TMI Tax Updates - e-Newsletter
May 18, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
Validity of notice issued for re-assessment - satisfaction of requirement of section 151(2) before issuance of notice u/s 148 - it was a fit case for issuance of notice u/s 148 - Merely because the papers were thereafter for some erroneous reason also placed before the Commissioner who also recorded his similar satisfaction would not take away anything from the previous conclusion. - HC
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Income Tax:
Disallowance of salary and interest paid to the partners - it is not a case where the assessment is made by the AO u/s.144 of the Act. It is a case where assessment u/s.143 is made in a manner laid down u/s.144 - AO directed to determine the income of the assessee after allowing deduction for payment of salary and interest to partners from the estimated income of the assessee - AT
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Income Tax:
Undisclosed investment in FD - CIT (A) has rightly noted that the increase of her investment in FD with Bank of India was not her undisclosed income - AT
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Income Tax:
Deduction u/s 54 - Assessee cannot claim deduction u/s 54F in proportion to increase in capital gains after attracting the provisions of section 50C, being valuation as per stamp duty rate - AT
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Income Tax:
Application of mutuality principle - rental income and service fee received from its corporate member/payee M/s. Reliance Industries Ltd. - income received from the said payee is taxable than that covered under ‘mutuality’ principle - AT
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Income Tax:
Recomputation of book profit u/s.115JB - MAT - Unless an assessee can show that depreciation was provided, by spreading 95% of the original cost, on the specified period, a claim in excess of what is set out in Schedule XIV of the Companies Act, 1956 cannot be allowed. - AT
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Income Tax:
Addition made u/s 40A(3) - payment through bearer cheques - payment made otherwise than by cheque or crossed cheque - since the entries in the bank statement reflects the names of two parties and also because of compelling circumstances of the sellers asking for such payment, then we hold that there is no merit in invoking provisions of section 40A(3) to such transactions - AT
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Service Tax:
Extended period of Limitation - suppression of facts - appellant has been subjected to periodical audit repeatedly both by the the department as well as statutory audit by CAG. It is further on record that the appellant is a State Government undertaking which can have no intention to deliberately evade payment of service tax - demand beyond normal period of limitation set aside - HC
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Service Tax:
Taxability - Drawings and designs - taxation of goods and that of services are mutually and explicitly conceived levies, it is clear that the same activity cannot be taxed as goods and as services - AT
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Central Excise:
CENVAT credit - duty paying invoices - endorsed Bill of Entry - in some of the Bills of Entry, the endorsement was signed by the Customs authority - Credit cannot be denied - AT
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Central Excise:
CENVAT credit - reversal of credit - Both the authorities have not given any reasons as to how provisions of Rule 6(3)(c) are not applicable in the present case and how Rule 6(3)(b) is applicable - AT
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Central Excise:
Ship stores supplied to Indian Navy - exemption under N/N. 64/1995-CE - once end-use certificate stand issued by the Indian Navy, the doubt entertained by the Customs cannot prevail - benefit allowed - AT
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Central Excise:
CENVAT credit - the entire appeal of Revenue is based on the claim that the Commissioner has not correctly quantified the amount of scrap generated - Drawing is a mechanical process and there would be definitely a loss in end cutting/ trimming. - AT
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Central Excise:
CENVAT credit - ISD - Since the appellant has only one factory and the credit was availed on the registered office and not at the factory is only technical lapse and the cenvat credit cannot be denied for technical infractions. - AT
TMI Short Notes
Notifications
Customs-
43/2018 - dated
17-5-2018
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Cus (NT)
Exchange Rates Notification No.43/2018-Custom(NT) dated 17.5.2018
GST - States-
53/GST-2 - dated
15-5-2018
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Haryana SGST
Waiver of late fee for FORM GSTR-3B
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PA/ETC/2018/63 - dated
29-3-2018
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Punjab SGST
E-Way Bill Not Required for Movement of Goods Within Punjab
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F.17(131)ACCT/GST/2017 - dated
16-5-2018
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Rajasthan SGST
Rescind the notification no. F.17(131)ACCT/GST/2017/3199 dated 26 March 2018
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G.O.Ms.No. 89 - dated
1-5-2018
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Telangana SGST
Telangana Goods and Services Tax Act, 2017- Registered personds having aggregate turnover of up to 1.5 crore – As a class of Registered person under section 148 of the TGST Act
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G.O.Ms.No. 87 - dated
1-5-2018
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Telangana SGST
