TMI Tax Updates - e-Newsletter
May 10, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
CST, VAT & Sales Tax
Highlights / Catch Notes
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GST:
Validity of assessment order - discrepancies in the invoices accompanied by e-way bills - The conclusion in the assessment order, in fact, mentions the statement recorded by the third party dealer and in the light of the fact that this statement forms the basis of assessment, the petitioner ought to have been granted opportunity to peruse the statement and put forth its objections to the same. This has not been done, constitutes principles of violation of natural justice. - HC
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GST:
Rejection of request for carry forward of Input Tax Credit (ITC) into the Goods and Service Tax regime - The petitioner is thus be permitted to transition the credit. After all, the consequence of such transition is only the availment of the credit and not the utilization itself, which is a matter of assessment and which can be looked into by the Assessing Officer at the appropriate stage - HC
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GST:
Levy of Central GST and State GST - use of motor cycles, as contract carriages - The apprehensions levelled by the petitioner to the effect that other operators are adopting differing positions in regard to the taxability of business receipts stands assuaged, the respondent stating that necessary action would be taken to ensure that there is compliance, across the board. - HC
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GST:
Bail Application of co-accused - fake/inadmissible ITC on the strength of such fake invoices - issuance of goods less invoices - not habitual offenders - the Department is still not forthcoming in filing complaint/charge-sheet in this case - Bail granted - DSC
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GST:
Bail application - issuance of bogus invoices without actually transferring the physical goods - It seems that the entire community would aggrieved if the economic offenders who ruin the economy of the State are not brought to book as such offences affects the very fabric of democratic governance and probity in public life. Further if a murder committed in the heat of moment upon passing being aroused, the economic offence is supposed to be committed with cool calculation and deliberately with an eye on personal profit regardless of the consequence of the community - Bail application rejected - DSC
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Income Tax:
Unexplained income - on money receipts - Peak addition - Once the business profit is determined at 8% of undisclosed receipts, then what is required to be seen is whether the said profit of 8% is sufficient to explain all the outgoings in the form of personal expenses and personal investments made by the assessee year on year and accordingly the assessee would be entitled for benefit of telescoping. Hence there cannot be any separate addition for personal expenses as made by the lower authorities. - HC
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Income Tax:
Adjustment made by the CPC (Centralized Processing Centre) u/sec. 143(1) - CPC did not allow set off of brought forward losses against the short term capital gain and hence, made the adjustment and raised a demand - As the issue in question is debatable, which needs to be considered in detail both the legal aspects and factual aspects and decision has to be arrived at. Such legal issues are not permissible to decide u/sec. 143(1) - HC
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Income Tax:
Determining the ALP under transfer pricing provisions - Determination of market value of of electricity - When a captive power plant in an industry supplies electricity to its own manufacturing unit, there is no power distribution cost. The savings of cost of power can be determined only when the rate at which the manufacturing unit of the company purchases power in the open market from the power distribution companies is considered. Imaginary costs which are not incurred cannot guide our decision. - AT
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Income Tax:
Addition u/s 68 - non maintenance of books of accounts - There was no actual credit of cash or otherwise received by the assessee. No entries are made in the books of account as admittedly no books of account are maintained. Thus based on the real income thereon no addition can be made based on these false or bogus figures. - An addition u/s. 68 of the Act was made on bogus figures which are not true and when no such entries were made in the books of account - Additions deleted - AT
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Income Tax:
Reopening of assessment u/s 147 - addition as concealed income u/s. 69 - The fact that the assessee has consistently alleged connivance of the bank authorities coupled with the fact that the currency details and lack of PAN details of the depositor evident on record remain unrebutted on record by the tax authorities cannot be allowed to remain ignored. In the facts as they stand unless these assertions are rebutted by cogent evidence, the assessee appears to have a claim which cannot be easily discarded - Matter remitted back for fresh adjudication - AT
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Income Tax:
Penalty u/s 271(1)(c) - Addition on account of non-genuine gifts - Penalty proceedings are separate and independent. It is an admitted fact that assessee offered the additional income, though, after issuing notice under section 142(1) by AO. Assessee was having in position of certain evidence in the form of declaration, details of donor and PAN number which were furnished the AO. It is also an admitted fact that no efforts were made by AO by issuing any notice to the donor under section 133(6) of the Act or any summon under section 133(1) of the Act. Facts remaining same that a gift received by assessee was treated as non-genuine gift for the want of complete evidence - No penalty - AT
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Income Tax:
Disallowance of Depreciation on furniture provided at the residence of employee - the assessee has not filed any evidence to prove the fact that the concerned Individual was having any casual connection of employment with the assessee - claim was rightly rejected - AT
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Income Tax:
Penalty levied u/s 271(1)(c) - the assessee has given evidences, on which no findings was given by Ld. CIT(A), in our view, the assessee reasonably explained the facts qua this addition before Ld. CIT(A. Therefore, in our view, this is not a fit case for sustaining the levy of penalty under section 271(1)(c) - AT
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Income Tax:
Unexplained reduction in closing work in progress - As there was a difference on account of change in following of accounting standard from AS 7 to AS 9 in the valuation of closing work in progress and that was already disallowed by AO in his order by observing as follows and once again disallowing this difference amounting to double disallowance, which should be disallowed - AT
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Customs:
Refund of the redemption fine and penalty remitted - Department application for revision is pending but no stay / interim protection sought against the order of Commissioner (appeals) - the Customs Department takes re-course to revision before the Government, it is incumbent upon them to also seek interim protection for retention of the assets seized by them at the original instance, if they so desire. Failure to do so would entitle the assessee in the respective cases to seek return/refund of the assets seized. - HC
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IBC:
Initiation of CIRP - Suffice to say that the Corporate Debtor admitted that in-spite of receipt of demand notice from the Operational Creditor it could not make payment of operational debt, due and payable due to his weak financial condition. - The fact proved on record is that the Corporate Debtor is an insolvent and its insolvency has to be resolved by the process of law - Tri
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IBC:
Initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute not - For the purpose of defeating the claim of the Operational Creditor, the Corporate Debtor is raising a feeble defence, which is not supported by any documentary evidence, that the Purchase Manager is not the Authorized Signatory of the Corporate Debtor in order to acknowledge the accounts - Tri
Articles
Notifications
Customs-
29/2021 - dated
7-5-2021
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ADD
Seeks to amend notification No. 07/2017-Customs (ADD), dated 17-02-2017, so as to extend the applicability of the said notification up to and inclusive of 31st October, 2021.
DGFT-
S.O. 1796 (E). - dated
7-5-2021
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FTP
Import of Urad - Modification Notification S.O. No.1261(E) dated 19th March, 2021
GST - States-
14/2021—State Tax - dated
6-5-2021
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Maharashtra SGST
Seeks to extend specified compliances falling between 15.04.2021 to 30.05.2021 till 31.05.2021 in exercise of powers under section 168A of MGST Act.
