TMI Tax Updates - e-Newsletter
April 28, 2021
Case Laws in this Newsletter:
GST
Income Tax
Benami Property
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
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GST:
Levy of GST - Supply of services or not - Principles of mutuality - amount collected as membership subscription fees - The applicant is not liable to pay GST on subscription fees and Infrastructure development fund collected from the members and this ruling is subject to the amendment to the CGST Act by section 1 of the Finance Act 2021, as and when it is notified. - AAR
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GST:
Seeking a direction to the respondents to extend the period of time for submitting of Form GSTR-9 and GSTR-9C for the financial year 2019-20 - we are not inclined to entertain the instant writ application and leave it to the petitioner, if so advised, to approach the statutory authority to seek further extension. - HC
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GST:
Confiscation of goods - jewellery items - evasion of GST or not - officers of the respondent department during shadow operation noticed two persons entering and coming out of the jewellery shop. The bags held by them were checked and those were found to be containing gold ornaments including stone weight. Ext.P2 notice makes it clear that goods were not accompanied by any documents showing or reflecting payment of tax on them as per the provisions of the GST Act, 2017 - petition dismissed. - HC
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GST:
Bail application - claiming false input tax credit on the basis of false sales invoices - The investigation in the matter is still under progress and the department has tried to interrogate the accused during investigation after taking permission from the Court but the accused on his health ground refused for being interrogated. - This is not a fit case for bail and hence the bail application is liable to be rejected - DSC
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Income Tax:
Liability for payment of advance tax - Amalgamation of company - whether the Company is obliged under the Act to pay advance tax between 1-04-2016 and 20-03-2017 for the assessment year 2017-18? - It cannot but be said that the petitioner company lost its entity only on 20.03.2017, upto this date the obligation to pay advance tax did not vanish. - HC
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Income Tax:
Validity of reopening of assessment u/s 147 - We see no justifiable reason to interfere with the order under challenge. We clarify that when a notice under Section 148 of the Income tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order’. - HC
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Income Tax:
Computation of capital gains under section 50 - no depreciation had been claimed or allowed in respect of the asset - Once, this is a fact that the moment assessee stopped claiming depreciation in respect of property and let out the same for rent, it ceases to be a business asset and thus, the profit or gain arising out of sale of property is to be considered as long term capital gain after indexation - AT
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Income Tax:
Concept of mutuality - Payment of interest / compensation to the members - The very fact that bylaws of the assessee-society contained the provisions that payment of dividend to its members goes to show that it is not a mutual society and commerciality is very much inherent in the activities of the assessee-society. In this regard, clause 75(6) of the Byelaws of the assessee-society is relevant. Therefore, the action of the Assessing Officer in thrusting the concept of mutuality even when the assessee-society never claimed the concept of mutuality, is bad in law and is hereby set aside. - AT
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Customs:
Confiscation - redemption fine - penalty - import of seafood for the purpose of export and trade - The appellant had no intention to violate FSSAI and FSS Act and had no intention to import goods contrary to the prohibition stipulated in the Act or any other law for the time being in force. Hence, the imposition of redemption fine and penalty is not sustainable in law - AT
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Customs:
Refund of Customs Duty - duty paid under protest - it is found that the Revenue has not challenged the show-cause notice as well as the Order-in-Original allowing the option to the appellant to seek an amendment in the Bill of Entry as permissible under Section 149 of the Customs Act, 1962 but the same was suo moto set aside by the learned Commissioner which is against law as held in various decisions relied upon by the appellant. - AT
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IBC:
Appointment of valuer for ascertaining the value of the land of the corporate debtor (CD) being industrial in nature - Once any finality is achieved over any issue, the order that has given finality will be binding on all the interested parties. Here whether the land is to be considered as agricultural or industrial in character has already been decided by NCLT, then by National Company Law Appellate Tribunal and finally by Hon'ble Supreme Court, therefore such order cannot be reopened and examined by this Bench. - Tri
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Service Tax:
Revenue neutrality - issue is revenue neutral without involving of any out flow of net tax to the Government - only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. - substantial question of law is answered in favour of the assessee - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (4) TMI 1112
Levy of GST - Supply of services or not - Principles of mutuality - amount collected as membership subscription fees paid by the members of the applicant towards facilities provided by the applicant - amount collected as infrastructure development fund for the development and maintenance of the facilities provided by the applicant - HELD THAT:- Finance Act, 2021 has over ruled what the Courts have held till now and has countered the Principle of Mutuality by way of Explanation which states that the members or constituents of the club and the club are two separate entities and persons for the purpose of Section 7 of CGST Act, 2017 which defines Supply - by virtue of Section 1 of Finance Act, 2021, the amendment brought in Section 7 of CGST Act, 2017 by way of Section 108 of Finance Act, 2021, will only come into effect on the date when Central Govt notifies the same and then the same will be notified with the corresponding amendments passed by the respective States and Union territories in respective SGST/ UTGST Act. Thus, unless the amended Section 7 of CGST Act, 2017 is notified, the applicant is not liable to pay GST on subscription fees and Infrastructure development fund collected from the members as per the Hon'ble Supreme Court judgment in the case of STATE OF WEST BENGAL ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE ORS. VERSUS M/S. RANCHI CLUB LTD. [ 2019 (10) TMI 160 - SUPREME COURT] - application allowed.
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2021 (4) TMI 1110
Copy of reply not placed on record - HELD THAT:- Mr. Ravi Prakash will ensure that the reply is placed on record. Furthermore, Ms. Venus Mehrotra, who appears on behalf of Ms. Sonu Bhatnagar, i.e., the counsel for respondent no. 2 and 8 says that a reply to the captioned application as well as a counter-affidavit to the main writ petition will be filed. In the previous order, i.e., order dated 17.03.2021, the appearance of Ms. Sonu Bhatnagar has been recorded, albeit incorrectly, for respondents no. 2 to 8. We are told that Ms. Bhatnagar appears on behalf of respondent no. 2 and 8. Furthermore, Mr. Ravi Prakash appears on behalf of respondent no. 1, 3, 4, 5, 6, 7, and 9. The record shall stand corrected to that extent. List on 07.07.2021.
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2021 (4) TMI 1059
Bail application - claiming false input tax credit on the basis of false sales invoices - HELD THAT:- The statement of accused was recorded and the accused in his statement has admitted that no goods were received by his firm dt his registered address from his suppliers and he claimed fake ITC on behalf of these fake firms. During investigation, the fifteen companies are found to be fake and the record of these firms and the E-way bill are filed with photographs of the persons which are found to be non-existent and even the premises of M/S Lotus Enterprises are not to be found on the address and on verification it was found that the address shown in the firm detail has never been running on the address and Mr. Omveer Singh was stated to be died on 31-07-2017, the death certificate and the panchnama of the company is also filed by the department and another panchnama of fake companies are found to be non-existent at the time of verification which clearly established that the accused has availed fake ITC credit on the basis of fake companies without doing any transactions with the firms. The investigation in the matter is still under progress and the department has tried to interrogate the accused during investigation after taking permission from the Court but the accused on his health ground refused for being interrogated. As far as the argument of jurisdiction of the case and the nature of punishment of the offence is concerned, it is transpired that the department after getting the information that the accused firm is involved in supply of goods in UP and on the basis of the notification of the department as produced before this Court also seems to have power to investigate the present case and since the offence relates to tax evasion and fall under the economic offence which does not fall in ordinary offence punishable upto 5 years imprisonment and such type of offences should not be considered liberally particularly in the manner in which the offence is alleged to have been committed by the accused and if in such type of offences accused is granted bail, there is every livelihood that the investigation of the case will be hampered and as such I do not find it to be a fit case for bail. This is not a fit case for bail and hence the bail application is liable to be rejected - bail application dismissed.
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2021 (4) TMI 1102
Seeking a direction to the respondents to extend the period of time for submitting of Form GSTR-9 and GSTR-9C for the financial year 2019-20 - Section 44 of the CGST Act, 2017 read with Section 35(5) of the RGST Act and Rule 80 of the CGST Rules, 2017 - HELD THAT:- The arguments advanced by the learned counsel for the petitioner cannot be accepted since the period for filing of the return is fixed by the Statute and it is the statutory authority alone who has power and authority to extend any period for compliance. Therefore, we are not inclined to entertain the instant writ application and leave it to the petitioner, if so advised, to approach the statutory authority to seek further extension. We refrain to entertain the present writ application and the same stands dismissed.
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2021 (4) TMI 1097
Failure of the petitioner to furnish monthly returns under Section 39 of GST Act - Principles of natural justice - HELD THAT:- The impugned orders dated 29.10.2018, 31.7.2019, 7.8.2019, 24.7.2019 and 20.8.2019 passed by the Respondent No.3, the Joint Commissioner of Sate Taxes, Danapur Circle, East Circle, Muzaffarpur in Form ASMT-13 need to be quashed and set aside, for the same to have been passed without following the principles of natural justice. In terms of the impugned order, financial liability stands fastened. Thus, it entails civil consequences, seriously prejudicing the petitioner inasmuch as, without affording any adequate opportunity of hearing or assigning any reason. Shri Satyabir Bharti, learned counsel for the petitioner states that without prejudice to the respective rights and contentions of the parties, petitioner is ready and willing to deposit a sum of ₹ 5 lacs with the appropriate authority within a period of two weeks from today. Petition disposed off.
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2021 (4) TMI 1095
Opening of portal for filing of form GST TRAN-I electronically or to accept the same manually - migration to GST regime - Kerela VAT Act - HELD THAT:- When the first respondent had all valid reasons to assume that the facilities to upload the necessary form was available till 30.12.2017, it is not available in the eye of law for the respondents to loathe the action of the first respondent in attempting to upload on 29.12.2017 - It is an undisputed fact that the assessees as well as the department have faced several difficulties, especially during the transitional stage of the new tax regime and even a Grievance Redressal Committee had also been formed for redressing the grievance of the dealers. The learned Single Judge was perfectly justified in issuing the judgment impugned - Appeal dismissed.
