TMI Tax Updates - e-Newsletter
April 2, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Depreciation u/s 32 on non compete fee - For the assessment year 2003-04, the CIT(A) allowed it and the Assessing Officer gave effect to the order passed by the CIT(A). For the assessment year 2004-05, no scrutiny assessment was carried out and for the assessment year 2005-06, the claim was allowed by the CIT(A) and it was given effect to by the Assessing Officer. Thus, the Assessing Officer was bound to be consistent with the earlier decisions.Therefore, we find that the Tribunal rightly granted relief to the assessee. - HC
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Income Tax:
Penalty u/s 271C (1) (a) - delayed deposit of the TDS deducted by the assessee - When the non-deduction of the whole or any part of the tax, as required by or under the various instances/provisions of Chapter XVII-B would invite penalty under Clause 271C(1)(a); only to a limited extent, involving sub-section (2) of Sec.115-O(coming under Chapter XIID) or covered by the 'second proviso' to Section 194B (coming under Chapter XVIIB) alone would constitute an instance where penalty can be imposed in terms of Section 271C(1)(b) of the Act. Since there is no obscurity in the above provision, it is not for the Court to read something more into it, contrary to the intent and legislative wisdom, which stands to be a forbidden field for the Court. It is settled law that the rule of 'strict interpretation' is the relevant one in so far as the fiscal statute is concerned. - HC
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Income Tax:
Recovery proceedings - attachment orders - The machinery prescribed under the provisions of the Income Tax Act, 1961 to deal with situation arising out of wrongful attachment of property for the buyer is to approach Tax Recovery Officer-VII under Rule 11 of the Schedule-II to the Income Tax Act, 1961. Therefore, it is the second respondent Tax Recovery Officer-VII who was the competent authority to pass proper order under the circumstances. - HC
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Income Tax:
Taxability of capital gain arising from sale of property - The assessee had acquired a right to get a particular flat from the builder and that right of the assessee itself is a capital asset. The word 'held' used in Section 2 (14) as well as Explanation to Section 48 clearly depicts that assessee must have some right in the capital asset which is subject to transfer. - the asset in question is a long-term capital asset and the assessee is entitled to the benefit of indexation from the date of allotment/agreement. - AT
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Income Tax:
TDS on interest u/s 194A - Assessee in default u/s 201 read with section 201(1A) - The customers who have provided Form No. 15G/15H has specifically requests through these forms that TDS should not be deducted on their FDs/respective withdrawals. - Section 201 of the Act cannot be invoked as it is a recovery provision - AT
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Income Tax:
Penalty u/s 271(1)(c) - bogus share capital transactions - The explanation offered towards bonafide issue of share capital cannot be outrightly rejected when tested on the touchstone of penalty proceedings of strict nature. The fact in the present case does not conclusively establish the malafide on the part of the assessee company. - AT
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Income Tax:
Addition u/s 68 - addition on the basis of receipts in the ledgerised cash sheet - the addition made by the AO has led to double addition and the same nature of transaction have been recorded in the master cash book and ledger account of summary sheet which is nothing but summary of all the transactions recorded in other seized documents. - Additions deleted - AT
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Customs:
Revocation of suspension of the Duty Credit Scrips - MEIS - he writ-applicant has been exporting the very same goods prior to the Foreign Trade Policy, 2015-20, and claiming the benefits under the then extant Focus Market Scheme (FMS) and has subsequently also exported the very same goods and claimed the benefits under the MEIS scheme. - It would be extremely unfair and unjust not to extend the benefits of the MEIS to the writapplicant on the ground that it had exported goods from a non- EDI port - HC
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Customs:
Revocation of Customs Broker License - time limitation for issuance of SCN - Admittedly in this case, the 90th day from the date of offence report dated 7.9.2016 would have expired on 06.12.2016 whereas the impugned show cause notice dated 31.11.2017. It was thus beyond the limitation prescribed under Regulation 20 of the Customs Broker Licensing Regulation, 2013. - HC
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Indian Laws:
Dishonor of Cheque - rebuttal of presumptions - The 2nd respondent did not even respond to the lawyer notice. It is true that no adverse inference can be drawn against the 2nd respondent for not sending the reply or not having mounted the box. The presumptions can be rebutted by him through other means also. But here, he has not rebutted the presumptions, nor taken any legally tenable contention to displace the presumptions available in favour of the appellant and that enables the appellant to get an order in his favour - HC
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Service Tax:
Recovery of service tax - The appellant is popularly known as a ‘telecommunication service provider’ and not as a ‘developer of immovable property’. The essence of the Project Agreement is to grant development rights to the Joint Venture Company and there is nothing in the contract which may even remotely indicate that MTNL intends to do business through the developer - It cannot, therefore, be said that any franchise service was rendered to the appellant - Demand set aside. - AT
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Central Excise:
Refund - rebuttal of presumption - the word “buyer” in clause (e) to proviso to Section 11B(2) of the Act cannot be restricted to the first buyer from the manufacturer. - the assessee paid additional duty of excise and had passed on the incidence of duty to its customers at the time of issue invoices/gate passes. Therefore, the subsequent issuance of credit note is of little avail as the incidence for the excise duty is deemed to have been passed on by the assessee to its buyer and therefore not entitled for filing an application for refund under Section 11B of the Act merely because they subsequently came to know that the rate of duty was NIL and credit notes are said to have been issued to the buyer. - HC
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VAT:
Best judgement assessment - formulae for levying the purchase tax on the ground that separate accounts are absent - There was absolutely no necessity or need for making any guess work. If the records are not available, then, the authority will have to take recourse to such best judgment assessment exercise. Instead of calling upon the petitioner to make available the records, the respondent had fallen back on guess work. On this sole ground, the impugned orders are quashed - HC
Articles
Notifications
Customs-
19/2021 - dated
31-3-2021
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ADD
Seeks to further amend notification No. 2/2016-Customs (ADD) dated 28th Jan, 2016 to extend the levy of Anti-Dumping duty on Melamine originating in or exported from China PR, up to and inclusive of 30th September, 2021.
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25/2021 - dated
31-3-2021
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Cus
Seeks to notify implementation of India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA).
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24/2021 - dated
31-3-2021
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Cus
Seeks to amend notification No. 52/2017-Customs, dated 30-06-2017 to make changes consequent to enactment of Finance Act, 2021.