Telangana Goods and Services Tax Act, 2017- Extension of due date for filing of application for refund under section 55 by notified agencies -Notification-orders- Communication-Regarding
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G.O.Ms.No. 86 - dated
27-4-2018
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Telangana SGST
Constitution of Appellate Authority for Advance Ruling for the State of Telangana under TGST Act, 2017
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G.O.Ms.No. 79 - dated
18-4-2018
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Telangana SGST
Telangana Goods and Services Tax (Third Amendment) Rules, 2018
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G.O.Ms No.78 - dated
18-4-2018
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Telangana SGST
Amendment in Notification No.8/2017- State Tax (Rate), issued in G.O. Ms No. 110, Dt. 29-06-2017
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G.O.Ms No.77 - dated
18-4-2018
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Telangana SGST
Rescinds the Notification No. G.O.Ms No. 40, Revenue (CT-II) Department, Dt. 23-02-2018
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351/2018/19(120)/XXVII(8)/2012 - dated
19-4-2018
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Uttarakhand SGST
Extension of last date for filing Annual return of Assessment Year 2016-17 under Uttarakhand VAT Rules,2005
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No.239/CSTUK/GST-Vidhi/2018-19 - dated
17-4-2018
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Uttarakhand SGST
Implementation of generation of e-way bill for intra-state movement of goods w.e.f 20/04/2018
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335/2018/5(120)/XXVII(8)/2018/CT-17 - dated
16-4-2018
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Uttarakhand SGST
Extension of date for filing FORM GSTR I for quarter April to June 2018 till 31st day of July 2018
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334/2018/5(120)/XXVII(8)/2018/CT-20 - dated
16-4-2018
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Uttarakhand SGST
Time Period for filing of application for refund under section 55
Money Laundering-
4/2018 - dated
16-5-2018
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PMLA
Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2018
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2018 (5) TMI 1030
Seizure of goods with vehicle - goods dispatched without E-way bill - petitioner has furnished the E-way bill before the respondent no.3 prior to the seizure proceedings and seizure order - Section 129(3) of the UPGST Act - Held that: - Once the E-way bill is produced and other documents clearly indicates that the goods are belongs to the registered dealer and the IGST has been charged there remains no justification in detaining and seizing the goods and asking the penalty - the seizure order dated 5.5.2018 as well as the consequential penalty order dated 5.5.2018 quashed - goods with vehicle to be released immediately - petition allowed - decided in favor of petitioner.
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Income Tax
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2018 (5) TMI 1026
Addition on account of cash surrendered at the time of survey - Held that:- We are of the view that assessee is a medical practitioner and it receives fees from the patients. It is normal that the patient is accompanied by his/her relatives, thus, the difference in name per se cannot be a ground to reject assessee’s explanation. Further, assessee has filed reconciliation regarding the difference in the amount. Another reason which appears to us is logical that the dispute was of non-inclusion of an amount of ₹ 17,98,122/-. This amount having been included in the cash book by the assessee, post survey in the books of account and thus form part of the income declared in the return. The same amount cannot be added again and hence addition of the same amount on the above reasoning is not justified. - Decided in favour of assessee
Addition on account of the difference in stock at the time of the survey - Held that:- this issue has arisen as the survey team did not appreciate the fact that stock in the trail balance as per the tally software represents the opening stock of the year and does not represent the stock of the day. The survey team on the basis of this, worked out the difference of ₹ 3,99,951/- and on being confronted the assessee being a doctor and not aware of the facts accepted the same and agreed to offer as income at the time of the survey. But later on, on examination, he could point out the error. Thus, this amount cannot be added as income of the assessee. It is a settled law, an amount offered or surrendered under a mistaken belief cannot be a ground for making addition - Decided in favour of assessee
Addition on account of business promotion expenses - denial by receiver of payment of any receipt - cross-examination denied - Held that:- The basis for drawing adverse inference against the assessee is the statement of Mr. Hardeep Bisht. Since, cross-examination of Mr. Hardeep Bisht has not been given to the assessee, the said statement cannot be used against the assessee. Cross-examination is an important aspect of appreciation of evidence. Mere denial by a person in the statement may not be sufficient to lead to the conclusion that the transaction is not genuine. Such person need to be confronted with the other evidences such as signature, etc. to find out the truth. In the absence of cross-examination, the statement recorded at the back of the assessee cannot be relied upon. Thus remit this issue back to the AO with a direction that he will allow cross-examination of Mr. Hardeep Bisht before relying upon the same for rejecting the claim of the assessee. - Decided in favour of assessee for statistical purpose.