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2021 (4) TMI 1094
Confiscation of goods - jewellery items - evasion of GST or not - HELD THAT:- Perusal of section 129 of the GST Act, 2017 makes it clear that the authorities under the Act are vested with powers to detain or seize and after detention or seizure to proceed further in the matter for assessing the tax and penalty, in case if it is found that the person transporting the goods or storing the goods while they are in transit indulge in contravention of the provisions of the GST Act or the Rules made thereunder. However, Section 130 of the GST Act deals with mens rea of a person who intends to avoid payment of taxes. If any person supplies or misuses any goods in contravention of the provisions of the GST Act or Rules with intend to evade payment of taxes or fails to account for any goods, on which he is liable to pay tax, the provisions of Section 130 of the GST Act applies. Notice issued under section 130 of the GST Act (Ext.P2) makes it clear that, officers of the respondent department during shadow operation noticed two persons entering and coming out of the jewellery shop. The bags held by them were checked and those were found to be containing gold ornaments weighing 2270.13 grams including stone weight. Ext.P2 notice makes it clear that goods were not accompanied by any documents showing or reflecting payment of tax on them as per the provisions of the GST Act, 2017 - petition dismissed.
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2021 (4) TMI 1093
Refund of unutilized input tax credit - Validity of the attachment of the bank account of the petitioner - HELD THAT:- Without expressing any opinion on the stand taken by the respondents at this stage, we are of the view that petitioner may file rejoinder affidavit to the stand taken by the respondents so that the case can be decided one way or the other. Let the rejoinder affidavit be filed within two weeks.
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2021 (4) TMI 1091
Input tax credit - seeking rectification of the GSTR-1 Form for the period of January 2018 to March 2018 - application was rejected on the ground that the period for making such an application expired at the end of September 2018 as per Section 37 of the West Bengal Goods and Services Tax Act, 2017 - period of January 2018 to March 2018 - HELD THAT:- As per Section 37(3) of the West Bengal Goods and Services Tax Act, 2017, It is to be noted that the Act does not provide any provision for appeal. Furthermore, there is no provision for condoning of such a delay. There are no reason to interfere as the statute has provided a period of limitation for seeking rectification. The writ court cannot, by itself, condone such a limitation period. Condoning such delay would make the provision otiose and open the floodgates for similar cases - application dismissed.
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Income Tax
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2021 (4) TMI 1090
Penalty u/s 271(1)(c) - non-disclosure of income in the return - AO observed that the assessee earned remuneration from a firm which was credited to the capital but not offered for taxation - HELD THAT:- A copy of the notice issued u/s 274 of the Act has been placed in the appeal folder, from which it is discernible that the AO did not strike off either of the two limbs viz., concealment of the particulars of income; and furnishing of inaccurate particulars.The penalty order came to be passed by holding that the assessee concealed his income. Recently, a full Bench of Hon‟ble Bombay High Court in Mohd. Farhan A. Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] considered this very issue. Answering the question in affirmative, the Full Bench held that a defect in notice of not striking the relevant words vitiates the penalty even though the AO had properly recorded the satisfaction for imposition of penalty in the order u/s 143(3) of the Act. Hon‟ble Bombay High Court in Pr.CIT Vs. Golden Peace Hotels and Resorts (P.) Ltd. [ 2021 (3) TMI 195 - SC ORDER] also took similar view that where inapplicable portions were not struck off in the penalty notice, the penalty was vitiated. SLP of the Department against this judgment has been recently dismissed in Pr.CIT Vs. Golden Peace Hotels and Resorts (P.) Ltd. [ 2020 (2) TMI 333 - BOMBAY HIGH COURT] . It is clear that where the charge is not properly set out in the notice u/s 274 viz., both the limbs stand therein without striking off of the inapplicable limb, but the penalty has been, in fact, levied for one of the two, such a penalty order gets vitiated. We find from the notice u/s 274 that the AO did not strike out one of the two limbs though the penalty was imposed with reference to the first one only, namely, concealment of particulars of income.
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2021 (4) TMI 1087
Rectification of mistake - Tribunal in not discussing and in not adjudicating on the objection of the assessee with regard to the comparability of the MPS Ltd to the assessee company - HELD THAT:- We find that there is an inadvertent mistake in the order of the Tribunal in not discussing and in not adjudicating on the objection of the assessee with regard to the comparability of the MPS Ltd to the assessee company and therefore, there is a mistake apparent from the record which needs rectification. Further, we also find that the assessee has filed additional evidence with regard to the comparability of MPS Ltd to the assessee company and therefore, it requires admission and remand of the issue to the file of the Assessing Officer/TPO for verification and re-consideration.
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2021 (4) TMI 1085
TP Adjustment - comparable selection - exclusion of Microgenetics Systems Ltd. by the TPO was done after applying the turnover-filter of ₹ 5 crores - HELD THAT:- As AR s submissions that there is no linkage between the turnover and profit margins though are not valid, but the TPO has also not given any concrete findings as to why this particular comparable was earlier selected and was only excluded following the turnover filter of ₹ 5 crores. This filter whether strictly followed by the TPO or not in other comparables is also not emerging from the order of the TPO. Thus, it will be appropriate to direct the TPO/AO for taking cognizance of this comparable after applying all the filters as well as the functional profile of the comparable into account and thereafter if all the parameters are proper, then select this comparable. Thus, Ground No. 2 of the assessee s appeal is partly allowed for statistical purpose. Rejection of R-Systems International Ltd. - As from the perusal of the annual reports, it can be seen that audited financial data for the relevant previous year (April, 2009 to March, 2010) is available in the public domain relating to four quarters. Merely having different financial year cannot discard this comparable from the list of comparables. Thus, we direct the TPO/AO to consider this comparable after applying all the filters as well as the functional profile of the comparable into account and thereafter if all the para-meters are proper, then select this comparable. Thus, Ground No. 3 of the assessee s appeal is partly allowed for statistical purpose. TCS Eserve International and TCS E-Serve Limited - It can be seen that the functional profile of these comparables are different from that of the assessee company. Both these entities are involved in software testing, verification and validation of software which falls in the domain of software development services. Besides this separate segmental details pertaining to ITeS/BPO activities are also not available in their financial statements.Therefore, we direct the TPO/AO to exclude both these comparables i.e. TCS Eserve International and TCS E-Serve Limited from the final list of comparables. Third party cost recoveries from AE for the purpose of applying the mark-up - HELD THAT:- As per the terms of the service agreement with the overseas AE, such expenses are recovered by the assessee on a costto- cost basis, without charging any mark-up. The CIT(A) has rightly held that the assessee should have marked up these expenses by a profit-margin before making the recoveries as the said expenses are part and parcel of the business of the assessee and forms part of the total cost based. Besides this the decisions of Cheil Communication India Pvt. Ltd. [ 2010 (11) TMI 630 - ITAT DELHI] is altogether on a different footing and the factual aspects are totally different from that of the assessee s case herein. In Cheil Communications, the issue was that of remunerated by its associated enterprises on the basis of a fixed commission/charges based on expenses or cost incurred by the assessee for release of a particular advertisement as well as on advisory services. Thus, Ground No. 7 of the assessee s appeal is dismissed Working capital adjustments on account of outstanding receivables - HELD THAT:- As submission of the Ld. AR was that the assessee could not recover two invoices dated 31.03.2009 and 30.10.2009 within the stipulated credit period of 30 days and there was delay of 11 and 6 days respectively in collecting these invoices on an isolated basis. But the Ld. AR claims that the weighted average period of realization with respect to all invoices during the relevant year put together was only 20.52 days. This issue needs to be verified properly by the TPO/AO, therefore, we are remanding back this issue to the file of the TPO/AO for proper adjudication after taking cognizance of the actual delay in collection of invoices. Needless to say, the assessee be given proper hearing after following principles of natural justice.Ground No. 8 of the assessee s appeal is partly allowed for statistical purpose. Exclusion of four comparables Accentia Technology Pvt. Ltd., Eclerx Services Ltd., I Gate Global Services and Infosys BPO Ltd . - HELD THAT:- From the perusal of these companies profiles and the findings given by the CIT(A) is apt. As in case of Accentia Technology Pvt. Ltd. there was extraordinary event that of merger took place during the year. In case of Eclerx Services Ltd., the functional profile is altogether different than the assessee company. In case of I Gate Global Services separate segmental data relating to IT enabled Services and IT Services were not available. In case of Infosys BPO Ltd., it is a giant in the area of the software development, besides this it assumes all risk leading to higher profits as well as there was an extra ordinary economic event during the year as it acquired membership interest in Machenic Systems LLC. Thus, all these comparables were rightly excluded by the CIT(A). Hence, all four grounds of Revenue s appeal are dismissed.
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2021 (4) TMI 1111
Reopening of assessment u/s 147 - re-opening beyond a period of four years - DGIT (Investigation) has for forwarded information regarding Assessee who had taken bogus purchase bills to reduce and suppress profits - HELD THAT:- There is some merit in the case. Till the next date, there shall be ad-interim relief in terms of prayer clause (d) which reads thus:- that pending the hearing and final disposal of the present petition, this Court may be pleased to stay the operation of the notice dated 28th March, 2019 ( Exhibit E ), subsequent proceeding which has been undertaken in consequence of the said notice and the subsequent order dated 29th March, 2021 ( Exhibit T ) and grant an injunction restraining the Respondents, their subordinates, servants, agents, successors-in-office from taking any steps in furtherance or in implementation of the notice dated 28th March, 2019 ( Exhibit E ) subsequent proceeding which has been undertaken in consequence of the said notice and the subsequent order dated 29th March, 2021 ( Exhibit T ).
