TMI Tax Updates - e-Newsletter
April 17, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
TMI SMS
Highlights / Catch Notes
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GST:
Confiscation of goods - failure to produce E-way bill - Section 129 of the Act - Principles of natural justice - The writ-applicant was directed to appear before the authority concerned on 05.04.2019 - Despite the same, the impugned order came to be passed on the very same day - On this short ground alone, we are inclined to quash the impugned order of confiscation in Form GST MOV-11 quashed - HC
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Income Tax:
Bogus purchases - When the AO has not doubted the sales declared by the assessee and merely rejecting the purchases is not proper. Assessee must have taken advantage by taking accommodation entries - Additions made by CIT(A) on profit margin is proper - AT
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Income Tax:
Penalty u/s 271AAB - undisclosed income - AO’s action penalizing the assessee qua the said disclosed / duly recorded income is found to be not sustainable therefore. - AO directed to re-compute the penalty only towards undisclosed income - AT
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Income Tax:
Penalty levied u/s 271B - delay in getting accounts audited u/s 44AB - Except making a submission of assessee that senior partner was no well, no plausible explanation was furnished - AO levied minimum penalty prescribed u/s 271B - Penalty confirmed.
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Income Tax:
Stay petition - Reopening of assessment u/s 147 - Prima facie on the basis of coded language diary entries and retracted uncorroborated statement of an alleged beneficiary, perhaps, the additions made by the Assessing Officer is highly questionable - a mechanical approach by directing the petitioner to pay 20% of the tax demand is not correct - stay granted - HC
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Income Tax:
Joint and several liability of partners for tax payable by firm - legality and validity of order passed u/s 188A directing to make payment of the tax arrears as mentioned in the order - petitioner having retired as partner of the firm with effect from 31.03.2012 raising any demand against the petitioner for assessment year 2013-14 and onwards does not arise - HC
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Income Tax:
Deduction u/s 10A - Disallowance of deduction u/s 35D of the Act would go to increase profit of the business on which deduction u/s 10A of the Act was to be allowed to the assessee. - the fact that the revenue has preferred appeal against the order of Tribunal is ground no ground not to follow the decision in assessee’s own case - AT
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Income Tax:
Income accrued in India - now when the assessee has been held as an agent of independent status, and the income of M/s Arc Line, Mauritius in the absence of any PE in India had been held as not taxable in India, therefore, there remains no basis for taxing the income of M/s Arc Line, Mauritius from its shipping activities under Sec. 44B of the Act in the hands of the assessee by treating it as a representative assessee of the aforesaid company. - AT
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Income Tax:
Income from other sources - Interest expense allowance against interest income - the interest expense accrued in favour of various banks on the money borrowed for the purpose of FDRs for security and also for bank guarantees to NSC. - Adjustments allowed - AT
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Customs:
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver - Notification
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Customs:
Seeks to extend anti-dumping duty on import of Acetone originating in or exported from Korea RP, Saudi Arabia and Chinese Taipei till 14th October, 2020. - Notification
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Customs:
Refund of SAD - mis-match of description of the goods - The SAD is paid on importation of the goods to safe guard the revenue of the state i.e. VAT/CST. As the same has been paid by the appellant, therefore, the appellant is entitled to claim the refund of SAD paid by them at the time of importation of the goods in terms of Notification No. 102/2007-Cus dt. 14.09.2007. - AT
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Customs:
Levy of Anti-Dumping Duty - effective date of notifications - whether Anti-Dumping Duty can be levied during the interregnum period from 21.06.2002 to 09.12.2002, i.e., from the end date of provisional Anti-Dumping Duty Notification and the imposition of final Anti-Dumping Duty by subsequent Notification? - Held No
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SEBI:
Relaxation in time period for certain activities carried out by depository participants, RTAs / issuers, KRAs, stock brokers - Circular
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Service Tax:
Rejection of declaration under Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES) - Where SCN were issued before the Scheme - Payment of Tax before the enactment of Finance Act, 2013 - The Service Tax VCES, is not intended for a person like the petitioner - HC
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Service Tax:
Refund of unutilized CENVAT Credit - POST GST era - the refund claim beyond the period of limitation provided under law is totally barred by limitation. Even the fact that the tax was paid under a mistake of law, cannot be adopted for grant of such refund. - AT
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Central Excise:
Reversal of cenvat credit - For proper verification of the figures of Cenvat credit reversal by the appellant, the same has not been done by the adjudicating authority in the remand order - No contrary evidence has been produced by the Revenue in their support of their claim that they are required to reverse total amount of Cenvat credit as computed by the department - demand set aside - AT
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Central Excise:
CENVAT Credit - amended w.e.f. 01.03.2015 - common input services - Though, part of the disputed period in this case falls under the scope of the amended provisions of Rule 6 ibid, but there will be no material change or such amendment in the case of the appellant in as much as the factory duly registered for manufacture of excisable goods have not dealt with any non-excisable goods, which were cleared from such registered factory. - AT
Articles
Notifications
Customs-
07/2020 - dated
15-4-2020
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ADD
Seeks to extend anti-dumping duty on import of Acetone originating in or exported from Korea RP, Saudi Arabia and Chinese Taipei till 14th October, 2020.