Addition on account of electricity expenses disallowed invoking explanation below Section 37(1) on the ground that such expenses are penal in nature - Held that:- This payment has been made by the assessee to the municipality for use of the electricity for commercial purposes. The assessee is carrying on its profession in a residential property. However, since the property is being used for profession, the corporation consider the use as commercial and hence levy commercial charges. Accordingly, in our view such charges cannot be considered to be a penalty so as to fall in the Explanation to Section 37(1) of the Act. Hence, the addition in dispute is deleted - Decided in favour of assessee
Addition on account of Sundry Creditors - Held that:- Addition to the extent of ₹ 5,07,741/- in respect of the difference in the opening balance cannot be sustained in the year under consideration. CIT(A) was justified in directing the AO to examine the opening balance and delete the addition of ₹ 5,07,741/- on account of the difference in the opening balance. Accordingly, we uphold the order of the CIT(A).
Denial of exemption u/s 54 - long term capital gain in respect of the residential property sold - use of the property as relevant criteria to consider the eligibility of the benefit - Held that:- The property sold by the assessee during the year was first floor and barsati floor. The said property was a residential property as is evident from the lease deed as well as other documents confirming to the fact that the first floor and barsati floor was constructed as residential and the other facts analysed herein above. There is no evidence that the said property has been reconstructed as commercial property. In fact it is not the case of the AO. Accordingly, we hold that the property sold by the assessee during the year was residential property and hence assessee is entitled for exemption under section 54 of the Act.
We are also in agreement with the alternative contention of the learned AR that the use of the property is not the relevant criteria to consider the eligibility of the benefit of section 54 of the Act. There is no such condition that the property should be occupied as a residence for claiming the exemption. As against this it may be relevant to mention that section 54B providing for exemption in respect of agriculture land specifically provides that such agriculture land was being used for agricultural purposes. In the absence of any such specific condition in Section 54, no such condition can be read. - Decided in favour of assessee.
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2018 (5) TMI 1025
Additions towards unexplained share application money u/s 68 - maintainability of appeal - Held that:- We are of the considered view that merely because the assessee has not filed the appeal in electronic form, the assessee’s appeal cannot be dismissed on technical grounds that too during transition period. We, further, noticed that the Hon’ble Supreme Court and various High Courts have already categorically stated that when technicalities and substantial justice is pitted against each other, the substantial justice deserves to be prevailed over technicalities.
Therefore, we are of the considered view that the CIT(A) was erred in dismissing the appeal filed by the assessee as not maintainable, hence, we set aside the issue to the file of the Ld. CIT(A) and direct him to admit the appeal filed by the assessee by directing the assessee to file its appeal in electronic format and also to condone delay in filing such appeal in electronic format. We also direct the Ld. CIT(A) to decide the issues on merits. - Appeal filed by the assessee is allowed for statistical purposes.