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2021 (4) TMI 1084
Revision u/s 263 by CIT - claim of assessee in respect of LTCG wherein no enquiry on the part of AO conducted - original assessment has scrutinised the assessment for AY 2014-15 since it was selected by the CASS especially for Suspicious Long Term Capital Gain on Shares (inputs from the Investigation Wing) - HELD THAT:- We note that pursuant to CASS, the AO had taken note of this issue i.e. Suspicious Long Term Capital Gain on Shares (inputs from the Investigation Wing) [ LTCG] and has called for the documents from the assessee to substantiate the genuineness of the transaction and pursuant to which the assessee had filed the documents which the AO in his assessment order has acknowledged to have verified from the share trader, which facts are evident from the perusal of the original scrutiny assessment order - So, the AO s action on the issue of accepting the claim of assessee in respect of LTCG which the Ld Pr CIT would like to rake up by passing the impugned order has already undergone enquiry by the AO; meaning the AO s action in the first round cannot be termed as a case of no enquiry on the issue of LTCG. Resultantly, the Ld. Pr. CIT cannot brand the action of AO to accept the claim of assessee in respect of LTCG as a case of no enquiry on the part of AO to term it as an erroneous order; and which finding could have facilitated him to usurp/interfere by exercising his revisional jurisdiction u/s. 263. We should bear in mind that in case if he wanted to interfere in the present case (since AO had enquired) then he (Ld. Pr. CIT) himself ought to have conducted enquiry to bring out the fallacy as to show how the enquiry conducted by the AO was erroneous. And for that the Ld. Pr. CIT while conducting enquiry is supposed to confront the assessee during the revisional proceedings with the materials which he is going to use against it and after eliciting the reply of the assessee then only could have passed the impugned order directing the AO to make the addition on LTCG. Failure to do so vitiates the impugned order directing addition of LTCG As revenue could not point out any difference in the law and facts in respect of the facts of this present case in hand as well as in the case of Ritin Lakhmani Ors [ 2020 (11) TMI 768 - ITAT KOLKATA] then, we are bound by the judicial discipline to follow the decision of the coordinate bench of this Tribunal in the case of Ritin (supra) wherein hold that the order passed u/s 263 of the Act is bad in law. Decided in favour of assessee.
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2021 (4) TMI 1083
Computation of capital gains under section 50 - no depreciation had been claimed or allowed in respect of the asset - Whether on Sale of any asset falling in the block of assets, the same has to be reduced for the WDV of the said block of Asset any not from the individual asset as done by Assessing Officer? - as per assessee no deprecation was claimed on these 17 units since Financial Year 2011-12 but the Assessing Officer treated the gain on sale of these units as short term capital gain under section 50C of the Act and computed the capital gain - HELD THAT:- We noted that the assessee has claimed depreciation on the property sold as Lunkard Sky Max of 17 units in AYs 2010-11 and 2011-12. But from AY 2012-13 i.e. Financial Year 2011-12 out of 17 units 7 units were given on rent and accordingly rental income was shown as income from house property and no depreciation was claimed on this property. We noted that this issue has been decided by Co-ordinate Bench of Mumbai in the case of M/s Prabodh Investment Trading Company Pvt. Ltd [ 2011 (2) TMI 1433 - ITAT MUMBAI ] as held if no depreciation had been claimed or allowed in respect of the asset, even though for an earlier period depreciation was claimed and allowed, from the year in which the depreciation claimed was discontinued, the asset would cease to be a business or depreciable asset and if the asset had been acquired beyond the period of thirty six months from the date of sale, it would be a case of long term capital gains. In our humble understanding, the ratio of the order appears to be that the asset had ceased to be a business asset and had become an investment Once, this is a fact that the moment assessee stopped claiming depreciation in respect of property and let out the same for rent, it ceases to be a business asset and thus, the profit or gain arising out of sale of property is to be considered as long term capital gain after indexation. - Decided in favour of assessee.
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2021 (4) TMI 1082
Addition u/s 68 - Unexplained loans - CIT(A) held that mere establishing of the identities of the lenders of loan together with the fact that the transactions were made through cheques could be itself establish the genuineness of the transactions - HELD THAT:- The assessee has complied with the basic conditions of the provision of 68 by submitting the confirmations of loan, copies of the Bank Statements and Copies of Income Tax Return of these four loan creditors. We noted from the assessment order that although the Assessing Officer has written a very elaborate order but he has missed the basic three ingredients of the provision of section 68 of the Act. Hence, not carried any enquiry qua these three conditions rather he mainly relied on the search conducted in the case of Bhawarlal Jain Group of cases. It is also not clear from the assessment order whether these loan parties are genuine or non-genuine and the amount received are unexplained but how. It is a fact that the assessee has discharged its primary onus by filing all these documents which the Assessing Officer should have verified and examined these parties. The assessee has complied with the basic conditions of the provision of 68 by submitting the confirmations of loan, copies of the Bank Statements and Copies of Income Tax Return of these four loan creditors. We noted from the assessment order that although the Assessing Officer has written a very elaborate order but he has missed the basic three ingredients of the provision of section 68 of the Act. Hence, not carried any enquiry qua these three conditions rather he mainly relied on the search conducted in the case of Bhawarlal Jain Group of cases. It is also not clear from the assessment order whether these loan parties are genuine or non-genuine and the amount received are unexplained but how. It is a fact that the assessee has discharged its primary onus by filing all these documents which the Assessing Officer should have verified and examined these parties. DR could not controvert the basic facts of the case except relying on the case law of Pawankumer M Sanghvi [ 2017 (5) TMI 1159 - ITAT AHMEDABAD] and Pr. CIT vs. NRA Iron Steel (P) Ltd. [ 2019 (10) TMI 1178 - SUPREME COURT] . Without pointing out the factual aspect of this case, we cannot take it as legal proposition laid down in the given facts. Hence, we are of the view that there is no infirmity in the order of the CIT(A) and hence, we confirm the same. The appeal of Revenue on this issue is dismissed. Addition of commission paid at the rate of 3% on the above loans and addition of interest on the above loan transactions - HELD THAT:- Since, the CIT(A) has already held this loan as genuine and we confirmed the order of CIT(A), these grounds are consequential and hence, dismissed.
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2021 (4) TMI 1080
Computing deduction u/s 10A - not considering the plea of the assessee that communication expenses should not be excluded from the export turnover for the purpose of computing deduction - HELD THAT:- we are of the opinion that this issue came up for consideration before the Hon ble Karnataka High Court in the case of CIT v. Tata Elxsi Limited [ 2011 (8) TMI 782 - KARNATAKA HIGH COURT] wherein held that for the purpose of computing exemption u/s 10A of the Act, when export turnover in the numerator is to be arrived after excluding telecommunication expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. Methodology adopted by the assessee in allocating the common / indirect costs among its various segments - apportionment adopted by Cisco India a reasonable basis of allocation of common expenses incurred - HELD THAT: - This method of apportionment has also been consistently adopted by Cisco India on a year on year basis. It was further submitted that the Bangalore Bench of the Tribunal in assessee s own case for A.Y. 2008-09 following the decision of the Hon ble Delhi High Court in the case of CIT v. EHPT India (P) Ltd. [ 2011 (12) TMI 49 - DELHI HIGH COURT] and for A.Y. 2009-2010 [ 2014 (11) TMI 849 - ITAT BANGALORE] has upheld the method of allocation of the common expenses adopted by the assessee and held that where two basis of apportionment of common costs are available, any one of the basis should be consistently followed. Thus, since Cisco India has been following headcount basis for allocation from past 8 years the same basis should be followed for A.Y. 2008-2009 as well. Further, the headcount basis of allocation of common expenses should be followed for A.Y. 2010-2011 as well. Disallowance of deduction claimed in respect of forex fluctuation which is capital in nature - assessee failed to furnish the details with regard to the foreign exchange gain / or loss along with evidences to support the same - HELD THAT:- As decided in own case [ 2014 (11) TMI 849 - ITAT BANGALORE] the foreign exchange gain from software development services has to be considered as part of the income from software development services while computing the margin of the assessee and accordingly the margin of 12.67% computed by the assessee is directed to be adopted - Being so, we remit the issue to the files of the AO /TPO with a direction to the assessee to furnish the details of foreign exchange gain or loss. We also direct the A.O. to decide the issue in the light of the above order of the Tribunal in assessee s own case above. TP Adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected from final list. Not making suitable adjustments to account for differences in the risk profile of the assessee vis - vis the comparables - Taking the consistent view, we direct the AO/TPO to give proper risk adjustment as discussed in own case [ 2014 (11) TMI 849 - ITAT BANGALORE] Computing the operating margin of Cyber Media Research Limited at 19.52% as against 12.88% computed by the assessee - HELD THAT:- This issue is remitted to the AO/TPO to re-compute the correct margin of operating margin of Cyber Media Research Limited, in accordance with law. Accordingly, this ground of the assessee is partly allowed for statistical purposes.
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2021 (4) TMI 1079
Claim of exemption u/s 54 denied - investment of the sale consideration in the new residential house was made in the name of the mother of the assessee - HELD THAT:- On perusal of the appellate order, we find that the ld. CIT(A) has not disputed the eligibility of exemption under section 54 of the Act, but, to allow the benefit to the assessee, the assessee was required to furnish the proof that the capital asset acquired was assessed in the hands of the assessee as per the decision relied on by the assessee. As prayed by the ld. Counsel for the assessee, we direct the ld. CIT(A) to give one more opportunity to the assessee to furnish the proof that the capital asset acquired was assessed in the hands of the assessee and in case the assessee fails to furnish the evidence, the appellate order already passed by the ld. CIT(A) stands sustained. Appeal filed by the assessee is allowed for statistical purposes.
