TMI Tax Updates - e-Newsletter
April 18, 2019
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Penalty u/s 271(1)(c) - excess claim of exemption u/s 54EC - Merely because the AO did not accept such a stand of the assessee, would not automatically permit revenue to levy penalty.
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Income Tax:
Cash basis for accounting - whether reimbursement received from the State Government should be taxed in the year in which such reimbursement was actually made by the State Government and not on accrual basis - taxability on cash basis allowed.
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Income Tax:
Interest u/s. 201(1A) - assessee has not remitted the TDS in to the account of Central Government within the time - department is allowed to claim interest on failure is upto the date of filing the return of income.
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Income Tax:
Levy of penalty towards excess Cash Found during search and seizure proceedings - in the absence of any clear cut finding about the cash not representing and belonging to the other family members as their past savings, the same cannot be treated as undisclosed income of the assessee for the year under consideration - penalty not sustainable
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Income Tax:
Penalty u/s 271AAB - defective notice - both the show cause notices issued by the AO for initiation of penalty proceedings u/s 271AAB are very vague and silent about the default of the assessee and further the amount of undisclosed income on which the penalty was proposed to be levied. - Penalties set aside.
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Income Tax:
Demand u/s 201 - alternative remedy - Petitioner cannot be permitted to bypass the statutory provisions and preempt departmental authorities from exercising statutory powers under the Act through misconceived writ petition - writ not entertained as adequate and efficacious departmental remedy was available
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Income Tax:
Allowable expenditure u/s 37 - assessee in the business of Milk products - set up unit for production of Mawa being also a milk product is a case of expansion of existing business and not a case of setting up of new industry - related expenses duly allowable
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Income Tax:
Capital gain vs business income - the shares were shown in the balance sheet as investment - Mere fact that the frequency of buying and selling shares may be higher itself would not be a determined factor.
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Income Tax:
Deduction u/s 80IB - non-allotment of more than one unit was inserted by the legislature - such condition which was inserted by the Parliament with prospective effect cannot be applied to deny the benefit of deduction pointing out that in allotment which was made earlier, there was breach of this condition - deduction allowed
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Income Tax:
Penalty u/s 271(1)(c) - quantum of addition has been confirmed by the High Court - mere rejection of a claim otherwise made bonafide and on arguable legal contentions would not give rise to penalty proceedings
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Income Tax:
Order of settlement u/s 245D(1) - full and true disclosure in application filed u/s 245C(1) - once the assessee approached settlement Commission with a certain amount, representing that it constituted full and true disclosure the question of “offering” another higher amount as a “full” disclosure is impermissible
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Income Tax:
Mandatory procedure u/s 260A - scope and procedure to adopted by the HC u/s 260A - The appeal is heard on merits only on the questions framed by the High Court u/s 260A(3) provided u/s 260A(4) - If the High Court was of the view that the appeal did not involve any substantial question of law, it should have recorded a categorical finding and should have dismissed the appeal in limine.
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Income Tax:
Taxability of capital gain in firm - revaluation of asset being land held by the partnership firm - money equivalent paid to retiring partners to enhanced portion of the assets re-valued does not constitute capital asset within the meaning of section 2(14) - There was also no transfer of capital asset by way of distribution of capital asset either on dissolution or otherwise within the meaning of section 45(4) r.w.s 2(14)
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Income Tax:
Revision u/s 263 - Ld. CIT without pointing out any infirmity in the reply /explanation of the assessee could not concluded that the assessment order passed by the AO was found to be ‘erroneous and prejudicial to the interest of revenue’ - explanation-2(a) to section 263 does not authorize or give unfettered powers to the Commissioner to revise each and every order
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Income Tax:
Disallowance of interest - fund used for its business purposes or Investments - When interest free funds were sufficient to meet the Investments , no disallowance is called for
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Income Tax:
Assessments u/s 153A - basis of the Special Auditor’s Report u/s 142(2A) - no addition can be made in unabated assessment u/s 153A(1)(b) unless it is based upon incriminating documents seized/impounded during the course of search
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Income Tax:
Deduction u/s 37 - accrual of liability - contributions made to the Institute of Road Transport - partly paid during year and partly in subsequent year - rightly allowed the same u/s 37 and the question of applying Section 35 (1)(ii) to the said contributions did not arise
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Customs:
Release of Consignments - imports of Pigeon Peas (Cajanus Cajan)/ Toor Dal (Toor Whole) - issuance of “Detention Certificate” for waiver of Demurrage and Container Detention Charges in terms of Regulation 6(1)(1) of Handling of Cargo in Customs Areas Regulations 2008 - there shall be a waiver of demurrage charges.
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Customs:
Extension of ADD - imports of soda ash - there cannot be a gap between expiry of original duties or extension of one year thereof under second proviso to Section 9A(5) and extension of period of such imposition by 5 years - Any amounts collected or obligations imposed on the basis of those notifications are declared to be without authority of law - Petition is entitled for refund.
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Customs:
Scope of the order - Order in appeal was common for several parties - Appellants claimed that since the appeals of two of the co-noticees have been allowed and the impugned order of Commissioner (Appeal) has been set aside, there appeal should also be allowed - though the argument look attractive but is without any substance.
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Customs:
Valuation of imported goods - for the purpose of contemporaneous price, the price which is under dispute and enhanced out of such dispute cannot be taken as a price of contemporaneous goods. Only a price which declared by the assessee and accepted by the department, the bill of entry thereof can only be taken as price of contemporaneous goods.
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Customs:
Classification of imported goods - vitrifiable enamels and glazes - the product in question is merely glass frit and some additional marginal raw materials, which were added in powder form. Only on this basis it cannot be concluded that it is Vitrified glaze.
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DGFT:
Laying down of modalities for import of Peas (including Yellow peas, Green peas, Dun peas and Kaspa peas), Pigeon Peas (Cajanus cajan)/Toor Dal, Moong dal and Urad dal For the fiscal year 2019 – 2020
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IBC:
Pre-admission proceedings - The limited enquiry has been converted into a full dressed trial - Corporate Insolvency Resolution Process is not a recovery proceeding and the Adjudicating Authority has to strictly adhere to the rules of procedure and the timelines set out in the I&B Code - efforts to derail the process should be frustrated
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VAT:
Plastics are produced in the chemical industry. Though plastics are products of petrochemicals, these are not chemical intermediaries. - P.P. powder cannot be termed as a “chemical”.
Articles
Notifications
Circulars / Instructions / Orders
Case Laws:
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Income Tax
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2019 (4) TMI 981
Black money assessment - undisclosed income under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - scope of satisfaction - omission to furnish the details in the returns under Section 139(1) - prosecution compliant for offences - petitioners prays for interim stay of the judgment of the High Court 2018 (11) TMI 955 - MADRAS HIGH COURT] on the ground that the said judgment may be acted upon in other similar cases HELD THAT:- While, we decline the prayer for stay, as the same would amount to grant of final relief, we make it clear that as the impugned judgment is under scrutiny of this Court, until appropriate orders are passed, the same shall not be taken as a precedent.
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2019 (4) TMI 980
Recovery proceedings - Attachment orders - HELD THAT:- If the Principal Commissioner, Income Tax, Chennai is satisfied in that behalf, the attachment with respect to other properties may be lifted so as to enable the petitioner to liquidate any of the assets and make the payment in terms of the order passed by the High Court.
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2019 (4) TMI 979
Deduction on account of payments made to the legal heir of the deceased partner - admissible expenditure under the provisions of the partnership deed - compensation to the outgoing partner towards the appreciation in the value of the immovable properties held by the assessee firm to the extent of his share of the partnership - HELD THAT:- As decided in PR. COMMISSIONER OF INCOME-TAX-16 VERSUS WADIA GHANDY CO. [ 2019 (2) TMI 1283 - BOMBAY HIGH COURT ] only to summarize, undisputed facts are that the partnership firm envisaged payment to a outgoing partner on the basis that the partner would have rendered service during his tenure as a partner of the firm but could not enjoy the fruits thereof on account of the fact that the work having remained incomplete, the concerned client had not been billed for the work already done. In similar circumstances, the courts have held that payment to the partner would amount to diversion of income at source by overriding title. No substantial question of law arises for our consideration. The income tax appeal is dismissed.
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2019 (4) TMI 978
Assessment u/s 14A r.w.r. 8D - HELD THAT:- Disallowance is made in terms of Rule 8D, the Tribunal cannot provide for an ad hoc formula. We, however, notice that the amount involved is not substantial and the discussion contained in the Judgment of the Tribunal would essentially point to the fact whether such disallowance at all was justified in view of sub Section (2) of Section 14A of the Act. This question is, therefore, not considered. Additional depreciation of installation of windmill in terms of Section 32(1)(iia) - Assessee being engaged in manufacture of articles and things, such additional depreciation would be admissible, whether the installation of plant and machinery was in connection with such business or not - according to the Revenue, generation of electricity amounts to production of goods - HELD THAT:- Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh, Indore Vs. Madhya Pradesh Electricity Board, Jabalpur [ 1968 (11) TMI 85 - SUPREME COURT OF INDIA] has held that electricity is goods within the meaning of the Sales Tax Act and the Excise Act. We do not find any reason to interfere with the view of the Tribunal. We make is clear that we have not examined the first contention of the Assessee in this respect namely additional depreciation under Section 32(1)(iia) would be available on installation of new plant and machinery, whether the same is for the purpose of Assessee s manufacturing business as long as the Assesse is engaged in such activity.
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2019 (4) TMI 977
Penalty u/s 271(1)(c) - quantum of addition has been confirmed by the High Court - Speculation loss claim - bonafide claim - assessee had shown certain derivative transactions and claimed a loss arising out of such transactions - Tribunal while deleting the penalty observed that the assessee had raised a claim which was based on bonafide interpretation of the provisions of the Act, was not a case where assessee had made intentionally a wrong claim - HELD THAT:- We are broadly in agreement with the view of the Tribunal. The assessee had made a bonafide claim. It may be that such claim was not accepted by the High Court. That by itself would not mean that the penalty should be confirmed. It is well settled that mere rejection of a claim otherwise made bonafide and on arguable legal contentions would not give rise to penalty proceedings. Reference in this respect can be made to the decision of the Supreme Court in case of CIT Vs. Reliance Petro Products Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] - Decided against revenue
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2019 (4) TMI 976
Deduction u/s 80IB - proportionate deduction - as per AO the assessee had breached certain conditions of the said section and therefore, deduction was denied - CIT (Appeals) allowed the appeal in part as held disallowance can only be proportionate to the units with respect to which such breach was committed - two appeals before the Tribunal - Tribunal allowed the assessee's appeal holding that the conditions of which the revenue was alleging breach of, were inserted in the legislation after the allotments were made. HELD THAT:- Tribunal held that the revenue's appeal against the proportionate disallowance would become infructuous. The Tribunal, therefore, allowed the assessee's appeal and dismissed the revenue's appeal. Against this judgment the revenue had filed the present appeal. Firstly, in our opinion the revenue should have filed two appeals when the Tribunal was deciding two separate appeals before itself, may be by common judgment. Tribunal has come to a factual finding that the assessee had already made allotments of certain residential units in favour of the same person/family long before the condition of nonallotment of more than one unit was inserted by the legislature in the said section. That being the position, we do not find that the Tribunal had committed any error in holding that the disallowance cannot be made. Through series of judgments this Court has held that such condition which was inserted by the Parliament with prospective effect cannot be applied to deny the benefit of deduction pointing out that in allotment which was made earlier, there was breach of this condition. Under the circumstances, the question of proportionate disallowance would become irrelevant. - Decided against revenue.