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23/2021 - dated
31-3-2021
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Cus
Seeks to extend the exemption from Integrated Tax and Compensation Cess upto 31.03.2022 on goods imported against AA/EPCG authorizations
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22/2021 - dated
31-3-2021
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Cus
Seeks to amend Notification No. 08/2020-Customs, dated 02.02.2020 to continue health cess exemption on specified parts of x-ray machines as per PMP of x-ray machines
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21/2021 - dated
31-3-2021
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Cus
Seeks to amend Notification No. 50/2017-Customs, dated 30.06.2017 to i. increase BCD on specified parts of x-ray machines as per PMP of x-ray machines ii. increase BCD on specified goods used for manufacturing electric vehicles as per PMP of electric vehicles iii. carry out other related changes
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G.S.R. 244 (E) - dated
1-4-2021
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Cus (NT)
Corrigendum - Notification No. 39/2021-Customs (N.T.) dated the 31st of March, 2021
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40/2021 - dated
1-4-2021
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Cus (NT)
Exchange rates Notification No.40/2021-Cus (NT) dated 01.04.2021
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39/2021 - dated
31-3-2021
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Cus (NT)
Sea Cargo Manifest and Transhipment (Amendment) Regulations, 2021
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38/2021 - dated
31-3-2021
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Cus (NT)
Seeks to notify the Customs Tariff (Determination of Origin of Goods under Comprehensive Economic Cooperation and Partnership Agreement between the Republic of India and the Republic of Mauritius) Rules, 2021
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37/2021 - dated
31-3-2021
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Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver
DGFT-
61/2015-2020 - dated
31-3-2021
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FTP
Amendment in Import Policy of Copper and Aluminium under Chapter-74 and Chapter-76 of ITC (HS), 2017, Schedule-I (Import Policy)
Income Tax-
27/2021 - dated
31-3-2021
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IT
Seeks to amend Notification No. 77/2020 dated 25 September 2020
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26/2021 - dated
31-3-2021
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IT
Faceless Appeal (Amendment) Scheme, 2021
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25/2021 - dated
31-3-2021
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IT
CBDT authorises the Assistant Commissioner of Income-tax/Deputy Commissioner of Income-tax (NaFAC)
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24/2021 - dated
31-3-2021
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IT
Section 120(1), (2) and (5) of the Income-Tax Act, 1961 - Jurisdiction of Income tax Authorities
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23/2021 - dated
31-3-2021
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IT
Section 120(1), (2) and (5) of the Income-Tax Act, 1961 - Jurisdiction of Income tax Authorities of Regional Faceless Assessment Centres
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22/2021 - dated
31-3-2021
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IT
Section 120(1), (2) and (5) of the Income-Tax Act, 1961 - Jurisdiction of Income tax Authorities of the National Faceless Assessment Centre
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20/2021 - dated
31-3-2021
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IT
Modification of Notification No. 93/2020 dated the 31st December, 2020
Indian Laws-
S.O. 1420 (E) - dated
31-3-2021
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Indian Law
Seeks to bring in force provisions of Part XIII of Chapter VI of the Finance Act, 2021
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (4) TMI 31
Validity of Summons issued - jurisdiction to initiate proceedings under the CGST/SGST Act - attachment of Bank Accounts of petitioner - HELD THAT:- The summons, which has been issued under Section 70 of the CGST Act cannot be construed as a notice affording an opportunity of hearing to the first respondent, in terms of Sub- Rule 5 of Rule 159 of the CGST Rules. The summons is in connection with the investigation initiated against the first respondent. Therefore, the appellant cannot take umbrage under the summons, dated 27.01.2021 to be construed as a notice under Rule 159(5). In the considered view of this Court, an order of attachment of the first respondent's bank account, which are stated to be 14 in number, should be for the purpose of protecting the interest of the Government Revenue and the Commissioner should be of the opinion, it is for such purposes and he is required to pass an order in writing attaching provisionally any property including bank account. The procedure is in terms of Rule 159 of the CGST Rules - It is submitted by the learned counsel for the appellants that the impugned order dated 10.03.2021 is yet to be given effect to and it is also submitted that the interest of Revenue would suffer, if the attachments are to be lifted at this stage, especially, when the first respondent is not cooperating in the investigation and therefore, the Court may fix a time frame within which the request for lifting the provisional attachment is decided by the first appellant. The authorized representative of the first respondent shall appear before the first respondent at 11.00 AM on 29.03.2021 - an opportunity of personal hearing be granted to the authorized representative - Appeal allowed in part.
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2021 (4) TMI 3
Attachment of bank Accounts of petitioner - HELD THAT:- As the bank attachments are consequent upon the impugned summons and by virtue of the summons being kept in abeyance, the attachments will have to stand lifted as well. This is particularly since, the summons has itself been challenged on the ground of lack of jurisdiction, as noted by me in paragraphs 3 4 of order dated 08.02.2021. There is a specific direction to the Assessing Authority to lift the attachments of the bank accounts. List this matter on 24.03.2021 along with W.P. No.4922 of 2020 and etc. batch.
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2021 (4) TMI 2
Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances - HELD THAT:- The provisions of Section 6 of the Central Goods and Services Tax Act, 2017 provide for the authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances to ensure that there is no overlap in the assumption of jurisdiction by the officers in respect of the same subject matter for the same period. In the present case, notices have been issued by the Assistant Commissioner of SGST /R3 on 17.12.2020 and reply furnished by the petitioner on 29.12.2020. Thus proceedings have been initiated by the State/R2. The impugned summon issued by the Central authority/R1, is kept in abeyance till the next date of hearing. List on 10.03.2021.
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Income Tax
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2021 (4) TMI 32
Depreciation allowable in respect of the property acquired in exchange of relinquishment of tenancy right in another property - HELD THAT:- As in the assessee's own case [ 2012 (9) TMI 555 - MADRAS HIGH COURT] as the agreement with the landlord, which showed the payment of consideration for the surrender of tenancy rights. Revenue does not dispute the existence of such an agreement. It is also not disputed by the Revenue that the purchase of the premises by the assessee was from M/s. Harsaran Singh Constructions Pvt. Ltd., which had nothing to do with the landlord. Given the fact that tenancy right is a capital asset, as held by the Apex Court in the decision reported in CIT v. D.P. Sandu Bros. Chembur (P.) Ltd. [ 2005 (1) TMI 13 - SUPREME COURT] that the surrender of tenancy rights amounted to transfer and hence, being a capital receipt, on the facts thus placed before this Court that the amount paid on account of surrender of tenancy rights being given by the assessee to the builder, there is no exchange of one property for the other. Hence, we have no hesitation in accepting the plea of the assessee, thereby rejecting the Revenue's contention raised in all these Tax Cases. Depreciation u/s 32 on non compete fee - whether it is an asset in the nature of patents, copyrights, trademark, licence, franchises or any other business or commercial right of similar nature? - HELD THAT:- Before us, a chart has been filed showing the issue relating to depreciation on non compete fee. From the chart, we find that for the assessment year 2001-02, the Assessing Officer himself allowed it, which was confirmed by the CIT(A) and the decision of the CIT(A) was accepted by the Department. For the assessment year 2002-03, no scrutiny assessment had been carried out. For the assessment year 2003-04, the CIT(A) allowed it and the Assessing Officer gave effect to the order passed by the CIT(A). For the assessment year 2004-05, no scrutiny assessment was carried out and for the assessment year 2005-06, the claim was allowed by the CIT(A) and it was given effect to by the Assessing Officer. Thus, the Assessing Officer was bound to be consistent with the earlier decisions.Therefore, we find that the Tribunal rightly granted relief to the assessee. Income from business - Whether the net book value of the entity taken over by the assessee over and above the consideration paid for acquiring three companies would not fall within the ambit of the provisions of Section 28(iv)? - HELD THAT:- Assessing Officer treated the transferred amount as income in the hands of the assessee, which was reversed by the CIT(A) concerned, which order was upheld by the Tribunal. The order passed by the Tribunal was reversed by this Court holding that the amounts, which were transferred to the assessee company represented various credits and deposits during the trading with the erstwhile company and the amount remained for a long time for recovery and remained unclaimed. The amounts were then transferred by the assessee-company to the general reserve treating it to be as profits and therefore, on facts, the decision in the case of CIT Vs. T.V.Sundaram Iyengar Sons Ltd. [ 1996 (9) TMI 1 - SUPREME COURT] would apply on all fours. Therefore, it was contended that the amount of credit balances written off and transferred to the general reserve account had to be treated as income of the assessee chargeable to income-tax. We find this decision to be wholly inapplicable to the facts and circumstances of the case on hand. For all the above reasons, we find that the Tribunal was right in granting relief to the assessee under the said head.
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2021 (4) TMI 28
Penalty u/s 271C (1) (a) - delayed deposit of the TDS deducted by the assessee - HELD THAT:- We are pursuaded that the questions falling for consideration in the instant tax appeals are no more remain res integra and covered by the Full Bench judgment in Lakshadweep Development Corporation Ltd [ 2019 (3) TMI 333 - KERALA HIGH COURT] in favour of the assessee as held once the burden is discharged by the person/assessee as to the existence of good and sufficient reason for not complying with the stipulation under Section 271C, it is for the authorities to consider with proper application of mind, whether the penalty is to be waived or reduced, based on the facts and circumstances. Section 271C of the Income Tax Act is quite categoric. Its scope and extent of application is discernible from the provision itself, in unambiguous terms. When the non-deduction of the whole or any part of the tax, as required by or under the various instances/provisions of Chapter XVII-B would invite penalty under Clause 271C(1)(a); only to a limited extent, involving sub-section (2) of Sec.115-O(coming under Chapter XIID) or covered by the 'second proviso' to Section 194B (coming under Chapter XVIIB) alone would constitute an instance where penalty can be imposed in terms of Section 271C(1)(b) of the Act. Since there is no obscurity in the above provision, it is not for the Court to read something more into it, contrary to the intent and legislative wisdom, which stands to be a forbidden field for the Court. It is settled law that the rule of 'strict interpretation' is the relevant one in so far as the fiscal statute is concerned. Hence levy of penalty, for delayed deposit of TDS is not attracted to the case on hand. - Decided in favour of assessee.