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2021 (4) TMI 1077
Concept of mutuality - Payment of interest / compensation to the members - members unanimously opined that they need to be compensated on account of delay in implementation of project failing which they may be forced to withdraw from the project and demand refund of advance paid to the assessee-society - Whether the assessee can be thrust upon the status of a mutual society? - HELD THAT:- In the instant case, the members even after obtaining site / plot from assessee-society once, is entitled to continue to retain his membership. Therefore, there is no contribution from his side though he is entitled to participate in the profits earned by the assessee-society, which can be distributed in the form of dividend. The very fact that bylaws of the assessee-society contained the provisions that payment of dividend to its members goes to show that it is not a mutual society and commerciality is very much inherent in the activities of the assessee-society. In this regard, clause 75(6) of the Byelaws of the assessee-society is relevant. Therefore, the action of the Assessing Officer in thrusting the concept of mutuality even when the assessee-society never claimed the concept of mutuality, is bad in law and is hereby set aside. Whether the interest expenditure can be allowed as a deduction u/s 37 or u/s 36(1)(iii) of the I.T.Act ? - Income Tax Authorities failed to appreciate that the money contributed by the members was invested in FD s and the portion of the interest earned thereon was credited to the account of the members way of compensation for delay in allotment of sites to the members. Therefore, the interest paid on advances from members is chargeable on interest income earned from depositing the same with the bank by the assessee. In other words, there is a direct nexus between the contribution by the members, which was utilized for making fixed deposit to earn interest income and payment of portion of such interest income earned as compensation to members for delayed allotment of sites. Therefore, the interest credited to the members is wholly and exclusively for the purpose of business and entitled to deduction u/s 37(1) of the I.T.Act. For claiming expenditure u/s 37(1) of the I.T.Act, there was no need for a cause and effect relationship between an item of income and expenditure as claimed by the A.O. All that would be necessary is only that it is for the purpose of business and not necessary for earning of the income. In this context, reliance is placed on the judgment of the Hon ble Apex Court in the case of Sassoon J David Co. Pvt. Ltd. v. CIT [ 1979 (5) TMI 3 - SUPREME COURT] Even assuming that interest income is assessed as income from other sources, whether the interest expenditure ought to be allowed as a deduction u/s 57(iii) of the I.T.Act.? - AO has taken a view that there is no obligation on the assessee-society to pay interest to its members when advance was received. Therefore, the A.O. concluded that there is no contractual obligation to pay interest. On the other hand, we are of the view that it is not the requirement under Contract Law that all terms of the contract be agreed upon upfront and there is no scope for alteration thereafter. In the instant case, the delay in procuring the land and formation of site was unforeseen at the initial stage when advances were collected by the assessee-society. Having parted with money and also with site allotment being delayed, the expectation of the members to be compensated by way of interest on their advances is only legitimate. In view of the foregoing reasoning, we are of the view that even assuming that interest income is to be taxed under the head income from other sources , the interest expenditure that is paid to the members of the assessee-society is to be allowed u/s 57(iii) of the I.T.Act. It is ordered accordingly.
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2021 (4) TMI 1104
Deduction u/s 80HHC - Whether Tribunal was right in law that the amendment to the third proviso to Section 80HHC with retrospective effect from 01.04.1998 is violative of Constitution of India when the assessee has not fulfilled the conditions of proviso of Section 80HHC(3)? - HELD THAT:- In view of the submissions made by the learned senior standing counsel for the appellant Revenue, following the ratio laid down in Commissioner of Income Tax Vs. Avani Exports [ 2015 (4) TMI 193 - SUPREME COURT ] the question of law that has been raised in the above appeals is decided against the Revenue. Accordingly, the Tax Case Appeals are dismissed.
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2021 (4) TMI 1068
Condonation of delay - delay of 266 days in filing the appeal - HELD THAT:- We find the reason for the delay was due to Post demerger activities between the assessee and its group companies and finalization of accounts of its listed companies during the relevant period due to which the assessee could not file the appeal within the stipulated time. Considering the same and since the assessee desires to avail the Vivad-se-Vishwas scheme for the A.Y. 2013-14, in the interest of justice, We hereby condone the delay of 266 days in filing the appeal before the Tribunal and proceed to hear the appeal. We are inclined to treat the instant appeal of the assessee as withdrawn relying on the decision of the Hon'ble High Court of Madras in the case of DCIT vs. M/s. Keyaram Hotels[ 2020 (11) TMI 142 - MADRAS HIGH COURT] . Accordingly, we hereby dismiss the instant appeal of the assessee for the A.Y. 2013-14 as withdrawn. However, we also make it clear that, if the assessee's case is not accepted in the Vivad-se-Vishwas Scheme by the Revenue for whatsoever may be reason on a subsequent date, then the assessee shall be at liberty to file Miscellaneous Petition before the Tribunal within the time limit prescribed under the Act to reinstate its appeal.
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2021 (4) TMI 1103
Proportionate deduction u/s 80IB(10) with respect to the units less than 1500 sq.ft. where the housing project contains units with built up area exceeding 1500 sq.ft. - HELD THAT:- Question of law involved in the present appeal is covered by the decision of the Hon'ble Division Bench of this Court reported in Commissioner of Income-tax, Chennai Vs. Elegant Estates [ 2016 (1) TMI 502 - MADRAS HIGH COURT] the question of law is decided against the Revenue and in favour of the assessee wherein held as assessee will be entitled for deduction u/s 80IB(10) with respect to income from flats measuring less than 1500 sq ft limit and assessee will not entitled for deduction u/s 80IB(10) proportionately only with respect to the income from the 2 flats exceeding the limit of 1500 sq ft when the assessee had considered all the flats as forming part of single project on interpretation of the provisions of section 80IB(10)(c) - the language used in the relevant provision of law does not bar a deduction claim altogether if some of the units sold exceed the specified dimensions. - Decided in favour of the assessee
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2021 (4) TMI 1062
Unexplained income u/s.69A - Addition on the ground that seized material i.e. Annexure A/1 indicates the total money receipt on sale of various plots - addition of subsequent assessment year is made in case of Jayantibhai Virjibhai Babariya (partner of assessee) in his individual capacity - HELD THAT:- We have noted that the AO made addition on the basis of seized documents by taking view that seized documents prima facie reflects the receipts of plot wise on-money in coded form. And that no explanation and evidences furnished by the assessee. The ld.CIT(A) while deleting the addition held that there is no evidence on record to establish that assessee firm was involved in plotting of the scheme. Further, the addition on the basis of Annexure A/1 has been made in case of Jayantibhai Virjibhai Babariya for A.Y. 2007-08 ( in individual capacity vide PAN: AFHPB 0820 M). The firm was not in existence and it was formed by way of partnership deed dated 01.06.2007. Assessee vehemently submitted before us that the firm came in to existence vide partnership deed dated 01.06.2007. Before us, no contrary evidences or material is place to show that the assessee-firm was in existence during the impugned financial year, if the firm was not in existence during the impugned financial year no assessment can be made on the non-existent (still to be born) entity. Therefore, we affirm the order of ld. CIT(A) that addition of ₹ 3.16 crore in case of assessee-firm is unjustified, accordingly, grounds raised by the Revenue are dismissed for this sole reason. However, it is made clear that our observation in this case will not affect the additions made in individual capacity of partner of the assessee namely Jayantibhai Virjibhai Babariya, in subsequent assessment years, which has to be examined by lower authorities independently. Appeal of the Revenue is dismissed.
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2021 (4) TMI 1101
Liability for payment of advance tax - whether the Company is obliged under the Act to pay advance tax between 1-04-2016 and 20-03-2017 for the assessment year 2017-18? - claim of the petitioner was that under the scheme of amalgamation, the petitioner/company ceased to exist with effect from 1.04.2016 notwithstanding the fact that the Tribunal allowed such amalgamation only on 20-03-2017 and further claiming that no advance tax for two quarters between 2016 and 2017, as claimed by the revenue, was payable by the petitioner - HELD THAT:- It is not in dispute that the petitioner/company and two other companies were amalgamated under the scheme of amalgamation before High Court of Delhi. Government of India in the Ministry of Corporate Affairs issued a notification on 17.12.2016 that the scheme of amalgamation of the petitioner was transferred to the National Company Law Tribunal, New Delhi and at Bangalore. Therefore, the scheme of amalgamation was transferred to the Tribunal. The Tribunal on receipt of the scheme from the hands of the Government of India on 17.12.2016 approved the same on 20-03-2017. The stamp of approval of the scheme of amalgamation, which in terms of law happened on 20-03-2017, albeit with retrospective effect i.e., from the date on which they had entered into such a scheme i.e., 1-04-2016. To consider whether the petitioner was liable to pay advance tax between the aforesaid dates, the provision concerning payment of advance will have to be noticed. Section 211 depicts quarters of payment of advance tax. The first installment/quarter is on or before 15th June, the next installment is on or before 15th September and the third installment is on or before 15th December. Therefore, the petitioner s claim of amalgamation having been accepted by the Tribunal on 20-03-2017 was obliged to pay advance tax for the said three quarters/three installments. The petitioner/company on the ground that it did not exist with effect from 1-04-2016 cannot escape the liability of payment of advance tax for the said three quarters. On and from the date of acceptance by the Tribunal i.e., 20- 03-2017, the last installment for the assessment year 2017-18 advance tax need not be paid. But, for the interregnum period, as held by the revenue, the petitioner cannot escape payment of advance tax as under Section 207 of the Act advance tax depends upon the current income. The income as declared is current income not as an amalgamated company but as an individual company. Therefore, the petitioner was obliged to pay advance tax for the said period. In so far as the judgment in the case of PRINCIPAL COMMISSIONER OF INCOME TAX, NEW DELHI v. MARUTI SUZUKI INDIA LIMITED [ 2019 (7) TMI 1449 - SUPREME COURT] of the Apex Court, the said judgment is also not applicable to the facts of the case at hand, as the scheme of amalgamation came into effect by an order being passed by the Tribunal on 20- 03-2017. The Apex Court in the aforesaid judgment has held that two companies may join to form a new company. When two company are merged and so joined as to form a third company or one is absorbed into one or blended with another, the amalgamating company losses its entity. The crux of the issue is when did the petitioner/company in the case at hand lose its entity. It cannot but be said that the petitioner company lost its entity only on 20.03.2017, upto this date the obligation to pay advance tax did not vanish. Therefore,find no good ground to interfere with the impugned assessment order passed by the respondent/Assistant Commissioner of Income Tax and the notice demanding an amount of ₹ 356,644,155/-.