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38/2020 - dated
15-4-2020
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Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver
GST - States-
36/2020-State Tax - dated
7-4-2020
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Maharashtra SGST
Seeks to extend due date for furnishing FORM GSTR-3B for supply made in the month of May,2020.
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34/2020-State Tax - dated
7-4-2020
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Maharashtra SGST
Seeks to extend due date of furnishing FORM GST CMP-08 for the quarter ending March, 2020 till 07.07.2020 and filing FORM GSTR-4 for FY 2020-21 till 15.07.2020.
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29/2020-State Tax - dated
7-4-2020
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Maharashtra SGST
Seeks to prescribe return in FORM GSTR-3B of MGST Rules, 2017 alongwith due dates of furnishing the said form for April, 2020 to September, 2020.
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28/2020-State Tax - dated
7-4-2020
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Maharashtra SGST
Seeks to prescribe the due date for furnishing FORM-GSTR-1 by such class of registered persons having aggreage turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year, for each of the months from April, 2020 to September, 2020.
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G.O. Ms. No. 15 - dated
1-4-2020
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Puducherry SGST
Prescribe the due date for furnishing Form GSTR-1 for the quarters April, 2020 To June, 2020 and July, 2020 to September, 2020
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G.O. Ms. No. 14 - dated
1-4-2020
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Puducherry SGST
Under section 25(6C) to specify class of persons, other than individuals who shall undergo authentication, of Aadhaar number in order to be eligible for registration under the Puducherry Goods and Services Tax Act, 2017
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G.O. Ms. No. 13 - dated
1-4-2020
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Puducherry SGST
Seeks to notify the date from which an individual shall undergo authentication, of Aadhaar number in order to be eligible for registration
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G.O. Ms. No. 12 - dated
1-4-2020
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Puducherry SGST
Notification under section 25(6D) to specify the class of persons who shall be exempted from aadhar authentication under the Puducherry Goods and Services Tax Act, 2017
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G.O. Ms. No. 11 - dated
1-4-2020
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Puducherry SGST
Puducherry Goods and Services Tax (Third Amendment) Rules, 2020
Indian Laws-
CORRIGENDA - dated
15-4-2020
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Indian Law
Corrigendum - The Finance Act 2020 (12 of 2020)
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (4) TMI 457
Confiscation of goods - failure to produce E-way bill - Section 129 of the Act - Principles of natural justice - providing of reasonable opportunity of hearing by the authority concerned before passing the final order of confiscation - Release of vehicle alongwith the goods - HELD THAT:- The writ- applicant was directed to appear before the authority concerned on 05.04.2019 at 11.00 a.m. Despite the same, the impugned order came to be passed on the very same day i.e. 05.04.2019 on which the writ applicant was supposed to remain present for the purpose of hearing. On this short ground alone, we are inclined to quash the impugned order of confiscation passed by the authority concerned in Form GST MOV- 11. The impugned order in the Form GST- 11 is hereby quashed and set aside - matter is remitted to the respondent no.1 for fresh adjudication - appeal allowed by way of remand.
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Income Tax
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2020 (4) TMI 465
Bogus purchases - Un substantiated closing credit balance of trade creditors - AO has restricted his enquiry only with regard to the purchases made from Advait Distributors Pvt. Ltd. which has been shown as outstanding sundry creditor - HELD THAT:- From the materials placed in the paper book it is noticed that the additional evidences furnished before Commissioner (Appeals) included PAN details of Advait Distributors Pvt. Ltd., copy of confirmation obtained from the said party, copy of ledger account of concerned party in assessee s books, copy of assessee s account in the books of Advait Distributors Pvt. Ltd. Commissioner (Appeals) has declined to look into the aforesaid evidences filed by the assessee with a general statement that no fruitful purpose would be served by admitting the evidences. Before rejecting the additional evidences, CIT(A) should have verified their authenticity himself or could have directed the Assessing Officer to verify them. - Matter restored before the AO. Disallowance u/s 14A r/w rule 8D - assessee has earned exempt income by way of dividend - assessee has not disallowed any expenditure attributable to such income - HELD THAT:- The contention of the learned Authorised Representative that due to availability of surplus interest free funds, no disallowance of interest expenditure under rule 8D(2)(ii) is to be made is acceptable keeping in view the legal position on the issue. Accordingly, we delete the disallowance of interest expenditure made under rule 8D(2)(ii). As regards the disallowance of administrative expenditure under rule 8D(2)(iii) amounting to ₹ 9,032, since, no convincing arguments have been advanced on behalf of the assessee, we confirm the said disallowance. Accordingly, disallowance u/s 14A r/w rule 8D is restricted to ₹ 9,032. These grounds are partly allowed.