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2021 (4) TMI 27
Method of accounting - accounting standards application - eligibility of completed contract method for computation adoption - Tribunal held that accounting standard, namely Accounting Standard-7 is not applicable to the assessee on the ground that it does not apply to real estate developers even when assessee has received significant advances and also project is completed upto 97% and as such, the date of completion of registration becomes insignificant, as it is a tactic to postpone the payment of income tax which is due for taxation for the period under consideration - HELD THAT:- On perusal of the decisions rendered by this court in the case of PRESTIGE ESTATE PROJECTS[ 2020 (5) TMI 239 - KARNATAKA HIGH COURT] , BANJARA DEVELOPERS CONSTRUCTIONS (P) LTD. [ 2020 (7) TMI 285 - KARNATAKA HIGH COURT] , VARUN DEVELOPERS [ 2021 (2) TMI 997 - KARNATAKA HIGH COURT] , S.N. BUILDERS DEVELOPERS[ 2021 (1) TMI 789 - KARNATAKA HIGH COURT] as well as the decisions of the Hon'ble Supreme Court in EXCEL INDUSTRIES [ 2013 (10) TMI 324 - SUPREME COURT] and in BILAHARI INVESTMENTS [ 2008 (2) TMI 23 - SUPREME COURT] and taking into account the fact that the Revenue itself has recognized the completed contract method for computation of the subsequent Assessment years, that is 2013-2014 and 2014-2015, we answer the substantial questions of law against the Revenue and in favour of the assessee.
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2021 (4) TMI 26
Reopening of assessment u/s 147 - notice beyond the period of four years - allowability of legal and professional expenses - whether re-opening is made only on change of opinion? - HELD THAT:- As per proviso to Section 148, it is clear that in the case of re-opening made beyond four years from the end of the relevant assessment year, it can only be resorted to in case of failure on the part of the assessee in disclosing, fully and truly, all material facts necessary for the assessment. However, this failure was not pointed out in the assessment order by the Assessing Officer. Therefore, it is clear that it can only be change of opinion on the part of the Assessing Officer with regard to the legal and professional expenses, which is against the provisions of proviso to Section 148. The Tribunal has rightly dismissed the appeal filed by the Revenue. The findings of the Income Tax Appellate Tribunal is proper. We do not find any ground much less any substantial question of law to interfere with the order passed by the Tribunal. The appeal is liable to be dismissed.
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2021 (4) TMI 25
Recovery proceedings - attachment orders - transfer made by the assessee during the pendency of proceedings under the Act - petitioner had approached both the Income Tax Officer and the second respondent Tax Recovery Officer-VII. However, both the officers remained mute and therefore the petitioner was compelled to approach the first respondent to intervene and invited an adverse order though the petitioner had purchased the property prior to the impugned provisional attachment - HELD THAT:- Rule 11 of the Schedule-II of the Income Tax, Act 1961 prescribes a method for a proper redressal of all the issues by a Tax Recovery Officer-VII, namely the second respondent herein. Therefore, the claim of the petitioner that the provisional attachment and the consequential final attachment pursuant to assessment orders dated 30.03.2013, 30.12.2011 and 31.03.2013 purportedly passed under Section 144 read with Section 147 for the Assessment Years 2005-2006 to 2008-2009 and under Section 144 of the Income Tax Act for the Assessment Years 2009-2010 and 2010-11 are required to be seen. The machinery prescribed under the provisions of the Income Tax Act, 1961 to deal with situation arising out of wrongful attachment of property for the buyer is to approach Tax Recovery Officer-VII under Rule 11 of the Schedule-II to the Income Tax Act, 1961. Therefore, it is the second respondent Tax Recovery Officer-VII who was the competent authority to pass proper order under the circumstances. Further, as per Section 281 of the Income Tax Act, 1961, where an assessee creates a charge or parts with possession by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever of any asset by an assessee in favour of any other person during the pendency of any proceeding under the Act is void. Proviso to the said Section contains an exception. That exception provided in clause (i) applies to a situation where there is transfer for adequate consideration and without notice of the pendency of such proceedings or, as the case may be, without notice of such tax or sum payable by the assessee. Use of the expression without notice of such tax or sum payable by the assessee indicates the absence of the knowledge of a third party. The language in the clause (i) to the said proviso can apply only to a bona fide purchaser and not the assessee himself. The impugned order also does not state that there were any pending proceedings on the date when the sale was made and completed in favour of the petitioner on 06.05.2011. The assessments were completed only on 30.03.2013, 31.12.2011 and 31.03.2013 under Section 144 read with Section 147 of the Income Tax Act, 1961 for the Assessment Years 2005-2006 to 2010- 2011. The impugned order of the first respondent seems to indicate that the third respondent had either failed to make returns required under Sub-Section (1) to Section 139 or had failed to file a revised written under Sub-Section (4) or 5 of these aforesaid Section or had failed to comply with all the terms of notices issued under Sub-Section (1) to Section 142 or failed to comply with the directions issued under Sub- Section (2A) of Section 142 or having filed a return, failed to comply with all the terms of the notice issued under Sub-Section (2) of Section 143 of the Act. Copies of these assessment orders are also not available for perusal. Therefore, without seeing the content of these orders and the background, the relief claimed by the petitioner cannot be granted in this writ petition contrary to the mandate of Rule 11 of the Schedule-II of the Income Tax Act, 1961. The issue as to whether the case of the petitioner would fall within the proviso to Section 281 of the Income Tax Act is also to be decided by the second respondent Tax Recovery Officer-VII. Therefore, while setting aside the impugned order and the observation contained therein, I remit the case back to the said second respondent Tax Recovery Officer to pass appropriate orders on merits in accordance with Rule 11 of the Schedule-II to the Income Tax Act, 1961.
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2021 (4) TMI 23
Reopening of assessment u/s 147 - reference to the Settlement Commission already made - exemption claimed under Section 11 in return of income for the Assessment Year under consideration, it amounts to escapement of income within the meaning of clause (c) of Explanation 2 to Section 147 - HELD THAT:- As assessment order passed in respect of petitioner's trust for the Assessment Year 2013-14 is already under reference to the Settlement Commission in terms of Section 245F(2) of the Act, which has been allowed to be proceeded with under Section 245D of the Act. Further, proceedings of the Settlement Commission have already been stayed vide order of the Hon'ble Supreme Court indicated herein- above. Furthermore, it is undisputed that the order passed under Section 12AA of the Act is already under challenge before this Court - Once the aforesaid proceedings are already pending consideration of this Court, it does not appear to reason as to why the fresh re-asseement notice was required to be issued at this stage. The matter requires consideration for which the opposite parties are granted four weeks' time to file detailed counter affidavit.
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2021 (4) TMI 22
Application for settlement of cases under Section 245C rejected - abolishment of Settlement Commission as proposed in Union budget 21-22 - as submitted that till Finance Bill 2021 is placed before the Houses of Parliament and assented to by the President of India, it is only a proposal and not enforceable and in absence of any enforceable enactment the Income Tax Settlement Commission is under statutory obligation to function as per the prevailing law - HELD THAT:- Considering the fact that Act has not been promulgated by the Parliament till date, prima-facie, we are of the view that Settlement Commission till date has not been abolished. In view of aforesaid, as an interim measure we provide liberty to the petitioner to file an application before the Income Tax Settlement Commissioner-respondent no. 4 by Monday i.e. 22.03.2021, as per procedure laid down under the Act and if such an application is filed the same shall be received by the Income Tax Settlement Commission- respondent no. 4.