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2021 (4) TMI 1099
Violation of principles of natural justice - show cause notice has been issued on 11.12.2019 listing the matter for personal hearing on 16.12.2019. However, the same has been served only subsequent to the time of personal hearing and there has been no opportunity of hearing extended to the petitioner - HELD THAT:- It is only if the records of assessment specifically reveal the position that the petitioner was in receipt of show cause notice dated 11.12.2019 crystallising the issues proposed to be dealt with in the assessment and replies have been put forth by the petitioner to the aforesaid proposals, that it could be assumed that the show cause notice, sent through email, has been taken note of and responded to by the petitioner. Learned Senior Standing Counsel today confirms, on a perusal of the records, that there is nothing in the record to indicate that the proposals in the show cause notice had been discussed in the course of hearing on 12.12.2019. The benefit of doubt, in the above circumstances, should be extended to the petitioner. It is also admitted that the show cause notice has been received by the petitioner on the date of hearing and beyond the time of hearing. The impugned order is also passed on the same date of hearing proposed in the show cause notice, i.e., 16.12.2019. The impugned order is set aside. Since the assessments are now to be conducted in terms of the faceless assessment scheme, I refrain from fixing a date of hearing afresh and merely direct that proceedings for assessment be completed after hearing the petitioner within a period of six (6) weeks from today.
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2021 (4) TMI 1060
Maintainability of appeal being signed digitally - CIT(A)] dismissing the appeal holding that the Form No.35 has been not verified by the Managing Director nor any other Director and hence the appeal is not valid - HELD THAT:- Admittedly, the provisions of Sec. 140 r.w. Rule 45 do require a managing director/director to sign and verify the appeal, but merely for the reason that on account of an inadvertent mistake the same had been digitally signed by the appellant company itself cannot justify the summarily rejection of the appeal by treating the same as invalid without confronting the said infirmity to the appellant. It is a settled canon of interpretation of procedural law that normally its non-adherence does not result in illegality which would render the appeal incompetent, unless such non-compliance related to a substantive provision and had caused prejudice to the other party and may have the effect of taking away a settled right. In fact, we are of the considered view that law relating to procedure may always not prove fatal to the proceedings initiated by the assessee and it would be in the interest of justice, fair and equitable to provide an opportunity to the assessee to rectify the irregularity in regard to compliance to the procedural rules unless the non-compliance to the procedure is of such a nature that it necessarily creates a bar or takes away a substantive right vested in the other side. Accordingly, in a case where the appeal is filed in accordance with the form but is not signed by the person specified under Rule 45, we are of the considered view that in all fairness the appellant should be granted an opportunity to correct this error rather than dismissing of the appeal as not maintainable when the same is otherwise complete in all respects and has been filed within the prescribed period of limitation. To sum up, the nonadherence of some part of the rule per se may not be a ground for rejecting the memorandum of appeal and it will be more appropriate for the appellate authority concerned to have granted an opportunity to the assessee to remove the defect, if any, provided the appeal was in substantial compliance to the provisions of Rule 45 and has been filed within the period of limitation. In all fairness the appeal of the captioned assessee merits to be restored to the file of the CIT(A) who shall after affording an opportunity to the assessee appellant to correct the aforesaid error, therein, dispose off the appeal on the basis of a speaking order in accordance with law
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2021 (4) TMI 1098
Validity of reopening of assessment u/s 147 - notice issued on the last day of expiry of limitation - HELD THAT:- Violation in following the procedure for reassessment as set out by the Supreme Court in the case of GKN Drive Shafts V. ITO ( 2002 (11) TMI 7 - SUPREME COURT ) where in conclusion, the Bench states as follows:- We see no justifiable reason to interfere with the order under challenge. We clarify that when a notice under Section 148 of the Income tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order . In the light of the above, the impugned order dated 30.12.2019 is set aside. The petitioner is permitted to file objections to the assumption of jurisdiction within a period of four (4) weeks from date of uploading of this order and an order be passed either accepting or rejecting the same within a period of three (3) weeks from date of receipt of objections, after hearing the petitioner. Proceedings for assessment, if any all, shall be initiated in accordance with law, thereafter.
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Benami Property
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2021 (4) TMI 1108
Prohibition of Benami Property Transactions - petitioners contend that the impugned show cause notices have been issued under the 1988 Act which do not record any reasons as mandated by law - HELD THAT:- Bombay High Court judgment in Joseph Isharat [ 2017 (3) TMI 1618 - BOMBAY HIGH COURT] and decision in Niharika Jain [ 2019 (7) TMI 1001 - RAJASTHAN HIGH COURT] are not binding on this Court even though they are having persuasive effect. As already concluded earlier, the Division Bench Judgment in M/s. Ganpati Dealcom Pvt. Ltd [ 2020 (3) TMI 899 - SUPREME COURT] is binding upon this Court even though the operation of the said judgment has been stayed by the Supreme Court. Accordingly, we are prima facie of the opinion that the writ petitioners are entitled to interim orders at this stage. However, I am of the further view that the Revenue is to be protected as the matter is sub-judice before the Supreme Court. Accordingly, the following interim orders are passed: A. The reference referred to in Section 24(5) of the 1988 Act shall not be treated as final and shall only be treated as provisional during the whole period, the writ applications are pending before this Court. B. Subject to its result, the reference will be treated as final. Thereafter, time to pass the adjudication order under Section 26(7) of the 1988 Act will start to run. Hence, it follows that the respondent authorities will not take any further steps in the matter till the disposal of these writ applications. C. The writ petitioners shall not sell, otherwise transfer, deal with, encumber or part with possession of the subject properties till the disposal of these writ applications. The respondent authorities are granted a period of six weeks to file their affidavits-in-opposition from date. Affidavits-in-reply, if desired to be submitted by the writ petitioners, be submitted within a period of two weeks thereafter.
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Customs
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2021 (4) TMI 1089
Confiscation - redemption fine - penalty - import of seafood for the purpose of export and trade - Frozen Pangasius Fillet Untrimmed 100% Non IQF - quality requirements of FSSAI and the FSS Act complied or not - HELD THAT:- The appellant while placing purchase order clarified to the vendor that the goods in question should be in compliance with the Indian Standards Food safety Standards (Contaminants, Toxins and Residues) Regulation, 2011 and Indian Food Safety and Standards Authority of India Regulation for microbiological requirements for fish and fishery products and also to meet other safety standards. In order to meet these standards, the vendor supplied the test certificate issued by the Ministry of Agriculture and Rural Development, Social Republic of Vietnam which certified that the goods imported was in compliance with FSSAI. Further, on subsequent laboratory analysis, the said product failed in two out of eighteen quality and safety parameters and as a result of which NOC was not issued by the Food and Safety Standard Authority - findings of both the authorities that the goods are liable for confiscation under Section 111(d) of the Act is not legally justified. The appellant had no intention to violate FSSAI and FSS Act and had no intention to import goods contrary to the prohibition stipulated in the Act or any other law for the time being in force. Hence, the imposition of redemption fine and penalty is not sustainable in law - Appeal allowed - decided in favor of appellant.
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2021 (4) TMI 1086
Refund of Customs Duty - duty paid under protest - claim rejected on the ground that appellant has not challenged the assessment of Bill of Entry not got it reassessed before or after out of charge of goods - HELD THAT:- Though the refund has been rejected by the original authority but the original authority has observed that the importer had an option to file an application for amendment of the Bill of Entry under Section 149 of the Customs Act, 1962 to rectify any mistake in the Bill of Entry based on the documents available at the time of importation but the learned Commissioner while passing the impugned order in para 12 denied the right of the appellant to seek amendment of Bill of Entry as permissible under Section 149 of the Customs Act, 1962. Further, it is found that the Revenue has not challenged the show-cause notice as well as the Order-in-Original allowing the option to the appellant to seek an amendment in the Bill of Entry as permissible under Section 149 of the Customs Act, 1962 but the same was suo moto set aside by the learned Commissioner which is against law as held in various decisions relied upon by the appellant. An identical issue has been considered by two Division Benches of this Tribunal in the case of M/S. CALISON FIBRES PVT LTD. VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , NHAVA SHEVA [ 2019 (7) TMI 1060 - CESTAT MUMBAI] . In para 5 in the case of Calisons Fibres Pvt. Ltd., the Division Bench directed that the request for reassessment be treated as application under Section 149 of Customs Act, 1962 for amendment of Bill of Entry and accordingly, directed the proper officer to consider the said application and pass appropriate order in accordance with law after granting opportunity of hearing to the appellant. Appeal disposed off.
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2021 (4) TMI 1107
Revocation of Customs Broker - penalty under Regulation 18 r/w Regulation 14 of the Customs Brokers Licensing Regulations, 2018 (CBLR) for alleged violation of Regulations 10(a) and 10(n) of the CBLR - whether the timelines are mandatory or directory? - HELD THAT:- Once the limitation prescribed is held to be mandatory, then the force of that mandate would have to be adhered to strictly. Moreover and additionally, the Central Board of Excise and Customs in Circular No.9/2010-Cus., dated 08.04.2010 in F.No.502/5/2008-Cus VI has set out an overall time limit for completion of suspension proceedings against a license holder - Evidently, the purpose is to ensure that suspension is not indefinite and proceedings are completed promptly so as to cause the least prejudice to the parties concerned. In this case this constitutes the fourth violation of the time limits. In the case dealt with by the Division Bench in SANTON SHIPPING SERVICES VERSUS THE COMMISSIONER OF CUSTOMS, THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL [ 2017 (10) TMI 621 - MADRAS HIGH COURT] , there was a violation only of one timeline whereas, as noticed by me earlier, in the present case the time lines set out have been violated not once, but on four occasions. Thus, the impugned order has no legs to stand, particularly, since there is no dispute on the sequence of events or the dates on which the events have transpired. Petition allowed.