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2018 (5) TMI 1024
Assessment u/s 153A - time barred assessment - proof of incriminating documents whatsoever has been found and seized by the search team during the search u/s 132 - Held that:- It is not in dispute that the last authorisation u/s.132 of the Act was executed on 28.5.2014. Twenty- one months from the end of the financial year 2014-2015 expires on 31.12.2016. Therefore, the orders of assessment in pursuance to the said search for the assessment years 2009-2010 to 2015-2016 were to be made on or before 31.12.2016.
It is not in dispute that the orders of assessment under consideration were dispatched only on 7.1.2017. Hence, in our considered opinion, the said orders of assessment were time barred and consequently, we set aside the same and allow this ground of appeal of the assessee for all the seven years under appeal.
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2018 (5) TMI 1023
Computation of long term capital gain - CIT-A directed taking the sale consideration of non agricultural land at ₹ 65 lakh by holding that payments to M/s. Kwality Frozen Foods Pvt. Ltd. and M/s. Magnum Holdings Pvt. Ltd. is covered under section 48(i)- Held that:- The assessee has sold the property for a consideration of ₹ 1,50,00,000/- ,which was purchased along with two other co-owners, entered into an agreement under which the beneficial ownership of M/s. Kwality Frozen Foods Pvt. Ltd. and M/s. Magnum Holdings Pvt. Ltd. was created in 1991. CIT(A) upheld that both these parties were having beneficial interest in the property and allowed the deduction of ₹ 85 lakhs paid to these companies under section 48(i) of the Act. These companies have paid consideration for acquiring beneficial interest in the said property which was also verified by the AO in the remand proceedings.
We find that the Ld. CIT(A) has taken a very balanced and correct view of the whole matter and thus allowed the payments made to the said two companies aggregating to ₹ 85 lakhs under section 48(i) of the Act while computing the capital gain and there is no reason to interfere in the said order as the same does not suffer from any illegality. Accordingly, we affirm the order of Ld. CIT(A) by dismissing the appeal of the Revenue.
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2018 (5) TMI 1022
Disallowance of salary and interest paid to the partners - estimation of income - rejection of books of accounts - determination of income - Held that:- Assessment has been made by the Assessing Officer by estimating the income of the assessee by rejecting the books of account by invoking the provisions of section 145(3) of the Act as he was not satisfied about the correctness of the book results of the assessee. Thus, it is not a case where the assessment is made by the Assessing Officer u/s.144 of the Act. It is a case where assessment u/s.143 is made in a manner laid down u/s.144. - Assessing Officer directed to determine the income of the assessee after allowing deduction for payment of salary and interest to partners from the estimated income of the assessee - Decided in favour of assessee.
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2018 (5) TMI 1021
Entitlement to deduction u/s 43B - Held that:- Ground raised by revenue stands squarely covered by various orders of this Tribunal in assessee’s own case for A.Y. 2004-05, 2005-06, 2006-07 and 2008-09 wherein it has been held that assessee was entitled to deduction u/s 43B of the Income Tax Act, 1961 (the Act) irrespective of payments. Payments have been audited by the Tax Auditors and the assessee has filed the details of payments, hence the assessee is entitled for deduction u/s. 43B of the Act. - Decided in favour of assessee.
Addition u/s 14A - non-utilisation of interest bearing funds for the purpose of investments that could yield dividend income - Held that:- Revenue has not been able to establish by way of documentary evidences that the interest bearing funds were utilised for the purposes of investments. The Certificate issued by the auditors which was verified by Ld.CIT(A) has not been found fault with by Revenue. Even though assessee has kept all the funds in one common pool, the presumption that the investment has been made from interest bearing funds cannot be appreciated, since for the year under consideration assessee has substantially demonstrated before Ld.CIT(A) regarding sufficient funds being available for investment purposes other than the interest bearing funds which has not been refuted by Ld.CIT,D.R. Ld.CIT(A) has observed that the funds are to be strictly utilised by assessee as per guidelines issued by RBI - No infirmity in Ld.CIT(A) deleting disallowance computed by Ld.AO under Rule 8D (iii). - Decided in favour of assessee.