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10/2021—State Tax - dated
6-5-2021
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Maharashtra SGST
Seeks to extend the due date for filing FORM GSTR-4 for financial year 2020-21 to 31.05.2021
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09/2021—State Tax - dated
6-5-2021
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Maharashtra SGST
Seeks to amend notification no. 76/2018-State Tax in order to provide waiver of late fees for specified taxpayers and specified tax periods
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08/2021—State Tax - dated
6-5-2021
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Maharashtra SGST
Seeks to provide relief by lowering of interest rate for the month of March and April, 2021
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13898 - FIN-CT1-TAX-0002/2020 - dated
7-5-2021
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Orissa SGST
Notification to extend specified compliances falling between 15.04.2021 to 30.05.2021 till 31.05.2021 in exercise of powers under section 168A of OGST Act
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13890 - FIN-CT1-TAX-0002/2020 - dated
7-5-2021
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Orissa SGST
Notification to extend the due date for filing FORM GSTR-4 for financial year 2020-21
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13886 - FIN-CT1-TAX-0002/2020 - dated
7-5-2021
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Orissa SGST
Seeks to amend notification no. 40982 dated 31.12.2018 bearing S.R.O. No. 503/2018 in order to provide waiver of late fees for specified taxpayers and specified tax periods
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13882 - FIN-CT1-TAX-0002/2020 - dated
7-5-2021
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Orissa SGST
Seeks to provide relief by lowering of interest rate for the month of March and April, 2021
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VI(1)/105(a)/2021. - dated
9-4-2021
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Tamil Nadu SGST
Seeks to amend Notification No. 6/2019- TNGST dated 31.05.2019
Income Tax-
56/2021 - dated
7-5-2021
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IT
Cash payment against medical treatment - Central Government specifies Hospitals, Dispensaries, Nursing Homes, Covid Care Centres or similar other medical facilities providing Covid treatment to patients for the purpose of Section 269 ST of the Income-tax Act, 1961
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (5) TMI 262
Violation of principles of natural justice - validity of assessment order - Assessing Authority has noted certain discrepancies in the invoices accompanied by e-way bills - TNGST Act - HELD THAT:- The petitioner has replied to the Officer on 23.12.2020 specifically requiring a copy of the statement relied upon by the respondent. In the show cause notice, the Assessing Authority states that the supplier had admitted in his statement recorded by the Central GST Authorities, stating that they had neither received any inward nor engaged in outward supply. The officer thus proposes to arrive at a conclusion that the transaction was not genuine and the petitioner was engaging in bill trading. In response, the petitioner has specifically sought the statement recorded by the third party dealer reserving his right to cross examine the dealer as well as to file objections to the same. The impugned order has come to be passed without hearing the petitioner and admittedly, without supplying the statement relied upon by the Officer. The conclusion in the assessment order, in fact, mentions the statement recorded by the third party dealer and in the light of the fact that this statement forms the basis of assessment, the petitioner ought to have been granted opportunity to peruse the statement and put forth its objections to the same. This has not been done, constitutes principles of violation of natural justice. Let the statement and other particulars relied upon by the Officer in the impugned order of assessment be supplied to the petitioner within a period of three (3) weeks from today - Petition disposed off.
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2021 (5) TMI 261
Rejection of request for carry forward of Input Tax Credit (ITC) into the Goods and Service Tax regime - argument by Revenue is that there had been several opportunities for rectification of the mistake as time had been extended till 31.03.20201 - HELD THAT:- In the present case, the error is seen to be inadvertent, constituting a human error. The Revenue does not dispute this either. Moreover, the era of GST is nascent and thus a rigid view should not be taken in procedural matters such as the present one. The petitioner is thus be permitted to transition the credit. After all, the consequence of such transition is only the availment of the credit and not the utilization itself, which is a matter of assessment and which can be looked into by the Assessing Officer at the appropriate stage - The third respondent, i.e., Deputy Commissioner of GST Policy, the Nodal Officer will enable the modification to be effected as well as the transition within a period of four (4) weeks from date of uploading of this order upon an application to be made by the petitioner in this regard - petition allowed.
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2021 (5) TMI 259
Sabka Viswas (Legacy Dispute Resolution) Scheme, 2019 - seeking to extend the date of payment towards full and final settlement of tax dues under the GST amnesty scheme - HELD THAT:- It is unfortunate that despite seeking adjournments on 04.02.2021 and 09.03.2021, on the ground that petitioner wishes to file a rejoinder on two occasions, no rejoinder has been filed till date - Cost not imposed. Petition dismissed.
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2021 (5) TMI 258
Levy of Central GST and State GST - use of motor cycles, as contract carriages - N/N. 17 of 2017-Central Tax (Rate) dated 28.06.2017 - Section 2(22), (25) and (26) of the Motor Vehicles Act, 1988 - HELD THAT:- The position in law, as laid down in Notification 12 of 2017, specifically Sl. No.15 (b), would apply in regard to the taxability of the transaction, and the petitioner as well as other similarly placed stakeholders appear to have acquiesced with this position. The apprehensions levelled by the petitioner to the effect that other operators are adopting differing positions in regard to the taxability of business receipts stands assuaged, the respondent stating that necessary action would be taken to ensure that there is compliance, across the board. Petition closed.
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2021 (5) TMI 227
Bail Application of co-accused - fake/inadmissible ITC on the strength of such fake invoices - issuance of goods less invoices - not habitual offenders - admittedly 57 days are already passed since arrest of the applicants/accused persons and as per information received from IO Sudhir, Department is still not in a position to precisely tell as to whether the complaint/charge-sheet would be filed within statutory period of 60 day - HELD THAT:- The fact that main accused Kabir Kumar is already released on bail, period of incarceration of both the accused persons coupled with the fact that the Department is still not forthcoming in filing complaint/charge-sheet in this case. Both applicants/accused persons namely Manish and Vikas are admitted to bail on furnishing bail bonds in the sum of each with one surety of like amount, subject to conditions imposed - bail application allowed.
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2021 (5) TMI 226
Bail application - issuance of bogus invoices without actually transferring the physical goods - prosecution under section 132(5) of CGST Act, 2017 - HELD THAT:- This court is of considered view that the present accused does not deserves to be released on bail. This is a economic fraud going to the root of the economy as this Court does not see any justifiable ground for grant of bail. It is settled preposition of law that economic offences in itself are considered to be gravest offence against the society at large and hence are required to be treated differently in the matter of bail. It seems that the entire community would aggrieved if the economic offenders who ruin the economy of the State are not brought to book as such offences affects the very fabric of democratic governance and probity in public life. Further if a murder committed in the heat of moment upon passing being aroused, the economic offence is supposed to be committed with cool calculation and deliberately with an eye on personal profit regardless of the consequence of the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest. The bail application moved by applicant/accused Anil Kumar Jain stands dismissed - Papers be tagged with the main case file.
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Income Tax
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2021 (5) TMI 266
Effect of Coronavirus pandemic - statutory timelines provided under the Income Tax Act, 1961 qua the assessees' need to be extended - case advanced on behalf of the petitioners', is that the recent surge in the Coronavirus pandemic has debilitated them as also those who are similarly circumstanced, making it difficult, to comply with the statutory obligations within the timelines provided under the Act - HELD THAT:- We are of the view that the matter requires examination and, therefore, a response on behalf of the respondents, on the issues raised in the petition, would be in order. Accordingly, issue notice.Mr. Jeevash Kuamr Tiwari accepts service on behalf of respondent no. 1 while Ms. Sonu Bhatnagar accepts service on behalf of respondent nos. 2 and 3. Likewise, Mr. Abhishek Maratha accepts notice on behalf of respondent no. 4 while Mr. Anupam Srivastav accepts service on behalf of respondent no. 5. Counter-affidavits will be filed within three days from today. Rejoinders thereto, if any, will be filed before the next date of hearing. For the moment, we intend to issue a limited ad-interim direction, which is, that if any coercive action is intended to be taken against any assessee (not confined to the petitioners herein), at least, 3 weeks prior notice will be given to enable the assessee, to approach the Court, or an appropriate statutory authority, for seeking requisite relief. Intimation, qua such orders, will be given by the revenue, by way of a written notice, which will be served on the concerned assessee.