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2021 (4) TMI 16
Taxability of capital gain arising from sale of property - Gain on transfer of asset as short-term capital gain - Whether date of allotment of property which is relevant for the purpose of computing the holding period and not the date of registration of conveyance deed? - CIT(A) held that since the property was held by the assessee for a period of 16 months from the date of registration till the date of transfer, therefore, the property in question is short-term capital asset and profit on such transfer is short-term capital gain and the assessee is not entitled to any indexation benefit - HELD THAT:- Coordinate Bench of the Tribunal in the case of Ranjana Bammi [ 2017 (8) TMI 338 - ITAT DELHI] has held that for determining the taxability of capital gain arising from sale of property, it is the date of allotment of property which is relevant for the purpose of computing holding period and not the date of registration of conveyance deed. The Hon ble Punjab Haryana High Court in the case of Mrs. Madhu Kaul vs. CIT [ 2014 (2) TMI 1117 - PUNJAB HARYANA HIGH COURT] has held the mere fact that possession was delivered later does not detract from the fact that the allottee was conferred a right to hold property on issuance of an allotment letter. The payment of balance instalments, identification of a particular flat and delivery of possession are consequential acts that relate back to and arise from the rights conferred by the allotment letter. The capital gain arising in that case was long-term capital gain. The Delhi Bench of the Tribunal in the case of Praveen Gupta [ 2010 (8) TMI 820 - ITAT DELHI] going into the provisions, it is not necessary that to constitute a capital asset the assessee must be the owner by way of a conveyance deed in respect of that asset for the purpose of computing capital gain. The assessee had acquired a right to get a particular flat from the builder and that right of the assessee itself is a capital asset. The word 'held' used in Section 2 (14) as well as Explanation to Section 48 clearly depicts that assessee must have some right in the capital asset which is subject to transfer. The various other decisions relied on by assessee also supports his case to the proposition that for determining the taxability of capital gain arising from sale of property, it is the date of allotment of the property which is relevant for the purpose of computing the holding period and not the date of registration of conveyance deed. We hold that the asset in question is a long-term capital asset and the assessee is entitled to the benefit of indexation from the date of allotment/agreement. We set aside the order of the CIT(A) and direct the AO to accept the amount of long-term capital gain as worked out by the assessee. Appeal filed by the assessee is allowed.
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2021 (4) TMI 14
TDS on interest u/s 194A - Assessee in default u/s 201 read with section 201(1A) - assessee in default and consequently the recovery of amount determined by the Assessing Officer - payees who had furnished Form No. 15G/15H - HELD THAT:- The assessee bank has not deducted TDS in respect of customers who have provided Form No. 15G and 15H of the Act under the statute as provided by the Income Tax Act. The customers who have provided Form No. 15G/15H has specifically requests through these forms that TDS should not be deducted on their FDs/respective withdrawals. The prime responsibility relating to TDS deduction u/s 201 is of the recipient assessee to pay the tax directly once they filed From No. 15G/15H and any tax liability will be held as pending in recipient assessee s cases and hence Section 201 of the Act cannot be invoked as it is a recovery provision as submitted by the Ld. AR. The decisions given by the Ld. AR also reiterates similar facts. Besides this, in Assessment Years 2002-03 to 2004-05, in the case of the assessee itself in the same branch, the Delhi ITAT in [ 2016 (3) TMI 1240 - ITAT DELHI] after following the judgment of the Jurisdictional Allahabad High Court in the case of the assessee itself, has quashed the proceedings u/s 201 of the Act on the similar lines. Further, for Assessment Year 2014-15 and 2015-16 also the issue is identical and no distinguishing feature was pointed out by Ld. DR at the time of hearing. Since, both the assessment years i.e. A.Y. 2014-15 and 2015-16 are identical, therefore, we are allowing both the appeals.
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2021 (4) TMI 13
Maintainability of appeal - low tax effect - Eligibility of exemption u/s 11 - HELD THAT:- In this case, admittedly, the tax effect involved is less than ₹ 50 lakhs. As per CBDT Circular No.3/18 dated 11.07.2018, the Department is precluded from filing the appeal before the Tribunal unless it is covered by any exceptions provided therein. The learned DR is not able to show that this appeal falls under any exceptions provided in that Circular and also admitted that the tax effect involved in this appeal is less than ₹ 50 lakhs and the Circular is applicable to all pending matters before Tribunal, High Court and Supreme Court also. Thus as the tax effect involved in this appeal is less than ₹ 50 lakhs and Department appeal is not maintainable. Accordingly, this appeal is dismissed.
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2021 (4) TMI 11
Penalty u/s 271(1)(c) - bogus share capital transactions - HELD THAT:- We notice that the action of the AO for formation of satisfaction in the course of assessment is quite vague without expressing exact nature of charge proposed against the assessee. The satisfaction in the course of assessment proceedings was neither here nor there. It is not known whether the charge is formed for alleged 'furnishing of inaccurate particulars of income' or for 'concealment of particulars of income'. The assessment order does not clearly specify the nature of default for which the penalty is sought to be initiated and thus suffers from vice of ambiguity. The condition precedent for exercise of jurisdiction under s. 271(1)(c) r.w.s. 271(1B) of the Act is thus not satisfied in the instant case. Having regard to the complex facts involved in the case in hand, the nature of charge against the assessee cannot be left to imagination. Consequently, the penalty proceedings initiated towards additions made on the basis of vague satisfaction in the course of assessment is a complete non-starter. The consequent penalty imposed under s. 271(1)(c) of the Act as a sequel to such invalid satisfaction requires to be quashed. The explanation offered towards bonafide issue of share capital thus cannot be outrightly rejected when tested on the touchstone of penalty proceedings of strict nature. The fact in the present case does not conclusively establish the malafide on the part of the assessee company. The assessee has filed detailed submissions in the course of assessment. The contentions raised do create some doubt in favour of the assessee. The impugned transactions of issue of share capital have been carried out through banking channel. The statement of third party has not been cross examined to fasten the onerous penalty. Hence, the assessee has shown existence of mitigating circumstances for exoneration from imposition of penalty. Thus, when tested on distinct parameters of penalty proceedings, the issue involved cannot said to be entirely free of any debate whatsoever. Hence, additions towards share capital in question would not ipso facto tantamount to alleged concealment of income. - Decided in favour of assessee.
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2021 (4) TMI 7
Addition u/s 68 - addition on the basis of receipts in the ledgerised cash sheets as per annexure of seized material found during the course of search - HELD THAT:- On perusal of the entire gamut of seized material, we find that there is a master cash book which is marked AA-6 of R-2 which is based on all other documents seized. Based on the said master cash book, surrender was made with regard to all the enclosed set of books which was accepted by the department. In that case we do not find any reason or justification to make separate addition with regard to the same account incorporated in the ledger account and the entries of ledger account arising out of the master cash book. This precise explanation was also given before the AO which has not been adverted to by the Ld. AO. CIT(A) has given a categorical finding as incorporated above after examining each and every entry appearing in the said seized documents which has also been shown to us during the course of hearing from the said seized documents. On independent examination of the documents, we agree with the findings of the CIT (A) that the addition made by the AO has led to double addition and the same nature of transaction have been recorded in the master cash book and ledger account of summary sheet which is nothing but summary of all the transactions recorded in other seized documents. No material has been brought on record to controvert the findings of the Ld. CIT (A) and, therefore, the order of the Ld. CIT(A) deleting the addition has confirmed and the grounds raised by the revenue are dismissed. Since we have already held that exactly same issue is involved in other two years and the same set of facts and findings are permeating therein also apparently our findings will apply in the other two year also.
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2021 (4) TMI 6
Addition on account of undisclosed cash deposits the bank account of the appellant - as per assessee the said deposit was from disclosed and known sources - CIT-A decided appeal ex-parte qua the assessee appellant on meritsHELD THAT:- DR was required to address as to how where the assessee is stated to have included the Registry of the property etc. demonstrating availability of funds how it could be stated to be a case of lack of evidence unless copies of the stated Registries were not filed. No such categoric finding has been recorded in the order noting that the documents stated to be made available were not filed. Similarly, in the remand report of the AO relied upon by the ld. CIT(A), it is seen that the predominant argument has been opportunity already provided. The assessee's explanation that he could not participate fully having remained pre-occupied in marriage etc. responsibility of a child remains unrebutted. The explanation in the circumstances is plausible. Thus, the exercise of relying on the non-speaking remand report becomes meaningless and cannot be said to be a fair and impartial exercise of power. In order to discard the explanation from agricultural sources specific dates need be recorded to show that the bank deposits being prior to availability of funds as per Form-J etc. No such finding is recorded. Considering the fact that the assessee is also attempting to obtain further documentary evidences to satisfactorily support its case, it is deemed appropriate and in the interests of substantial justice to set aside the impugned order back to the file of the CIT(A) requiring the said authority to specifically address the evidences relied upon and in the eventuality, these are found to be insufficient and incomplete, the said fact be confronted to the assessee and opportunity to make good deficiencies noticed, if any, be provided. The First Appellate Authority thereafter to pass a speaking order in accordance with law after providing the assessee an effective opportunity of being heard.