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2019 (4) TMI 975
Treatment to income from transaction of shares - period of holding for less than one year - short term capital gain OR business income - HELD THAT:- The question whether the particular assessee is in the business of buying and selling shares or an investor, must necessarily depend on range of facts and circumstances. No single factor would decide the answer to the said question. In the present case, the Tribunal has taken into account all relevant facts. The significant factors as noted that the assessee was a professional, that no borrowed funds were used for purchase of shares, no interest inter alia was paid, the shares were shown in the balance sheet as investment and in all cases other than the intra day transactions, delivery of the shares was taken. We do not find that the Tribunal has committed any error in holding that the assessee was not in the business of buying and selling shares. Mere fact that the frequency of buying and selling shares may be higher itself would not be a determined factor. In fact, the Tribunal noticed that the assessee had rarely indulged in repeat buying and selling the same script. - Decided against revenue
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2019 (4) TMI 974
Penalty u/s 271(1)(c) - excess claim of exemption u/s 54EC - HELD THAT:- As decided in THE PR. COMMISSIONER OF INCOME-TAX-18 VERSUS SHRI BHARATKUMAR MANEKLAL PARIKH [ 2019 (3) TMI 583 - BOMBAY HIGH COURT] assessee had not offered certain receipts to tax under bonafide belief that the same was not taxable. Quite apart from the existence of the letter dated 20th September, 2010 not being disputed by the revenue either before the CIT (Appeals) or the Tribunal, during the assessment proceedings undoubtedly the assessee had made full representation why according to his belief the receipt was not chargeable to tax. Merely because the AO did not accept such a stand of the assessee, would not automatically permit revenue to levy penalty. So much, it made abundantly clear by the Supreme Court through series of judgments particularly in case of Reliance Petroproducts Pvt. Limited [ 2010 (3) TMI 80 - SUPREME COURT] . Further, the reference to the Chartered Accountant's opinion in favour of the assessee made by the Tribunal also cannot be discarded. We do not find any assertion of the revenue at any stage of the proceedings that no such opinion existed. Penalty for breach of Section 54EC - HELD THAT:- Amount involved is extremely small and we therefore, do not entertain the question without going into merits thereof. We however record the confession for the assessee that the question whether investment under section 54EC can be total of ₹ 50 lakhs in all or would be capped to ₹ 50 lakhs in a assessment year, permitting similar such investment in the next year was not free from doubt. The assessee had no intention to breach this ceiling. - Decided in favour of assessee
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2019 (4) TMI 973
Stay of recoveries - reducing the condition of deposit 20% imposed by the department - Pr . CIT directed to deposit 20% of the disputed tax to enable the Petitioner to enjoy the stay against the recoveries - HELD THAT:- We find that the Petitioner has some prima facie grounds against the order of assessment. The question would be, once the AO makes additions to the income of the Petitioner by applying formula of gross profit rate shown by the Petitioner in last few years, could the AO thereafter make further additions on individual grounds? Would such additions not to be telescoped in the gross profit rate adopted by the Assessing Officer? These are the grounds, which we are sure, the Petitioner would raise about before the Commissioner (Appeals) and the Commissioner (Appeals) would take a view in accordance with the law. Taking into account asking the Petitioner to deposit 10% of the disputed tax pending the Appeal, would serve the purpose of justice. Subject to Petitioner fulfilling such condition, further recoveries be stayed till the Appeal is disposed of by the Appellate authority. Petitioner shall deposit further amount before the Income Tax authorities latest by 15/04/2019, so as to make the total deposit with the department (inclusive of 4.5 lakhs already deposited) of 10% of the disputed tax demand.Upon the Petitioner fulfilling such condition, the further recoveries would be stayed. Petitioner stated that the Petitioner s Bank account has sufficient funds to fulfill said condition of deposit. We permit the department to withdraw such amount from the account that would meet with the above condition of deposit of 10% with intimation to the Petitioner and thereafter forthwith release both the bank accounts from the attachment.
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2019 (4) TMI 972
Allowable expenditure u/s 37 - preoperative expensive for Mawa Project - expansion of existing business OR case of setting up of new industry - Whether a new project unconnected with the existing business which was capital in nature and not deductable u/s 37(1)? - HELD THAT:- The assessee -company was set up with the objects to produce or caused to be produced by process, grate, pack, store and sell milk products and ice cream. In furtherance of such objects, the assessee had already set up an ice cream producing unit. Using same management, control and accounts, the assessee attempted to set up another unit for production of Mawa, which is also a milk product. Under such circumstances, tribunal correctly came to the conclusion that this is a case of expansion of existing business and not a case of setting up of new industry. The Supreme Court in case of Alembic Chemical Works Co. Ltd. Vs. Commissioner of Income Tax, Gujarat [ 1989 (3) TMI 5 - SUPREME COURT] was considering a case where the assessee was engaged in the business of manufacturing antibiotic including the Penicillin. The assessee acquired knowhow to produce higher yield and sub culture of high -yielding strain of penicillin. Observing that there was no evidence to indicate that this was not in the line of existing manufacture of Penicillin, the Court held that the expenditure was revenue in nature. - Decided against revenue
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2019 (4) TMI 971
Exemption u/s 11 and 12 - Petitioner already enjoyed registration u/s 12AA - fresh order on assessment - breach of judicial discipline - AO not carried out the directions of the Tribunal - scope of AO in remand proceedings - HELD THAT:- In the present case, the AO was passing a fresh order on assessment as directed by the Tribunal. The Tribunal, in its order dated 30/11/2017, had made it clear that the Petitioner already enjoyed registration under Section 12AA. Only question was, on facts, the Petitioner's claim of exemption under Sections 11 and 12 was valid. Since AO had not applied his mind on this aspect of the matter, the Tribunal remanded proceedings before the AO. The scope of the fresh order that the AO would pass, pursuant to this order of the Tribunal, was, therefore, confined to the inquiry in relation to the Petitioner's claim of exemption under Section 11 and 12. The issue of the validity of the registration of the Petitioner under Section 12AA was not at large before him. Perusal of the order of the AO and in particular, the quoted portion thereof, would convince us that the AO has travelled far beyond the scope of the inquiries before him and has breached all propriety of judicial discipline. AO has held that the Tribunal was not correct in granting deemed registration to the Petitioner. He has, in fact, criticized the Judgment of the Supreme Court on the ground that such Judgment notes a Division Bench Judgment of the High Court but not a larger Bench Judgment. Assessing Officer does not indulge into such bravado in future. Firstly, it was not within his scope to decide whether the decision of the Tribunal was correct or incorrect. Far more serious is his conduct of criticizing the Supreme Court Judgment. The entire hierarchy of judicial set up would be disturbed if a quasi judicial authority or for that matter, any Court or subordinate Judicial Officer were allowed to disregard questioning the correctness of the decision of a higher authority, forum or Court. The impugned orders are set aside. Since the Assessing Officer has not carried out the directions of the Tribunal to examine the Petitioner's claim of exemption under Sections 11 and 12 of the Act on merits, we place back the proceedings before him for passing a fresh order.
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2019 (4) TMI 970
Disallowance u/s 14A read with Rule 8D - income earned from the investments by way of dividend etc. - HELD THAT:- It could not be disputed by the learned counsel for the revenue that the aforesaid matter is covered by the judgment of this Court in Principal Commissioner of Income Tax-I, Chandigarh v. M/s Vardhman Chemtech Private Limited, Chandigarh - [ 2018 (10) TMI 1037 - PUNJAB AND HARYANA HIGH COURT] wherein the appeal filed by the revenue against the deletion of disallowance of ₹ 40,28,526/- under Section 14A of the Act read with Rule 8D of the Rules, was dismissed.
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2019 (4) TMI 969
Exemption u/s 10(10C) - amount received by the assessee on voluntary retirement, who was in service of Bank - HELD THAT:- As the question of grant of exemption, an amount received on the for voluntary retirement from the institution stipulated in the said provision is argued, it is no longer res-integra and has been concluded by a series of judgments by different High Courts including the Madras High Court, which has been approved by the Hon'ble Supreme Court as well and one such order is produced by the learned counsel for the appellants herself in the case of Chandra Renganathan and other Vs. CIT, Chennai [ 2009 (10) TMI 498 - SUPREME COURT OF INDIA] as held that amounts received by retiring employees of the RBI would be eligible for exemption under the aforesaid provisions of the Income Tax Act. On behalf of the Union of India and the Commissioner of Income Tax, the respondent herein, it was submitted that in view of the said Circular, the respondent herein, it was submitted that in view of the said Circular, the respondent would allow the benefit of deduction to the appellants under Section 10(10C) of the Income Tax Act, 1961, as far as the retired employees of the Reserve Bank of India are concerned - Decided against revenue.
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2019 (4) TMI 968
Demand u/s 201 as barred by limitation - pre-emptive petition to restrain the respondents from passing an order of assessment - notice u/s 131 - alternative remedy - HELD THAT:- Petitioner cannot be permitted to bypass the statutory provisions and preempt departmental authorities from exercising statutory powers under the Act through this misconceived writ petition. Against such an order, the aggrieved party has an adequate and efficacious departmental remedy, therefore, at this juncture, we are not inclined to put paid to the show cause notice and the proceedings initiated thereunder. The reliance placed on the decisions of Gujarat and Bombay High Court are clearly distinguishable in the facts and circumstances of the case at hand, hence, they would not come to the rescue of petitioner. We deliberately refrain ourselves from making any observation touching the merit of the case, lest it may cause prejudice to the petitioner or the revenue as the case may be, in the final outcome of the proceedings.
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2019 (4) TMI 967
Revision u/s 263 - examine the claim of the assessees under Section 80HHC as they are Supporting Manufacturers - HELD THAT:- This Court, in the case of Commissioner of Income Tax, Trichirappalli v. M/s.Asian Handlooms, Karur, [ 2013 (12) TMI 541 - MADRAS HIGH COURT] remanded the cases back to the Assessing Authority to consider the case of the assessees for grant of benefit under Section 80HHC The present appeals filed by the Revenue against the orders of the Tribunal cancelling the orders passed by the learned Commissioner of Income Tax under Section 263 of the Income Tax Act, have become infructuous. Therefore, we dispose of these appeals without answering the questions as having been rendered infructuous, with a liberty to the assessees to raise their claim under Section 80HHC of the Act on merits, before the Assessing Authority, in accordance with law.
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2019 (4) TMI 966
Reopening of assessment - information received from the Information Wing on the basis of which the present proceedings have been initiated - HELD THAT:- Return filed by the petitioner was not taken up for scrutiny initially, and only an intimation under Section 143(1) has been issued, the assumption of jurisdiction in this case cannot be faulted, particularly since the respondent has, in the reasons for re-opening, cited tangible material upon which he rests his belief of escapement of income. As relying on RAJESH JHAVERI STOCK BROKERS P. LIMITED [ 2007 (5) TMI 197 - SUPREME COURT] there is no merit in this writ petition and the same is dismissed. The order of re-assessment dated 29.11.2017 thus stands revived in the light of the rejection of the objections of the petitioner dated 19.02.2018. The petitioner seeks and is granted liberty to challenge the order of re-assessment dated 29.11.2017 before the Commissioner of Income Tax (Appeals). Since the petitioner has been litigating against the proceedings for re-assessment from 19.12.2017 when it filed the first writ petition challenging the order of reassessment, the appeal shall be received by the Commissioner of Income Tax (Appeals), if filed within two weeks from today, without reference to limitation.
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2019 (4) TMI 965
Deduction u/s 37 or 35 - accrual of liability - weighted deduction for contributions made to the Institute of Road Transport u/s 35(1)(ii) was available - partly paid during year and partly in subsequent year - HELD THAT:- Though the payments to the extent of ₹ 13,53,000/- was made by the Assessee before the end of the previous year i.e, on 31.03.1992 relevant to the Assessment year 1992-1993 and ₹ 20,00,000/- on four different dates in the next financial year 1992-1993, but the Assessee has not even claimed weighted deduction under Section 35 (1)(ii) . Though the said provisions have been referred to in the Assessment Order, and the claim of the Assessee was made in that provision, but since the Assessee has not claimed weighted deduction of one and half times but only on the actual total expenditure incurred by the Assessee in this year on accrual basis, since the direction of the State Government for the payment of ₹ 20,00,000/- came just before the end of the financial year, therefore, in our opinion, the entire expenditure in this regard ie., ₹ 33,55,400/-, deserves to be allowed in the hands of the Assessee under Section 37 for A.Y.1992-1993 in the present case. Therefore, both the authorities below have rightly allowed the same under Section 37 of the Act and the question of applying Section 35 (1)(ii) of the Act to the said contributions did not arise, since the Assessee has not claimed weighted deduction for one and half times of actual expenses in this regard. Therefore, the first question deserves to be answered against the Revenue and in favour of the Assessee. Reimbursement of the amount on account of Students' Concession Passes given by the Assessee which itself is a State Government Undertaking and was bound by the directions of the State Government - cash basis for accounting adoption - year of assessment - whether reimbursement received from the State Government should be taxed in the year in which such reimbursement was actually made by the State Government and not on accrual basis in A.Y.1992-1993? - HELD THAT:- There is no statutory compulsion on the part of the Assessee to account for all its income on accrual basis only, but even a mixed or a hybrid system of accounting can be adopted by the Assessee. The only thing is that such method of accounting should be consistently adopted by the Assessee. Since, the reimbursement of Students' Concession Passes, was the issue arising in this year for the first time only, the assessee cannot be faulted in adopting cash basis for accounting for such reimbursement from the State Government in its Profit and Loss Accounts on cash basis. Since the reimbursement by the State for these Assessment Years admittedly were not received during these Assessment years, the same cannot be taxed in these years. Tribunal as well as the CIT (A) in our opinion rightly allowed this practice to be adopted by the Assessee on account of reimbursement only for cash basis. Therefore, the Second Question of Law also deserves to be answered as against the Revenue and in favour of the Assessee.
