunder or under any other law for the time being in force to declare on the package thereof the retail sale price of such goods to which the provisions of Sub-Section (2) shall apply. Thus, Section 4A has a reference to the Standards of Weights and Measures Act, 1976. However, the Notification does not have any reference to the Standards of Weights and Measures Act, 1976. In the case of goods which are assessable under Section 4A, when the goods are cleared to industrial consumers, as per the provisions of the Standards of Weights and Measures Act, there is no requirement to affix the M.R.P. In such cases, the goods would be assessable under Section 4 of the Central Excise Act, 1944 - In the present case, the Notification does not refer to the Standards of Weights and Measures Act, 1976. Thus, even if the goods are cleared to industrial consumers or otherwise, if they are sold to the ultimate consumer at a price which is not exceeding ₹ 500/- per piece, the clocks or watches would be eligible for the benefit of the Notification. The name of the industry/organization was engraved on the watches and the assessee has put forward a specific plea that these were sold to the industrial organizations for being distributed to their employees as complimentary gifts. The Department has not put forward any evidence to show that there has been a further sale by the industry/ organization to another person. Therefore, in the present case, the ultimate consumer is the industry/organization to which the assessee has sold the watches. This being so, the retail sale price being less than ₹ 500/-, the assessee are eligible for the benefit of the Notification. Appeal dismissed - decided against Revenue.
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2019 (3) TMI 1092
Valuation - inclusion of pre-loaded operational software in assessable value - essential software for computers - composite contract for supply of computers - Held that:- The basis for the proceedings initiated by the Department is that Chapter Note 6 of Chapter 85, which provided for separate assessment of preloaded software, was deleted and hence, the classification of software changed to Heading 8523 of the Central Excise Tariff Act, 1985 with effect from 01.01.2007. Thus, after 01.01.2007 software loaded on to the CPU has lost the eligibility for separate duty assessment and became assessable to duty as a part of the CPU and thereby part of the computer system. The judgement of the Hon ble Apex Court in the case of Commissioner of Central Excise, Pondicherry Vs. M/s. Acer India Ltd. [2004 (9) TMI 106 - SUPREME COURT OF INDIA] has been greatly relied upon by the appellants. However, it is pertinent to take note that the facts of the said case relates to a period prior to the deletion of Chapter Note 6 of Chapter 85 of the Central Excise Tariff Act, 1985. In the present case, the software is preloaded in the CPU. Appellants do not manufacture software. The purchase order for the computer system is a composite one which is for supply of computer system preloaded with Windows XP (OS) and Antivirus software besides the service and installation at customer s site - From the evidence tendered by the above witness as well as from the invoices, it is seen that the software is preloaded. The Ld. Counsel for the appellants has made a frail effort to argue that these are only testing software. Undisputedly, for activation and use of the computer this software is essential. The software is thus an integral part of the computer systems, though shown separately in the invoices. The value of the software has to be included in the assessable value for payment of Excise Duty. Revenue neutral situation - Held that:- The appellant has to pay Central Excise Duty on the assessable value arrived for the computer sets after including the value of software. Any service tax to be paid under ITSS services for Royalty has no connection or bearing with the liability to discharge Excise Duty. Therefore, the prayer of the appellant that they have paid service tax and that therefore the demand of duty under Central Excise law has to be set aside or adjusted, is without any legal basis and not acceptable. Demand with interest upheld - penalty set aside - appeal allowed in part.
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2019 (3) TMI 1091
Revised refund claim - refund claimed on the ground that the value adopted at the time of removal from the factory gate was higher than the value prevailing at or about the same time at the depot for the same goods - main ground on which the Commissioner (Appeals) has disallowed the refund claim is that the appellant has not followed Rule 7 of the Central Excise Valuation Rules, 2000 - scope of remand - Held that:- It can be seen that the adjudicating authority had gone into the question as to whether the appellant had adopted a higher value at the factory gate than the value of goods cleared at the Kit Stores. After perusing the invoices, the said issue was found to be in favour of the appellant. The issue of unjust enrichment was also examined by the adjudicating authority. Thus, after complying with the remand direction, the adjudicating authority has sanctioned the refund of ₹ 13,23,279/-. Hence, the conclusion arrived by the Commissioner (Appeals) in the impugned Order that the adjudicating authority had not examined the aspect of Rule 7 of the Central Excise Valuation Rules, 2000, etc., is beyond the scope of remand. Further, there has been no Show Cause Notice issued till now by the Department for recovery of the erroneous refund. In such circumstances, the entire exercise of analyzation by a further remand, as requested by the Ld. AR for the Department, is futile. The sanction of refund by the adjudicating authority is right and proper - appeal allowed - decided in favor of appellant.