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2018 (5) TMI 1020
Disallowance u/s 14A r.w.r.8D - suo moto disallowance - Held that:- While computing such disallowance, the amount already disallowed by the assessee in the sum of ₹ 5,13,033/- should be reduced. We also hold that the disallowance of indirect expenses under the third limb, cannot by any stretch of imagination exceed the total indirect expenses debited by the assessee in its profit and loss account. The total indirect expenses debited by the assessee in the profit and loss account is ₹ 52,91,969/-. In view of this we hereby direct the AO to re-compute the disallowance under the third limb of Rule 8D(2) by considering 0.5% of the dividend bearing investments as reduced by ₹ 5,13,033/- subject to maximum of total indirect expenses of ₹ 52,91,969/- under the normal provisions of the Act. Accordingly grounds raised by the assessee are allowed for statistical purposes.
Disallowance u/s 14A made while computing the book profits u/s 115JB - MAT - Held that:- This issue is now settled by the recent Special Bench decision of Delhi Tribunal in the case of ACIT vs Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein it was held that no disallowance u/s 14A of the Act could be made by resorting to computation mechanism provided under Rule 8D of the rules. The ld. AO should make disallowance u/s 14A having regard to the books of account on some rational basis as expenditure incurred for earning exempt income in terms of clause (f) of section 115JB of the Act. The disallowance already made by the assessee in the sum of ₹ 5,13,033/- should be made u/s 14A while computing book profits u/s 115JB of the Act. We direct the AO accordingly.
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2018 (5) TMI 1019
Disallowance u/s 43B on account of unpaid sales tax - Held that:- In view of Circular No. 496. dated 25-09-1987 and Circular no.674 dated 29.12.1993 which are binding on the revenue authorities and in view of the evidence submitted by the assessee that the sales tax had been converted into loan pursuant to provisions of the State Act i.e. West Bengal Sales Tax Act, the assessee is deemed to have complied with the provisions of section 43B and accordingly entitled for deduction of the same. Hence we have no hesitation to consider grant of deduction u/s 43B on account of unpaid sales tax. - Decided in favour of assessee
Disallowance u/s 43B on account of unpaid interest to IDBI - Held that:- From a perusal of the aforesaid provision it is very clear that the unpaid interest which got converted into loan cannot be claimed as deduction u/s 43B of the Act. Hence we hold that the CIT(A) had rightly confirmed the disallowance of unpaid interest payable to IDBI. - Decided against assessee.
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2018 (5) TMI 1029
Penalty levied u/s 271D and 271E - whether as the Sections do not specify any minimum penalty or maximum penalty, the cases of the assessee's are outside the Amnesty Scheme mentioned? - Held that:- Special leave petition is dismissed. HC order confirmed [2017 (11) TMI 202 - KERALA HIGH COURT]
HC has held a reading of Section 271D shows that a person who is liable to pay penalty thereunder shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted, in contravention of Section 269SS. Similarly, u/s 271E also, the penalty provided is a sum equal to the amount of loan or deposit or specified advance, if so repaid. When a specified sum is so provided as the penalty, such specified sum is the minimum penalty payable. That does not, however, mean that the benefit of the Scheme can be claimed only by those assessee's who have been levied penalty under the provisions of the Act providing for minimum penalty and maximum penalty.