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2021 (4) TMI 1100
EPCG Scheme - export obligation wrongly discharged with 100 per cent export by its group companies - validity of notices dated 19th August, 2019 and 1st January, 2021 - petitioners say that the said two notices are without jurisdiction and bad in law - HELD THAT:- The two notices respectively dated 19th August, 2019 and 1st January, 2021 have been issued by the authorised officer. The interference by Writ Court at the Show Cause stage can be made only on very limited grounds. The matter being in adjudication stage and that the two notices cannot be said to be without jurisdiction on face on record, the said two notices need not be interfered with, at this stage. The adjudication pursuant to the Show Cause should be brought to a logical conclusion. The petitioner shall cooperate with the adjudicating authority in terms of the notice dated 1st January, 2021. Since no adjudication has been made by the respondents as yet and that there has been no coercive steps taken since August 2019, it is expected that there shall be no coercive action from the respondents as against the petitioners till one week after the communication of the adjudication order in terms of the show cause notice dated 1st January, 2021. Nothing further remains to be adjudicated in this writ petition and the same is, accordingly, disposed of without any order as to costs.
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Corporate Laws
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2021 (4) TMI 1072
Seeking to restore the name of the Company in the Register of Companies - Section 252 of the Companies Act, 2013 - HELD THAT:- The Company has not deposited heavy cash in its Bank Account during the period of demonetization. Copy of Bank statement along with demonetization affidavit is enclosed to the Application. We are satisfied with the reasons shown by the Applicant for restoration of the name of the Company in the register of companies maintained by the Respondent - By exercising the powers conferred on this Tribunal under Section 252 of the Companies Act, 2013, and Rule 87-A of NCLT (Amendment) rules 2017, R/w. NCLT Rules, 2016 and basing on the assurance given by the Learned representative for Applicant Company would be making good all pending statutory compliances on restoration of the Company, it seems to be a fit case to order restoration of the Company by RoC (H) in the interest of the Company, its shareholders and the Creditors. The Registrar of Companies, the respondent herein, is ordered to restore the original status of the Company as if the name of the company has not been struck off from the Register of Companies - application allowed.
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2021 (4) TMI 1066
Scheme of amalgamation - seeking to dispensing the meetings of Equity Shareholders, Secured Creditors and Unsecured Creditors - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- The Tribunal is empowered, under Section 230(9) of the Companies Act, 2013, to dispense with calling of a meeting of creditors or class of creditors, where such creditors or class of creditors, having at least ninety per cent value, agree and confirm, by way of affidavit, to the Scheme of Amalgamation. In the instant case, as detailed supra, the Applicant Companies have filed Certificates given by the Chartered Accountants certifying the number of Equity Shareholders of the respective Companies constituting 100% of Shareholding of the Applicant Companies and the number of Secured/Unsecured Creditors of the Applicant Companies constituting more than 90% have furnished consent affidavits. No purpose would be served in directing the convening of the meetings in question. Therefore, it would be just and appropriate to dispense with the meetings as sought for, on the principle of case of doing business, and to facilitate the Company to file necessary second stage Petition seeking to sanction the Scheme, subject to fulfillment of all statutory conditions, after notice to the respective Statutory Authorities. Application disposed off.
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2021 (4) TMI 1065
Seeking to restore status/name of the Company - seeking 252 (3) of the Companies Act, 2013 - HELD THAT:- It is not in dispute that the Registrar of Companies is conferred with power U/s. 248(1) to strike off the Company, if the Company has failed to commence its business within one year of its incorporation or a Company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any Application within such period for obtaining the status of a dormant Company U/s. 455. However, Section 248(6) states that the Registrar of Companies, before finally striking off Company, has to satisfy himself that sufficient provision has been made for the realization of all amounts due to the Company and for the payment or discharge of its liabilities and obligations by the Company within a reasonable time, and, if necessary, obtain necessary undertakings from the Managing Director, Director or other persons in charge of the management of the Company. It is also not in dispute that the instant Company Petition is filed in accordance with law; there are no investigations pending against the Company; the Respondent has not opposed the Petition; and left the issue to Tribunal to consider the case subject terms and conditions. The Directors/Shareholders of the Company has undertaken to file all the returns, statements and documents that are required under the Companies Act, 2013 within the prescribed time. Therefore, in the interest of justice would be met, if the name of Company is restored as prayed for, however, subject to conditions mentioned below. The Registrar of Companies, Karnataka, the Respondent herein, is directed to restore the name of the Company in the Register maintained by the Registrar of Companies, Karnataka as if its name had not been struck off from the rolls of the Register, with restoration of all other consequential actions taken by the Registrar of Companies - petition disposed off.
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2021 (4) TMI 1063
Scheme of amalgamation and merger - seeking to dispense with the convening and holding of the meeting of Shareholders, Unsecured Creditors of the Transferor Company - seeking to dispense with the convening and holding of the meeting of Shareholders, Secured Unsecured Creditors of the Transferee Company and to convene the Meeting of Secured Creditors of the Transferor Company etc. - HELD THAT:- The Companies have followed extant provisions of Companies Act in framing the Scheme in question, which are duly approved by the Board of Directors of the Companies involved. The Statutory Auditors/Chartered Accountants of the Company have also issued respective Certificates by inter-alia certifying the details of shareholders, creditors, and compliance of accounting treatment as prescribed U/s. 133 of the Companies Act, 2013 with reference to the Scheme in question. The Applicant Companies have disclosed all the material facts relating to the Scheme in question and filed necessary documents along with the Application - the case, made out by the Applicants so as to grant relief as sought for, by dispensing with the meeting of the Shareholders of the Applicant Companies and Unsecured Creditors of the Transferor Company and convene the meeting of the Secured Creditors of the Transferor Company by appointing the Chairperson and Scrutinizer for convening the meeting, fixing venue, time, quorum etc. is accepted. Application allowed.
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2021 (4) TMI 1061
Transfer of shares - Petitioners are alleged to be non-shareholders of the Company, as early as 2007-2008 - time limitation - HELD THAT:- In the instant case, as per the contentions made by the Parties, it should be deemed that valid consideration has been paid, executed valid transfer deed and surrendered original share certificates to the Transferee. However, the Petitioner No. 1 alleges that he does not remember executing any share transfer form in connection to the R1 Company and even if executed, it would not bind on him as it is un-intentional. Similarly, while accepting to surrendering the impugned shares to the Respondents, he has further contended that they were given in different context and similarly about the consideration. Having signed Form for share transfer, surrendering original share certificates etc, the Petitioner is estopped from disputing them, that too, after lapse of considerable time. Moreover, the Petitioners are not strangers to the Company and pretending ignorance about the impugned transaction are baseless and untenable, and same are liable to be rejected and thus, those allegations/contentions are hereby rejected. The Petitioners are admittedly aggrieved by the deletion of their names as Members in the Company, as early as on 21.02.2008, however, the Petitioners chose to file the present petition only on 03.08.2012 before the then Company Law Board (CLB), Chennai Bench, after lapse of more than four years on the pretext that they are aware of it only in the year 2012, and the grounds raised on behalf Petitioners are un-tenable and baseless. Therefore, the contention of the Petitioners that the petition is within limitation is not at all tenable and liable to be rejected - Since, the Tribunal held that the Petitioners ceased to be Members of the Company as early as on 21.02.2008 and the Petition under Sections 397/398 of Companies Act, 1956 are not maintainable. Therefore, the allegations with regard to acts of oppression and mismanagement do not arise. Petition dismissed.
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Insolvency & Bankruptcy
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2021 (4) TMI 1088
Oppression and mismanagement - Siphoning of funds - diversion of funds - investigation of the Respondent No. 1 Company's affairs by Registrar of Companies - HELD THAT:- It is clear that the NCLT may direct the Central Government to investigate under Section 210 (2) of the Companies Act 2013. After a reference from the NCLT, the Central Government has to mandatorily appoint an Inspector under Section 210 (2) of the Act. Therefore, before the Learned NCLT passes such an order, it will follow as a natural corollary that the Learned NCLT, at least form prime facie opinion, based on the records available and the submissions made, that such an investigation into the affairs of the Company was necessary, and such direction, in any event, ought to be issued to the Central Government and not to the Registrar - the direction issued by the Learned NCLT appointing the Registrar of Companies to investigate into the affairs of Respondent No. 1 Company violates the provisions of the statute, in as much as in terms of Section 210 (2) of the Companies Act 2013, such a direction can be given only to the Central Government and not to the Registrar. In terms of Section 213 of the Companies Act 2013, such a direction can be given, once again, only to the Central Government and not to the Registrar, and only upon the satisfaction of the conditions precedent specified therein. The Learned NCLT erred in directing the Registrar of Companies to investigate into affairs of Respondent No. 1 Company, as the said Directions violate the statutory provision of Section 210 (2) and Section 213 of the Companies Act 2013 - Appeal allowed in part.