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2019 (4) TMI 964
Stay of penalty proceedings u/s 271(1)(c) - HELD THAT:- Penalty order has already been framed by the Assessing Officer u/s 271(1)(c) of the Act. On such statement, the captioned Stay Applications become otiose and hence dismissed.
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2019 (4) TMI 963
Disallowance of interest on term loan paid by the assessee company on the loan raised from the Bank - allegation that raised fund had not been used for its business purposes - interest free funds as sufficient to meet the Investments - HELD THAT:- Assessee referred to the balance sheet of the assessee-company which shows that assessee-company has share capital and unsecured loans to the tune of ₹ 16.92 crores. The assessee has interest free unsecured loans in a sum. Thus, assessee has sufficient interest free funds available, then presumption would arise that loan given by the assesseecompany to the subsidiary company, would be out of the interest free funds generated as are available with the assessee-company. When interest free funds were sufficient to meet the Investments above, no disallowance could be made against the assessee. We are of the view that addition is wholly unjustified. We, accordingly, set aside the orders of the authorities below and delete the addition. - Decided in favour of assessee.
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2019 (4) TMI 962
Interest u/s. 201(1A) - assessee has not remitted the TDS in to the account of Central Government within the time - assessee has not filed Form No. 26A as per provisions to Section 201(1) so that Assessing Officer could have determined whether the assessee is in default or not - HELD THAT:- No doubt assessee has not filed the Form 26A but now assessee has brought evidence before the Assessing Officer to substantiate that the payee NECL has filed the return of income and paid the due tax. We cannot forget that assessee is collecting the above tax on behalf of Government and the duty on the assessee is statutorily obligated upon. When assessee fails to comply with the provisions, the liability is on the assessee until the due tax is collected or paid to Government. In this case, no doubt assessee has not complied with the provisions but Government has collected the due tax from the payee on the date of filing the return of income and payee paid the due tax before filing the return of income. Therefore, following the decision of the Hon'ble Supreme Court in the case of Hindustan Coca-Cola Beverages Ltd [2007 (8) TMI 12 - SUPREME COURT OF INDIA] the department is allowed to claim interest on failure is upto the date of filing the return of income. Therefore, we direct the Assessing Officer to calculate the interest u/s. 201(1A) from the date of payment to the date of filing of the return of income by the payee. Therefore, ground of appeal filed by the assessee is allowed. Interest u/s. 234B charagibility - double taxation by way of interest, once u/s. 201(1A) from the payer-assessee and again u/s. 234C from Navayuga Engineering Company Limited (NECL) - HELD THAT:- Assessee has submitted that the payee has filed return of income and paid the due tax including interest u/s. 234B, Assessing Officer cannot calculate interest u/s. 201(1A). In our view, assessee failed to understand the mandate of the two Sections i.e., Sec. 201(1) is the obligation on the collector of tax and Sec. 234B is the obligation on the tax payer itself, who has to pay the due tax on time. There is significant difference in statutory obligations posted on the collector of tax and statutory obligation on the tax payer. Therefore, these two obligations and the mandate of two sections are different and cannot be equated. Accordingly, grounds raised by assessee are dismissed. Demand raised u/s.201(1) 201(1A) - mis-match of figures and information in Balance Sheet of assessee and NECL - HELD THAT:- On careful verification of bank statement of NUTPL submitted before us, we notice that NUTPL received ₹ 54.25 Crores on 25-06-2010 but on the next day, the same funds were transferred to NECL. What is the necessity to transfer on the next day, what is the purpose, is it paid on behalf of assessee or whether they have their own contract. The balance sheet of NECL and NUTPL were not filed before us to verify the figures. Since there are discrepancies noted in the entries and bank transactions, we deem it fit and proper to remit this issue back to the file of Assessing Officer to verify this transaction exclusively from the letter issued to ICICI and payment to NUTPL and subsequently, same payment of ₹ 44.25 Crores and ₹ 10 Crores were made from NUTPL to NECL on the next day. Accordingly, grounds raised by Revenue are allowed for statistical purposes.
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2019 (4) TMI 961
Deduction u/s 54F - claim of deduction on the basis of full value of consideration actually or stamp value u/s 50C - HELD THAT:- The ld. CIT(A) has correctly held that the assessee is entitled for deduction U/s 54F in respect of full value of consideration received and not the value taken by the Sub-Registrar for the purposes of stamp duty. The issue is squarely covered by the decision of the Hon ble Delhi High court in the case of CIT Vs. Nilofar Singh [2008 (8) TMI 165 - DELHI HIGH COURT], which has been followed by the ITAT Jaipur Bench in the case of Nand Lal Sharma Vs. ITO [2015 (6) TMI 482 - ITAT JAIPUR] and also in the case of Gyan Chand Batra [2010 (8) TMI 528 - ITAT JAIPUR] Unexplained credits - HELD THAT:- A categorical finding has been recorded by the CIT(A) after considering the remand report, to the effect that the assessee has received a cheque of ₹ 55.00 lacs from M/s Megha Colonizers which was deposited in his bank account maintained with OBC bank on 16/3/2007. The confirmation of M/s Megha Colonizers was also filed before the lower authorities. Accordingly, there is no infirmity in the order of the CIT(A) in deleting the addition of ₹ 55.00 lacs. Similarly with regard to ₹ 11.00 lacs, the CIT(A) found that the assessee has received a cheque from his brother Shri Satya Narain which is duly verifiable from the bank statement of Shri Satya Narain who has issued cheque to the assessee on 24/3/2007. The assessee has also filed confirmation from his brother Shri Satya Narain. Detailed findings so recorded by the CIT(A) with regard to receipt of ₹ 11.00 lacs by the assessee from his brother through account payee cheque and confirmation have been filed by the brother has not been controverted by the DR by bringing any positive material on record. Accordingly, we do not find any infirmity or illegality in the impugned order of the CIT(A) in deleting the addition of ₹ 11.00 lacs. Since the additions have been deleted by the CIT(A) after giving proper opportunity to the A.O. and calling a remand report, there is no contravention of Rule 46A of the IT Rules. The total addition of ₹ 66.00 lacs (55,00,000/- + 11,00,000/-) so deleted by the CIT(A) are correct. Reopening of assessment - no service of notice u/s 143(2) - HELD THAT:- following the reasoning in [2019 (4) TMI 825 - ITAT JAIPUR], we do not find any merit in the assessment so framed without issue of notice u/s 143(2) of the Act. Accordingly, the assessment order so passed is liable to annulled ab-initio as the same has been passed without issue of notice U/s 143(2).
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2019 (4) TMI 960
Taxability of capital gain in firm - revaluation of asset being land held by the partnership firm - Transfer of capital asset on dissolution of firm or otherwise u/s 45(4) r.w.s. 2(14) - money equivalent as paid by the partnership firm to the retiring partner - difference of opinion by members of tribunal - reference to Third Member by the Hon'ble President u/s.255(4) - HELD THAT:- In agreement with the view of the Ld.CIT(A) that money equivalent to enhanced portion of the asset revalued and credited in capital account of the partner is not a capital asset and distribution of such money equivalent to the partners on retirement did not constitute transfer of capital asset on dissolution of the firm or otherwise within the meaning of section 45(4) r.w.s. 2(14), there was difference of opinion between my Learned Brother and myself and the point of difference was referred to Third Member by the Hon'ble President u/s.255(4) of the Act. Hon'ble Third Member [ 2019 (1) TMI 1551 - ITAT MUMBAI] answered both the questions in the negative and in favour of the assessee agreeing with the view of the Judicial Member. Since the Majority view of the Members is against the Revenue, the grounds raised by the Revenue in both the appeals are decided against the Revenue in conformity with the order passed by the Third Member.
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2019 (4) TMI 959
Accrual of income - Addition on account of accrued interest on loans, debentures and bonds - computation of taxable income earned from business of insurance u/s 44 - HELD THAT:- We are of the considered view that the assessee company had rightly not recognised an amount as income for the years as per its accounting policy and as per policy issued by the Insurance Regulatory Development Authority (IRDA). So, finding no illegality or perversity in the findings returned by the ld. CIT (A), ground no.1 is determined against the Revenue. Addition on account of expenses incurred on Guest House repairing - HELD THAT:- When the expenditure incurred by the assessee company for maintenance of company s own guest houses, the same is covered u/s 30(a)(ii) of the Act. The repair expenses thereof would also be allowed as deduction as section 30(a)(ii) of the Act. So, we find no ground to interfere with the findings returned by the ld. CIT (A) and consequently ground no.2 is determined against the Revenue. Addition u/s 14A - assessment of insurance company - HELD THAT:- Hon ble Supreme Court in Maxopp Investment Ltd . . [ 2018 (3) TMI 805 - SUPREME COURT OF INDIA] are not sustainable because of the fact that in case of insurance company, the assessee in this case, the income is to be computed as per provisions contained u/s 44 read with Rule 5 of First Schedule, coupled with non-obstante clause and in these circumstances, the AO is not empowered to travel beyond these provisions. Section 14A contemplates an exception for deduction as allowable under the Act are those contained under sections 228 to 438 of the Act and section 44 creates special application of these provisions in case of the insurance companies. AR for the assessee stated at Bar that the decision rendered by coordinate Bench of the Tribunal right from AYs 2000-01 to 2005-06 have not been challenged in the Hon ble High Court. No illegality or perversity in the findings deletion made by the ld. CIT (A), ground no.3 is determined against the Revenue.
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2019 (4) TMI 958
Revision u/s 263 - return income of the assessee was accepted by the AO without carrying out proper and necessary enquiries regarding unsecured loans received by the assessee during the year from one Satish Chander Gupta, Chandigarh - lack of enquiry or prejudice - HELD THAT:- Assessment u/s. 143(3) of the Act was framed by the Assessing Officer after obtaining necessary details from the assessee and further the same were examined by him. Therefore, even if, the same has not been spelt elaborately in the assessment order it cannot be said that there is a lack of enquiry or prejudice has been caused to the Revenue, as we have discussed various case laws in earlier part of this order which are identical to the facts before us. Even otherwise in the case of Narayan Tatu Rane vrs. ITO [ 2016 (5) TMI 1162 - ITAT MUMBAI] it was held that newly inserted explanation-2(a) to section 263 does not authorize or give unfettered powers to the Commissioner to revise each and every order, if in his opinion, the same has been passed without making enquiries or verifications which should have been made. Even from the records, we notice that the assessee by way of exhaustive reply filed with the CIT in respect of all the aforesaid issues, on the basis of which the order passed by the AO was sought to be revised, had thus furnished clarifications as regards all the said issues and demonstrated that the assessment order was not erroneous and prejudicial to the interest of revenue‟. However, the Ld. CIT without pointing out any infirmity in the reply /explanation of the assessee, and as to why the same could not accepted had rather hushed through the matter and concluded that the assessment order passed by the AO was found to be erroneous and prejudicial to the interest of revenue . By no stretch of imagination, the assessment order can be termed as erroneous and or prejudicial to the interest of revenue and are required to be satisfied for invoking the provisions of section 263 of the Act - Decided in favour of assessee.
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2019 (4) TMI 957
Mandatory procedure u/s 260A for appeal before High Court - reopening u/s 147 - no factual foundation for issue of notice - no escaped assessment - no valid reason to believe - High Court dismissed the appeal stating no substantial question of law arises - distinction between the questions proposed by the appellant for admission of the appeal and the questions framed by the Court - HELD THAT:- The questions, which are proposed by the appellant, fall under Section 260A (2) (c) of the Act whereas the questions framed by the High Court fall under Section 260A (3) of the Act. The appeal is heard on merits only on the questions framed by the High Court under subsection (3) of Section 260A of the Act as provided u/s 260A (4). In other words, the appeal is heard only on the questions framed by the Court. If the High Court was of the view that the appeal did not involve any substantial question of law, it should have recorded a categorical finding to that effect saying that the questions proposed by the appellant either do not arise in the case or/and are not substantial questions of law so as to attract the rigor of Section 260A of the Act for its admission and accordingly should have dismissed the appeal in limine. In our view, the respondent had a right to argue at the time of hearing of the appeal that the questions framed were not involved in the appeal and this the respondent could urge by taking recourse to subsection (5) of Section 260A of the Act. But this stage in this case did not arise because as mentioned above, the High Court neither admitted the appeal nor framed any question as required under subsection (3) of Section 260A of the Act. The expression such question referred to in subsection (5) of Section 260A of the Act means the questions which are framed by the High Court under subsection (3) of Section 260A at the time of admission of the appeal and not the one proposed in Section 260A (2) (c) of the Act by the appellant. High Court should have seen that substantial questions of law do arise in the appeal for being answered on their respective merits. The impugned order is set aside. The case is remanded to the High Court for deciding the appeal filed by the Commissioner of Income Tax-Mumbai afresh on merits as provided u/s 260A( 4) of the Act to answer the three questions framed by this Court under Section 260A( 3).