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2021 (4) TMI 5
Capital gain computation - Disallowance of discount allowed to customers - recomputation of long term capital gain by adopting market value determined for the purpose of payment of stamp duty as per provisions of section 50C - HELD THAT:- We find that both the counsels for the assessee as well as Revenue have agreed for set aside the appeal to the file of the AO to reconsider the issue of disallowance of discount allowed to customers and recomputation of long term capital gains from sale of property by referring valuation to the DVO. Therefore, without considering merits of the case, we deem it appropriate to set aside the appeal to the file of Assessing Officer and direct him to reconsider the issue of disallowance of discount allowed to customers in light of claim of the assessee that it has furnished various evidences to justify its claim. Similarly, the issue of recomputation of long term capital gains has also been set aside to the file of Assessing Officer, with a direction to the Assessing Officer to determine correct market value of the property by referring valuation to the DVO, in accordance with the provisions of section 50C(2) of the Act. Needless to say, the assessee shall furnish necessary evidences before the Assessing Officer to justify its case. Appeal filed by the assessee is treated as allowed for statistical purposes.
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2021 (4) TMI 4
Additions for the on-money paid by the assessee - assessee purchased certain land at Baner, which was jointly owned by Tapadia family and Bansal family - Tapadia family accepted to have received on-money - As submitted by assessee land was sold to the assessee by Tapadia family. As against that, the land was stated to be, in fact, sold by Tapadia and Bansal families - HELD THAT:- There is no impact of this submission because the land in question at Baner was sold to the assessee jointly by Tapadia and Bansal families. Mere omission of the name of Bansal family has no bearing. Incriminating document found from the premises of Tapadia family did not indicate any date of cash payment and hence, the Tribunal ought not to have confirmed the additions for the years in question - we are at loss to appreciate as to what is the significance of this submission. The Tapadia family admitted to have received on-money from the assessee in the financial years relevant to assessment years under consideration. Once the factum of receipt of on-money is established, there cannot be any separate years of the seller receiving on-money and the buyer giving it. This contention is also repelled. Three decisions in support of deletion of the additions, which were not dealt with in the order - We find that the substance of the decisions is the same subject matter. Once an issue has been decided on the entirety of the facts and circumstances of the case, there is no separate need to discuss each and every decision relied by the assessee when the cumulative effect of all such decisions is taken into consideration. No cross examination of Shri Ajay Tapadia from the Tapadia family was allowed by the Assessing Officer, whose statement constituted the basis of additions - We find that the Tribunal in this regard noticed that the AO issued summons to Shri Ajay Tapadia on two occasions but he did not appear. Be that as it may, the statement of Shri Ajay Tapadia was not the sole basis of additions. Apart from the statement, incriminating material in the form of documentary evidence to this effect was also found during the course of search indicating the assessee paying on-money. Not only that, the Tapadia family admitted the genuineness of the document and offered the amounts as its income for the relevant years.Miscellaneous Applications stand dismissed.
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2021 (4) TMI 1
Reopening of assessment u/s 147 - whether seized material relied on by the ld. AR for reopening of assessment does not show that any chargeable income to tax had escaped assessment and there is no nexus with the conclusion reached by the AO? - HELD THAT:- There is a search in the case of RNSIL u/s. 132 of the Act and unearthing of incriminating material on 16.2.2012 on the basis of information supplied by the DCIT, Central Circle 2(3), Bangalore, the Assessing Officer come to a conclusion that there was an escapement of income in the hands of the assessee and issued Notice u/s. 148 - The reasons were germane to the prima facie reached by the Assessing Officer for any chargeable income to tax has escaped assessment by reason of non-disclosing the above payments recorded any seized material by the assessee in his books of accounts. The material that was considered by the AO for reopening of the assessment may not show conclusively that there was escapement of income. The statement available at the time of reopening of assessment, the Assessing Officer reached conclusion that there is escapement of income in the hands of the assessee. It is well settled that at the time of issuing Notice u/s. 148 of the Act, the Assessing Officer is only required to reach a tentative or prima facie belief regarding escapement of income and that requirement is satisfied in the present case. The argument advanced by the assessee's counsel is that the name of the assessee is not specifically mentioned in the seized document seized during the search action and also date of payment is not mentioned therein and who has paid has also not mentioned, therefore, material gathered by the Investigation Wing cannot be the information for the purpose of reopening of the assessment. In our opinion the recorded reasons for reopening of assessment have nexus with the formation of A.O. belief that income chargeable to tax had escaped assessment. The required nexus also can be established by the statement of searched party recorded u/s. 132(4) of the Act. Being so, in our opinion, the Assessing Officer righly reopened the assessment for these assessment years and the ground relating to reopening of assessment in these two assessment years under consideration is upheld. Addition basis of seized material which is in the form of diary jottings in the hand writing of the Vice President (Finance), RNSIL which was retrieved from the computer maintained by RNSIL - HELD THAT:- The documents relied on by the Assessing Officer for making addition in these assessment years was dumb document and lead nowhere since these diary jottings are not supported by any corroborative material or evidence to show that the information made by lower authorities is correct. Further unsigned document in the form of diary jottings cannot be relied upon for making or sustaining the addition. In the present case, more so, the Managing Director of RNSIL made a categoric statement in his letter that no payments were made to the assessee in the F.Y. 2008-09 to F.Y. 2010-11. Further even if the Assessing Officer wants to rely on the diary jottings to make an assessment or relying on the statement of any third party, the same is required to be furnished to the assessee and if the assessee wants to cross examine any of the parties whose statements were relied on by the Assessing Officer, the same is to be provided to the assessee In the present case, the assessee is having grievance for not furnishing the seized material to the assessee and there was no question of providing an opportunity of cross examining of the parties whose statements are relied on by the Assessing Officer while completing the assessment. We are not in a position to uphold the addition sustained by the CIT(Appeals). The circumstances surrounding the case are not strong enough to justify the rejection of the assessee's plea of asking the copies of seized material and providing an opportunity of cross examination of the parties concerned. In view of above, we set aside the order of the lower authorities and allow the ground taken by the assessee in their appeals for both the assessment years under consideration.
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Customs
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2021 (4) TMI 29
Revocation of suspension of the Duty Credit Scrips - MEIS - exported goods from a non- EDI port - return of said Duty Credit Scrips to the petitioner after extending the validity thereof for a period of 18 months from the date of such return of the said Duty Credit Scrips - issuance of petitioner Duty Credit Scrips under the provisions of the Merchandise Exports from India Scheme in the Foreign Trade Policy - HELD THAT:- In the present case, the authorities had themselves sought clarification from the DGFT as to whether such declaration was mandatory prior to 1.6.2015 and were awaiting such clarification. The authorities had even issued three scrips to the writ-applicant against six of its applications, which were later suspended while awaiting such clarification. Hence, it is not correct to blame the writ-applicant for not having sought amendment immediately. Unlike in other cases, in the present case, no authority issued any communication to the writ-applicant to seek amendment of the shipping bills under Section 149 of the Customs Act, 1962. Even the letters addressed by the respondents in August 2018, asking to remove the deficiency, did not specify that the writ-applicant would have to seek amendment under Section 149 of the Customs Act, 1962 - the writ-applicant cannot be said to have delayed, when the issue, whether or not the declaration was required prior to 1.6.2015 was under consideration by the authorities and when the authorities themselves have never asked the writ-applicant to amend the shipping bills under Section 149 of the Customs Act, 1962, and have only asked to remove the defect and that too as late as in August 2018. There is no dispute that the writ-applicant is eligible to claim the benefits under the MEIS since it has admittedly exported the notified goods to the notified countries as per the scheme of the MEIS - The writ-applicant has been exporting the very same goods prior to the Foreign Trade Policy, 2015-20, and claiming the benefits under the then extant Focus Market Scheme (FMS) and has subsequently also exported the very same goods and claimed the benefits under the MEIS scheme. It would be extremely unfair and unjust not to extend the benefits of the MEIS to the writapplicant on the ground that it had exported goods from a non- EDI port - Application allowed.