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2018 (5) TMI 1028
Treating the interest on corpus funds received as corpus donations u/s 11(1)(d) - Whether voluntary contributions received by a trust with specific direction that they shall form part of the corpus includes interest accruing/credited on deposits from above donations? - Held that:- SLP dismissed. HC Order confirmed [2017 (9) TMI 1232 - KERALA HIGH COURT]
HC has held that reading of Section 11 shows that subject to the provisions of Sections 62 and 63, the incomes enumerated therein shall not be included in the total income of the previous year of the person in receipt of the income. The interest earned on the contributions already made by the donors would also partake the character of income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust. If that be so, conclusion is irresistible that the Tribunal has rightly held that the interest earned would qualify for exemption under Section 11(1)(d) of the Income Tax Act. No question of law
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2018 (5) TMI 1018
Reopening of assessment - invalid notice u/s 143 - Held that:- It is an admitted fact that assessee filed reply in response to the notice under section 148 of the I.T. Act on 26.11.2013 and submitted before A.O. that original return filed before him may be treated as return filed in response to the notice under section 148 of the I.T. Act. The A.O. on the same day served notice under section 143(2) upon assessee-company whose signature tally on the said notice. Therefore, notice issued under section 143(2) is invalid and resultantly, the assessment is vitiated and is liable to be quashed. - Decided in favour of assessee
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2018 (5) TMI 1017
Disallowance on account of sundry balances written off being capital loss and not allowed as business expenses under section 36(1)(vii) - Held that:- The money due from sundry debtors which could not realized till the last year has to be allowed under section 36(i)(vii). In view of these facts, we are not in agreement with the conclusion reached by the CIT(A) that sundry balances written off were of capital in nature and could not be allowed. In our considered opinion all these advances/deposits are arising out of business exigencies of the assessee and have to be allowed whether or not routed through the profit and loss account. So far as sundry debtors are concerned, the same are allowable in the year of writing off. We are inclined to reverse the order of Ld. CIT(A) on this issue and allow the ground raised by the assessee.
Disallowance on account of non payment of license fee under the provisions of section 43B - Held that:- After perusing the order of the authorities below, we find that facts are not coming out conspicuously as to the nature of the payment except that the assessee submitted before the authorities below that the said payment represented the non refundable deposit to be placed with the BMC for the multi storey building constructed by it. The matter requires a thorough examination and verification at the level of AO. Therefore, we restore it back to the file of AO with a direction to examine the same and decide afresh as per law and facts after affording a reasonable opportunity of being heard to the assessee. This ground is allowed for statistical purposes.
Disallowance regarding society maintenance charges - Held that:- The said expenses are covered in the mutual settlement reached between the builder and the society. A.R. also filed a certificate before the Bench stating that society has provided some amount towards expenses as settlement amount for handing over to the society. The matter needs examination and verification at the level of AO as to whether the said expenses incurred by the assessee to the tune of ₹ 47,35,028/- is in fact borne by the assessee in terms of the various documents filed by the assessee during the year. Accordingly, we restore this issue to the file of AO with a direction to decide the same afresh, as per facts and law after affording a reasonable opportunity of being heard to the assessee. The ground raised is allowed for statistical purpose.
Disallowance on account of legal expenses - Held that:- The material on record including the documents filed by the Ld. A.R. in the form of certificate from the assessee and minutes of proceedings of the society, we find that the issue is seized off between the society and the assessee as is apparent from the documents placed before us. Since these documents require verification and examination at the level of AO, we restore the issue back to the file of the AO with the direction to examine the same and decide the issue afresh as per law after affording the reasonable opportunity of hearing to the assessee. The ground is allowed for statistical purpose.
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2018 (5) TMI 1016
Assessment u/s 153A - gifts treated as cash credit - Held that:- In the case of CIT vs. Gurinder Singh Bawa (2015 (10) TMI 1761 - BOMBAY HIGH COURT) held that once an assessment was not pending but had attained finality for a particular year it could not be subject to proceedings under section 153A if no incriminating materials were gathered in the course of search or during the proceedings under section 153A which were contrary to and were not disclosed during the regular assessment proceedings.
In this case, the assessee filed the return of income which was processed under section 143(1) of the Act and no notice under section 143(2) was issued and the AO made assessment for the year in question qua the sums declared by the assessee as gifts treating them as cash credit covered under section 153 of the Act. The Hon’ble Bombay High Court applied the view taken in the case of CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. (2015 (5) TMI 656 - BOMBAY HIGH COURT). We, therefore, respectfully following the ratio laid down by the Hon’ble Bombay High Court, direct the AO to delete all the additions made in this year - Decided in favour of assesse
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2018 (5) TMI 1015
Penalty u/s 271(1)(c) - wrong claim of the cost of construction - Held that:- The whole restriction of cost of construction out of WIP in the current year to the tune of ₹ 57,80,000/- and carrying forward the excess cost of construction to the extent of ₹ 1,76,68,705/- is tax neutral as it is not a disallowance or excess claim but a reduction in the claim of the cost of construction which has correspondingly resulted into higher cost of WIP to be carried forward for being claimed as cost of construction in the subsequent years against the sales of the said project.