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2020 (4) TMI 464
Addition u/s 69A - assessee has made cash deposit in a bank account - HELD THAT:- Though, there may be a delay of about 24 25 days between the cash withdrawal and cash deposit, however, the explanation of the assessee in this regard is acceptable. - Cash deposit made on 1st February 2014, in our view, stands explained. Generation of cash from agriculture activity - Held that:- in the impugned assessment year, the assessee has offered net agricultural income, which has been accepted by the Assessing Officer. Therefore, explanation of the assessee that he has past savings from agricultural income cannot be rejected totally. Assessee s claim that the entire net agricultural income was available with him is also not acceptable considering the fact that the assessee must have utilized some amount out of such income for his domestic and other expenditure. Thus, out of the net agricultural income of the past years, the assessee could reasonably be accepted to have saved an amount of ₹ 9,00,000. Therefore, to that extent, cash deposit made in the bank account stands explained. Balance cash deposit of ₹ 19,80,000 assessee has relied upon the affidavit of the concerned persons and confirmation letters. As it appears, the aforesaid documentary evidences (affidavits, etc.) were not furnished before the Assessing Officer, but were furnished for the first time before learned Commissioner (Appeals). - CIT(A) has rejected these evidences by stating that they are in the nature of self serving documents. - Since, the aforesaid verification has not been done by the Departmental Authorities, matter restored before the AO to that extent. Decided partly in favor of assessee.
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2020 (4) TMI 463
Penalty u/s 271(1)(c) - additions made on account of disallowance of promotional and advertisement expenses and claim of excess loss on sale of motor car - HELD THAT:- As regards advertisement and promotional expenses, it is noticed, the AO himself has stated that such expenditure was incurred by the assessee in the preceding years. It is further evident, only due to increase in the quantum of expenditure the AO has disallowed the expenditure on the allegation that the assessee has failed to furnish any evidence to support such increase in the expenditure. Disallowance is not due to any false claim made by the assessee but on the basis of doubt entertained with regard to the quantum of expenditure - assessee cannot be accused of furnishing inaccurate particulars of income or concealing income Claim of excess loss on account of sale of motor car, it is the claim of the assessee that such excess loss was claimed inadvertently due to ignorance. AR has submitted, during the assessment proceeding the assessee has furnished a working of short term capital loss on sale of motor car and the Assessing Officer has accepted such loss and allowed carry forward of the same - excess claim of loss was because of the fact that the assessee has debited it to his profit and loss account. The explanation of the assessee that, it is a bonafide and inadvertent mistake is acceptable. Therefore, even in respect of this addition also, there cannot be any allegation of either furnishing inaccurate particulars of income or concealment of income. We hold that the imposition of penalty under Section 271(1)(c) in the present case is uncalled for. - Decided in favour of assessee.
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2020 (4) TMI 462
Bogus purchases - CIT(A) restricting the disallowance @ 3% of bogus purchases against 100% made by AO - assessee is a trader in cut and polished diamonds - HELD THAT:- Considering the salient feature of the diamond industry, we are in agreement with Ld. CIT(A) that the margin derived by the diamond manufacturers are between 1.5% to 4.5% and in trading profits are in the range 1 to 3%. When the AO has not doubted the sales declared by the assessee and merely rejecting the purchases is not proper. Assessee must have taken advantage by taking accommodation entries. Therefore, we are inclined to accept the finding of Ld. CIT(A). Accordingly, grounds raised by the revenue are dismissed.