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2021 (5) TMI 265
Unexplained income as reflected in the seized material in search -.on money receipts - Before the ld CIT-A, the assessee explained initially that the notings do not relate to the assessee and they do not reflect income of the assessee - HELD THAT:- We find that the ld AR before us had completely owned up the entire entries as noted in the seized materials on behalf of the assessee Shri Haresh Mohanlal Mehta by reaffirming the earlier stand taken before the ld AO and at the time of search proceedings before the Investigation team. Hence the receipts mentioned in the loose papers represent on monies received by the assessee from his business. It is a settled principle that what can be taxed in respect of on money is only a profit element since the seized material clearly shows evidences of expenditure out of the said receipts.The summary of the total receipts as per seized material and duly quantified as per tally accounts, is provided. We find that the total on money receipts reflected in the seized materials for the Asst Yea₹ 2006-07 to 2011-12 is only ₹ 14,44,54,717 as tabulated supra, whereas the addition made by the ld AO in the hands of Shri Haresh Mohanlal Mehta itself works out to ₹ 16,56,97,919/- on account of business receipts and expenses and personal outgoings and investments. This results in great anamoly as total additions made exceeds the total on money receipts itself. It is not in dispute that the only source of unaccounted income for the assessee is the receipt of on money from construction business - total additions made cannot exceed the construction on money receipts. Obviously, the on money receipts cannot be taxed in its entirety as assessee had also incurred certain business expenditure which were also kept out of books and which are also reflected in the same seized materials. It is well settled that the seized documents should be considered in its entirety and the revenue cannot consider that part of the seized material which is favourable to it and ignore that portion which is detrimental to revenue. Only the reasonable profit percentage of the aforesaid total on money receipts is to be estimated for the purpose of taxation in the hands of Shri Haresh Mohanlal Mehta. In this regard, we find that the Co-ordinate Bench of this Tribunal in the case of M/s. Platinum Properties [ 2014 (12) TMI 800 - ITAT MUMBAI] had dealt with the similar issue, wherein the profit percentage @ 8% was determined on on-money receipts - Thus we direct the ld AO to consider profit percentage at 8% of on money receipts to be taxed as business profits of the assessee for the relevant Asst Years. Peak addition - addition on account of unexplained investment in LIC policies - HELD THAT:- We have already held that profit percentage on money receipts should be determined at 8% of ₹ 35,90,000/- for the Asst Year 2006-07. Accordingly, the question of any addition on account of peak credit does not arise. Further, the business payment as well as administrative expenses are deemed to be allowed once the profit percentage is applied to the total turnover. Further, with respect to the personal expenses, the year wise details of the same were filed by the ld AR in a tabular form which was also placed before the ld CITA.Once the business profit is determined at 8% of undisclosed receipts, then what is required to be seen is whether the said profit of 8% is sufficient to explain all the outgoings in the form of personal expenses and personal investments made by the assessee year on year and accordingly the assessee would be entitled for benefit of telescoping. Hence there cannot be any separate addition for personal expenses as made by the lower authorities. Wherever, there is positive cash balance in any year, the same would get carried forward as opening cash balance and would be considered as available cash for explaining the cash outgoings as stated supra. A separate chart is enclosed as an annexure to this order, wherein the actual amounts to be taxed for the respective Asst Year is clearly mentioned after considering all the outgoings in the seized materials together with the on money receipts reflected thereon. Unexplained expenditure - HELD THAT:- There is absolutely no allegation or even mention of any cash payment made by Shri Haresh Mohanlal Mehta to Shri Jerry D Cunha. There cannot be any addition towards alleged investment in Hotel Haredia to the tune of ₹ 48,50,000/-, which was made merely by placing reliance on the statement of a third party Shri Jerry D Cunha, which is absolutely without any basis and substance. Hence the addition made in this regard deserves to be deleted. Accordingly, the said alleged outgoing of ₹ 48,50,000/- is not considered by us in the tabulation (separately enclosed as an annexure to this order) while working out the cash available with Shri Haresh Mohanlal Mehta.
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2021 (5) TMI 263
Adjustment made by the CPC (Centralized Processing Centre) u/sec. 143(1) - assessee filed it s return of income declaring total income at NIL after set off of current year s business loss and also brought forward business loss - CPC did not allow set off of brought forward losses against the short term capital gain and hence, made the adjustment and raised a demand - HELD THAT:- As the issue in question is debatable, which needs to be considered in detail both the legal aspects and factual aspects and decision has to be arrived at. Such legal issues are not permissible to decide u/sec. 143(1) as decided by this Tribunal in the case of M/s. VisakhaJilla Nava Nirmana Samithi [ 2020 (2) TMI 1489 - ITAT VISAKHAPATNAM] Even otherwise, the ld. CIT(A) has followed the decision of this Tribunal in PADMAVATHI SRINIVASA COTTON GINNING AND PRESSING FACTORY. [ 2009 (3) TMI 246 - ITAT VISAKHAPATNAM] while allowing the set off of losses and the department did not place any other decision of the superior Court to controvert the decision relied upon by the ld. CIT(A) - Therefore, the issue is squarely covered by the decision of this Tribunal against the Revenue, hence, we find no reason to interfere with the order of ld. CIT(A) and dismiss the appeal of the Revenue.
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2021 (5) TMI 256
Assessment u/s 153A - whether an addition can be made an assessment order passed u/s 153A read with section 143(3) of the Act, in the case of unabated assessment, when no incriminating material was found or seized during the course of search? - HELD THAT:- It is well settled that the Assessing Officer has to confront the assessee with the material collected behind the back of the assessee, if he chooses to use the material against the assessee and that he should provide the assessee an opportunity of crossexamination. Not having done so makes the evidence in question bad in law. In this case, the assessee has furnished all the bills evidencing the purchase of shares, copies of contract notes of the brokers, copies of the bank accounts disclosing the transaction etc. The transactions that they have taken place through banking channels. Demat statements demonstrate that the transactions had taken place on the platform of NSE. STT has been paid on these transactions. This proves the genuineness of its transactions. The Assessing Officer has no evidence or adverse material to disprove these transactions. Additions cannot be made based on inferences. - Decided in favour of assessee.
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2021 (5) TMI 255
Reopening of assessment u/s 147 - carbon credits sales addition and Section 43B disallowance of provisions of gratuity and leave encashment payments - HELD THAT:- This tribunal s first round order dealing with the Revenue s appeal in Section 143(3) proceedings [ 2015 (9) TMI 642 - ITAT HYDERABAD ] has already decided the issue in Revenue s favour holding that such receipt is capital in nature as As legislature has inserted Section 115BBG in the Act vide Finance Act, 2017 w.e.f.01-04-2018 treating the said carbon credits as taxable income. We make it clear that we are in AY.2008-09 only. This is not in Revenue s case that the said statutory provision carries any retrospective effect. We thus hold that both the lower authorities have erred in law and on facts in treating the assessee s carbon credits receipts as taxable income. The impugned addition is directed to be deleted therefore. Whether the impugned re-opening is liable to be sustained in the facts of the instant case or not? - Assessing Officer s sole re-opening reason recorded to this effect dt.30-03-2013 goes contrary to the tribunal s landmark decision in My Home Power Ltd., Vs. DCIT [ 2012 (11) TMI 288 - ITAT HYDERABAD] deciding the issue in assessee s favour as upheld in hon ble jurisdictional high court in CIT Vs. My Home Power Ltd.,[ 2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT] . The assessee s case in the light of hon ble apex court s landmark decision in GKN Driveshafts (India) Ltd., Vs. ITO, [ 2002 (11) TMI 7 - SUPREME COURT] that all the facts invalidate the impugned re-opening as well since their lordships have made it clear that there are twin stages of posing challenge to correctness thereof i.e., by filing objections before the Assessing Officer at the threshold stage as well as during the course of scrutiny assessment s appeals. We follow the foregoing reason mutatis mutandis and hold that the impugned reasoning is also not sustainable as per law. The same stands quashed therefore. The assessee s third substantive ground raising the issue of correctness of 43B disallowance is rendered infructuous in above terms.