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2019 (4) TMI 956
Order of settlement u/s 245D(1) by settlement Commission - full and true disclosure in application filed under 245C (1) - offer of additional income - retraction of statement offering additional income recorded under oath u/s 132(4) - HELD THAT:- This Court is of the opinion that the approach of the ITSC was flawed throughout. Apart from brushing aside the fact that the retraction took place close to two years after the statement was made, the commission overlooked that nowhere did the assessees complain that the statement of the first respondent was recorded under coercion. His explanation for retraction was that the disclosures were not feasible, because he did not have the benefit of the records. But that is the point: if indeed someone is involved in clandestine activities, but is aware of its monetary magnitude and indeed discloses it voluntarily, he is in the best position to say if it is supported by evidence. At the stage of voluntary disclosure there was candour on the part of the first statement, that he could not support the out of book transactions with evidence. Later too, the position did not alter. Furthermore, the other important fact is that the assessee made no attempt to support the claim that the loan credit and other credits were genuine; the parties concerned, their creditworthiness and the reason for the credit was not substantiated in any manner. The second and equally important reason for this Court to hold that the ITSC gravely erred in its approach is an utter disregard to the condition that the assessee always has the duty to come clean and make full disclosure. After noting and brushing aside the Revenue s objections with regard to the complete lack of explanation by the assessee with respect to credits claimed, the ITSC proceeded to compute the amounts offered and observed that the difference in the net asset and the income declared was ₹ 5.55 crores. Jakhotia accepted the difference as their undisclosed income computed in the manner given (in the order) and in the spirit of settlement agreed to offer additional income of ₹ 5.55 crores. The decision of the ITSC was untenable in law. Once the assessee approached it with a certain amount, representing that it constituted full and true disclosure (and had maintained that to be the correct amount till the date of hearing) the question of offering another higher amount as a full disclosure is impermissible. Ajmera Housing [ 2010 (8) TMI 35 - SUPREME COURT OF INDIA] clearly held that there is no stipulation for revision of an application filed under 245C (1) of the Act and thus the natural corollary is that determination of income by the Settlement Commission has necessarily to be with reference to the income disclosed in the application filed under the said Section in the prescribed form. The amount offered in this case, clearly could not have been considered or accepted. The ITSC, in this regard, fell into error as there was no full and true disclosure by the assessees. Consequently, the impugned order is hereby set aside and quashed.
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2019 (4) TMI 955
LTCG - applicability of Explanation to Section 73 assessee was of an investor and not of a businessman - activities of buying and selling of shares being speculative in nature - HELD THAT:- The two things immediately emerge from the Judgment of the Tribunal. Firstly the question of nature of assessee's activities of buying and selling of shares being speculative in nature with special reference to Explanation 73 was not an issue at all. We therefore do not permit the Revenue to raise such a contention for first time in this Appeal before the High Court since this issue can at the be considered as one of the facts and law. The second thing which emerges from the Judgment of the Tribunal is that the Tribunal had noted relevant facts applying correct parameters to come to a conclusion that in relation to the shares held by the assessee in excess of one year the intention was to invest in shares and not to engage itself in business of buying and selling the shares - No question of law arise
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2019 (4) TMI 954
Assessments u/s 153A - basis of the Special Auditor s Report u/s 142(2A) - AO has not relied on incriminating documents seized/impounded during the search proceedings - HELD THAT:- It is settled legal position that in case of unabated assessment u/s 153A(1)(b), unless such assessment is based upon incriminating documents seized/impounded during the course of search, no addition can be made, no infirmity can be found in the impugned order passed by the Tribunal in upholding the order passed by the Commissioner (Appeals) - No substantial question of law
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2019 (4) TMI 953
Penalty u/s 271AAB assessment u/s 153B - specification of default as per clause (a) to (c) of section 271AAB(1) - In the absence of any grounds specified in the show cause notice as well as any amount to be treated as undisclosed income of the assessee for the purpose of levy of penalty under section 271AAB, the initiation of penalty is not valid - HELD THAT:- It is clear that both the show cause notices issued by the AO for initiation of penalty proceedings u/s 271AAB are very vague and silent about the default of the assessee and further the amount of undisclosed income on which the penalty was proposed to be levied. Even the Hon ble Jurisdictional High Court in case of Shevata Construction Co. Pvt. Ltd [ 2016 (12) TMI 1603 - RAJASTHAN HIGH COURT] has concurred with the view taken by Hon ble Karnataka High Court in case of CIT vs. Manjunatha Cotton Ginning Factory, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] which was subsequently upheld by the Hon ble Supreme Court by dismissing the SLP filed by the revenue in the case of CIT vs. SSA s Emerald Meadows, [ 2016 (8) TMI 1145 - SUPREME COURT] . Accordingly, following the decision of the Coordinate Bench as well as Hon ble Jurisdictional High Court, this issue is decided in favour of the assessee by holding that the initiation of penalty is not valid and consequently the order passed u/s 271AAB is not sustainable Absence of a finding that the income disclosed by the assessee is an undisclosed income as explanation to section 271AAB(1) - penalty is not mandatory but to be imposed on merits of each case - HELD THAT:- We hold that the entries in the seized documents representing the payment on account of land, in the absence of the other essential facts regarding the particulars of the land as well as the persons do not constitute undisclosed income of the assessee as defined in the explanation to section 271AAB. Accordingly, the penalty levied under section 271AAB by the AO and confirmed by the ld. CIT (A) is not sustainable As regards the alternative plea regarding the requirement of maintaining the regular books of account by the assessee, we find that the assessee is not engaged in any business activity or any other professional activity requiring the regular books of account. The income derived by the assessee is only from Income from house property and income from other sources as well as the profit from partnership firm for which regular books of account are not required to be maintained. See - Ravi Mathur vs. DCIT [ 2018 (6) TMI 1128 - ITAT JAIPUR]
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2019 (4) TMI 952
Penalty u/s 271AAB - defective notice - assessment u/s 153B post search and seizure - HELD THAT:- Following the earlier decision of this Tribunal in the case of Ravi Mathur vs. DCIT [ 2018 (6) TMI 1128 - ITAT JAIPUR] , we hold that the levy of penalty u/s 271AAB is not mandatory but the AO has a discretion after considering all the relevant aspects of the case and then to satisfy himself that the case of the assessee falls in the definition of undisclosed income as provided in the explanation to section 271AAB Validity of initiation of penalty proceedings for not specifying the ground and default in the show cause notice issued u/s 274 - HELD THAT:- Thus it is clear that both the show cause notices issued by the AO for initiation of penalty proceedings u/s 271AAB are very vague and silent about the default of the assessee and further the amount of undisclosed income on which the penalty was proposed to be levied. Even the Hon ble Jurisdictional High Court in case of Shevata Construction Co. Pvt. Ltd [ 2016 (12) TMI 1603 - RAJASTHAN HIGH COURT] has concurred with the view taken by Hon ble Karnataka High Court in case of CIT vs. Manjunatha Cotton Ginning Factory, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] which was subsequently upheld by the Hon ble Supreme Court by dismissing the SLP filed by the revenue in the case of CIT vs. SSA s Emerald Meadows, [ 2016 (8) TMI 1145 - SUPREME COURT] . Accordingly, following the decision of the Coordinate Bench as well as Hon ble Jurisdictional High Court, this issue is decided in favour of the assessee by holding that the initiation of penalty is not valid and consequently the order passed under section 271AAB is not sustainable. Absence of a finding that the income disclosed by the assessee is an undisclosed income as explanation to section 271AAB(1) - HOLD THAT:- We hold that the entries in the seized documents representing the payment on account of land in the absence of the other essential facts regarding the particulars of the land as well as the persons do not constitute undisclosed income of the assessee as defined in the explanation to section 271AAB of the Act. Accordingly, the penalty levied u/s 271AAB by the AO and confirmed by the ld. CIT (A) is not sustainable Expenditure on renovation of house - The department has not brought on record the fact of actual expenditure incurred by the assessee on the renovation work of the house or carried out during the year under consideration as well as following the decision of the Coordinate Bench of this Tribunal, the penalty levied u/s 271AAB is not sustainable Household expenditure - The household expenditure without considering the drawings of the earning members of the family cannot be treated as undisclosed income. Neither during the search proceedings or in the assessment proceedings any enquiry was conducted to find out the mis-match of drawings made by the family members as well as the household expenditure recorded in the seized document. Therefore, merely because of the expenditure recorded in the seized document, it would not ipso facto constitute the undisclosed income in terms of explanation to section 271AAB - penalty not sustainable Excess Cash Found - We find merit in this contention that when the cash was found from the residence of the assessee and from different rooms of the house, then the savings of the other family members cannot be ignored while considering the undisclosed income on account of cash found at the residential premises of the assessee. From the statement recorded u/s 132(4) itself, the department has pointed out that the cash was found from different rooms of the residential premises and, therefore, the benefit of past savings of other family members is required to be given on this account. Accordingly, in the absence of any clear cut finding about the cash not representing and belonging to the other family members as their past savings, the same cannot be treated as undisclosed income of the assessee for the year under consideration - penalty not sustainable Excess jewellery silver found - In the facts and circumstances of the case, the personal jewellery of the assessee and family members acquired in the past and some part of which was also inherited will not fall in the ambit of undisclosed income. Hence the penalty levied by the AO against such disclosure is not sustainable. It may be pertinent to mention that the statement recorded u/s 132(4) itself would not either constitute an incriminating material or undisclosed income in the absence of any corresponding asset or entry in the seized document representing the undisclosed income. Accordingly, the penalty levied by the AO u/s 271AAB is deleted.
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2019 (4) TMI 951
Condonation of delay of 98 days - assessee wife was undergoing medical treatment for uterus cancer - HELD THAT:- We have heard both the parties and convinced that there is a reasonable cause for delay in filing the appeal, accordingly, the delay is condoned. Additional ground - HELD THAT:- The additional ground raised by the assessee with regard to validity of issue of notice u/s 274 r.w.s. 271 is a legal issue which does not require verification of facts or need further investigations. - additional ground raised by the assessee is admitted. Penalty u/s 271(1)(c) - defective notice - notice u/s 271 r.w.s. 274 is ambiguous causing confusion and the assessee was not made known for which limb of the notice the penalty proceedings were initiated - HELD THAT:- In the instant case as discussed above, the AO did not strike out the irrelevant column. Therefore, respectfully following the decision of Hon ble Andhra Pradesh High Court in the case of Baisetty Revathy [ 2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT] and the decision of Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] , we hold that the notice issued u/s 271(1)(c) is invalid.