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2020 (4) TMI 461
Penalty u/s 271AAB - undisclosed income - statement as recorded u/s. 132(4) - CIT(A) deleted the penalty - HELD THAT:- CIT(A) has nowhere examined the relevant facts qua assessee s alleged undisclosed income as to whether the same represented any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other document in the light of the foregoing explanation. We also notice that their lordships judgment in Sudarshan Silk Mills [ 2008 (4) TMI 5 - SUPREME COURT] does not deal with the impugned statutory provision but involved sec.271(1)(c) penalty proceedings only. We therefore reverse the CIT(A) s lower appellate findings under challenge to this effect in principle. Whether there is any undisclosed income involved going by sec. 271AAB Explanation (c) or not? - A perusal of the case file suggests that the assessee s sec. 132(4) disclosure made during the course of search declared total income involving capital introduced, profit as per P L account, capital in the name of sundry creditors, profit on sales @ 5%, commodity profit with miscellaneous and other income etc., involving corresponding sum(s). Out of this, the assessee s books had duly recorded initial capital, sundry creditors and miscellaneous income and the balance amount ( involving commodity profits ) stood not recorded in the regular books of account u/s. 271AAB explanation- (c)(A) of the Act. Mr. Tulsiyan fails to dispute that this latter undisclosed income component has seen light of the day due to search wherein the corresponding seized documents. AO was very well justified in invoking the impugned penal provision qua the assessee s undisclosed income of ₹690,69,994/- than the entire disclosure of ₹16,05,25,000/-. Revenue has failed to pin-point any material in the nature of seized documents indicating the remaining three components of initial capital, sundry creditors and miscellaneous income (supra) which could be held to be undisclosed income going by sec.271AAB Explanation (c) AO s action penalizing the assessee qua the said disclosed / duly recorded income is found to be not sustainable therefore. We have ourselves assumed our jurisdiction of the final fact-finding authority under the provision of the Act to decide upon correctness of impugned entire penalty than remitting the issue back to the AO or the CIT(A) for afresh adjudication. The Assessing Officer is now directed to frame consequential computation of the impugned penalty as per law qua the assessee s undisclosed income of ₹690,69,994/-only. Ordered accordingly.
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2020 (4) TMI 460
Assessment u/s 153A - disallowing the claim under Section 80IA(iv)(4) - Whether no incriminating material was seized as claimed by the assessee? - AR has made submissions that the CIT(Appeals) has not adjudicated the ground of appeal on jurisdictional issue where there is no incriminating material seized during the search and therefore claim of deduction under Section 80IA (4)(iv) is bad in law and also submitting the Paper Book to support his submissions - HELD THAT:- We found strength in the submissions of learned Authorised Representative and on perusal of the CIT(Appeals) order, there is no adjudication or findings by the CIT(Appeals) on the Ground of appeal No.2.2 as referred in the above paragraph raised by the assessee before the CIT(Appeals). Therefore considering the principles of natural justice, we set aside the order of CIT(Appeals) and restore the disputed issue to the file of CIT(Appeals) to adjudicate the legal ground on the jurisdiction of the Assessing Officer first in assessment made under Section 153A of the Act where no incriminating material was seized as claimed by the assessee. If the assessee does not succeed, the CIT(Appeals) shall pass the order on merits with speaking order on merits with findings. Accordingly, the grounds of appeal of the assessee are allowed for statistical purposes.
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2020 (4) TMI 459
Reopening of assessment - assessment reopened beyond four years - wrong claim u/s 10(B) - HELD THAT:- There is not even whisper in the assessment order that there was any negligence on the part of the assessee in disclosing the particulars which is required for completing the assessment. It is also not in dispute that the assessment was reopened after four years therefore, the provisions of s. 147 of the Act will come into operation. Unless the AO establishes that there was any negligence on the part of the assessee in disclosing all the material facts relevant to the assessment, the assessment cannot be reopened. In this case, it is not the case of the Revenue that there was any negligence on the part of the assessee in disclosing the material facts relevant to the assessment years therefore, the CIT(A) has rightly allowed the appeals of the assessee and the same is confirmed. Expenditure incurred for registration of trade mark - Nature of expenditure - revenue or capital expenditure - HELD THAT:- This Tribunal is of the considered opinion that the trade mark is nothing but a capital asset. Admittedly, the assessee incurred the expenditure for registration of the trade mark in foreign countries therefore, any expenditure incurred by the assessee in connection with creation/establish of capital asset has to be necessarily be treated as a capital expenditure and the assessee cannot claim the same as revenue expenditure. However, as rightly submitted by the Ld. Counsel for the assessee, the assessee is entitled for depreciation. Therefore, the AO may allow depreciation at the applicable rate. Disallowance of expenditure u/s. 14A r.w.r. 8D - HELD THAT:- Tribunal is of the considered opinion that in case the assessee has invested the borrowed funds it has an impact on the expenditure therefore, it has to be ascertained before making any disallowance. Moreover, as rightly submitted by the Ld. counsel for the assessee, the investment which earned dividend income or exempt income alone has to be considered for limb 2 and limb 3 of Rule 8D(2) of the Rules. This aspect also needs to be re-examined. Both the authorities below has examined this aspect, the orders of the authorities below are set aside and the entire issue with regard to the disallowance u/s. 14A of the Act is remitted back to the file of AO. AO shall re-examine the matter afresh in the light of the material that may be filed by the assessee and decide the issue in accordance with law after giving a reasonable opportunity to the assessee. Exemption claimed u/s. 10B - HELD THAT:- In view of the judgment of Camiceria Apparels India (P.) Ltd. [ 2019 (3) TMI 73 - MADRAS HIGH COURT] the matter needs to be re-examined. It is also necessary to compute the eligible deduction by applying the provisions of sub s. (4) to s. 10B of the Act. This aspect naming the judgment of the Madras High Court and the provisions of Section 10B (4) of the Act was not considered by the earlier Bench of this Tribunal when the issue was decided against the assessee. Therefore, this Bench of the Tribunal is of the considered opinion that the decision in the assessee s own case for the earlier assessment years may not be applicable for the year under consideration. Accordingly, the orders of the both the authorities below are set aside and the issue with regard to deduction u/s. 10B of the Act is remitted back to the file of AO.