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2021 (4) TMI 24
Revocation of Customs Broker License - forfeiture of security deposit - time limitation for issuance of SCN under Regulation 20 read with Regulation 18 of the Customs Broker Licensing Regulation, 2013 - HELD THAT:- Regulation 20 of the Customs Broker Regulation, 2013 makes it clear that the Commissioner of Customs shall issue a notice in writing to a customs broker within a period of 90 days from the date of receipt of an offence report stating that the grounds on which it is proposed to revoke the license or impose penalty requiring a customs broker to submit within a period of 30 days to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defence and also to specify in the said statement whether the customs broker desires to be heard in person before the Deputy commissioner of the Customs or the Assistant Commissioner of Customs. Admittedly in this case, the 90th day from the date of offence report dated 7.9.2016 would have expired on 06.12.2016 whereas the impugned show cause notice dated 31.11.2017. It was thus beyond the limitation prescribed under Regulation 20 of the Customs Broker Licensing Regulation, 2013. Petition allowed.
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Insolvency & Bankruptcy
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2021 (4) TMI 17
Handover vacant possession of the leased out premises to the Respondent besides claiming lease rental - whether the Owner/ Lessor of land in actual physical possession of Corporate Debtor can recover the same while moratorium is in effect? - HELD THAT:- It is abundantly clear that the property occupied by the Corporate Debtor cannot be recovered by the Owner/ Lessor during the period of moratorium. What is material is that the property should be occupied by the Corporate Debtor which is interpreted as actual physical occupation of the property and not right or interest created in such property . A bare reading of this provision reveals that the order of moratorium takes effect from the insolvency commencement date which, as defined under Section 5(12), means the date of admission of an application for initiating CIRP by the Adjudicating Authority under Section 7, 9 or 10 of the I B Code. It lasts till completion of CIRP. Under Section 12 of I B Code the time limit for completion of CIRP is provided as 180 days from the date of admission of application to initiate such process which can be extended for a further period not exceeding 90 days but has to be mandatorily completed within a period of 330 days from the insolvency commencement date including the period of judicial intervention - Adverting to the facts of instant case be it seen that 180 days from the date of commencement of CIRP expired on 26th January, 2020 and since the Resolution Professional did neither apply for extension for CIRP beyond the ordinary period of 180 days nor was a Resolution Plan approved or liquidation order passed by the Adjudicating Authority before the expiry of CIRP period viz. 26th January, 2020, moratorium ceased to operate beyond 26th January, 2020. It is not in controversy that the Corporate Debtor has subsequently been pushed into liquidation in terms of order dated 12th January, 2021 passed by the Adjudicating Authority. There are no force in the contention raised by the Appellant that the moratorium was in force on 4th November, 2020 when the impugned order came to be passed - appeal dismissed.
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2021 (4) TMI 12
Liquidation of the Corporate Debtor - resolution plan not submitted as required - HELD THAT:- It is noted that in response to the EOI, no resolution plan has been received from any quarters. Therefore, the CoC in its 5th meeting resolved in favour of liquidation of the Corporate Debtor. In view of the unanimous decision of the CoC, we have no other option than to admit MA 4008 of 2019 and initiate Liquidation process of the Corporate Debtor. In the 5th CoC meeting, CoC members having 27.68% of voting share has assented for appointment of RP as Liquidator but CoC members having voting share of 72.34% dissented for appointment of RP as Liquidator. Since the majority of the CoC Members had voted against Applicant s appointment as liquidator. From the subsequent material submitted it is observed that Mr. Rajeev Muppidi from Axis Bank Limited vide its email dated January 15, 2020, has consented on behalf of the bank for the appointment of RP as Liquidator. The application is allowed to initiate liquidation process against the Corporate Debtor.
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2021 (4) TMI 10
Undervalued Transactions - seeking declaration that the transaction of Plant and Machinery of the Corporate Debtor to Respondent No.3 as fraudulent - seeking necessary directions for cancellation of the transaction of sale of Plant and Machinery of Corporate Debtor - HELD THAT:- As per the Final Audit Report dated 15.05.2020 the book value of the Machinery is ₹ 1.56 Cr. However, on perusal of the documents placed on record by the Respondent no. 3 it has been observed that the Machinery has been purchased by the Respondent No. 3 vide bill no. 407 dated 03.05.2019 for an amount of ₹ 7,55,200/- and bill no. 408 dated 08.05.019 for an amount of ₹ 14,40,600/- (Inclusive of GST). The Final Audit Report states that during the period under audit there have been no transaction as laid down in Section 49 and with respect to Section 66 of the code, the observations made only rely on the fact that the Corporate Debtor has trans-ferred its fixed assets just before the initiation of CIRP by the way of books entries - However, on scrutinizing the details of all the documents placed on record, the Directors of the Corporate Debtor were well aware of the fact that an application has been filed on 25.01. 2019 and the same is pending for initiation CIR process against the Corporate Debtor, therefore the Directors of the Corporate Debtor deliberately entered into an undervalued transaction - These facts support that there was an intention to defraud the creditors by keeping these assets of the Corporate Debtor beyond the reach of the Creditors or any such person who is entitled to make a claim against the Corporate Debtor. These transactions are covered under the provisions of the Section 49 and 66 of the Code - the sale of plant and machinery of the Corporate Debtor to the Respondent no. 3 stands cancelled - these transactions are covered under the provisions of the Section 49 and 66 of the Code - application allowed.
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2021 (4) TMI 9
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor had failed and neglected to pay the sum with respect to the said bills. The Operational Creditor, therefore, issued a Demand Notice dated 27th November, 2019 under section 8 of the Code in Form-3 of the Code on the Corporate Debtor, demanding a sum of ₹ 3,98,890.54/-. The said notice was duly served on the Corporate Debtor by Speed Post with acknowledgement due. Tracking Report in that behalf is annexed as Annexure-H to the petition. The Corporate Debtor did not reply to the Demand Notice dated 27th November, 2019 till the date of filing of the petition. The application is complete in all respect, and deserves admission particularly in view of the fact that the Corporate Debtor has neither given any reply to the Demand Notice nor filed any reply before this Adjudicating Authority. Application admitted - moratorium declared.
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2021 (4) TMI 8
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Debt - Existence of debt and dispute or not - HELD THAT:- Despite the invoice were duly received and dues were acknowledged by the Corporate Debtor, they failed to pay the due amount. Hence, the Operational Creditor issued a demand notice under Section 8 of the Code on 31.08.2019. The Corporate Debtor failed to fulfil its obligations to make timely payment against supplies/services provided - It also appears from the Application that the claim amount satisfies the minimum default requirement [prior to the notification of 24th March 2020] under Section 4 of the Code. On perusing the notice sent under Section 8 (2) of the Code and it is seen that the Corporate Debtor received the notices, however they did not pay the amount of unpaid outstanding due. Therefore, on all counts the Application deserves to be admitted. The present application is complete and the Applicants are entitled to claim its dues, which remain unpaid by the Corporate Debtor. In the light of above facts and circumstances the present application is liable to be admitted and CIRP ordered against the Corporate Debtor. Petition admitted - moratorium declared.
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Service Tax
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2021 (4) TMI 15
Recovery of service tax - Franchise service - amount received against development compensation charges (Development Charges) - extended period of limitation - CENVAT credit on the purchase of towers during the period 2004-05, 2005-06 and 2006-07 - additional demand for liability of service tax on POP (a component of IUC charge) - HELD THAT:- It was imperative for the Department to establish that under the Project Agreement, MTNL had conferred a representational right i.e a right available with a Joint Venture Company (franchisee) to represent MTNL (franchisor). However, neither the show cause notice alleged that such a representational right was granted by MTNL to the Joint Venture Company nor any finding has been recorded by the Commissioner in the impugned order in this regard, though this issue was specifically raised by the appellant before the Commissioner. In the absence of such an essential requirement of the charging provision, service tax could not have been imposed. Project Agreement indicates that the developer has not to represent itself as MTNL, nor has its identity as a Joint Venture Company been subsumed in the identity of the appellant. In the present case, the Project Agreement executed between MTNL and the Joint Venture Company is for development of the immovable property and is no manner identified with the appellant. The appellant is popularly known as a telecommunication service provider and not as a developer of immovable property . The essence of the Project Agreement is to grant development rights to the Joint Venture Company and there is nothing in the contract which may even remotely indicate that MTNL intends to do business through the developer - It cannot, therefore, be said that any franchise service was rendered to the appellant - Demand set aside. CENVAT Credit - HELD THAT:- It is a fact that out of the total amount of CENVAT credit of ₹ 4,99,32,736/- that has been disallowed claiming it to be for purchase of towers falling under Chapter 73. However, an amount of ₹ 4,90,91,607/- consisted of goods falling under Chapter 84 and 85 and, therefore, the appellant could avail the CENVAT credit. Even in respect of towers, the Delhi High Court in VODAFONE MOBILE SERVICES LIMITED, INDUS TOWERS LIMITED, TOWER VISION INDIA PRIVATE LIMITED, BHARTI INFRATEL LIMITED, VERSUS COMMISSIONER OF SERVICE TAX, DELHI [ 2018 (11) TMI 713 - DELHI HIGH COURT] observed that CENVAT credit is allowed to the telecommunication companies in respect of towers classified under chapter 73. It has been held that the said credit is available by considering the towers as capital goods and also as inputs. POP (a component of IUC charge) - HELD THAT:- The appellant very fairly stated that details were not provided by the appellant to the Commissioner - this issue is remitted to the Commissioner for a fresh decision and for this purpose the appellant may submit all the relevant documents within six weeks from today so as to enable the Commissioner to take an appropriate decision within the next three months. Appeal allowed in part and part matter on remand.