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2021 (4) TMI 1081
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - lease deed - financial lease as per the terms laid down under the guidelines of Indian Accounting Standards or not - HELD THAT:- Reliance placed in the case of ASEA BROWN BOVERI LTD. VERSUS INDUSTRIAL FINANCE CORPN. OF INDIA [ 2004 (10) TMI 325 - SUPREME COURT ]. This matter of Asea Brown related to lease finance agreement dated 4th December, 1990 with Respondent No.3 of that matter, pursuant to which the Appellant took 56 cars under the lease finance from Respondent No.3 in that matter. Subsequently, Respondent No.3 became notified party under Section 3(2) of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 due to certain illegal transactions covering period between 1.4.1991 and 6.6.1992. The transaction dated 4th December, 1990 was not referable to the concerned period. The Central Government appointed Respondent No.1 of that matter under Section 3(1) of 1992 Act over properties belonging to Respondent No.3. Under Section 5(8)(d), we are concerned with Indian Accounting Standards. With this in view, if para 63 of the Indian Accounting Standards (referred supra) is perused, the present lease deed does not have any Clause of transfer of ownership of the underlying asset (which is land) (and not flats harped on by Appellant) to the lessee or flat buyers who would be sub-lessees at the end of the lease term - Material is Para 62 of Accounting Standards (referred supra) which states that a lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. Paragraphs 63 and 64 records the factors or indicators which individually or in combination are required to be seen if it is a financial lease. The Respondent has in comparative chart filed, referred to various clauses to forcefully put on record that the present lease deed is not a finance lease. Even without referring to them when we keep in view the guiding factor if the lease transfers substantially all the risks and rewards incidental to ownership , we find that the present lease deed hopelessly fails in this regard. The Appellant, even after creating the lease kept with itself all the rights to control and monitor the project which was to come up. The Appellant of course now has tried to say in the Appeal that it was only exercising minor supervision over the land use (see 9.12 of the Appeal), which we do not agree to. What we can see from the Lease Deed which we have just referred in brief, is that the acts which could be performed by the lessee, were fully controlled by the Appellant. The lessee, of course, had the liberty to construct and transfer the flats by way of sublease. The above discussion shows that while risks and liabilities were transferred to the lessee, the rewards incidental to ownership were not transferred. There is no Clause of transfer of ownership at the end of lease term - when we have gone through the Lease Deed keeping the classification of leases and the indicators mentioned above, we do not find that the lease deed in question can be said to be a finance lease. In the present matter, there is no sale of land. It is lease, for premium /rent with almost all rights controlled by the Lessor. We have gone through the provisions of Section 5(8)(f) and also when we keep the above observations of the Hon ble Supreme Court of India, we are unable to persuade ourselves to accept the submission that when land is leased out, if premium is fixed and instalments are given, it should be treated as a financial lease. There are no substance in this arguement. Appeal dismissed.
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2021 (4) TMI 1078
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- The instant petition is filed by the Applicant is well within limitation. That apart, the Application is also complete in all respect. The documents so produce by the Financial Creditor clearly establish the 'debt and there is default on the part of the Corporate Debtor in payment of financial debt. Thus, under the facts and circumstances, the Applicant fulfils the requirement of the IB Code and the Applicant is a Financial Creditor within the meaning of Section 5 (7) 5(8)(C) of the IB Code - it is evident that Respondent has committed a default in payment of financial debt and therefore, it is a fit case to initiate Corporate Insolvency Resolution Process by admitted the instant application. Application admitted - moratorium declared.
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2021 (4) TMI 1075
Appointment of valuer for ascertaining the value of the land of the corporate debtor (CD) being industrial in nature - HELD THAT:- On perusal of this memo dated 14.01.2021, it appears that there are two demands in it. One is about charges over the change of land use (CLU) amounting to ₹ 23,96,30,131; another is Property Fire Tax amounting to ₹ 17,82,443. The point taken into consideration is, this memo was issued only after Honourable Supreme Court upheld the order passed by Honourable NCLAT. With regard to second item, in case it is to collect any property tax, it has to proceed against the successful bidder if any tax is payable after liquidation process is closed, because this applicant has not raised its claim before sale process. The Honourable NCLAT also factually observed that the agriculture land falling into high potential zone is not permitted to allow industrial units to come up. It has further held that the land was sold on as is where is basis. Besides this, Honourable NCLAT has held that no final agreement was entered into for conversion. On the observations above, when the Honourable NCLAT dismissed the Appeal by upholding the order of this Bench stating that the land is agriculture in character, then the appellant before NCLAT approached Honourable Supreme Court, there also it was held that the Supreme Court is not inclined to interfere with the order of NCLAT. It is not that Honourable Supreme Court has not examined the issue after MCF filed an affidavit; it indeed examined the affidavit of MCF, and then only made observation of non-interference, therefore the Honourable Supreme Court has set this issue at rest by giving finality to the order of NCLAT. Once any finality is achieved over any issue, the order that has given finality will be binding on all the interested parties. Here whether the land is to be considered as agricultural or industrial in character has already been decided by NCLT, then by National Company Law Appellate Tribunal and finally by Hon'ble Supreme Court, therefore such order cannot be reopened and examined by this Bench. There are no merit in this application seeking conversion and revaluation of the assets already sold to the successful bidder - application dismissed - List all other pending applications for hearing on 06.04.2021.
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2021 (4) TMI 1074
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - pre-existing dispute between the parties prior to the issuance of the alleged demand notice - HELD THAT:- There has been no admission of operational debt by the respondent. In fact, there has been a dispute regarding the quality of the goods being supplied by the applicant. Further the corporate debtor on 20.05.2019 vide an email already intimated the applicant regarding the substandard quality of the goods supplied by them and the losses that were incurred by the corporate debtor on using the same supplied materials. There was existence of dispute much prior to the issuance of notice under Section 8 of the Code. Respondent has raised dispute with sufficient particulars. The amount of claim raised by the applicant clearly falls within the ambit of disputed claim. The claim of dispute suggests the need of elaborate investigation. In the facts it is reiterated that existence of genuine dispute in the present case cannot be ruled out. As per Section 9 (5) (ii) (d) of the Code provides that adjudicating authority shall reject the application if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility - Petition is thus rejected.
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2021 (4) TMI 1073
Seeking to condone the delay of 379 days in filing an Application for restoration of the Petition - HELD THAT:- This Application has been filed and Learned Counsel for the Applicant was heard. Learned Counsel for the Applicant repeatedly insists that on the fault of the erstwhile Counsel, the Applicant should not be penalised as the non appearance of the erstwhile Counsel for the Applicant had made this Tribunal to dismiss the Petition for default. The Applicant was genuinely misled in view of non appearance of the representative of the Applicant before this Tribunal which had left to the dismissal of the Application for this cause. The same has also been compounded further by the uploading of an order on 02.11.2018 which has been as rightly pointed out by Learned Counsel for the Applicant had misled the Applicant as if the Application is still pending on the file of this Tribunal and even though the same has been disposed of as dismissed for default on 08.10.2018 itself and thus we find a merit in the submissions made by the Applicant. The delay of 379 days in filing the Application seeking for restoration of the Petition stands condoned.
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2021 (4) TMI 1071
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors or not - existence of debt and dispute or not - HELD THAT:- This Adjudicating Authority is satisfied that the Operational Creditor has proved its case by placing evidence that default has occurred for which the Corporate Debtor was liable to pay. The Operational Creditor has also placed on record of proof of sending notices to the Respondent/Corporate Debtor for their appearance and for making submissions also along with the requirements as stipulated under the provisions of the IB Code, 2016 for the purpose of initiating Corporate Insolvency Resolution Process. In these circumstances, having satisfied with the submissions made by the Petitioner/Operational Creditor, this Adjudicating Authority is inclined to admit the instant Application. Application admitted - moratorium declared.
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2021 (4) TMI 1070
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Debt - demand Notice u/s 8 of IBC has never been received by the Corporate Debtor - HELD THAT:- The Demand Notice U/s. 8 dated 05.04.2019 is recorded and annexed as Annexure A- 4. It was sent by speed post and in rejoinder the Operational Creditor has also produced on record the postal track report as Annexure-1 (Page No. 18 of the rejoinder) which shows that the Demand Notice was sent at correct Registered address of the Corporate Debtor and it has been delivered to the Corporate Debtor - the Demand Notice was served to the Corporate Debtor but Corporate Debtor did not reply to the notice either by pointing pre-existing dispute or the fact that it has made payment of the amount of the debt as claimed by the Operational Creditor. It is the defence of the Corporate Debtor that in fact some amount is receivable from them but we hold that defence of set off or counter-claim is not available under the IBC, 2016. We also make it clear that if Corporate Debtor had any defence, he certainly would have replied the Demand Notice within 10 days of its receipt - the Operational Creditor established that there is an Operational Debt more than ₹ 1,00,000/- (as per Sec. 4 of IBC, 2016) due and payable by the Corporate Debtor and Corporate Debtor committed the default in paying the same in spite of receipt of notice U/s. 8 of IBC. This Application is defect free - Adjudicating Authority is further satisfied that the Operational Creditor has proved its case by placing evidence that default has occurred for which the Corporate Debtor was liable to pay - application admitted - moratorium declared.
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2021 (4) TMI 1069
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - financial creditors or not - Homebuyers - Tripartite agreement - fulfilling the threshold limit or not - existence of debt and dispute or not - HELD THAT:- As per the Insolvency and Bankruptcy Code, (Amendment) Ordinance, 2019 dated 28.12.2019 Financial Creditors who are homebuyers of Real Estate Project can file a Petition U/s 7 of the Code, 2016, jointly only if there are 100 of such homebuyers or if they are 10% of total homebuyers, whichever is less. However, in the instant Petition, only one Homebuyer has filed the case which neither amounts to 10% of the total class of Financial Creditors nor 100 Financial Creditors. The Petitioner, therefore, fails at the very threshold. It is also seen that in the instant case, as per the Construction agreement, the default has occurred on 01.07.2013. The CP is filed on 17.09.2019, i.e. almost 6 years after the cause of action and default. In the instant case the Petitioner is before this Tribunal mainly to execute its decree and hence would not be eligible to file a Petition for execution of the decree received from the NCRC. We may add that if home buyers who obtain decrees from other fora also, such as from RERA, are permitted to file petitions under the IBC, that would defeat the purpose of the above referred amendment in section 7 of the Code laying down the threshold of 100 or 10% home buyers, whichever is less - Hence, as per the decision in the case of Sushil Ansal [ 2020 (8) TMI 396 - NATIONAL COMPANY LAW APPEALLATE TRIBUNAL, NEW DELHI ] while remedies are available to a home buyer elsewhere, as also under IBC (with the aforesaid threshold), once he receives a decree, the same cannot be brought for execution by invoking Section 7 of the IBC. We are also in agreement with the Respondent that since there is a Tripartite Agreement with the ICICI Bank Ltd. and the loan amount was disbursed by ICICI Bank Ltd., not only the cancellation can be done by the ICICI Bank but also the repayment can be done only to the ICICI Bank which would be the Financial Creditor in the instant case and not the Petitioner, as the Petitioner has handed over this right to this Bank as per the tripartite agreement. The ICICI Bank has not been made a party in the CP and the Petition suffers from non-joinder. Petition dismissed.