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2020 (4) TMI 458
Penalty levied u/s 271B - delay in getting accounts audited u/s 44AB - Whether no specific charge was communicated vide the show cause notice, prior to levy impugned penalty? - HELD THAT:- We have noted that in the show cause notice, the AO has fairly mentioned to show cause and to appear within 7 days as to why a penalty u/s 271B should not be levied. AO also mentioned about the opportunity of hearing in person or through authorised representative. The assessee failed to substantiate and furnish plausible explanation, the explanation furnished by the assessee was not found to be plausible - no reasonable cause for not levying penalty was disclosed to the AO. AO levied minimum penalty prescribed u/s 271B. - Except making a submission of assessee that senior partner was no well, no plausible explanation was furnished. Assessee filed the copy of death certificate of the Sr Partner of the assessee. The date of death of the partner is 05.04.2018 that is almost six years of the relevant period. Moreover, the assessee was getting the audited report from last several years and cannot plead the ignorance of the provisions. - Levy of penalty confirmed.
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2020 (4) TMI 456
Stay petition - Reopening of assessment u/s 147 - whether a prima facie case had been made out by the petitioner seeking stay, we have given our attention to the assessment order dated 21st December, 2019? - HELD THAT:- Prima facie on the basis of coded language diary entries and retracted uncorroborated statement of an alleged beneficiary, perhaps, the additions made by the Assessing Officer is highly questionable. We feel that instead of taking a mechanical approach by directing the petitioner to pay 20% of the tax demand or providing installments, respondent Nos.1 and 2 ought to have considered the prima facie case, balance of convenience and financial hardship, if any, of the petitioner. Stay Granted - Let the appeal be decided by the Commissioner of Income-Tax (Appeals) within a period of four months from the date of receipt of an authenticated copy of the order.
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2020 (4) TMI 455
Joint and several liability of partners for tax payable by firm - recovery of outstanding demand from the petitioner in the capacity of a partner for the assessment years 2011-12 and 2012-13 that is upto 31.03.2012 to the extent of ₹ 38,40,780.00 plus interest under Section 220(2) - HELD THAT:- When learned counsel for the petitioner pointed out the anomaly, Mr. Walve, learned standing counsel submitted on the basis of the instructions received from respondent No.1 who is present in the Court that there is no demand payable by the firm for the assessment years 2011-12 and 2012-13 and consequently, question of raising of any demand against the petitioner does not arise. Further, petitioner having retired as partner of the firm with effect from 31.03.2012 raising any demand against the petitioner for assessment year 2013-14 and onwards also does not arise.
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2020 (4) TMI 454
Joint and several liability of partners for tax payable by firm - legality and validity of order passed u/s 188A directing to make payment of the tax arrears as mentioned in the order - HELD THAT:- When learned counsel for the petitioner pointed out the anomaly, Mr. Walve, learned standing counsel submitted on the basis of the instructions received from respondent No.1 who is present in the Court that there is no demand payable by the firm for the assessment years 2011-12 and 2012-13 and consequently, question of raising of any demand against the petitioner does not arise. Further, petitioner having retired as partner of the firm with effect from 31.03.2012 raising any demand against the petitioner for assessment year 2013-14 and onwards also does not arise. - Notice quahsed.