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2021 (5) TMI 254
Determining the ALP under transfer pricing provisions - Determination of market value of of electricity - Determination of the quantum of profit claimed as deduction u/s 80IA - determine the price at which the electricity is transferred by the Captive Power Plant of the assessee company to the manufacturing unit of the assessee company - HELD THAT:- The Hon ble Gujarat High Court in the case of Pr. CIT vs. Gujarat Alkalies and Chemicals Ltd.[ 2016 (10) TMI 1111 - GUJARAT HIGH COURT ] has held the market value of per unit of electricity sold by the assessee in the open market, is the price charged by the Gujarat Electricity Board to its customers. Courts have determined that the market value should be the rate at which electricity is supplied by the State Electricity Boards to its industrial customers. As already stated the Explanation to Section 80IA(8) inserted by the Finance Act, 2012 w.e.f. 01.04.2013 gives an option for determination of Market Value as the ALP under the transfer pricing provisions OR as the price of such goods and services as, that it would fetch in the open market. If it is taken that ALP is the market value, then we find there is no dispute that the MAM is CUP. The contention of the ld. D/R that when MAM is taken as CUP, we need not determine a tested party is erroneous. The ICAI in Guidance note u/s 94B of the Act has laid down that the tested party has to be identified even when MAM is CUP. In this case the assessee has taken that the tested party as the non-eligible unit and whereas the TPO has taken the tested party as the CPP i.e. the eligible unit. In our view the profit of the non-eligible unit also has to be properly determined. The only purpose for which the manufacturing unit is taken as the tested party was to determine the market value at which the manufacturing unit purchases power from unrelated third parties. No other function etc. are in question. In our view taking the manufacturing unit as tested party for the purpose of determination of ALP with MAM being CUP, cannot be found fault with. The TPO has chosen to take the price specified in the PPAs for purchase of power as the market value. The PPA is a 20 year agreement. The assessee required to take statutory clearances and approvals. The price is regulated. The sale of power under the terms and conditions of PPA cannot be considered as the market value of the sale of electricity. Such sales cannot be considered as made in uncontrolled conditions . The ld. D/R submitted that the power generating company does not have distribution costs. When a captive power plant in an industry supplies electricity to its own manufacturing unit, there is no power distribution cost. The savings of cost of power can be determined only when the rate at which the manufacturing unit of the company purchases power in the open market from the power distribution companies is considered. Imaginary costs which are not incurred cannot guide our decision. While determining the ALP under transfer pricing provisions, in our view the assessee has correctly identified the manufacturing unit as the tested party and CUP as the MAM and the purchase price of electricity in the open market from the State Electricity Board to the manufacturing units in uncontrolled conditions as the ALP. As consistent with the view taken in the case of M/s. Electrosteel Casting Limited [ 2019 (3) TMI 687 - ITAT KOLKATA ] and applying the propositions of law laid down by the jurisdictional High Court in the case of Graphite India Ltd. [ 2016 (8) TMI 1353 - ITAT KOLKATA ], M/s. Kanoria Chemicals Industries Ltd.[ 2018 (2) TMI 1724 - ITAT KOLKATA ] and Gujarat Alkalies and Chemicals Ltd. (supra) as well as the judgement of the Hon ble Chhattisgarh High Court in the case of Godawari Power Ispat Ltd. [ 2013 (10) TMI 5 - CHHATTISGARH HIGH COURT ] we uphold the finding of the ld. CIT(A) and dismiss this appeal of the Revenue.
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2021 (5) TMI 252
Disallowance of depreciation on Intangible assets - Depreciation was claimed on certain Intangible assets: technical know-how, goodwill and non-compete fees - HELD THAT:- As decided in own case [ 2018 (1) TMI 12 - ITAT PUNE] Tribunal directed grant of depreciation on Intangible assets but on the reduced value imbibing the effect of increase in the value of the Panki land to ₹ 13.00 crore and consequently reducing the value of Intangible assets. In instant case, it is seen that the AO disallowed full depreciation on Intangible assets. However, the ld. CIT(A) overturned the assessment order without noticing the Tribunal order, by which dirction was given to increase the value of Panki plot to ₹ 13.00 crore from ₹ 1.00 lakh initially shown by the assessee and thereby correspondingly reducing the value of Intangible assets and the resultant claim of depreciation thereon. This position was fairly accepted by the ld. AR. Respectfully following the precedent, we set-aside the impugned order and restore the matter to the file of the AO for allowing depreciation on intangible assets but only after giving effect to the afore-extracted direction from para 69 of the Tribunal order. Needless to say, the assessee will be allowed opportunity of hearing in such fresh proceedings. Appeal allowed for statistical purposes.
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2021 (5) TMI 251
Estimation of income - bogus purchases - CIT(A) estimated additions of 12.5% - HELD THAT:- We find that the issue has rightly been clinched in proper perspective by Ld. CIT(A). The Sales Turnover was not in doubt and the assessee was in possession of primary purchase documents. The payment to the supplier was through banking channels. There could be no sale without actual purchase of material keeping in view the assessee's nature of business. The facts of the case made it a fit case to estimate the profit element embedded in these transactions. The estimation of 12.5% as made by Ld. CIT(A) was quite fair and reasonable on the facts of the case. Therefore, concurring with findings of Ld. CIT(A) in the impugned order, we dismiss the appeal of revenue.
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2021 (5) TMI 250
Addition u/s 68 - non maintenance of books of accounts - AO has given notice u/s. 133(6) of the Act to the sundry creditors and advances from customers and when none of these could be served, the assessee came with this explanation that there was bogus accounting by the accountant of the assessee - HELD THAT:- As fixed deposits were made by the assessee over a period of time during the AYs 2012-13, 2013-14, 2014-15 2015-16. This is evident from the record. It is also recorded by the AO that these sundry creditors and advances from customers appearing in the balance sheet are bogus and that no such creditors or customers exist. If on the asset side of the balance sheet the fixed deposits belonging to the earlier assessment years are taken as the opening balance as these are brought forward from earlier year, then in the liability side of the balance sheet, the amount received from the sundry creditors and advances from customers should be opening balances or deleted. It is clear from the balance sheet that the figure of sundry creditors and advances from customers is only balance sheet figure to counter the asset in the form of fixed deposit brought in as an asset in the balance sheet this year. The figure of sundry creditors and advances from customers are not of any cash or credit amount received by the assessee. There was no actual credit of cash or otherwise received by the assessee. No entries are made in the books of account as admittedly no books of account are maintained. Thus based on the real income thereon no addition can be made based on these false or bogus figures. No addition can be made u/s. 68 of the Act unless the assessee maintains books of account as held by the Hon'ble Bombay High Court in the case of CIT vs. Bhaichand N. Gandhi [ 1982 (2) TMI 28 - BOMBAY HIGH COURT] and in the case of CIT Vs. Ms. Mayawati [ 2011 (8) TMI 12 - DELHI HIGH COURT] An addition u/s. 68 of the Act was made on bogus figures which are not true and when no such entries were made in the books of account. In view of the above discussion, we delete the addition made u/s. 68 of the Act on facts of this case. This ground of the assessee is allowed. Addition in this year can be made u/s. 69 - We restore the matter to the file of the AO for fresh adjudication in accordance with law. The AO shall consider by the investments in the fixed deposits and interest thereon were brought to tax in the earlier assessment years i.e. AYs 2012-13, 2013-14, 2014-15 2015-16 or not. The AO, as per law is permitted to re-open the assessment of those earlier years on bringing them in case if any to tax.