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2019 (4) TMI 922
Block assessment u/s 158BC 158BD - Non filing of Income Tax returns - Revenue Authorities had rejected the acknowledgements of the returns filed by the assessee because it did not match with the records maintained by the Revenue Authorities - HELD THAT:- Revenue Authorities have not conducted any investigation on that regard. Revenue Authorities also ought to have examined the copy of the returns filed by the assessee that was produced before them and thereafter arrived at a proper conclusion. Revenue Authorities had not taken any coercive action for the alleged fraud committed by the assessee. In this situation we can neither hold the matter in favour of the Revenue nor the assessee - addition made by the AO in the block assessment is devoid of merits because there is no conclusive finding by the Revenue that the assessee had not filed its return of income for the assessment years 1997-98 to 2003-04. Hence we hereby direct the Ld.AO to delete the addition made in the block assessment. Addition towards Recurring deposit - AO added the same to the undisclosed income of the assessee because the transactions were not accounted in the assessee s books of accounts - HELD THAT:- In similar situation herein above in SHRI RAKESH SARIN, [ 2011 (6) TMI 977 - ITAT CHENNAI] , we have deleted the addition made by the Ld.AO because the Ld.AO had failed to examine the return filed by the assessee and the explanation submitted. Addition towards pro notes - as during the course of search certain pro-notes were found in the assessee s premises and since no explanation could be obtained from the karta of the HUF Shri Rakesh Sarin who was unavailable at that time and the manager who was present, the Ld.AO added the aggregate of the same as the undisclosed investment - HELD THAT:- The pro-notes were incomplete in all aspects and therefore presumption cannot be made that the assessee had lend money though there is some air of doubt. Moreover peak credit concept may also be applicable in the case of the assessee due to rotation of advances and repayments. It appears that the Ld.AO has not examined those aspects. There is every probability that if such exercise would have been carried out the source of the amount utilized in the finance business would have been explainable as the amount utilized in the business would have been much less than the addition made by the Ld.AO. Therefore adhoc addition of the amount mentioned in the entire pro-notes is not justifiable. Further the Ld.AO has also not made any investigation in the market to find out whether any amount borrowed from the assessee was pending to be returned to the assessee. Further the Ld.AO had also not made proper investigation from the borrowers. When the Ld.AO has not made any investigation on this regard addition made only on the basis of presumption is not justifiable Addition being the amount advanced to M/s. BMB Productions as unexplained advances - HELD THAT:- As during the course of search proceedings it was observed by the Ld.AO that the assessee had advanced money to M/s. BMB Productions and the same was returned. Since excess money of ₹ 1,50,000/- was returned, theLd.AO added the same to the income of the assessee which was subsequently confirmed by the Ld.CIT(A). Before us neither the assessee nor the Ld.AR has produced any materials or advanced any arguments to negate the finding of the Ld.Revenue Authorities, therefore we have no other options but to confirm the order of the Ld.Revenue Authorities. Accordingly we hereby confirm the addition of ₹ 1,50,000/- made by the Ld.AO
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Customs
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2019 (4) TMI 950
Release of Consignments - imports of Pigeon Peas (Cajanus Cajan)/ Toor Dal (Toor Whole) - issuance of Detention Certificate for waiver of Demurrage and Container Detention Charges in terms of Regulation 6(1)(1) of Handling of Cargo in Customs Areas Regulations 2008 - HELD THAT:- The petitioner will remit the entire duty component of the consignments imported by him in case were such duty is leviable as per paragraph 15(iii) above along with a bank guarantee for the 10% of the invoice value. In cases where the duty impact is neutral, the petitioner shall furnish a bank guarantee for the 10% of the invoice value. Upon satisfaction of the aforesaid conditions, the consignment shall be released forthwith. Waiver of Demurrage and Container Detention Charges - Held that:- In the light of Rule 6(l) of the Handling of Cargo in Customs Areas Regulations, 2009, which provides that the Customs Cargo Provider shall not, subject to any other law for the time being in force, charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be, there shall be a waiver of demurrage charges. Petition disposed off.
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2019 (4) TMI 949
Extension of ADD - imports of soda ash - clearances made after 02.07.2018 without any authority of law through Customs Notification 33/2017-Customs (ADD) dated 30.06.2017 issued under Section 9A(5) extending duty imposed under Customs Notification 34/2012-Customs (ADD) dated 03.07.2012 - HELD THAT:- The original imposition in the present case was by way of the Notification dated 03.07.2012 and was valid till 02.07.2017. The levy was extended in the exercise of power under second proviso to Section 9A(5) of the Act through Customs Notification 33/2017 dated 30.06.2017 by a year till 02.07.2018. No notification extending duties can now be issued in terms of the settled law. No notification with retrospective or prospective effect can now be issued by the Respondent herein even if the sunset review is decided in favour of the applicant domestic producers in terms of the settled legal position that there cannot be a gap between expiry of original duties or extension of one year thereof under second proviso to Section 9A(5) and extension of period of such imposition by 5 years under first proviso to Section 9A(5) of the Customs Tariff Act, 1975. The respondents are hereby restrained and enjoined from collecting any duties under Notification No. 34/2012 Customs (ADD) dated 03.07.2012 read with subsequent Notification No.33/2017 Customs (ADD) dated 03.06.2017, on or after 02.07.2018. Any amounts collected or obligations imposed on the basis of those notifications are declared to be without authority of law - petition allowed.
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2019 (4) TMI 948
Scope of the order - Order in appeal was common for several parties - tribunal has set aside the order in case of two parties - Appellants in the present case have claimed that since the appeals of two of the co-noticees have been allowed and the impugned order of Commissioner (Appeal) has been set aside, there appeal should also be allowed as the impugned order has been set aside. - Held that:- Though the argument advanced by the Counsel for appellants look attractive but is without any substance. The scope of order of the appellate authority is limited to the appeal under consideration. The order of appellate authority cannot be held to have decided the appeal which was not under consideration before the bench then - the order of the Commissioner (Appeal), [impugned order], to the extent of appellants before that bench is set aside, and not the entire order. It may happen in case where there are multiple noticees, few may not chose to challenge the order passed against by them. In case the order is set aside in respect of those who have filed the appeal is set aside then it will not imply that relief has been granted to the all the noticees. Jurisdiction - power of Additional Director DRI to issue SCN - Held that:- The issue is decided in the case of SUNIL GUPTA VERSUS UNION OF INDIA AND OTHERS [2014 (12) TMI 151 - BOMBAY HIGH COURT] - decided against appellant. There are no merits in the contentions raised by the appellants in their appeal or during the course of arguments - appeal dismissed - decided against appellant.
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2019 (4) TMI 947
100% EOU - Provisional release of goods - export of goods - No corroborative evidences - cross examination of witnesses - Held that:- It is settled law that statements recorded under section 108 of Customs Act, 1962 are admissible piece of evidence and need not be further corroborated. The goods were liable for confiscation under Section 113(i) and the exporter liable to penalty under Section 114 (iii) of the Customs Act, 1962. However, the ends of justice will be met if the penalty imposed on the exporter i.e. Appellant 1 is reduced to ₹ 40,00,000/- (Rupees Forty Lakhs only). Appeal allowed in part.
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2019 (4) TMI 946
Valuation of imported goods - White Poppy Seed - enhancement of value - rejection of declared value - HELD THAT:- As regard the application of price of USD 2700 PMT on the basis of Bill of Entry of contemporaneous import, the bill of entry of Laxmi Trading Co. was relied upon wherein the 2700 PMT was enhanced price by the custom under the identical dispute - It is a settled law that for the purpose of contemporaneous price, the price which is under dispute and enhanced out of such dispute cannot be taken as a price of contemporaneous goods. Only a price which declared by the assessee and accepted by the department, the bill of entry thereof can only be taken as price of contemporaneous goods. The enhancement of the price and consequential demand, interest etc. are not sustainable - Appeal allowed - decided in favor of appellant.
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2019 (4) TMI 945
Classification of imported goods - vitrifiable enamels and glazes - whether the imported goods are to be classified as Glass Frit under CTH 32074000 or Vitrifiable Enamels Glaze under CTH 32072010 - no detailed chemical examination carried on - extended period of limitation - HELD THAT:- Revenue has not undertaken any chemical examination/ test of the goods to show that the goods in question were not Glass Frit but Ceramic Glaze. When the Revenue had an apprehension that the products in question has been mis-classified as Frit the Revenue should have got the goods chemically examined. The terminology used by the supplier or the statement of the importer cannot be the only ground to classify the product as Glaze - Not only the nature of the product, it was very well open for the revenue to investigate as to how the imported product was put to use. Merely on the basis of the statement, the classification of the product cannot be fixed. The Custom Tariff Entry 32072010 is for Vitrifiable Enamels and glaze , which means that the vitrifiable glaze shall be classified in the said Chapter heading. The CTH 32074000 is for glass frit and other glasses in the form of powder, granules and flakes. As per the adjudicating authority and the Revenue itself, the major difference between the glass frit and glaze is physical properties and appearance. When such a view has been taken by the adjudicating authority, in that case, he should have described / discussed the physical properties and appearance of the goods to finalize the classification of the impugned goods, which was not done. The HSN Explanation considers Glass Frit as the intermediate / preparation to make vitrifiable glaze and after preparing the glass Frit, suitable for further use for glazing, it can be considered as vitrifiable glaze - In the present case, as informed by M/s Vidres S.A., Spain, the product in question is merely glass frit and some additional marginal raw materials, which were added in powder form. Only on this basis it cannot be concluded that it is Vitrified glaze. Also as per the email of supplier, the addition of raw materials to already formed Glass Frit is to cater to the various requirement of each individual customer. However this cannot be interpreted so as to conclude that the product is vitrified ceramic glaze at the time of import per se. Extended period of limitation - HELD THAT:- The issue involved is of interpretation and classification of goods. The Appellant had classified the goods on the basis of supplier s invoice. Even in case of past import the dispute of classification was not raised by the revenue - the malafide intention or suppression on the part of the Appellant is not proved - demand is barred by limitation. Appeal allowed - decided in favor of appellant.
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Corporate Laws
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2019 (4) TMI 944
Imposition of penalty - excavation of minor mineral, i.e., ordinary earth, without obtaining requite permission - Held that:- Evidently, the ordinary earth is not specifically defined as 'minor mineral'. However, the Central Government is empowered to declare any other mineral as a minor mineral. In pursuance of such power, the Central Government issued the Notification on 3rd February 2000 and thereby declared ordinary earth as a 'minor mineral'. The Supreme Court in the case of Promoters and Builders Association of Pune Vs. State of Maharashtra Ors. [ 2014 (12) TMI 1342 - SUPREME COURT OF INDIA] , after analysing the provisions, contained in Section 48(7) of the Code of 1966 and the Notification dated 3rd February 2000 whereby the ordinary earth was declared as a minor mineral, observed in unequivocal terms that, ordinary earth used for filing or levelling purposes in construction of embankments, roads, railways, buildings to be a minor mineral in addition to the minerals already declared as minor minerals. The ordinary earth does not fall within the meaning of the definition, minor mineral , as declared by the Notification, as it cannot be said to be for the purposes of filling or levelling in construction of embankments, roads, railways and buildings. The authorities, it seems, have proceeded on the premise that the very excavation of the ordinary earth was subject to levy of royalty de hors the use for which it was put to - In view of the plain language of the provisions especially the definition of minor minerals the action of the authorities cannot be sustained. Petition allowed.
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2019 (4) TMI 943
Direction to pass Winding up of order in respect of first respondent company - appointment of Official Liquidator to take possession of the assets properties, books and records of the first respondent company by following the summary procedure of winding up - HELD THAT:- Section 273 of the Companies Act lays down what order to be passed by the Tribunal if a petition under Section 272 of the Companies Act is presented before it. Section 273(2) of the Companies Act, 2013 says where a petition is presented on the ground that it is just and equitable that company should be wound up, the Tribunal may refuse to pass an order of winding up if it is of the opinion that some other remedies are available to the petitioners and the petitioners are acting unreasonably in seeking the remedy of winding up instead of pursuing other remedies. In the case on hand the company name has been struck off by the Registrar of Companies under Section 248 of the Companies Act. Petitioners are having a remedy to have the company restored and seek an order for operation of bank amounts that are freezed. By doing so petitioners have a remedy of getting back their amounts which is in the bank accounts. But petitioners without seeking restoration of the company under Section 252(1) or 252(3), unreasonably, asking for winding up order. Petition dismissed.
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Insolvency & Bankruptcy
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2019 (4) TMI 942
Initiation of Corporate Insolvency Resolution Process - Operational Creditor - section 8 of Insolvency Bankruptcy Code - HELD THAT:- Initiation of Corporate Insolvency Resolution Process at the instance of an Operational Creditor is provided for under the provision engrafted in Section 9 of the I B Code, whereunder an Operational Creditor may file an application before the Adjudicating Authority for initiating a Corporate Insolvency Resolution Process after complying with the statutory requirements of Section 8. The status of parties respectively as Operational Creditor and Corporate Debtor was neither in issue before the Adjudicating Authority nor has the same been disputed before this Appellate Tribunal. It is also not disputed that the relations inter-se the parties in regard to the licensed premises are governed by the Leave and License Agreement which stipulates in unambiguous terms that the license fee @ ₹ 88 per sq. ft. per month shall be calculated on the basis of super built up area . Since the debt and default is established, the Adjudicating Authority will admit the application under Section 9 of I B Code after providing an opportunity to the Respondent Corporate Debtor to settle the claim of Appellant, if it so chooses - appeal allowed.