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2020 (4) TMI 453
Deduction u/s 10A - disallowance of claim of deduction u/s 35D - Whether any disallowance u/s 35D of the Act would go to increase the profit of the business of the assessee and deduction u/s.10A of the Act had to be allowed on such enhanced profits? - CIT(A) in directing the AO to compute the capital employed by treating the FCCB also as part of the capital employed - HELD THAT:- Tribunal in assessee s own case [ 2015 (9) TMI 556 - ITAT BANGALORE] has taken a view that for the purpose of computing the capital employed for allowing deduction u/s 35D of the Act, the FCCBs should also be taken into consideration. The grievance projected by the Revenue in its appeal is that the decision of the Tribunal has not been accepted by the Revenue and a further appeal to the Hon ble High Court is being preferred. We are of the view that the fact that the revenue has preferred appeal against the order of Tribunal is ground no ground not to follow the decision in assessee s own case, especially when the decision of the Tribunal has not been so far reversed by any higher forum. Accordingly, we find no merit in the appeal by the revenue and the same is dismissed. Disallowance of deduction u/s 35D of the Act would go to increase profit of the business on which deduction u/s 10A of the Act was to be allowed to the assessee. - Following the decision in the case of M/s Eka Software Solutions Pvt.Ltd., Vs DCIT [ 2020 (1) TMI 1182 - ITAT BANGALORE] , decided in favor of assessee.
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2020 (4) TMI 452
Income accrued in India - PE in India - India-Mauritius DTAA - income from shipping activities under Sec. 44B - Assessment of assessee is an agent of M/s Arc Line, Mauritius, a company which was incorporated in Mauritius and was engaged in the activity of shipping in international traffic - A.O applying the provisions of Sec. 44B assessed the income of M/s Arc Line, Mauritius from its collections from shipping activities @ 7.5% - HELD THAT:- Tribunal while disposing off the quantum appeal of M/s Arc Line, Mauritius for the year under consideration i.e A.Y. 1998-99 [ 2018 (2) TMI 1524 - ITAT MUMBAI] had concluded viz. (i) that, the assessee i.e M/s Freight Connection India Pvt. ltd. being an agent of an independent status could not be considered as constituting an agency PE of the assessee; (ii) that, M/s Arc Line, Mauritius did not have any PE in India; and (iii) that, the income derived by M/s Arc Line, Mauritius from its shipping activities in the absence of any PE in India could not be brought to tax in India. On the basis of the aforesaid facts, we find ourselves to be in agreement with the claim of the ld. A.R that now when the assessee has been held as an agent of independent status, and the income of M/s Arc Line, Mauritius in the absence of any PE in India had been held as not taxable in India, therefore, there remains no basis for taxing the income of M/s Arc Line, Mauritius from its shipping activities under Sec. 44B of the Act in the hands of the assessee by treating it as a representative assessee of the aforesaid company. We thus set aside the order of the CIT(A) and delete the addition made by the A.O in the hands of the assessee, vide his order passed under Sec. 143(3)/147 r.w.s 161 163 of the Act, dated 30.03.2001.
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2020 (4) TMI 451
Income from other sources - Interest expense allowance against interest income brought to tax under the head income from the other sources - HELD THAT:- As decided in own case [ 2016 (11) TMI 743 - ITAT MUMBAI] and [ 2017 (10) TMI 1523 - ITAT MUMBAI] merit in the arguments of the ld.AR that the interest incurred to the banks should be allowed while assessing the interest income of the assessee from the deposits with NSE and we are not convinced with the findings of ld.CIT(A) that there is no nexus between the funds/deposits lying with the NSE under lien and NSE have various deposits or FDR under lien or deposits out of sources as discussed supra and the interest expense accrued in favour of various banks on the money borrowed for the purpose of FDRs for security and also for bank guarantees to NSC. Accordingly, we set aside the order of ld.CIT(A) and direct the AO to allow deduction of interest out of the interest received from the National Stock Exchange. - Decided against revenue
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Customs
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2020 (4) TMI 450
Refund of SAD - Rejection on the ground that there is a mis-match of description of the goods and the goods imported by the appellant were not the same which were sold by the appellant - HELD THAT:- This fact could have been verified by the authorities after verifying the records of the appellant itself who claims that the goods sold by them are the same goods which have been imported and the Revenue alleging that these are not the same goods; therefore, onus is on the Revenue to prove that the goods sold by the appellant are not the same goods which have been imported. The SAD is paid on importation of the goods to safe guard the revenue of the state i.e. VAT/CST. As the same has been paid by the appellant, therefore, the appellant is entitled to claim the refund of SAD paid by them at the time of importation of the goods in terms of Notification No. 102/2007-Cus dt. 14.09.2007. Refund allowed - appeal allowed - decided in favor of appellant.