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2021 (5) TMI 249
Reopening of assessment u/s 147 - addition as concealed income u/s. 69 - specific depositing slip of cash is not under assessee's signatures - HELD THAT:- The assessee has consistently stated that his account has been misused by a Bank personnel without his authority and the sums have been utilized again by the Bank personnel evident by way of transfer entries. The beneficiary is named by the assessee as erstwhile Bank Manager Shri Pawan Kumar Gupta and there is no contradictory evidence. Since the correctness of the above assertions need to be verified, it is deemed appropriate to set aside the impugned order directing the tax authorities to take into consideration the fact that there has been a continued lapse on the part of the specific PNB Branch in as much as the currency details remained unmentioned, PAN details of the depositor of the huge cash amount remains unaddressed and above all, the fact that the beneficiary account No. 0904000210151272 is claimed to belong to Shri Pawan Kumar Gupta, Bank Manager of PNB, Pundri needs to be specifically addressed. It can never be over emphasized that justice should not only be done but also seen to be done. The inordinate reliance placed upon the depositing slip which to the naked eyes of the AO or the tax authorities appears to be of the assessee without caring to subject it to forensic examination is an act of gross carelessness and an irresponsible lapse of procedure and an unfortunate example of whimsical and arbitrary exercise of power. In these peculiar facts and circumstances, the order which is a prime example of gross carelessness and abuse of power reeking of multiple failures and exhibiting continued lapse of fair dispensation of justice raising many a question on the whimsical biases of the tax authorities I hope is an aberration and not a norm. It brings out the department's helplessness in not addressing the facts and possible connivance and definite abuse of power by the beneficiary account holder who the tax authorities deem it necessary to shelter. The fact that the assessee has consistently alleged connivance of the bank authorities coupled with the fact that the currency details and lack of PAN details of the depositor evident on record remain unrebutted on record by the tax authorities cannot be allowed to remain ignored. In the facts as they stand unless these assertions are rebutted by cogent evidence, the assessee appears to have a claim which cannot be easily discarded. Since there is no finding on the correctness of these assertions, the matter is remanded back with the direction to pass a speaking order in accordance with law.
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2021 (5) TMI 245
Penalty under section 271(1)(c) - Addition on account of non-genuine gifts in absence of sufficient evidence - HELD THAT:- In appeal before the Tribunal, the matter was restored to the AO with the direction to assessee to furnish complete evidences. In restoration proceedings, the assessee in response to show cause notice furnished the details of donors along with their PAN and stated that now the donors are co-operating with the assessee and that the assessee has offered the amount of gift as an additional income in revise return of income. As noted that the AO neither accepted the revised return of income nor investigated about the creditworthy of donor and genuineness of donor by issuing any notice under section 133(6) of the Act or summon under section 131 of the Act. The AO simply held that assessee concealed the income. We have further notices that the assessee voluntarily offered the amount of gift as additional income, therefore, the assessee has no right to challenge the action of AO in holding the gift as non-genuine. Penalty proceedings are separate and independent. It is an admitted fact that assessee offered the additional income, though, after issuing notice under section 142(1) by AO. Assessee was having in position of certain evidence in the form of declaration, details of donor and PAN number which were furnished the AO. It is also an admitted fact that no efforts were made by AO by issuing any notice to the donor under section 133(6) of the Act or any summon under section 133(1) of the Act. Facts remaining same that a gift received by assessee was treated as non-genuine gift for the want of complete evidence. In our view, this is a case where the assessee made a bonafide claim, it was accompanying with certain documentary evidence, and however, it was not conclusively proved for the want of confirmation from donor. A.O. also made no efforts to bring and adverse evidence on record. When the assessee mad a claim which was coupled with evidence, though it was not conclusively proved, it cannot be a fit case for levy of penalty under section 271(1)(c) of the Act. Therefore, we direct the A.O. to delete the penalty under section 271(1)(c) - Decided in favour of assessee.
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2021 (5) TMI 244
Addition u/s 68 - addition made under section 68 on account of share capital contribution by treating the same as unexplained cash credits - HELD THAT:- The Kolkata Bench of the ITAT Shram Tie Up Pvt. Ltd. [ 2018 (3) TMI 1403 - ITAT KOLKATA ] has passed similar orders in many cases on the same issue of additions made u/s. 68 of share capital and has set aside the assessment to the file of the AO for fresh adjudication with a direction that Assessing Officer may examine the evidence already on record as well as other documentary evidences which the assessee may file before him and adjudicate the issue in accordance with law. The assessee is directed to cooperate and produce all the persons who may be summoned by the Assessing Officer for examination as and when called for by the Assessing Officer. Keeping in view the totality of the facts and circumstances of the case, the submissions of both sides and also the orders of the Co-ordinate Bench of the Tribunal in similar matters, we set aside this issue to the file of the AO for fresh adjudication in accordance with law - Appeal of the assessee is allowed for statistical purposes.
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2021 (5) TMI 243
Disallowance of Excise Duty and Interest - HELD THAT:- We find merit in the submissions of assessee that the liability was crystallized during the relevant financial year, moreover, the assessee made the payment of liability of excise duty and the interest thereon before the due date of filing return of income. Therefore, we direct the assessing officer to delete the entire disallowance of excise duty and interest thereon. In the result this ground of appeal is allowed. Disallowance of Depreciation on furniture provided at the residence of employee - CIT(A) after considering the submissions of the assessee held that Aniruddh Bhudeka is not the employee of the assessee and that the expenses were not for the purpose of business of the assessee. However, the disallowance of depreciation was restricted to 10%. Before us the assessee has not filed any evidence to prove the fact that Aniruddh Budheka was having any casual connection of employment with the assessee. Therefore, we do not find any merit in the ground of appeal raised by the assessee. Hence, the finding of the ld. CIT(A) is affirmed. Disallowance of sundry balance written off as trading loss - HELD THAT:- So far as claim No.(i) of reversal of Export rebate credited twice in the books the assessee explained that excess income was booked earlier and is admissible to the extent of such amount. We found that the assessee has reasonably explained the right of to that extent. Claim No.(ii) with regard to given to workers, and has not been repaid or adjusted against the wage payable. This amount is also clearly admissible under section 28 of the Act. Claim No.(iii) relates to uncashable soiled notes is also clearly a trade loss under section 28 of the Act. Claim No.(iv) relates to difference in opening balance of various parties assessee has claimed this amount relates to Birla Cellulosic, Futura Poly and Vardhaman Syntex, which was due to difference in opening balance of those parties. Therefore, considering the fact the assessee huge turnover and some difference may occur due to human error, therefore, this amount is also allowed to be write off. Claim No.(v) relates trade deposit given in the course of business of ₹ 1,355/-. The said amount was deposits with Gujarat Gas, Ahmed Electricals, Indian Oils, Bharat Petroleum and BSES Ltd., and Sheetal Corporation. Since the amount was given during the course of business and was not refunded by various parties. Thus, this amount is also allowed as business loss. Claim No.(vi) relates to advances given for supply of store items which was not refunded nor the items were supplied. This amount was also paid as a business activities and loss thereof is allowable under business law. Claim No.(vii) relates to purchase of advance license for importing flex fiber assessee claimed that due to market conditions the flex fibers were not imported and such license could not be used and on expiry of license period it was write off. We find that assessee claim is admissible under section 28 of the Act in Business Loss. Claim No.