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2019 (4) TMI 941
Operational Creditor or not - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - as per the applicant, in the instant case, the respondent Resolution Professional is having no authority to decide the of claim of the applicant and it is incorrect to say that the respondent has travelled beyond his jurisdiction while rejecting the claim of the applicant by holding such that the applicant is not an 'Operational Creditor' - Principles of Natural Justice - HELD THAT:- It is now settled position in law that under the provisions of the I B Code, the RP has not been vested with adjudicatory power. He is legally expected to collate and verify the claim submitted before him and to place the same before the CoC for its proper consideration under the provision of Section 21 of the Code. In case there arise some need for clarification/direction to be sought for, then he can approach this Adjudicating Authority, under the relevant provision of the Code. Nowhere the RP has been conferred with such adjudicatory power to accept or reject a claim coming under a particular class/category. The RP is assigned a duty to constitute the CoC and to convene and to attend meetings thereof, as per the Section 25 of the I B Code. That apart, to prepare the memorandum of information in conformity with the other provisions and scheme of the Code. In addition to the above, the CoC is equally expected to go through the same and to form its opinion on such agenda placed before it, so that the RP can take appropriate action on the subject or can approach this Adjudicating Authority for issuance of some directions, if necessary. Principles of Natural Justice are applicable in all administrative action as a rule and deviation therefrom is only exception and, therefore, such principles are equally applicable to a CIRP, because the Resolution Professional as well as Committee of Creditors are creature of the I B Code and their duties are like public servant/public institution. Application allowed.
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2019 (4) TMI 940
Initiation of Corporate Insolvency Resolution Process - Default of the Respondent Company in clearing the debt - Section 9 of the Insolvency and Bankruptcy Code, 2016 - existence of debt and default or not? - HELD THAT:- It is significant to note that despite opportunities given to the parties, they could not reconcile the accounts. The Applicant vide his additional affidavit has furnished the details of the payment made by the JV and it is shown that the payment has been accounted for the purchase orders placed by the JV itself. The Respondent Company has not provided conclusive proof for settlement of the dues raised by the Applicant company, despite opportunities for reconciliation of accounts, it is held that the amount claimed by the Applicant is due by the Respondent to the Applicant. Whether the pendency of winding up petition in the Hon'ble High Court is a bar to initiate CIRP of the Respondent Company? - HELD THAT:- In the instant case the Hon'ble High Court has kept the appointment of an Official Liquidator in abeyance. Hence, we are of the view that there is no bar to initiation of CIRP of the Respondent Company. The application stands admitted in terms of Section 9(5) of IBC, 2016 and the moratorium shall come in to effect as of this date.
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2019 (4) TMI 939
Initiation of Corporate Insolvency Resolution Process - Operational Creditor - Operational Debt - section 9 of the I B Code - Held that:- Arrears of rent arising out of the Agreement to licensee no where exclude from its purview - the objection that the claim of the applicant is not an operational debt is not sustainable under the provisions of the Code and is found devoid of any merit. Admittedly, the agreement for license has been executed on 1st day of January 2016 and the letter dated 04.09.2017 i.e. Annexure-A shows that they have not obtained legal permission to rent out the premises from the Urban Development Department and they have proposed to rent out the space limited to 1665 Sqft. carpet area and not 2281 Sqft. of super built up area. No valid explanation forthcoming as to why there is a difference in the reduction of sq. ft. in the letter for permission sent by the applicant to the authority which would have send before leasing out the premises to the respondent. It is an indication that there was a deliberation in between the applicant and the respondent in respect of the area in use by the respondent. It is a circumstance strengthening that there was a mutual understanding for reduction of the area in use by the respondent. The respondent being established per-existing dispute comes under Section 5(6) of the Code, an application of this nature is not found maintainable - this petition is liable to be rejected.
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2019 (4) TMI 921
Initiation of Corporate Insolvency Resolution Process - statutory form No. 6 as prescribed by sub-rule (1) of Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT:- Admittedly, M/S. Hardik Industrial Corporation Private Limited is liable to pay financial debt to its financial creditors State Bank of India. No other objection has been raised by the financial creditor(s). The material on record clearly establish the financial debt is due from the corporate debtor to financial creditor and occurrence of debt by the corporate debtor in payment of financial debt. Under Section 10 of the Code the Adjudicating Authority is not empowered to go beyond the record as prescribed under section 10 and the information is required to be submitted in form 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 subject to ineligibility prescribed under Section 11 and if all the information is provided by the corporate debtor as also the mandatory requirements under Section 10 and form No. 6 are complete then it is to be admitted if otherwise not ineligible under Section 11. It is well settled that pendency of proceedings and initiation of action under SARFAESI Act cannot be an impediment or bar to initiate the Corporate Insolvency Resolution Process under Section 7 of the Code nor it can be a ground to reject the Resolution Petition - A perusal of the petition goes to show that it is complete in all respects. Further, admittedly, M/S. Hardik Industrial Corporation Private Limited is liable to pay financial debts to its Financial Creditors. No other objection has been raised by the Financial Creditors or by any other person. The materials on record clearly establish that financial debt is due from the Corporate Debtor to the Financial Creditors and there is occurrence of debt by the Corporate Debtor in repayment of financial debt. This Adjudicating Authority is of the considered view that this is a fit case to admit the petition triggering Corporate Insolvency Resolution Process and accordingly this petition is admitted under Section 10(4)(a) of the Code.
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2019 (4) TMI 920
Initiation of Corporate Insolvency Resolution Process - statutory form No. 6 as prescribed by sub-rule (1) of Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT:- On perusal of the petition goes to show that it is complete in all respect. Further, admittedly, M/S. UIC Corporation Private Limited is liable to pay financial debt to its financial creditors including State Bank of India and Union Bank of India. No other objection has been raised by the financial creditors. The material on record clearly establish the financial debt is due from the corporate debtor to financial creditor and occurrence of debt by the corporate debtor in payment of financial debt. Under Section 10 of the Code the Adjudicating Authority is not empowered to go beyond the record as prescribed under section 10 and the information is required to be submitted in form 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 subject to ineligibility prescribed under Section Il and if all the information is provided by the corporate debtor as also the mandatory requirements under Section 10 and form No. 6 are complete then it is to be admitted if otherwise not ineligible under Section Il. Admittedly, M/S. UIC Corporation Private Limited is liable to pay financial debts to its Financial Creditors including the Union Bank of India. No other objection has been raised by the Financial Creditors or by any other person. The materials on record clearly establish that financial debt is due from the Corporate Debtor to the Financial Creditors and there is occurrence of debt by the Corporate Debtor in repayment of financial debt - this Adjudicating Authority is of the considered view that this is a fit case to be admitted for triggering Corporate Insolvency Resolution Process and accordingly this petition is admitted under Section IO(4)(a) of the Code. The Interim Insolvency Resolution Professional is hereby directed to cause a public announcement of the initiation of 'Corporate Insolvency Resolution Process' and call for submission of claims under Section 13(I)(b) read with Section 15 of the Code and Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - application disposed off.
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2019 (4) TMI 919
Initiation of Corporate Insolvency Resolution Process - statutory form No. 6 as prescribed by sub-rule (1) of Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT:- Under Section 10 of the Code the Adjudicating Authority is not empowered to go beyond the record as prescribed under section 10 and the information is required to be submitted in form 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 subject to ineligibility prescribed under Section 11 and if all the information is provided by the corporate debtor as also the mandatory requirements under Section 10 and form No. 6 are complete then it is to be admitted if otherwise not ineligible under Section 11. It is well settled that pendency of proceedings and initiation of action under SARFAESI Act cannot be an impediment or bar to initiate the Corporate Insolvency Resolution Process under Section 7 of the Code nor it can be a ground to reject the Resolution Petition. Admittedly, M/S. VHCL Limited is liable to pay financial debts to its Financial Creditors including the Central Bank. No other objection has been raised by the Financial Creditors or by any other person. The materials on record clearly establish that financial debt is due from the Corporate Debtor to the Financial Creditors and there is occurrence of debt by the Corporate Debtor in repayment of financial debt - this Adjudicating Authority is of the considered view that this is a fit case to admit the petition triggering Corporate Insolvency Resolution Process and accordingly this petition is admitted under Section IO(4)(a) of the Code. The Interim Insolvency Resolution Professional is hereby directed to cause a public announcement of the initiation of 'Corporate Insolvency Resolution Process' and call for submission of claims under Section 13(1)(b) read with Section 15 of the Code and Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Application disposed off.
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Service Tax
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2019 (4) TMI 938
Condonation of delay in filing appeal - time limitation - appeal filed beyond the stipulated time frame of 90 days from the date of receipt of the adjudication orders - power of Commissioner (Appeals) to condone delay - HELD THAT:- Section 85 of the Finance Act, 1994 mandates that the appeal shall be filed before the Commissioner (Appeals) within two months from the date of receipt of the adjudication order. The said statutory provision has empowered the Commissioner (Appeals) for condonation of delay upto a further period of one month , if the appeal is not presented within the stipulated time frame of two months - thus, the Commissioner (Appeals) is not empowered to condone the delay, if the appeal is presented before him beyond the period of three months. Admittedly, in this case, appeals were preferred by the appellant beyond the prescribed time limit provided in the statute. Thus, the Commissioner (Appeals) has rightly rejected the appeal on the ground of limitation. Appeal dismissed.
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2019 (4) TMI 937
Works Contract - Four SCN issued under “Commercial or Industrial Construction Services” and “Construction of Complex Services” by invoking Section 73 of the Finance Act, 1994 with interest under Section 75 and penalty under Sections 76, 77 and 78 of the Finance Act. First two SCN - benefit of Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007 - benefit of abatement denied for the reason that the appellant did not include the cost of free material supplied to the appellant in the gross amount charged for the purpose of computation of abatement - Held that:- Supreme Court in the case of Bhayana Builders (P) Limited. [2018 (2) TMI 1325 - SUPREME COURT OF INDIA] observed that the value of taxable services cannot be dependent on the value of goods supplied free of cost by the service recipient and such a value has no bearing on the value of services provided by the service recipient - The Commissioner, therefore, could not have denied the benefit of abatement merely for the reason that the appellant had not included the cost of free material supplied to the appellant in the gross value of services. The second finding recorded by the Commissioner is that the appellant should have discharged service tax @ 4.12% since this was the rate of tax when the payment was received and not 2.06% - This finding cannot also be sustained. The taxable event in relation to service tax is rendering of service and thus tax has to be levied at the rate prevailing during the period such service was provided and not the rate of tax that was prevailing at the time of the payment - thus, the demand confirmed by the Commissioner in the first two show cause notices deserves to be set aside. Third SCN - Demand of service tax proposed on the differential value calculated on comparing the gross amount as per the balance sheet and the gross amount as per ST-3 Returns - Held that:- The demand could not have been confirmed under “Commercial or Industrial Construction Service” for the reason that it was a composite contract and in the nature of “Works Contract Services” - The demand could not have been confirmed under “Commercial or Industrial Construction Service” in view of the decision of the Supreme Court in Larsen & Toubro Ltd [2015 (8) TMI 749 - SUPREME COURT]. Fourth SCN - Denial of cenvat credit to the appellant because the appellant had struck off column No. 5B of the ST-3 Return for the period 2010 to 2011 relating to cenvat credit taken and utilised - Held that:- This is a factual aspect inasmuch as it has to be seen whether the enclosure was enclosed with the ST-3 returns and in any case the Commissioner has not examined the same because Column 5B had been struck off. This aspect, therefore, needs to be examined by the Commissioner. It is, therefore, considered appropriate to remand the matter to the Commissioner to re-examine this Fourth Issue. Appeal allowed in part and part matter on remand.
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2019 (4) TMI 936
Condonation of delay of 1786 days in filing the appeal - Delay on the ground that appellant was mis-advised by his auditors - proper justification for the delay or not - Held that:- Since, the appellant had the advice of his accountant as well as his auditors there is no reason for him to have delayed filing an appeal until he got a notice from the department for recovery of the arrears. The delay is inordinate and the explanation given is not convincing enough to condone it. The application for condonation of 1786 days delay is rejected - Appeal dismissed.