In the case of CIT vs Somany Evergree Knits Ltd (2013 (4) TMI 154 - BOMBAY HIGH COURT) the Hon’ble Jurisdictional High Court has held that where there was a bonafide mistake on the part of the assessee, the imposition of penalty is not warranted where the Revenue does not dispute the same. - Decided in favour of assessee.
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2018 (5) TMI 1014
Benefit of deduction u/s. 54 - major amount was invested 3 years prior to present sale and purchase agreement was also registered at that time and thus the condition of prior purchase within one year of sale was not fulfilled - whether the date of purchase of property completed on 13.12.2011 falls within a period of one year from the date of sale is covered under the provision of section 54? - Held that:- An identical issue came up for hearing in the case of the CIT vs. Smt. Beena K. Jain (1993 (11) TMI 7 - BOMBAY High Court) wherein has held that the Tribunal is justified in granting exemption to the assessee on the basis of date of possession of the flat when the balance consideration was paid. Thus the relevant date for the purpose of section 54 of the Act was 13.12.2011 when the petitioner paid final consideration amount on the flat and the possession was taken. - Decided against revenue
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2018 (5) TMI 1013
Unexplained income u/s 68 - advances received from customers - CIT-A deleted the addition accepting additional evidence - no opportunity have been given to the A.O. to rebut the additional evidences produced - denial of natural justice - Held that:- A.O. noted in the assessment order that specific query letters were issued to the assessee calling for confirmation and other details to prove both the above grounds. However, on the date fixed, nothing was produced by assessee to the satisfaction of the A.O. The A.O. feeling no alternative, made the addition. Assessee submitted that assessee produced the evidence before Ld. CIT(A) but no application filed for admission of additional evidence.
Assessee produced the evidence for the first time before Ld. CIT(A) in respect of both the grounds of appeal. However, no opportunity have been given to the A.O. to rebut the evidences produced by assessee at appellate stage and even no remand report have been called for in the matter. It is, therefore, a case of denial of an opportunity to the A.O. at appellate stage, particularly, when no evidence was filed before A.O. at assessment stage
Nothing has been done in the matter. Even the assessee has not made any request to the Ld. CIT(A) for admission of the additional evidence as per submission of the Learned Counsel for the Assessee. We, therefore, do not subscribe the view of the Ld. CIT(A) for deleting both the additions in such a manner. We, accordingly, set aside the order of the Ld. CIT(A) and restore these issues to his file with a direction to redecide the grounds by giving reasonable, sufficient opportunity of being heard to the assessee as well as A.O - Decided in favour of revenue for statistical purposes.
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2018 (5) TMI 1012
Undisclosed investment in FD - CIT-A deleted addition accepting the revised Balance Sheet which according to revenue, was an additional evidence thus violation of Rule 46A - Held that:- As brought to our notice that interest accrued on the existing FD savings bank was transferred to the FD as investment, thus increasing the value of investment in FD by an amount of ₹ 3,76,65,625.26/- as evident from perusal of page 10 of the paper book. Thus, we note that the Ld. CIT (A) has rightly noted that the increase of her investment in FD with Bank of India was not her undisclosed income as alleged by the AO and we do not find any infirmity in this finding of Ld. CIT(A) and we concur with the same.
Coming to the ground raised by the revenue in respect of violation of Rule 46A, we note from the impugned order of the Ld. CIT (A) that the Ld. CIT (A) has called for a remand report from the AO. Our attention was drawn to page nos. 22 and 23 of the paper book which is the remand report forwarded by the AO dated 02.12.2015 wherein the AO has given his remand report, therefore, there is no violation of Rule 46A of the Rules. Thus, this ground of appeal of revenue is dismissed.