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Central Excise
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2021 (4) TMI 35
Refund of Additional duty of excise - rubberised textile fabrics - incidence of duty - rebuttal of presumption under Section 12B regarding the incidence of duty - reliable evidence of the incidence not having been passed on to the purchaser or any other person - Revenue had failed to rebut the evidence produced by the petitioner that the presumption enacted by Section 12B sufficiently stands rebutted - under Section 11BB of CEA - Relevant time is 3 months from the date of filing the refund application (i.e. 21.07.1990) till the date of payment. HELD THAT:- The closest decision to the facts of the case on hand is the decision in M/S. CHENNAI PETROLEUM CORPORATION LTD., MANALI, CHENNAI VERSUS COMMISSIONER OF GST CENTRAL EXCISE [ 2020 (11) TMI 352 - MADRAS HIGH COURT ] wherein the appellant assessee raised an invoice for supply of Raw Naptha which is a dutiable product and the invoice was raised by the said appellant assessee on its marketing company M/s.IOCL who in turn raised invoice on the purchaser, M/s.PPN who in turn manufactured power by use of Raw Naptha and other raw materials. It was held that if at all duty can be said to have been collected in excess on account of over valuation of the supplies, it is the consumer of the said raw materials/Raw Naptha, namely, M/s.PPN who could have been claimed refund of excise duty as per settled legal position and merely because M/s.IOCL issued credit note to the buyer, namely, M/s.PPN, it cannot be said that the incidence of excise duty was not passed on to the purchaser, M/s.PPN. It was further held that once the incidence of excise duty has been passed on, whether it further passed on to the ultimate buyer or consumer or not is not a relevant question and the appellant assessee therein cannot be said to have borne any incidence of excise duty illegally levied and therefore they have no right to claim any refund. Admittedly the assessee at the time of issuance of invoices/gate passes have collected the additional duty of excise from its customers/buyers. Much after that they filed a refund claim and produced the copies of credit notes stating that the duty collected from the buyers had been refunded to the assessee and hence they are entitled for claiming refund under Section 11B of the Act. Thus, it is not disputed by the assessee that the amount of duty of excise had been passed on to its customers - the word buyer in clause (e) to proviso to Section 11B(2) of the Act cannot be restricted to the first buyer from the manufacturer. The basis for the claim of refund was on account of the fact that on or after 31.05.1990 the rate of duty was NIL. For the period between 31.05.1990 and 06.07.1990 the assessee paid additional duty of excise and had passed on the incidence of duty to its customers at the time of issue invoices/gate passes. Therefore, the subsequent issuance of credit note is of little avail as the incidence for the excise duty is deemed to have been passed on by the assessee to its buyer and therefore not entitled for filing an application for refund under Section 11B of the Act merely because they subsequently came to know that the rate of duty was NIL and credit notes are said to have been issued to the buyer. The Tribunal was right in affirming the order passed by the First Appellate Authority who confirmed the order passed by the adjudicating authority - Petition dismissed.
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2021 (4) TMI 21
Maintainability of petition - available of alternate remedy - whether the supplies effected by the appellant dealer from the Domestic Tariff Area to Special Economic Zone were exempted from excise duty under Rule 19 of the Central Excise Rules, 2002? - HELD THAT:- The submission made by the appellant, stating that no orders have been passed in terms of the directions issued in the earlier writ petition, is a false statement. The learned counsel for the appellant would plead that there is no mistake on the part of the counsel in making such a statement as the receipt of the order accepting the directions issued, was not informed by the client to the counsel and the counsel also genuinely believed the statement, because the affidavit, which was drafted in the writ petition, contained an averment that no orders were passed and this was signed by Mr.T.K.Ravi, son of K.Omana Marar, who is the Head-Commercial of the appellant company. Furthermore, the learned counsel would submit that he was also of the bonafide belief that no orders were passed because in the counter affidavit filed in the writ petition by the Assistant Commissioner, there is no such averment. We are not inclined to accept it to be an inadvertent mistake, but a sheer case of irresponsibility on the part of the appellant in not placing the full facts before the Court. Under normal circumstances, we would have come down very harshly on the appellant, but we do not propose to do so because the appellant has now realized the mistake as mentioned by the learned counsel for the appellant and that they would pursue the appellate remedy available to them as directed by the Writ Court. While admonishing the appellant for their conduct and directing them to be extremely careful while dealing with Court matters and not to come to any adverse notice of this Court on any future occasion, we refrain from imposing costs or making any other strong observation against the appellant - the writ appeal is dismissed and the order passed by the learned Single Bench is confirmed.
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2021 (4) TMI 19
Classification of goods - fertilizers for the purpose of export - classified under Chapter 31 or under Chapter 38 of the Central Excise Tariff Act? - violation of principles of natural justice - HELD THAT:- It is well settled that what is not finding place in the show cause notice cannot be introduced for the first time in the final order. That would amount to taking the noticee/assessee by surprise. This is clear violation of principles of natural justice. The assessing the authority is amenable to granting personal hearing to the petitioner on 05.04.2021. On the said date, the petitioner shall appear before the authority - Petition allowed.
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CST, VAT & Sales Tax
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2021 (4) TMI 20
Best judgement assessment - formulae for levying the purchase tax on the ground that separate accounts are absent - petitioners are engaged in imports, consignment sales, local purchase as well as inter-state purchase - Section 12 of the TNVAT Act, 2006 - HELD THAT:- Even though the petitioners are having accounts in respect of all the transactions as mentioned above, the respondent in the impugned order has invoked a formulae for levying the purchase tax on the ground that separate accounts are absent. If the petitioner had been called upon to segregate the transactions and make available the details regarding local purchase, then, the respondent could have very easily and precisely computed the petitioner's liability. But he had not done so. Instead, the entire turn over has been taken into account and invoking some arbitrary formulae, the purchase tax has been levied. In the impugned order, the proportionate local purchase liable for tax value has been estimated by taking into account the overall turn over. There was absolutely no necessity or need for making any guess work. If the records are not available, then, the authority will have to take recourse to such best judgment assessment exercise. Instead of calling upon the petitioner to make available the records, the respondent had fallen back on guess work. On this sole ground, the impugned orders are quashed and the matter is remitted to the file of the respondent to pass orders afresh in accordance with law. This writ petition is allowed by way of remand.
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2021 (4) TMI 18
Best Judgement Assessment - Section 22(4) and (5) of TNVAT Act - HELD THAT:- There is no doubt that action has been taken under Section 22(4) and Section 22(5) of TNVAT Act. To do so, action could have been initiated only after 31.10.2016. But then, show cause notice was issued in the month of August 2016 itself. In this case, the petitioner has been filing their returns on self assessment basis under Section 22 of the Act. The dealer will be deemed to have been assessed on 31st day of October. The case on hand pertains to the assessment year 2015-16 - the petitioner is deemed to have been assessed on 31.10.2016. This writ petition was filed on 27.12.2016. It has been disposed of today ie., 02.03.2021. The period from 27.12.2016 to 02.03.2021 will be excluded for the purpose of computing the limitation. The attachment of the petitioner's account lying with the second respondent bank was pursuant to the order passed by the first respondent. Since the order passed by the first respondent itself has been set aside, the attachment also stands raised - Petition allowed.