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Central Excise
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2019 (4) TMI 935
Clandestine manufacture and removal - clubbing of clearances - clearance of manufactured ingots clandestinely in the garb of scrap - it was alleged that Appellants were operating from the same common premises and were engaged in the manufacture and Clandestine removal the Zinc Ingots - HELD THAT:- It is evident that the records of the Appellant-Rishabh were picked up or resumed from their own premises located near Cannara Bank at Circular Road, Hathras without panchnama. We notice that the said claim of Appellant-Rishabh is duly supported by the letters of Smt Sandhya Maheswari and Shri Sandeep Maheshwari (Authorized representative of Appellant-Rishabh) both dated 8.01.2016 , intimating the facts to the Commissioner Central Excise, Agra . We do not feel that any further evidence was required to substantiate the claim. Linkage of the private records like Note Pads , Writing Pads and Register and the Computer print out with Appellant-Rishabh - HELD THAT- The observations of the Adjudicator are totally contrary to the admitted position in Para 6 and Para 18 respectively of the Show Cause Notice, which ruled out relevance of these documents with the Appellant-Rishabh. The fact of Smt Rashmi Jhawer s organizing and handling business activities from Calcutta is unambiguously clarified by Shri Sandeep Maheshwari in his statement recorded on the spot, on the day of search on 08.01.2016. While specifying his own responsibilities in the activities of maintenance of the records of the Appellant-Rishabh, at Hathras. We do not find any evidence on record to support the Revenue s claim of issue and /or service of any of the five summons to Smt. Rashmi Jhawar and thus her avoidance to tender evidence. Reliability on statements - HELD THAT:- The Adjudicator had denied cross examination of Shri Santosh Jhawer , on the grounds of being co-accused and also at the same time relied on his statement recorded behind the back of the Appellant-Rashmi Jhawer , implicating Smt. Rashmi Jhawar. As per settled law, the statement of co-accused is a evidence but the statement of so claimed co-accused Shri Santosh Jhawer have been heavily relied against the Appellant-Rishabh, disregarding and by passing other direct evidences, is contrary to the settled law. Thus, it is convincing that the Appellants were operating and conducting their business from their respective premises and did not indulge in the manufacture of Zinc Ingots during the disputed period in the Show Cause Notice - the impugned order confiscating seized goods and confirming demand of duties and imposition of penalties is set aside - appeal allowed - decided in favor of appellant.
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2019 (4) TMI 934
Principles of natural justice - applicablity of judgement COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [ 2018 (2) TMI 117 - SUPREME COURT OF INDIA ] - CENVAT Credit - outward transportation - place of removal - HELD THAT:- It is submitted that the reported judgment has no application to the present case, but the High Court has not dealt with this contention in the proper perspective. Issue notice, returnable within four weeks.
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2019 (4) TMI 933
CENVAT Credit - duty paying documents - credit denied on the ground that credit availed on the basis of photocopy of the receipt issued by Indian Airlines in the name of M/s Aanex Services, New Delhi and that the receipt does not show all the details - Held that:- No illegality or perversity could be pointed out by the learned counsel for the appellant in the concurrent findings of fact recorded by the authorities below warranting interference by this Court. No satisfactory explanation has been furnished by the learned counsel for the appellant for not producing the original invoices instead of photocopies which were produced. Referring to the judgment in Shivam Electrical Industries's case [ 2018 (2) TMI 816 - JAMMU AND KASHMIR HIGH COURT ] relied upon by the learned counsel for the appellant, suffice it to notice that the said pronouncement being based on its own facts does not advance the case of the appellant. Appeal dismissed - decided against appellant.
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2019 (4) TMI 932
Vailidity of Notification issued by CBEC dated 10.5.2009 - whether clarificatory in nature or not - period involved in the SCN - Held that:- There is an overlap in the periods in the show cause notices. The first show cause notice was issued to the respondent on 17.8.2007 invoking the extended period of five years on the basis of commission paid to the OCA on account of export sales for the period 09.07.2004 to 31.03.2006. The second show cause notice dated 27.9.2007 was issued for the period May, 2006 to March, 2007. The Tribunal noticed that the notification regarding the associated enterprises was issued on 10.5.2008 and the entire period in the show cause notice dated 21.4.2009 was prior to that date. The department had no material to issue such a show cause notice alleging transaction between associated enterprises. Further, the show cause notice could not invoke the allegation of associated enterprises when the law at the time did not provide for the same and the notification was introduced on 10.5.2008 without it being made expressly retrospective. Since the payment of commission to the OCA were well within the knowledge of the department prior to the issuance of show cause notice dated 21.4.2009, the extended period could not have been invoked in the third show cause and the same is barred by time. No question of law much less a substantial question of law arises in this appeal - appeal dismissed.
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2019 (4) TMI 931
Clandestine manufacture and removal - SSI Exemption - want of production of finished goods records - discrepancy in the raw material stocks - Confiscation of finished goods - HELD THAT:- Finished goods were seized for want of production of finished goods records, despite the admitted fact that the said records were under resumption by the search team. On perusal and comparing the physical balance of finished goods stocks with the recorded balances in the resumed manually prepared and also soft copies of stocks registers, we do not find any variation - the order justifying the confiscation of the finished goods is not consistent with the facts on records and against the provisions of law. Discrepancy in the raw-material stock - HELD THAT:- To arrive at the total quantity and value of procured raw materials, the Revenue had erroneously resorted to double accounting of details of some consignments of raw materials received from two parallel sources, the manufacturing company and its dealer. The data supplied by manufacturer also included the purchases through its dealer. This has resulted in artificial escalation in value of raw material to ₹ 5,06,46,859/- instead of correct amount of ₹ 3,09,08,423/- - there is no force in the findings of procurement and receipt of unaccounted or additional raw materials and use thereof in clandestine manufacture of the finished goods and set aside the findings relating thereto. Rejection of the request of Cross-examination - HELD THAT:- The denial of cross-examination of Shri Nirmal Jeet Singh owner of transport namely M/s Krishna Road Lines, Shri Umang Kumar and Ramchandra both ex-employee of the appellant was essential to test the purpose of maintenance of parallel manual records (the relied upon documents) and the contents recorded therein. It was more so in the case of Sh. Umang Kumar, who had explicitly through his written communication denied any linkage of the documents prepared by him without the knowledge of the appellant, and after 7 months of his disassociation from the appellant - also, cross-examination of Shri Nimaljeet Singh was not rejectable even on the grounds that he had not retracted his statement and whether the same was recorded without threat, duress or coercion - the impugned order denying request for cross-examination, is clearly in violation of principles of natural justice and as a consequence, the relied upon statements and the records referred therein have to be eschewed from the proceedings. Further, the Revenue had not conducted investigations at the end of all the buyers for ascertaining the credibility of the Loading Slips/ Enquiry Slips. The Sale Enquiry Slips/ Loading Slips and manually prepared sale registers are not admissible evidences. Thus these two incredible / suspect documents viz Sale Enquiry Slips/ Loading Slips and manually prepared sale register and party ledgers, cannot legally corroborate each other to establish their credibility - the findings of the Court below in the impugned order is set aside and it is held that the reliance on Sale Enquiry Slips/ Loading Slips and manually prepared sale register and party ledgers is misplaced - The Revenue have failed to bring out any concrete, corroborating, reliable and independent evidence even distantly establishing receipt of additional raw-materials, production of finished goods, transportation of goods, transit seizure, seizure/ at the buyers end, of clandestinely removed finished goods consignments, receipt of Sale proceeds including additional consideration in support of alleged under valuation, etc. To substantiate allegations of the clandestine manufacture and removal and undervaluation, etc. corroborative evidence is required. Appeal allowed - decided in favor of appellant.
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2019 (4) TMI 930
CENVAT Credit - sugar cess paid on imported sugar - whether the assessee is entitled to CENVAT credit on sugar cess as the same is not one of the duties allowed for CENVAT credit under Rule 3(1) of the CENVAT Credit Rules, 2004? - Held that:- As per Rule 3 of CCR, 2004, CENVAT credit is not permissible on everything which has been paid but only such duties as are specified in it. Every Cess is levied under some specific Act and since there is no separate mechanism for collection etc., of such cesses, cess is deemed to be a duty of excise under Central Excise Act and correspondingly all provisions of the Central Excise Act will apply - A plain reading of Rule 3 would show that all cesses have not been made eligible for CENVAT credit but only duties of excise or additional duties of excise or education cess etc., have been made eligible for CENVAT credit. Sugar cess is clearly not covered in Rule 3 of CCR, 2004. The Hon’ble High Court of Karnataka in COMMISSIONER OF CENTRAL EXCISE VERSUS M/S SHREE RENUKA SUGARS LTD [2014 (1) TMI 1469 - KARNATAKA HIGH COURT] has allowed CENVAT credit on sugar cess which leaves me with no option but to follow this judgment while most respectfully disagreeing with it. The appellant is entitled to CENVAT credit on the sugar cess paid on the imported sugar - Appeal allowed - decided in favor of appellant.
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2019 (4) TMI 929
Clandestine removal - supply of yarn to job workers for getting the fabric manufactured - it was found that some of the job workers and buyers were not traceable or existing or the sub job workers stated that they did not undertake the job work - HELD THAT:- O nly on the ground that some job workers could not be found or that some of them refused to have done job work, it cannot be concluded that no activity of job work manufacturing of fabrics was undertaken. The transporter did not show as to where else their vehicles were deployed. Moreover the statement of few transporters that they did not transport the fabric cannot be a ground to hold that no fabric was manufactured as the main job workers have accepted the manufacture of fabric on job work. Even the clearance/ sale of fabric and duty payment thereupon is not under dispute - There are no evidences that job work charges paid by the Appellant to the job workers flowed back to them. Even if some of the buyers of the fabrics could not be found, it cannot lead to the conclusion that the Appellant did not sell the fabrics to such parties. I t cannot be said that the Appellant did not get manufactured the fabrics and instead diverted the yarn in the market. No single evidence has been adduced by the Revenue to show that the Appellant had cleared yarn from their factory for sale as such and thereby evaded central excise duty. Not a single buyer of yarn has been identified by the Revenue nor there are any statements of the employee, authorized signatory or the director of the Company that the Appellant had cleared any yarn clandestinely and it is coupled with the fact that no consideration has shown to have been received by the Appellant. There are no evidences of transportation of yarn from the Appellant s factory or its diversion. It is a settled law that the allegation of clandestine removal should be based upon clinching evidences whereas in the present case, not a single evidence of clearance and sale of Yarn by way of any evidence in the form of clearance of yarn, identification of buyers, receipt of consideration and any single paper supporting the allegation of the revenue has been found. The revenue could not produce any evidence of removal and sale of POY and hence the demand on alleged removal of same does not sustain - appeal allowed - decided in favor of appellant.
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2019 (4) TMI 928
SSI Exemption - dummy unit or independent unit? - exemption under Notification No. 50/2003-CE dt. 10.06.2003 availed by the receiving unit - case of Revenue is that that M/s Fine is clearing the goods to the Company under the invoices of M/s Fewa, who is availing the area based exemption under Notification No. 50/2003 dt. 10.06.2003, therefore, M/s Fine is not entitled to avail the benefit under exemption Notification - HELD THAT:- The Company out of the seized goods has purchased the goods valued at ₹ 52,79,914 from M/s Fewa, which was manufactured in their premises and the same were found recorded in the statutory records by the visiting officers - The appellants submitted the details of the purchase of rest of goods but the same has not been examined, therefore, the demand of ₹ 5,87,376/- on seized goods at the premises of the Company is not sustainable, accordingly no redemption fine and penalty is imposable as goods are held not liable for confiscation. Demand of ₹ 3,31,242/- has been confirmed on the basis of packing material recovered from the Company alleging that M/s Fine has clandestine removed the gold series of switches to the Company on the basis of packing material - HELD THAT:- Sh. Harjinder Singh was cross examined and denied his statement and submitted that the same has been dictated to him and no other corroborative evidence has been produced by the Revenue in support of the allegation - demand not sustainable. Demand of ₹ 17,43,264/- has been raised on MCB/Isolators - it was alleged that MCB/Isolators manufactured by M/s Fine were sent to M/s Fewa for their clearance - HELD THAT:- M/s Fewa purchased MCB/Isolators parts/components thereto from M/s Shiva Electrical Corporation, Gagret, for which copies of invoices were produced that the authority below has not given any credence to the said documents and held that MCB/Isolators manufactured by M/s Fine were sent to M/s Fewa for their clearance and M/s Fewa returned the same to M/s Fine. As the demands have been confirmed without examining the invoices issued by M/s Shiva Electrical Corporation, Gagret. Further, no variations of stock were found - demand not sustainable. Demand of ₹ 9,55,550/- has been confirmed alleging that M/s Fewa sent the raw material and packed material to M/s Fine, whereas M/s Fewa has raised the invoices in respect of the finished goods - HELD THAT:- T he allegation itself is contradictory that M/s Fine is manufacturing the goods and clearing in the name of M/s Fewa when machineries are installed at M/s Fewa who was found manufacturing the goods during the course of investigation itself. In the absence of any positive evidence, the allegation is not sustainable which is alleged on presumptions only, therefore, the demand is not sustainable - demand set aside. Demand of ₹ 2,04,043/- has been confirmed on the basis of the document showing receipt of 1,03,560 ps. Switches from M/s Fine by the Company - HELD THAT:- It is alleged that M/s Fine is procuring raw material clandestinely and manufacturing the goods and clearing clandestinely. We find that the said allegation is on the basis of third party documents from M/s Fine without any corroborative evidence - demand not sustainable. Demand of ₹ 18,02,807/- - it is alleged that M/s Fine procured packing material and other inputs used in manufacture of their final products in excess of their recorded clearances - HELD THAT:- Sh. Gaurav Lekhi during the cross examination has stated that they supplied goods only to the extent mentioned on the bill and never supplied extra quantity. They never cleared/sold the goods without invoice or against cash payment to M/s Fine or M/s Fewa. We find that the said demand is on the basis of suspicion and no corroborative evidence of clandestine manufacture, transport, flow back, electricity consumption have been brought on records - demand not sustainable. Demand of ₹ 72,72,294/- has been confirmed against M/s Fine on the ground that M/s Fine is manufacturing the goods and clearing the same in the name of M/s Fewa to avail SSI exemption - HELD THAT:- As no corroborative evidence has been produced by the Revenue, therefore, clearances of M/s Fine cannot be clubbed with the clearances of M/s Fewa. In these circumstances, M/s Fine is entitled to avail SSI exemption as M/s Fewa and M/s Fine are two independent units, which are having separate machinery and manufacturing and clearing the goods independently - demand set aside. Appeal allowed in toto.