(viii) relates to payment to Techno Economic Viability Report but the project was not undertaken for business reasons. We find that expenses incurred on such Techno Economic Viability are admissible under section 37 of the Act and are allowable expenses. Claim No.(ix) relates to advance paid to SLM Manieklal. The assessee claimed that advance was given purchase of machinery, machinery could not be purchased in time. The said company was declared as sick by Board of Industrial Financial and Reconstruction (BIFR) and it became impossible to recover the advance. In our view, this amount is also admissible as a business loss. In the result, this ground of appeal which consist of several claims as referred above are allowed. Disallowance of Electricity expenses in respect of residence of Employees Director - HELD THAT:- Considering the facts that during the assessment the assessee provided the complete details of the various premises on which the assessee bore the electricity expanses as recorded by assessing officer in para 10 of his order however, the assessing officer has not investigated the genuineness of the claim by making independent inquires . The lower authorities have not disputed about the allotment of various residential unit, but disallowed the claim for the want of evidence, moreover the assessee has recovered rent which is offered for taxation, therefore, considering the totality of the facts we direct the assessing officer to allow the entire electricity expenditure. TDS u/s 195 - disallowance of brokerage commission payment to non-resident without TDS - HELD THAT:- There is no dispute that the assessee paid brokerage and commission to the agents who rendered services outside India. Further the assessing officer has not brought any material on record that the income of the recipient is taxable in India. The Hon'ble Delhi High Court in CIT Vs EON Technology (P) ltd [ 2011 (11) TMI 20 - DELHI HIGH COURT] held that when a non-resident agents operates outsides the country no part of his business arise in India, and since payment is remitted directly abroad, and merely because an entry in the books of accounts was made, it does not mean that the non- resident had received any payment in India. The Hon ble Apex Court in GE India Technology (P) Ltd [ 2010 (9) TMI 7 - SUPREME COURT] held that in case the amount paid by the appellant to the foreign software supplier was not royalty and the same did not give rise to any income taxable in India and therefore, the appellant was not liable to deduct tax at source, it arise only when such remittance is chargeable under the Act under section 4, 5 or 9 - when the brokerage and commission to the agents who rendered services outside India and the income of recipient in not taxable in India, hence, the assessee was not under obligation to deduct tax at source on payment of such commission of brokerage. - Decided in favour of assessee. Penalty levied under section 271(1)(c) - HELD THAT:- While deciding quantum appeal, we have deleted the disallowance on account of expenditure on excise duty and interest, sundry balance written off, disallowance of electricity expenses. However, the claim of depreciation is affirmed. Thus, no penalty on the addition/disallowance on account of excise duty, disallowance on sundry balance written off and electricity expenses would survive. So far as, confirmation of depreciation on furniture is concerned. The assessee claimed it revenue expenditure, the A.O. treated the same as capital expenditure and allowed the 15% depreciation. However, on appeal, the Ld. CIT(A) restricted the depreciation to 10%. In our view, the disallowance is based on difference of opinion between the assessee and assessing officer. Thus, no penalty on difference of opinion and on mere disallowance is levieable. Addition on account of interest received from the Municipal Corporation - No specific finding while levying penalty on this addition is recorded. The Ld. CIT(A) in para 11 of the impugned order discussed the fact in detail. As per the order of Ld. CIT(A), this amount was receivable by assessee which was adjusted by Municipality in F.Y. 2004-05 against the interest of ₹ 4,05,804/- and court expenses of ₹ 15,202/-. This compensation was offered by the assessee during the assessment proceedings. The explanation of assessee that it was offered voluntarily, was not accepted, the Ld. CIT(A) held that it was offered only when notice under section 142(1) dated 25.10.2007 was issued to furnish all the receipts during the year with regard to dispute with the Municipality and only then the assessee offered Assessing Officer in para 12 noted that assessee has filed inaccurate particulars of income in respect of all additions/disallowance. However, while levying the penalty under section 271(1)(c) of the Act, the A.O. held that all issues [additions] fall under the ambit Explanation 1 to section 271(1)(c). Explanation 1 to 271(1)(c) relates to deemed concealment, thus, in our view, the A.O. was not quite sure about the initiation and on levying the penalty. It is settled law that A.O. cannot levy the penalty other than the charges on which it was initiated. The Ld. CIT(A) has also not specified the specific charge and only held that A.O. correctly levied the penalty on this addition. Thus, the penalty order qua this addition is also not sustainable. In the result, the grounds of appeal raised by the assessee are allowed.
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2021 (5) TMI 242
Penalty levied u/s 271(1)(c) - Addition on account of unexplained deposit into bank and interest credited on savings bank and Addition on account of unexplained deposit into bank and interest credited on savings bank - HELD THAT:- As additions sustained purely on the basis of estimate. Thus, no penalty on these two additions will survive. Estimating the addition at the rate 20% of sales proceeds of shares for want of details in respect of sale transactions, in substitution of the addition as made by the AO alleging unexplained transaction of Shares - We are conscious of the fact that this part of additions were not pressed by assessee in quantum appeal before Tribunal. It is settled position under law that penalty proceedings are separate and independent. The lower authority while deciding the issue of penalty must considered whether, the assessee has provided reasonable explanation and evidences qua the addition, during the penalty proceedings or not. In our view the assessee has reasonably explained the facts regarding the additions before Ld. CIT(A). No findings were given by Ld. CIT(A) on such evidences. Thus, considering the aforesaid factual decision and the submission of ld.AR of the assessee that the two additions are basically made on estimation basis, we find merit in his submission. It is settled law that no penalty under section 271(1)(c) of the Act is leviable on estimated addition. So far as addition no (iii) is concerned, we are of the view that with regard to these additions the assessee has given evidences, on which no findings was given by Ld. CIT(A), in our view, the assessee reasonably explained the facts qua this addition before Ld. CIT(A. Therefore, in our view, this is not a fit case for sustaining the levy of penalty under section 271(1)(c) of the Act, even on third addition. - Decided in favour of assessee.
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2021 (5) TMI 241
Disallowance u/s 14A r.w. Rule 8D - HELD THAT:- Investment which did not yield exempt income is liable to be excluded while assessing the expenditure to earn the exempt income u/s 14A r.w. Rule 8D(2). Accordingly, we set aside the finding of the CIT(A) in question and direct the AO to assess the expenditure to earn the exempt income while implementing the decision titled as ACIT Vs. Vireet Investment P. Ltd.[ 2017 (6) TMI 1124 - ITAT DELHI] . Accordingly, these issues are decided in favour of the assessee against the revenue. Disallowance of Education Cess while assessing the income tax paid during the year - HELD THAT:- In view of the decision of the Hon ble Bombay High Court in the case of Sesa Goa [ 2020 (3 ) TMI 347 - BOMBAY HIGH COURT] we are of the view that the deduction in respect of education cess on the income tax paid during the year is liable to be granted in accordance with law. Accordingly, this issue is decided in favour of the assessee
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2021 (5) TMI 240
Disallowance u/s 14A r.w. Rule 8D - HELD THAT:- Undisputedly, the assessee has no exempt income in this year. The CIT(A) has relied upon the decision of Cheminvest Ltd. Vs. ITO [ 2015 (9) TMI 238 - DELHI HIGH COURT] and others which has been mentioned in the order. Moreover, we noticed that the case of the assessee has duly been covered by the assessee own case for the A.Y.2011-12 by CIT(A) where there is no exempt income, there should be no disallowance u/s 14A r.w. Rule 8D of the Rule. The CIT(A) has passed the order judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, these issues are decided in favour of the assessee against the revenue.