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2019 (3) TMI 1090
Method of valuation - section 4 or section 4A of CEA - Watches - Held that:- Notification No. 20/1999 –CE (NT) dated 28.02.1999 was superseded by Notification No. 09/2000-CE (NT) dated 01.03.2000 and by subsequent supersession of Notifications later, Notification No. 05/2001 dated 01.03.2001 was superseded by Notification No. 13/2002-CE (NT) dated 01.03.2002. In Notification No. 13/2002, Sl. No. 89 refers to watches. These Notifications show that watches were notified goods during the relevant period of dispute - When the goods are notified under Sub-Section (2) of Section 4A of the Central Excise Act, 1944, then, the valuation can only be under Section 4A of the Central Excise Act - The contention of the appellants that the goods do not fall under the category of packaged commodities, etc., cannot be accepted. The said issue was settled by the Hon’ble Supreme Court in the case of M/s. Whirlpool of India Ltd. Vs. Union of India [2007 (11) TMI 6 - SUPREME COURT OF INDIA]. The Hon’ble Supreme Court held that use of the term “or otherwise” in the definition of “commodity in packaged form” would suggest that a commodity if packed in any manner in units suitable for sale, whether wholesale or retail, becomes “commodity in packed form”. Therefore, Section 2(b) of the Standards of Weights and Measures Act, 1976 would apply. Thus, the goods having been notified items, are definitely assessable under Section 4A of the Act - appeals filed by the assessee contending that the goods are to be assessed under Section 4 of the Central Excise Act, 1944, are without merits - appeal dismissed - decided against appellant.
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2019 (3) TMI 1089
Clearances to EOUs and SEZs - benefit of N/N. 22/2003-CE dated 31-3-2003 and 53/2003-Cus (NT) dated 22/7/2003 - denial of benefit on the ground that the appellants did not produce Re-warehousing certificates in respect of such clearances - Held that:- The Appellants are only reiterating that the re-warehousing certificates are not available/traceable. They are not forthcoming to submit whether the said certificates was lost in transit or misplaced and if so any FIR was lodged with relevant authorities. The revenue are not accepting the letters and CA certificates submitted by the Appellants and at the same time the revenue is also not forthcoming on if any steps were taken to find out from the respective range / division officer of the customers of the Appellants whether said goods have been received by them. Both the notifications in question and the board circulars issued in this regard cast an obligation on the Appellants as well as the department at the end of supplier as well as receiver. The goods in question are removed and received under bond and necessary accounting needs to take place at the supplier as well as receivers end - It is seen that in terms of circular No.579/16/2001 dated 26.06.2001, the superintendent in charge of the consignor of Excisable goods is required to send weekly reminders to the superintendent in charge of the consignee. It is also seen that the Deputy/ Assistant Commissioner shall secure a satisfactory proof of the goods having been received by the consignee / ensure that the duty of excise on the goods not received at the destination is recovered from the consigner. In the present case, no such efforts have been made by the department. In the entire chain of events officers’ at the consignees end would certainly be in a position to confirm the receipt of the goods or otherwise from their own records as well as the records of the consignees. Therefore it is in the interest of justice that the matter needs to go back to the original adjudicating authority to make necessary enquiries with the division/range of consignors of the Appellant so as to confirm whether the goods were received. Appeal allowed by way of remand.
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2019 (3) TMI 1088
Valuation - inclusion of subsidy of VAT, which was granted by the Govt. of Rajasthan - Section 4 of the Central Excise Act, 1944 - Held that:- For the initial period the assessees are required to remit the VAT recovered by them at the time of sale of the goods manufactured. A part of such VAT is given back to them in the form of subsidy in Challan 37 B. Such Challans are as good as cash but can be used only for payment of VAT in the subsequent period. In terms of the scheme of the Government of Rajasthan payment of VAT using such Challan are considered legal payments of tax - Revenue is not correct in taking the view that VAT liability discharged by utilizing such subsidy challans cannot be taken as VAT actually paid. By following the decision of the Tribunal in the Welspun Corporation Ltd. case [2017 (5) TMI 177 - CESTAT MUMBAI] it can be concluded that there is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans. Appeal allowed - decided in favor of appellant.