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Indian Laws
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2021 (4) TMI 36
Dishonor of Cheque - legally enforceable liability - rebuttal of presumptions under Sections 118(a) and 139 of Negotiable Instruments Act - HELD THAT:- The execution of the cheque was admitted; similarly, he had failed to prove the plea of discharge and since it was contended that the cheque was issued as security; both the arguments were not acceptable to the court and the learned Magistrate proceeded to convict the 2 nd respondent as stated supra. Against that conviction, when appeal was preferred, the learned Sessions Judge reversed the finding on various reasons. According to him, it was a house deposit scheme, which had completed in the year 2005, and therefore, there is no possibility of issuing a cheque as claimed by the appellant on 22.01.2008 - The Sessions Judge also noticed inconsistency with regard to the date of issuance of the cheque between the testimony of PWs 1 and 2 and that on consideration of these aspects, the version of the 2 nd respondent was accepted and thus the finding of conviction was reversed. The appellant is a co-operative society, which is guided by the provisions of the Co-operative Societies Act. In no stretch of imagination it could be thought, nor it was suggested that a document was fabricated by the officials of the society for the purpose of deceiving one of its own members for getting enrichment of the society. In fact, that itself is the strength of the prosecution case - there is no serious dispute with regard to the execution of the Ext.P3 cheque. Both PWs 1 and 2 have stated that the instrument was issued after the 2 nd respondent had defaulted monthly repayments and amounts had fallen in lump towards repayment of monthly instalments due to the society. Then the 2nd respondent reached the society and handed over the Ext.P3 cheque, which version cannot be ignored. The Ext.P2 document reveals that he had received an amount of ₹ 18,500/- in the scheme on 05.03.2005. The consideration shown in Ext.P3 is the amount outstanding, together with interest accrued. This fact cannot be eschewed for the mere reason that the statement of accounts was not produced by the appellant. The appellant has proved the case beyond doubt, which entitles him to draw the presumptions under Sections 118 and 139 of the Act. The 2nd respondent did not even respond to the lawyer notice. It is true that no adverse inference can be drawn against the 2nd respondent for not sending the reply or not having mounted the box. The presumptions can be rebutted by him through other means also. But here, he has not rebutted the presumptions, nor taken any legally tenable contention to displace the presumptions available in favour of the appellant and that enables the appellant to get an order in his favour - Appeal allowed.
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2021 (4) TMI 34
Dishonor of Cheque - rebuttal of presumption - offence punishable under Section 138 of the Negotiable Instruments Act - whether the first respondent could rebut the presumption? - HELD THAT:- After revisiting the evidence, the answer should be in negative. From the very outset, she had been taking a negative attitude. Even though the lawyer notice was tendered in her correct address, she refused to receive the same. It is a matter of adverse inference. Her first expression of the transaction had come up when the power of attorney holder, PW1 was cross examined. Then she took the stand that the document was given in consideration of ₹ 20,000/-, borrowed by her, that the said amount has already been repaid - The case of PW1 is that the appellant had lent the amount to the first respondent on his assurance. Whatever it may be, once the signature in Ext.P1 stands admitted, it is for her to rebut the presumptions; that has not been attempted. It is trite that the burden of proving a plea of discharge is on the person who raises the contention. Particulars of such repayment are lacking. It also does not stand the reason that, in spite of repaying the amount, she had not taken steps to get back the document alleged to have given as security - The learned counsel for the first respondent argued that the appellant is a fictitious person, such a person is not available and everything was stage managed by PW1. It is true that the first respondent has taken such a plea. But when she was examined as DW1, at the beginning stage itself she has stated that she knew the complainant. After taking such a stand in her chief examination, she cannot be heard to take a contention challenging the identity of complainant. Ext.P1 cheque can be found to be issued in discharge of a legally enforceable liability as seen on its face value. The presumptions available in favour of the complainant are not rebutted. That would attract the offence under Section 138 of the Act. That means the finding of the lower appellate court acquitting the first respondent cannot be sustained - Appeal allowed - decided in favor of appellant.
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2021 (4) TMI 33
Dishonor of Cheque - Constitutional Validity of Appointment of the retired District Sessions Judge by the impugned Government Orders as Additional Court - section 138 read with Section 141 of Negotiable Instruments Act, 1881 - HELD THAT:- The Law Commission had taken note of the experience of the judicial post for the purpose of appointment and conferment of power of Special Judicial Magistrates with the object of securing the expeditious disposal of criminal cases. The Joint Select Committee also took note of the criticisms against the system of Honorary Magistrates and expressed the view that proper way to deal with the arrears of petty criminal cases was to appoint sufficient number of stipendiary Magistrates as a wholesome deletion of the institution of Honorary Members would give rise to problems in some States. The Joint Select Committee suggested that provision be made for the appointment of Special Judicial Magistrates with certain modifications in the earlier system. One of the suggestions was that the appointees should either be persons in Government service or those who have retired from Government service. As a result of these deliberations, Section 13 of the Code of Criminal Procedure, 1973 came to be enacted in their present form. The Hon'ble High Court, vide order dated 19.08.2015, requested the State Government to intimate the cadre of the proposed 38 temporary additional Courts to be created in the State of U.P. to be manned by retired judges and contractual staff for disposing off such cases which constitute the majority of pendency i.e. motor vehicle challans, insurance claims and check bouncing matters, to the Court - Pursuant to the aforesaid letters of the High Court, the State Government, vide letter dated 16.10.2015, requested to the Hon'ble High Court that looking to the nature of the cases, decision with regard to the appointment of the Presiding Officer and staff be taken at the end of Hon'ble High Court. There are no warrant for placing a narrow construction on the words 'who holds or has held any post under the Government' to confine them to appointments of Government servants, present or past only, and to exclude members belonging to the subordinate Judicial Services. Furthermore, the duration of appointment has been restricted to one year at a time which would give the High Court an opportunity to observe the work of the appointee to enable it to decide whether or not to extend the appointment for a further period, if the workload justifies such continuance. We are, therefore, of the opinion that there is no error in the impugned Government Orders appointing the retired District Sessions Jude in temporary Additional Court to try the cases of motor vehicle challans, insurance claims and cheque bouncing matters. A bare reading of the aforesaid Section 142 of the Negotiable Instruments Act reveals that it governs taking of cognizance of the offence and starts with a non-obstante clause - the Judicial Officers, who have been appointed on 38 posts of Additional Courts created under the recommendation of 14th Finance Commission, are retired Judicial Officers belonging to U.P. Higher Judicial Services cadre and is superior to the Court of Judicial Magistrate of First Class, hence the claim of the petitioners being inferior Court than one prescribed under Section 142 of the Negotiable Instruments Act or not empowered under Section 13 of the Code of Criminal Procedure, 1973 does not arise as these Officers are the judicial officers of higher cadre. The instant writ petition is devoid of merit, which is liable to be dismissed - Petition dismissed.
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2021 (4) TMI 30
Dishonor of Cheque - insufficiency of funds - compounding of offence under Negotiable Instruments Act - HELD THAT:- The law regarding compounding of offence under Negotiable Instruments Act is no more res integra and the offences under the said Act can be compounded at any stage of the proceedings. The Hon'ble Supreme Court in the case of K. M. Ibrahim vs. K.P. Mohammad and another [ 2009 (12) TMI 903 - SUPREME COURT ] where it was held that Section 147 of the aforesaid Act does not bar the parties from compounding an offence under Section 138 even at the appellate stage of the proceedings. Taking into account the fact that the parties have agreed to end the proceedings by way of compromise and the opposite party no.2 has already received the amount of cheque along with interest/ cost and he does not want to pursue the proceedings against the revisionist, this Court deems it appropriate to compound the offence on the basis of compromise deed dated 10.11.2020 entered into between the parties - in case the revisionist deposits 15% of the cheque amount to the High Court Legal Services Committee, Allahabad within the stipulated period, the judgment and sentence dated 06.09.2018 passed by the trial Court duly confirmed by the appellate court vide judgment dated 01.02.2020, is set aside. Revision allowed.
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