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2021 (5) TMI 239
Income from house property - ALV - Computing deemed rental income in respect of certain unsold flats - Addition as notional deemed income from house property in respect of unsold units lying vacant held as stock-in-trade - HELD THAT:- These issues have duly been covered by the decision of the Hon ble ITAT in case of M/s. Saranga Estate Pvt. Ltd. [ 2019 (3) TMI 1649 - ITAT MUMBAI] - we direct the AO to delete the addition made towards annual letting value in respect of stock-in-trade. Accordingly, grounds raised by assessee are allowed. In the result, appeal filed by the assessee is hereby allowed.
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2021 (5) TMI 238
Disallowance u/s 80P(2)(d) on interest income earned from investment in co-operative banks - HELD THAT:- As relying on LANDS END CO-OPERATIVE HOUSING SOCIETY LTD VERSUS I.T.O. WARD-16 (1) (3) , MUMBAI [ 2016 (2) TMI 620 - ITAT MUMBAI] and TOTAGARS CO-OPERATIVE SALE SOCIETY, [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] assessee is entitled for the deduction u/s 80P(2)(d) in respect of the interest income earned from investment in co-operative banks. - Decided in favour of assessee.
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2021 (5) TMI 237
Disallowance u/s 14A r.w.r. 8D(2)(ii) - HELD THAT:- Disallowance under section 14A r.w.r. 8D cannot go beyond the extent of exempted income itself. This view is fortified by the judgment of CIT Vs. Chettinad Logistics (P.) Ltd., [ 2017 (4) TMI 298 - MADRAS HIGH COURT] and Joint Investments (P) Ltd [ 2015 (3) TMI 155 - DELHI HIGH COURT] . Following the aforesaid decision of the Madras High Court in the case of Envestor Ventures Ltd.[ 2021 (1) TMI 922 - MADRAS HIGH COURT] deleted the disallowance made under section 14A r.w.r. 8D. Same view was taken by Co-ordinate Bench in the case of Global Teck Park Pvt. Ltd. Being so, taking a consistent view, we are inclined to hold that disallowance in the case of assessee cannot exceed the exempted income to the tune of ₹ 4,180/- only. Thus, ground Nos.2 and 3 of appeal of the assessee are partly allowed. Disallowance of claim of assessee on account of reduction of closing stock of work in progress - Return filed under section 153A of the Act based on AS 9 - HELD THAT:- The assessee furnished the details of claim of deduction under section 80IB(10) in earlier years - AR submitted that the disallowance on account of reduction in value of closing stock of work in progress in the Assessment Year under consideration due to change of applicability of accounting standing from AS 7 to AS 9 to be restricted to only to the extent of ₹ 27,80,57,341/- on which the assessee has claimed deduction under section 80IB(10) of the Act in earlier years and the balance of ₹ 1,18,83,207/- on which the assessee has not claimed deduction under section 80IB(10) in earlier years. Hence, the disallowance in this Assessment Year shall be restricted to ₹ 27,80,57,341/- only account of change in following of accounting standard from AS 7 to AS 9. Otherwise, it will not reflect the true and correct state of affairs of the company and cost of work in progress is to be valued at cost or market price whichever is lower. Unexplained reduction in closing work in progress - HELD THAT:- As there was a difference on account of change in following of accounting standard from AS 7 to AS 9 in the valuation of closing work in progress and that was already disallowed by AO in his order by observing as follows and once again disallowing this difference amounting to double disallowance, which should be disallowed - Hence, the total addition made by the AO is deleted -This ground of assessee is allowed.
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2021 (5) TMI 234
TDS u/s 194H - disallowance u/s 40(a)(ia) - Assessee has paid commission on credit cards to various banks without deducting tax at source - HELD THAT:- Following this decision and the decision in assessee's own case in the earlier years [ 2017 (10) TMI 1564 - ITAT MUMBAI] and[ 2016 (2) TMI 1300 - ITAT MUMBAI] Ld.CIT(A) deleted the disallowance made u/s. 40(a)(ia) r.w.s. 194H of the Act. We do not see any good reason to interfere with the decision of the Ld.CIT(A) in deleting the disallowance made u/s.40(a)(ia) of the Act. - Decided in favour of assessee.
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Customs
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2021 (5) TMI 267
Exemption from imposition of IGST - oxygen concentrators imported by the State Government - N/N. 30/2021-Customs, dated 01.05.2021 - HELD THAT:- The petitioner states that he will deposit the requisite amount with the Registry of this Court within the next three days - In the meanwhile, in case, the oxygen concentrator, sought to be imported by the petitioner, reaches the concerned customs barrier, the same will be released, subject to the petitioner depositing, with this Court, an amount equivalent to IGST presently payable by him, in accordance with the impugned notification, within three days from today. Since the requisite IGST will be deposited by the petitioner, with this Court, the respondent will not levy a charge qua the same on the importing agency, i.e., FedEx Corporation. List the matter on 18.05.2021.
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2021 (5) TMI 260
Refund of the redemption fine and penalty remitted - Department application for revision is pending but no stay / interim protection sought against the order of Commissioner (appeals) - HELD THAT:- Admittedly, no interim protection has been obtained by the respondents - Though the provisions of Section 129DD do not expressly provide for seeking or grant of interim protection, such provision for interim protection is implicit in any provision for appeal or revision and this is a position settled by several decisions including a decision of this Court in the context of the Income Tax Act 1961, in the case of Paulsons Litho Works vs. Income-Tax Officer [ 1993 (11) TMI 50 - MADRAS HIGH COURT] . Thus, in cases where the Customs Department takes re-course to revision before the Government, it is incumbent upon them to also seek interim protection for retention of the assets seized by them at the original instance, if they so desire. Failure to do so would entitle the assessee in the respective cases to seek return/refund of the assets seized. Petition disposed off.
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Insolvency & Bankruptcy
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2021 (5) TMI 253
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - existence of debt and dispute or not - Service of demand notice - time limitation - HELD THAT:- Since the Corporate Debtor did not pay the outstanding, till 14.09.2020, the Operational Creditor served on the Corporate Debtor a demand notice under Section 8 of the IB code. In-spite of receipt of such notice, the Corporate Debtor neither made any payment nor replied the notice, pointing any pre-existing dispute. Hence, this application is filed to start the Corporate Insolvency Resolution Process of the Corporate Debtor - Notice of this application was duly served to the Corporate Debtor. One of its Directors, Mr. Mukund D. Patel appeared and filed the reply. We have gone through contentions therein. It appears to us that the Corporate Debtor did not dispute the fact that the operational debt of more than ₹ 17,62,920/- is due and payable by it to the Operational Creditor. It has also admitted that the payment of operational debt could not be made due to peculiar financial position that has arisen due to COVID-19 pandemic. Since the Corporate Debtor admitted the existence of its debt and the default and also admitted that he did not make any payment in-spite of receipt of demand notice, we did not go into details of his further explanation(s) given in reply. Suffice to say that the Corporate Debtor admitted that in-spite of receipt of demand notice from the Operational Creditor it could not make payment of operational debt, due and payable due to his weak financial condition. The fact proved on record is that the Corporate Debtor is an insolvent and its insolvency has to be resolved by the process of law - application for CIRP admitted - application is defect free and is admitted - moratorium declared.