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2019 (3) TMI 1087
Penalty u/r 15 (2) of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 - irregular availment of credit on 15 (2) of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 - Scope of appeal - Held that:- Once the appeal is filed against the order, the appeal cannot limited to any scope of which it is proposed to review by the Department, but the entire issue gets opened and the appellant is free to take any issue on the matter of the law and fact also before the Appellate Authority. The appellant had already taken a point of law before the learned Commissioner (Appeal) citing the decision of Aditya Cement [2016 (9) TMI 1127 - CESTAT NEW DELHI]. But the learned Commissioner (Appeal) has ignored this fact and confined his decision only on point of penalty, which is not legal and correct. Extended period of limitation - Held that:- Extended period of the limitation will not be available in this case as it is undisputed and agreed fact that the Department was aware of the issue at the time of audit objection itself and the appellant has also paid the Cenvat Credit along with interest on 17.11.2012 by reversing the Cenvat Credit, Cess and interest on 29.11.2012 in compliance with letter from the Superintendent dated 07.02.2012. Appeal allowed - decided in favor of appellant.
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2019 (3) TMI 1086
CENVAT Credit - denial of credit for the reason that the service provider has not paid the service tax to the Central Government - Held that:- Interestingly, instead of initiating proceedings against the service provider who has defaulted in making the payment of service tax, the department has initiated proceedings against the appellant who has availed credit on such input services. The cause of the show cause itself is without any legal or factual basis. The demand therefore cannot sustain - appeal allowed - decided in favor of appellant.
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2019 (3) TMI 1085
CENVAT Credit - input services - Services used for ‘Maintenance of Residential Colony’ which is Industrial Township - period March, 2009 to October, 2009 - Held that:- The issue decided in appellant own case M/S HINDALCO INDUSTRIES LTD. VERSUS COMMISSIONER, CENTRAL EXCISE, ALLAHABAD [2018 (12) TMI 1624 - CESTAT ALLAHABAD], where it was held that all the input services in question incurred for the upkeep and maintenance of the colony is an essential business expenditure and accordingly, Cenvat Credit is allowable under the provisions of Rule 2(l) of the Cenvat credit rules, 2004 - credit allowed - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2019 (3) TMI 1084
Benefit of composition scheme - section 15 of KVAT Act - sale of liquor - place of business - section 4 of KVAT Act - Held that:- Considering the issue pending before the Division Bench of this court, it would be appropriate to direct the respondent to proceed with the reassessment proceedings and the same shall be subject to the result of STA No.153/2016 pending before this court - It is needless to mention that even if the reassessment order is passed for the tax periods in question, the same shall not be enforced until a decision to be taken by this court in STA 153/2016. The petitioner is at liberty to produce books of accounts on 25.3.2019 without expecting any notice from the respondent. The respondent – authorities shall consider the books of accounts, objections/submissions of the petitioner – assessee and shall proceed in accordance with law - petition disposed off.
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2019 (3) TMI 1083
Validity of assessment order - TNVAT Act - no opportunity to produce the relevant documents pertaining to the purchases - principles of natural justice - Held that:- Admittedly, no request was made either to the petitioner or to the other end sellers requesting them to produce copies of invoices. Further, both the other end seller as well as the petitioner who is a purchaser belong to the same tax circle under the respondent - In the instant case, the purchasing dealer as well as the other end seller have reported their sales and purchase to the respondent and there is no suppression of the sale or the purchase to the respondent by either of them. All these factors were not duly considered by the respondent in the impugned assessment order. Further no opportunity of personal hearing was given to the petitioner while passing the impugned assessment order. The matter is remanded back to the respondent for fresh consideration and the respondent shall pass final orders, after giving sufficient opportunity to the petitioner to raise all objections available to him under law - petition allowed by way of remand.