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2019 (4) TMI 927
CENVAT Credit - input services - Repair of vehicles - Business Support service - Event Management Services - Cargo Handling service - Supply of Tangible Goods service - Works Contract Service - Hotel, Inn, Guest house, club or campsite service - Real Estate Agent Service - Convention Services - Association Membership Service - Information Technology Software Service - CHA Services for export - Renting of immovable property service - CHA (Import) - Video tape production service - Legal Consultancy Service - Public Relation Service - Company Secretary Service. Repair of vehicles - HELD THAT:- The said service has been used by the assessee for providing free after sale service to customers which is the condition of sale of the assessee. As there is condition to provide free after sale service to the customers during warranty period, therefore, the assessee is entitled to avail credit on the said service - Credit allowed. Business Support service - HELD THAT:- These services have been availed by the assessee for disposal of hazardous waste, storage of records, management and administrative support to maintain international telecommunication network and interpreter of Japanese language - the disposal of hazardous waste is a statutory requirement for undertaking manufacturing activity by the assessee. Therefore, the assessee is entitled to avail credit thereon - In respect of storage of record, this activity is relating to the manufacturing activity, and is in relation to accounting, therefore, the assessee is entitled to avail credit - With regard to the international telecommunication network, and interpreter of Japanese language, we find that the said services are required for availing technical assistance from the Japanese engineer otherwise the assessee is not able to understand conversion made between them and Japanese technician - Credit allowed. Event Management Services - HELD THAT:- The assessee has launched new models of their products, namely, Dream Yuga and for launching new product or organizing event of sale promotion are part of the sale of the products which is directly related to manufacturing activity. It is the assessee, who has to decide how the event is to be organized for promotion of their sale or launching new product - Credit allowed. Cargo Handling Services - HELD THAT:- The said service has been used by the assessee in their own factory for air lifting of their goods inside the factory. Therefore, the assessee is entitled to avail credit on input service - Credit allowed. Supply of Tangible Goods Service - HELD THAT:- The senior officials are engaged in the activity of manufacturing of the assessee and sale promotion thereof. In fact, these official have been provided the car in terms of their employment agreement and these employees are engaged in the purchase and sale of the inputs/final goods of the assessee. Therefore, these services are input services and the assessee is entitled to avail credit thereof - Credit allowed. Works Contract Service - HELD THAT:- These services used for repair of building and machine and these are not used for construction of new building but the same is used for repair of building and machine and these services do qualify as input service - Credit allowed. Hotel, Inn, Guest house, club or campsite service - HELD THAT:- The said services have been used by the assessee for official purposes by employees/foreign engineers for business promotion, customer support and for foreign engineer, whose service has been availed for technical assistance in their manufacturing activity - Credit allowed. Real Estate Agent Service - HELD THAT:- The services used by the senior officials of Honda, Japan who visit the company for legitimate business purposes and rest houses are taken on lease for their stay. Therefore the services used by the assessee for the purpose of sales promotion, customer support, directly qualify as input service - Credit allowed. Convention Service - HELD THAT:- The conventions arranged for business or marketing of the goods manufactured by the assessee. Therefore, said activity is having direct nexus with the manufacturing activity of the assessee - Credit allowed. Association Membership Service - HELD THAT:- The said service has been availed by the assessee for approval of products etc. at a concessional rate and updated information about technological development - Credit allowed. Information Technology Software Service - HELD THAT:- The said services are in relation to software solution, creation of web space, bandwidth charges and uploading of advertisement etc. are directly or indirectly in relation to manufacture of final products - Credit allowed. CHA Services for export - HELD THAT:- CHA service has been availed upto port of export and any service availed upto place of removal i.e. port of export (in case of export) is entitled as input service - Credit allowed. Renting of immovable property service - HELD THAT:- The regional offices are used for marketing of the product of the assessee, therefore, the said service is having nexus with the manufacturing activity of the assessee - credit allowed. CHA (Import) services - HELD THAT:- The said service used for procurement of inputs and without procurement of inputs, no manufacturing activity can take place. Therefore, the said service has direct nexus with the manufacturing activity of the assessee - credit allowed. Video tape production service - HELD THAT:- The said service used for advertising and sales promotion which is directly covered within the definition of input service under Rule 2(l) of Cenvat Credit Rules, 2004 - Credit allowed. Legal Consultancy Service - HELD THAT:- The assessee has availed the legal consultancy service from the legal consultant in relation to company law and environmental law, which is essential for their manufacturing process with regard to how to proceed with business - Credit allowed. Public Relation Service - HELD THAT:- Since the services has been used for advertisement and sales promotion. Without launching new product, the sale activity cannot take place - Credit allowed. Company Secretary Service - HELD THAT:- The said service has been availed by the assessee to discharge statutory obligations to maintain proper records. Therefore, the said has formed part of their manufacturing activity, which is directly or indirectly related to the manufacturing of final product of the assessee - Credit allowed. Appeal allowed in toto.
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2019 (4) TMI 926
Absolute Confiscation - prohibited item/area - Cosmetics - stoppage of imports at Goa - ex-parte decision - principles of Natural Justice - HELD THAT:- Goa is not an approved place of entry for the import of cosmetics is not in doubt. Notwithstanding the commercial interest and the emotional outburst in the appeal, the law, particularly those prescribed for the protection of its citizenry, has to be strictly complied with. Failure in compliance renders the goods liable to confiscation - appeal dismissed.
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CST, VAT & Sales Tax
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2019 (4) TMI 925
Levy of tax on EXIM Scrips - rejection of adjudication merely because the ground in that regard was not mentioned in the Second appeal memo - issue related to FY 1993-94 and 1995-96 - HELD THAT:- Maharashtra Sales Tax Tribunal (MSTT) was of the view that the relevant documents available on record were not sufficient for adjudication of the additional ground that was sought to be canvassed by the applicant. It would have certainly required leading of additional evidence. We find that the applicant never made any application for leading any additional evidence to substantiate its claim that the Exim Scrips were in fact surrendered to the Government and were not sold. In fact, in the order of MSTT dated 8th December, 2006, it was specifically contended by the applicant that since the additional ground is a pure question of law, it could be raised at any time in the appeal proceedings and therefore the MSTT ought to have entertained the additional ground. Having found that the additional ground was not a pure question of law, but required additional documents and evidence which needed to be verified, produced and appreciated, we do not think that the MSTT was unjustified in not entertaining the additional ground regarding surrender of Exim Scrips - the MSTT was legally justified in not adjudicating on the point regarding levy of tax on Exim Scrips. The question answered in the affirmative and against the applicant and in favour of the revenue. Interpretation of statute - Section 41 (2) of the Bombay Sales Tax Act, 1959 and in Notification entry 39 under Section 41 of the Bombay Sales Tax Act, 1959 - whether plastic powder is not a chemical? - contravention by issuing declarations of T/TT Forms against his purchases of plastic powder or not? - issue related to F.Y. 1993-94 - HELD THAT:- What Section 41(1) inter alia provides is that in public interest, the State Government may exempt any specified class of sales or purchases from payment of the whole or any part of any tax payable under the provisions of the BST Act. Then Section 41(2) stipulates that where any dealer or person has purchased any goods under a declaration given by him under any of the notifications issued under Section 41(1) and, (a) any of the conditions subject to which such exemption was granted; or (b) any of the recitals or the conditions of the declaration, are not complied with, for any reason whatsoever, or, in any other case, where such dealer or person was not entitled to issue such declaration; then without prejudice to the other provisions of the BST Act, such dealer or person shall be liable to pay purchase tax on the purchase price of the goods so purchased. How the purchase tax has to be levied is also thereafter set out. P.P. powder can never be termed as a chemical so as to fall within Notification Entry 39 issued under Section 41 of the BST Act. When one is to apply the common parlance test, it is clear the same cannot be described as a chemical . It is not in dispute that plastic granules / powder is obtained from crude oil and in scientific terms would be a chemical obtained in refining of crude oil. It also cannot be disputed that plastics are produced in the chemical industry. Though plastics are products of petrochemicals, these are not chemical intermediaries. P.P. powder cannot be termed as a chemical and therefore would not fall within Notification Entry 39 issued under Section 41 of the BST Act - the question will have to be answered in the affirmative and against the applicant and in favour of the revenue.
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2019 (4) TMI 924
Exemption in respect of investment made on moulds, dyes and jigs - Addition of investment in the fixed capital - eligibility certificate - Section 4-A(3) of the U.P. Trade Tax Act - HELD THAT:- The exemption from payment of Sales Tax was initially granted by the State Government through U.P. Act No. 22 of 1984 with effectfrom 12.10.1983 by introducing Section 4A - under U.P. VAT Act regime the units were entitled for exemption only after they deposit the Tax and then a refund ofonly net tax paid only with the return of the remaining amount mentioned on the Entitlement Certificate were refunded or within the period as mentioned therein. Now, after introduction of Goods and Service Tax with effect from1st July, 2017 there is no scheme ofexemption. The matter in question relates to the grant of exemption initially granted under Sales Tax Act then under Trade Tax Act and then under U.P. VAT Act but, no exemption under GST Act. It is not appropriate to accept the contention of respondent that the petitioner has an alternative remedy and the petitioner be relegated back as if aggrieved bythe order passed by the Commissioner, aspresently only notice under Section 4A-(3) of the Act is issued - The case of grant or rejection of exemption, should be decided at the earliest so that businessman can plan his business accordingly. The case in hand shows that four tax regime have changed and presently country in under new G.S.T. Regime, the old pending cases should be decided at the earliest which will be in the interest of both theparties i.e. petitioner as well as the State and we, therefore, reject the contention of the respondent for relegating back the petitioner to approach the Commissioner in pursuance of notice issued under Section 4-A(3) of the Act. The Divisional Level Committee, after considering the report submitted by the two independent authorities has rightly directed to include the investment made by the petitioner in fixed capital investment towards moulds,dyes and jigs, which were given by the petitioner to various vendors for manufacture of components, which were exclusively being used for manufacture of components of the petitioner and, thereafter, manufacture of such components were supplied back only to the petitioner. District Level Committee, respondent No. 3 after considering the report submitted by G.M.D.I.C.and the Sales Tax department i.e. Joint Commissioner (Executive) respondent Nos. 4 and 5 have rightly came to the conclusion by including investment made by the petitione rin moulds, dyes and jigs in the fixed capital investment. Once the respondent No. 2 chooses not to file revision before the High Court against theTribunal's order of remand dated 17.12.2013, the same cannot be permitted to re-agitate the matter by way of a proceeding under Section 4A-(3) of the Act. Thus, the Commissioner has not exercised its powerjudicially in issuing the impugned notice dated 02.04.2018 under Section 4-A(3) of the Act - petition allowed.
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Indian Laws
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2019 (4) TMI 923
Permission for withdrawal of appeal - petitioner seeks liberty to withdraw the writ petition and approach the Court with fresh writ petition with the same cause of action, on behalf of the concerned aggrieved parties - HELD THAT:- The writ petition is dismissed as withdrawn.
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