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2020 (4) TMI 449
Levy of Anti-Dumping Duty - effective date of notifications - whether Anti-Dumping Duty can be levied during the interregnum period from 21.06.2002 to 09.12.2002, i.e., from the end date of provisional Anti-Dumping Duty Notification and the imposition of final Anti-Dumping Duty by subsequent Notification? HELD THAT:- An identical issue came up before the Division Bench of this very Tribunal in the case of M/s. Picasso Overseas v. Commissioner of Cus. (Imports), Chennai [ 2017 (10) TMI 366 - CESTAT CHENNAI ] after following the decision of the Hon ble Apex Court in the case of M/s. G.M. Exports [ 2015 (9) TMI 1162 - SUPREME COURT ], has set aside the demand towards Anti-Dumping Duty. There are no justifiable reasons to deviate from the decision since the Revenue has not been able to distinguish the above case, nor has it filed any contrary decisions - appeal allowed - decided in favor of appellant.
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Insolvency & Bankruptcy
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2020 (4) TMI 448
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of dues - existence of dispute or not - HELD THAT:- There is pre-existing dispute over claim made in the instant Petition, and the Petitioner failed to explain laches and limitation, and it is initiated with an intention to recover the balance amount of 10 % which is stated to have forfeited, which is contrary to settled position of law. It is also placed on record that Respondent is a solvent company and having around 2000 employees on regular and seasonal on its roll. Therefore, the Company cannot be put under CIRP, when the Petitioner failed to make out case in favour of such prayer. Since the Respondent, for the first time stated to have raised plea of forfeiture of remaining balance amount in its reply dated 08th March, 2019, it would be just and proper to direct the Respondent to reconsider the claim of Petitioner, dispassionately, in terms of Purchase order and Agreement in question, in order to avoid further litigation, without prejudice to the rights of both the Parties. The Petitioner is permitted to submit their representation about its claim along with supported documents to the Respondent within the period of 4 (four) weeks from the date of receipt of copy of this order - Petition disposed off.
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2020 (4) TMI 447
Sanction of resolution plan - Section 31 (1) of the Code - HELD THAT:- It is observed that the amount payable towards the operational creditors is ₹ 0.35 crore as provided in the resolution plan. Further, the amount to be distributed between operational creditors in the event of liquidation, if distributed in order of priority in Section 53(1) of the Code would be NIL. There are 5 dissenting unsecured financial creditors i.e. EPI Money Pvt. Ltd., United Petro Finance Limited, Oxyzo Financial Services Pvt. Ltd., Bajaj Finance Limited and Equitas Small Finance Bank Ltd. and the amount provided for the dissenting unsecured financial creditors is ₹ 0.25 crore. The liquidation value payable to them under section 53(1) in the event of liquidation would be NIL. Hence, Section 30(2)(b) of the Act stands complied with. The requirements under section 31(1) of the Code are satisfied in the present case. In para No. 4 of Form H he RP has certified that the resolution plan complies with all the provisions of the Code and Regulations and does not contravene any of the provisions of the law for the time being in force. The RP has also certified that the resolution applicant Vaibhav Buildtech Private Limited has submitted affidavit pursuant to Section 30(1) of the Code confirming its eligibility under section 29A of the Code to submit the resolution plan and the contents of the said affidavit are in order - the decision taken by the financial creditors falls within the ambit of its commercial and banking wisdom and is therefore, not being interfered with. In view of the provisions of Section 30(4) of the Code, we approve the resolution plan submitted by Vaibhav Buildtech Private Limited as approved by the CoC. The resolution so approved shall be binding on the corporate debtor and its employees, members, creditors [including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed,] guarantors and other stakeholders involved in the resolution plan - moratorium order passed by the Adjudicating Authority under Section 14 of the Code on 15-11-2018 shall cease to have effect - RP shall forward all records relating to the conduct of the CIRP and the resolution plan to the Board to be recorded on its database. Application disposed off.