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2019 (3) TMI 1082
Compounded rate of tax - completion of deemed assessment - Restaurant business - TNVAT Act - estimation of taxable turnover - It is the case of the petitioner that based on the one day sales, the respondent cannot estimate the total taxable turnover - principles of natural justice - Held that:- The objection regarding assessment based on one day sales on the date of inspection by the Enforcement Wing of the respondent (i.e., on 07.11.2014), has not been duly considered by the respondent. Even though, the petitioner had cited various authorities, which according to him, support his case the said authorities have not been duly considered by the respondent. The petitioner is doing restaurant business and it is common knowledge that the sales turnover varies from day to day - On working days it will be lesser and on festival day and public holidays it will be generally higher. Therefore, one day sales turnover cannot be the basis for assessing the total taxable turnover. Eventhough, the authorities were placed by the petitioner before the respondent, the said authorities have not been considered by the petitioner - Further, in the instant case, no personal hearing was granted to the petitioner, eventhough a specific request was made by the petitioner, in his reply dated 04.01.2016 - It is well settled that personal hearing will have to be granted to the assessee under the Tamil Nadu Value Added Tax Act, 2006 as held by the internal circular bearing circular No.7 of 2013 of the Principal Commissioner of Commercial Tax. The matter is remanded back to the respondent for fresh consideration and the respondent shall pass final orders, after giving sufficient opportunity of hearing to the petitioner - petition allowed by way of remand.
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Indian Laws
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2019 (3) TMI 1081
Dishonor of cheque - Dishonest person - Direction to deposit amount of the compensation as a condition precedent to maintain the order of the bail or to entertain the appeal preferred by the petitioner in the Sessions Court - Sections 143A and 148 of the Negotiable Instruments Act - whether the provisions can be applied only to those complaints which are filed after 1.9.2018 or the complaints or appeals which are already pending wherein the Courts can pass the orders only after 1.9.2018? Held that:- Right to appeal is a statutory right and it protects the liberty of the convicted accused and provided further forum to agitate the issue of the liberty of the accused. The right to appeal is considered a fundamental right under Article 21 of the Constitution of India. The criminal Courts have powers to impose various conditions at the time of granting bail, in the trial and also at the appellate stage. In appeal, the accused is not innocent but he is held guilty by the first Court. Thus, though his liberty is to be protected, simultaneously, the Court’s powers to do justice to the complainant at the same time cannot be shadowed. The appellate Court hence to strike balance of these two circumstances by adopting a reasonable view. The provision of section 148 is in consonance with the power vested with the appellate Court which can impose some conditions at the time of granting bail or at the time of admission of appeal. However, the right to appeal and his liberty cannot be taken away but to be protected by applying the principle of reasonability while imposing conditions. The condition imposed at the time of pending appeal of the payment of the amount of compensation should not curtail the liberty of the appellant/accused. Such condition if not fulfilled, then, amount is recoverable finally, if the conviction is maintained. The amount can be recoverable with interest. If conviction is confirmed, the order of a higher rate of interest or commercial rate of interest, may be passed; or in default maximum sentence may be imposed. Moreover, the fine or compensation is made recoverable as per the provision of section 421 of Code of Criminal Procedure - In the present case, the impugned orders are passed on 3.8.2018 by the learned Magistrate and the amendment came into force on 1.9.2018. Obviously, in the order dated 3.8.2018, section 148 is not mentioned by the learned Additional Sessions Judge. He did not intend to pass the order under section 148 but it is to be understood that the learned Sessions Judge passed the order under Code of Criminal Procedure by using the powers of the criminal Court to impose putting condition at the time of granting bail. Such a condition of bail can be imposed or it can be modified for non-compliance of the condition in view of the nature of the offence and the circumstances. The orders dated 24.9.2018 imposing a condition that the accused to deposit 25% amount out of total compensation, are modified that the petitioner/accused is directed to deposit 20% of the total amount of the compensation - petition allowed in part.
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2019 (3) TMI 1080
Dishonor of cheque - levy of additional charges - senior citizen - section 138 of NI Act - Held that:- The order passed by the first respondent runs to more than 30 pages and most irrelevant aspects relating to criminal prosecution of dishonoured cheque, relating to “cut and paste” portions of the entire Sections 92 and 138 of the Negotiable Instruments Act, have been written. Thereafter, further “cut and paste” portions from an unknown source had also been given - the first respondent had completely misdirected himself as to the nature of the grievances of the petitioner. It must be remembered that the dishonour of the cheque of the petitioner was not due to any fault on the part of the petitioner. It was an error on the part of the Bank. The petitioner cannot be mulcted with a torturous procedure as was done in this case by the respondents. Further, the respondents have acted with no heart. They do not seem to understand the plight of a senior citizen who has been a dutiful citizen all his life. The impugned order does not convey any reason for imposing the charges of ₹ 1,000/- on the petitioner - the first respondent had seriously erred in passing the impugned order and consequently, the impugned order of the first respondent is set aside - petition allowed.
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