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2021 (5) TMI 248
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute not - ratification of contract - HELD THAT:- Since the Corporate Debtor was completely aware of the existence of such outstanding balances in its books, the confirmation of balances by their Purchase Manager cannot be considered as voidable and hence cannot be invalid. In continuation to the above, the contract was not rescinded and hence sub-section 2 of Section 27 of the Specific Relief Act, 1963 does not permit rescission of the contract and the grounds that it is impliedly ratified - Further, the Corporate Debtor's objection that the Purchase Manager cannot enter or sign the confirmation of balances of its creditors on behalf of the Corporate Debtor and thereby making the entire transaction as invalid ab initio is not sustainable. For the purpose of defeating the claim of the Operational Creditor, the Corporate Debtor is raising a feeble defence, which is not supported by any documentary evidence, that the Purchase Manager is not the Authorized Signatory of the Corporate Debtor in order to acknowledge the accounts. The Corporate Debtor has not placed on record any concrete evidence to show that the said signature has been obtained balance conformation of accounts of the Corporate Debtor. This Bench is inclined to admit this Application as the Applicant has made out a case and also satisfied this Adjudicating Authority for admitting this Application. It is also proved that there is a debt due and payable by the Corporate Debtor - Application admitted - moratorium declared.
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2021 (5) TMI 247
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditor - existence of debt and dispute or not - HELD THAT:- It is seen from the 'Master Data' that the Applicant's company is a public company limited by shares. The transaction between both the parties arise out of agreement of sale dated 04.01.2016. Admittedly, after various issues between both, the agreement for sale was cancelled by Applicant and consequently sought for refund of the advance paid. This clearly fails as 'financial debt' under Section 5(8) of IBC, 2016. Thus, it is concluded that the alleged debt failed as Financial Debt - application dismissed.
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2021 (5) TMI 246
Permission for withdrawal of Corporate Insolvency Resolution Process (CIRP) - Section 12A of Insolvency And Bankruptcy Code, 2016 (IBC) and Regulation 30A of Insolvency and Bankruptcy Board of India [Insolvency Resolution Process for Corporate Persons] Regulations, 2016, (Regulations) r/w Rule 11 of NCLT, Rules 2016 - HELD THAT:- Perusal of the statement of the expenditure as made out at Page No. 37 discloses that apart from the fees as claimed by the IRP a major portion of the expenditure seems to have been incurred in respect of meeting of the expenditure in relation to Advocate fees for filing of the Application under Section 19(2) as well as the present Application and for filing a Counter to the Application as filed by the erstwhile Director under Section 60(5) of the IBC, 2016. Since already a sum of ₹ 2,00,000/- as represented by the Operational Creditor seems to have been paid and the additional cost in a sum of ₹ 75,000/- seems to have been incurred in relation to the legal cost, in view of non-cooperation on the part of the personnel of the Corporate Debtor and also in defending the Application as filed by the erstwhile Director of the Corporate Debtor, it is appropriate that the balance sum of ₹ 73,938.45 is required to be defrayed by the Corporate Debtor. The CIRP initiated against the Corporate Debtor stands withdrawn.
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2021 (5) TMI 236
Permission for withdrawal of appeal - appellant case is that Appeal may be allowed to be withdrawn with liberty to seek restoration in case the effort with regard to Section 12 A of IBC runs into difficulty - HELD THAT:- There are no reason to doubt that the Adjudicating Authority without standing on technicalities would pass appropriate Orders, if settlement has taken place between the Original Operational Creditor and Corporate Debtor and CoC is not yet constituted. The Appeal is permitted to be withdrawn with liberty to seek restoration of the Appeal in case at any future time the effort to settle in terms of Section 12A of IBC runs into difficulty and does not happen.
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2021 (5) TMI 235
Permission for withdrawal of appeal - Appellant submits that in view of such developments, she has instructions from the Appellant to withdraw the Appeal - HELD THAT:- The Appeal is disposed as withdrawn without liberty to challenge the same Impugned Order.
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2021 (5) TMI 233
Permission to withdraw the appeal with the liberty to file fresh appeal at appropriate stage - HELD THAT:- Permission granted. The appeal is dismissed as withdrawn.
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2021 (5) TMI 232
Permission to withdraw the appeal with liberty to pursue the legal remedies that may be available to Appellant - HELD THAT:- This is not objected to by Respondents as the Corporate Insolvency Resolution Process proceedings are proceeding ahead and embargo placed on constitution of Committee of Creditors stands removed in terms of order dated 4th February, 2021. The appeal is dismissed as withdrawn. The Appellant shall be at liberty to pursue any other remedy available under law.
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2021 (5) TMI 231
Withdrawal of appeal - Learned Counsel submits that he has instructions from the Appellant to withdraw this Appeal - HELD THAT:- The Appellant is allowed to withdraw this Appeal. It is disposed accordingly.
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2021 (5) TMI 230
Permission for withdrawal of appeal - Appellant submits that he has been instructed to withdraw the instant Appeal bearing no. Company Appeal (AT) (Insolvency) No. 928 of 2020 - HELD THAT:- Appellant does not want to press the Appeal. The Appeal is dismissed as not pressed.
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2021 (5) TMI 229
Permission for withdrawal of appeal - fault in the conduct of Corporate Insolvency Resolution Process or not - order of admission and commencement of Corporate Insolvency Resolution Process against the Corporate Debtor was not communicated to Appellant for 7 months - principles of natural justice - HELD THAT:- The appeal is permitted to be withdrawn with liberty granted to the Appellant to file an application before the Adjudicating Authority (National Company Law Tribunal), Division Bench-I, Chennai for revisiting the impugned order and expunging the observations/ remarks made against the Appellant as Resolution Professional, within one week. Appeal dismissed as withdrawn.
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2021 (5) TMI 228
Permission for withdrawal of appeal - Appellant submits that the claim of the Respondent (Financial Creditor) has already been settled and the company petition which was pending before the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata - HELD THAT:- Since in the instant appeal no more grievance survives, learned counsel for the Appellant is permitted to withdraw. The appeal is accordingly dismissed as withdrawn.
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PMLA
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2021 (5) TMI 264
Attachment of property under PMLA - Hospitality sector - Seeking permission for extra finance under the Emergency Credit Line Guarantee Scheme ( ECLGS ) due to covid pandemic - HELD THAT:- A perusal of the valuation report of the property, which is confirmed by the Yes Bank, shows that the total value attributed to the property is to the tune of ₹ 342.40 crores, and the realisable value of the said property is ₹ 325.20 crores. The valuation report has been given by the CBRE, which is a valuation advisory services agency, and the said report has also been placed on record - Considering the fact that the Yes Bank s valuation of the property is to the tune of ₹ 342.40 crores which is accepted by the bank and the bank has approved the loan, and the attachment by the ED is to the tune of ₹ 120,20,46,000/- crores, this Court grants permission to availing of the loan under the ECLGS scheme. While maintaining the ED s attachment order to the tune of ₹ 120,20,46,000/- crores, and safeguarding the ED s rights in respect of the said attachment, permission is granted to the Petitioner to avail of the loan to the tune of ₹ 25 crores under the ECLGS scheme, by creating a second charge in respect of the subject property- Holiday INN, which is situated at Asset Area 12, Aero-city, Delhi International Airport, New Delhi- 110037 - Petition disposed off.
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CST, VAT & Sales Tax
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2021 (5) TMI 257
Violation of principles of natural justice - reasonable opportunity given to the petitioner to explain his case or not - HELD THAT:- Section 27 of the Tamil Nadu Value Added Tax Act, 2006, provides for reasonable opportunity, which includes the personal hearing. However, the petitioner has not been given personal hearing and therefore, considering the facts and circumstances of the case, this Court is of the considered view that the impugned order is liable to be set aside and the matter needs consideration afresh. The matter is remanded back to the second respondent for fresh consideration after giving reasonable opportunity including the personal hearing as contemplated under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 and to pass appropriate orders on merits and in accordance with law - Petition allowed by way of remand.
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