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Service Tax
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2020 (4) TMI 446
Rejection of declaration under Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES) - Where SCN were issued before the Scheme - Payment of Tax before the enactment of Finance Act, 2013 - Benefit of export of services - HELD THAT:- Since Export of Service Rules, 2005 introduced by Notification No.9/2005-ST dated 03.03.2005 and Taxation of Services ( Provided from outside India And Received in India) Rules, 2006 introduced by Notification No.11/2006-ST dated 19.04.2006 became redundant in the light of the amendment in the Finance Act, 2012 new set of rules came to be framed. Place of Provision of Services Rules, 2012 replaced Export of Service Rules, 2005 introduced by Notification No.9/2005-ST dated 03.03.2005 and Taxation of Services ( Provided from Outside India And Received in India) Rules, 2006 introduced by Notification No.11/2006-ST dated 19.04.2006. Thus, the petitioner cannot state that neither a notice nor an order of determination had been issued to the petitioner in respect of any period on any issue prior to the Scheme. The amendment in the Finance Act, 2012 did not introduce service tax on intermediary or insurance intermediary service for the first time. It was liable to tax all along in terms of section 65(105)(zl) of the Finance Act, 1994 w.e.f. 01.05.2006 prior to that the service - In fact, the case of the petitioner that it was exempt from payment of tax in terms of Export of Service Rules, 2005 was rejected by the Tribunal vide Final Order No.1278/08 dated 17.11.2008 and by Commissioner of Central Excise vide Order in Original No. 19/2010 dated 03.11.2010. Thus, for the earlier period also, the petitioner has been held liable to pay tax for up for the normal period of limitation. Mere change in the provisions in the Finance Act, 1994 vide Finance Act, 2013 did not alter the nature of levy of service tax on the services provided by the petitioner. Even according to the Department, the petitioner was not exempted from payment of service tax under the provisions of the Export of Service Rules, 2005. For the period after 01.07.2012, Rule 9(c) of the Place of Provisional Rules, 2012 specifically continued the levy on services provided by the petitioner. The issue is the same issue in respect of which it has been issued with Show Cause Notice. The Service Tax Voluntary Compliance Scheme, 2013, is not intended for a person like the petitioner - petition dismissed.
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2020 (4) TMI 445
Refund of unutilized CENVAT Credit - Post GST era - time limitation - Applicability of clause B(f) of the Explanation in Section 11B of the Act - HELD THAT:- Every refund claim arises on account of fact that the same was not required to be paid. Reference can be made to the Hon ble Madras High Court decision in the case of Assistant Commissioner of Service Tax, Chennai vs. Nataraj Venkat Associates [2014 (5) TMI 179 - MADRAS HIGH COURT] laying down that the refund claim beyond the period of limitation provided under law is totally barred by limitation. Even the fact that the tax was paid under a mistake of law, cannot be adopted for grant of such refund. Refund cannot be allowed - appeal dismissed - decided against appellant.
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Central Excise
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2020 (4) TMI 444
Interpretation of the remand order of this Tribunal - CENVAT Credit - input services - Outdoor Catering Service - HELD THAT:- On going through the said remand order of this Tribunal, it is clearly mentioned that the adjudicating authority shall verify the figures also. On verification of the figures, as contended by the appellant that they have borne the cost of tea and snacks provided to the employees free of cost, for the same, the adjudicating authority was also required to consider to allow Cenvat credit for inputs/input services used to provide tea and snacks. For proper verification of the figures of Cenvat credit reversal by the appellant, the same has not been done by the adjudicating authority in the remand order - No contrary evidence has been produced by the Revenue in their support of their claim that they are required to reverse total amount of Cenvat credit of ₹ 35,06,550/-. The appellant has rightly reversed the amount of ₹ 24,67,690/- - demand of account of reversal Cenvat credit of ₹ 10,38,860/- do not sustain - penalty also set aside - appeal allowed - decided in favor of appellant.
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2020 (4) TMI 443
CENVAT Credit - common input services availed for taxable as well as exempt services - availment of common input services such as professional services, tour operator service, chartered accountant service, telephone service, security service etc., in the factory of manufacture of the excisable goods as well as in the premises of generation of electricity - credit disallowed on the ground that the requirement of sub-rule (3) of Rule 6 of the Cenvat Credit Rules, 2004 have not been complied - HELD THAT:- The electrical energy cannot be considered Nil rated goods. Further, the Central Government in exercising of the powers conferred under Section 5A of the Central Excise Act, 1944 has not specifically issued any notification, in exempting electrical energy from payment of Central Excise duty. Hence, electrical energy in my considered view cannot be categorized as exempted goods in terms Section 2(d) of the Act. Rule 6 ibid was amended w.e.f. 01.03.2015, which was to the effected that Explanation-1 was inserted vide Notification No. 6/2015-CE (NT) dated 01.03.2015. The said Explanation reads as for the purpose of this rule, exempted goods or final products as defined in clauses (d) (h) of Rule 2 ibid shall include non-excisable goods cleared for a consideration from the factory . Though, part of the disputed period in this case falls under the scope of the amended provisions of Rule 6 ibid, but there will be no material change or such amendment in the case of the appellant in as much as the factory duly registered for manufacture of excisable goods have not dealt with any non-excisable goods, which were cleared from such registered factory. Appeal allowed - decided in favor of appellant.
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