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2021 (4) TMI 1064
Seeking fixing of the CIRP costs and fee of the applicant along with directions to the Respondent No. 1 to pay the same - section 60(5) of the I B Code, 2016 read with Regulations 33(2) of the Insolvency And Bankruptcy Board of India (Insolvency Resolution Process For Corporate Persons) Regulations, 2016 read with Rule 11 of NCLT Rules, 2016 - HELD THAT:- It is on record that CoC in its second meeting has not passed a resolution regarding approval of the fees of IRP nor regarding replacement of IRP with RP. In view of order of CIRP being impugned set aside by NCLAT, the IRP as a prudent officer is required to change reasonably and in our view a sum of ₹ 4 Lakhs plus @18% GST to be paid to 'Interim Resolution Professional' as his fees for period of 61 days. In addition, ₹ 1,86,890/- towards other expenses and ₹ 2 lakhs for security charges and other charges also to be paid to IRP. Thus, Interim Resolution Professional is allowed a total amount of ₹ 7,86,890/- Lakhs approximately which is to be paid by the Respondent No. 2 which should be paid within two weeks. Application allowed.
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Service Tax
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2021 (4) TMI 1096
Levy of service tax - reimbursement of the damage of the municipal roads due to such work - section 174 (2)(e) of the CGST Act - HELD THAT:- There is no scope for passing any interim order, as prayed for, in the writ petition as the same will amount to passing of final order in the writ petition. An issue, however, remains to be adjudicated as to whether the petitioner is liable to pay service tax in view of the notification and the fate of ₹ 18,90,432/- paid by the petitioner as GST. Let this matter appear under the heading Hearing on 25th February, 2021.
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2021 (4) TMI 1092
Revenue neutrality - issue is revenue neutral without involving of any out flow of net tax to the Government - suppression with intent to evade tax or not - extended period of limitation - reimbursement of actual expenses paid to another service provider - service also ought to have been provided by the appellant - pure agent services - omission to mention certain details in the periodical returns to be filed with the authorities - constitutes evidence of suppression of facts with a deliberate and wilful intention to evade tax or not. When actual expenses paid to another service provider are reimbursed by the service receiver, can still the authorities hold that that service also ought to have been provided by the appellant and therefore, the charges in this regard cannot be excluded as charges paid in the capacity as a 'Pure Agent'? - HELD THAT:- The issue was held in favour of the assessee in a decision of the Hon'ble Supreme Court in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [ 2018 (3) TMI 357 - SUPREME COURT] where it was held that Realising that Section 67, dealing with valuation of taxable services, does not include reimbursable expenses for providing such service, the Legislature amended by Finance Act, 2015 with effect from May 14, 2015, whereby Clause (a) which deals with consideration is suitably amended to include reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service. Thus, only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. As this issue is decided in favor of assessee, other issues becomes irrelevant to be considered - appeal allowed - decided in favor of assessee.
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Central Excise
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2021 (4) TMI 1109
Default in payment of duty - Applicability of Rule 8(3A) of CER or section 11A of CEA - applicability of the case of Gujarat High Court in Indsur Global Ltd's case [ 2014 (12) TMI 585 - GUJARAT HIGH COURT] - HELD THAT:- In the instant case, admittedly the assessee had already paid as duty even before the audit declared amounts as payable. Rule 8(3A) applies to cases where the assessee had defaulted in payment of excise duty beyond 30 days from the due date. So, the said rule cannot apply to the instant case and as rightly held by the CESTAT, the said Rule does not apply to every case where in the department, during the scrutiny of returns, during audit or during investigation finds any additional amount payable as duty of excise. Such demands would be recoverable by issuing a notice under Section 11A of the Act and would be covered under Rule 8(3A) - The Tribunal has given cogent reasons for its finding that the assessee's case is a case of demand under Section 11A and is not covered by Rule 8(3A) and the Revenue was not correct in denying utilization of Cenvat Credit to the assessee by applying the said sub-rule. Gujarat High Court in Indsur Global Ltd's case declared that portion of sub-Rule (3A) of Rule 8, which requires a defaulter to clear the finished products on payment of excise duty without availing the Cenvat Credit as unreasonable and violative of Article 14 of the Constitution of India holding that it amounts to a serious restriction on the assessee's fundamental right to carry on trade or business of his choice which is guaranteed under Article 19(1)(g) of the Constitution of India - Merely because the Hon'ble Supreme Court granted stay of the said order of the Gujarat High Court, it is not open to the appellant herein to contend that the ratio of the Gujarat High Court ought not to be followed by this Court. The Tribunal rightly set aside the penalty imposed on the respondent and also the demand imposed on the respondent under Rule 8(3A) - no substantial question of law arises for consideration in this Appeal - Appeal dismissed - decided against Revenue.
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2021 (4) TMI 1105
Issuance of form SVLDRS-3 either electronically or manually - allowing the Petitioner to pay tax dues beyond 30th June, 2020 either electronically or manually - HELD THAT:- The Opposite Parties 3 and 4 are not justified in contending that only because the Petitioner filed SVLDRS-1 before the Rourkela Commissionerate, its request for acceptance of the declaration and payment of the admitted tax amount could not be considered. The Court finds this to be a hyper technical approach. As regards the Petitioner not availing the opportunity of hearing, the Court finds plausible the explanation offered by the Petitioner that it was unable to upload the documents in form SVLDRS-2A on 20th March, 2020 unless the answer to the question whether it wanted a personal hearing was answered in the negative. This appears to have been done involuntarily and in any event does not appear to be a good reason for the Opposite Parties to deny processing of the Petitioner s declaration in Form SVLDRS-1 - a direction is issued to the Opposite Party No.3, Designated Committee, Bhubaneswar which in fact sent SVLDRS-2 to the Petitioner and on whose portal the Petitioner had uploaded its documents in SVLDRS-2A to now issue Form SVLDRS-3 to the Petitioner not later than 3rd May, 2021. Subject to the Petitioner thereafter paying the tax due as indicated therein within fifteen days thereafter, the opposite Party No.3 will issue to the Petitioner the discharge in SVLDRS-4. Petition disposed off.
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2021 (4) TMI 1076
Denial of interest on the penalty refunded - section 11BB of CEA - HELD THAT:- Hon ble Apex Court in the case of COMMISSIONER OF CUS. (PORT) , KOLKATA VERSUS CORONATION SPINNING INDIA [ 2015 (8) TMI 442 - SC ORDER] has clearly held that interest of only refundable duty is admissible under Section 11BB had not that of penalty and fine - the appellants are not entitled to any refund of interest on penalty amount under Section 11BB. As regard, the appellant s contention that the revenue cannot recover the same, as no demand show cause notice has been issued. I find that the said issue cannot be decided in the present proceedings. Appeal dismissed.
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2021 (4) TMI 1067
Rate of interest on refund - rate to be fixed at the rate of 12% or not? - HELD THAT:- In view of the notification existing as on date i.e. No. 24/2014 vide which the Government has exercised its power even under Section 35FF of Central Excise Act for fixing the rate of interest that the said rate has specifically been fixed at the rate of 6% per annum. Further perusal of Notifications shows that Notification No. 17/2002 has been superceded by Notification No. 24/2014. Notification No. 64/2003 as has been relied upon by the Hon ble Courts in the above said decision is the one which superceded non other than said Notification No. 17/2002. Hence none of the decisions as relied upon by appellant can apply. Appeal dismissed.
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Indian Laws
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2021 (4) TMI 1106
Dishonor of Cheque - joint complaint by two complainants - Section 138 read with Section 142 of NI Act, allows for such joint complaints or not - HELD THAT:- From the legal position enunciated by various High Courts in reference to Section 200 of Cr. P. C, a joint complaint by two or more person against an accused is clearly not maintainable - reliance may be placed in the case of Parijanashram Swamiji vs. Kailaje [ 1985 (11) TMI 242 - KARNATAKA HIGH COURT] . Whether what is held by various High Courts with reference to Section 200 of Cr. P. C is applicable to the complaints filed under Chapter XVII of the Act? - HELD THAT:- The reference to the complainant as a person in Section 138 of the Act, prima facie, indicates that Section 138 too envisages a complaint by a single person. Similarly, if we look at the provisions of Section 141 of the Act, which pertains to the offences by the companies, it also refers to a person committing an offence under Section 138 - Section 142, which lays down the procedure as to how the cognizance in a complaint filed under Section 138 of the Act is to be taken by the Court, also speaks of a complaint and not the complaints which would also indicate that it envisages only one complainant in a complaint and, therefore, rules out filing of a joint complaint by two or more than two persons. As is provided under Section 143 of the Act, the cases under Section 138 of the Act are required to be tried summarily by following the procedure laid down under the provisions of Sections 262 to 265 of the Code of Criminal Procedure. It is only when at the commencement of, or in the course of, a summary trial, it appears to the Magistrate that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Magistrate shall after hearing the parties, record an order to that effect and thereafter recall any witness that may have been examined and proceeded to hear or rehear the case in the manner provided by the Criminal Procedure Code. It is, thus, not correct to say that Chapter XVII is a complete Code in itself and exclude the applicability of the Criminal Procedure Code. This petition is allowed in part and the impugned complaint and the proceedings taken thereon, in so far as respondent No.2 is concerned, shall stand quashed.
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