Claim of exemption regarding principal sum of investment in mutual fund - assessee had voluntarily offered the said sum in her return of income - CIT-A allowed the claim - Held that:- CIT(A) has decided the issue raised by the assessee and has directed the AO to go through the details of the mutual fund investment and tax only the amount which is taxable after excluding the principal sum of investment which was mistakenly shown as income in the facts as narrated above is fair and reasonable order. Taking into consideration the facts discussed above, we note that the legal issue that has been raised by the assessee that only the right income has to be taxed has been rightly decided by the Ld. CIT(A) which does not call for any interference.
Coming to the question as to whether the assessment can be completed below the returned income CIT(A)’s direction even if it results in an assessment below the returned income and consequently refund arises, it is valid as per law. Moreover we note that the relief sought cannot be refused merely because the assessee has omitted to claim the relief as held by the Hon’ble Supreme Court in Anchor Pressings P. ltd. Vs. CIT [1986 (7) TMI 1 - SUPREME Court]. Therefore, for the aforesaid reasons given above, the revenue’s ground of appeal is dismissed.
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2018 (5) TMI 1011
Penalty u/s.271E - reasons for noncompliance of notice of hearing before the Assessing Officer as well as the CIT(A) - Held that:- In order to render substantial justice to the assessee, all materials facts are required to be brought on record to adjudicate the issue. For doing to, an opportunity has to be allowed to the assessee. Further, we are alive to the fact that the assessee had been a habitual defaulter in complying with the notices issued by the Assessing Officer as well as the CIT(A).
The assessee has undertaken before us that if one more opportunity is granted to the assessee, the assessee will definitely appear before the Assessing Officer and present his case. Keeping this undertaking of ld A.R. of the assessee in view in the open court, we set side the orders of lower authorities and restore the matter back to the file of the Assessing Officer with a direction to re-adjudicate the issues involved in the present appeal after allowing reasonable opportunity of hearing to the assessee. - Decided in favour of assessee for statistical purposes.
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2018 (5) TMI 1010
Disallowance u/s. 14A with the aid of Rule 8D(2)(ii) and 8D(2)(iii) - Held that:- In both the appeals preferred by the revenue, the assessee did not earn any exempt income during the AY 2009-10 and 2012-13, therefore, CIT(A) was justified in deleting the disallowance as made by the AO in the assessment order by invoking sec. 14A read with Rule 8D of the Rules. Hence, ground no. 1 raised by the revenue for AY 2009-10 stands dismissed and the sole ground raised by the revenue in AY 2012-13 also stands dismissed.
Disallowance of interest made by the AO with reference to the interest free loans granted to subsidiaries and group associate companies - Held that:- There was business connection between assessee and the companies to whom advances were made for undertaking projects in the field of real estate and civil infrastructure. Since the assessee was an active participant in the projects undertaken by the SPVs and JVs and had deep economic interest in these entities, therefore, we hold that the advances granted by the assessee in the course of its business was due to commercial expediency, therefore, the funds advanced by assessee to SPVs and JVs were in fact used for the business purposes of the assessee and, therefore, the condition prescribed for allowing deduction u/s. 36(1)(iii) were fulfilled by the assessee.
Disallowance of expenses on account of legal and professional fees relating to long term lease - Held that:- The specific instance of long term leases executed during the year and the corresponding legal and professional expenses incurred which aggregated to ₹ 6,03,500/- (the same which was already disallowed suo moto by the assessee in the computation of income). Having regard to these facts and considering the inability of the department to point out the specific items of legal expenses totaling ₹ 6,01,800/-, we are inclined to uphold the order of the Ld. CIT(A) and dismiss this ground of appeal of the revenue.
Disallowance of prior period expenditure - Held that:- Since in the present case the decision to abandon the public issue of shares was taken during the year, the loss got crystallized in the relevant year and, therefore, rightly allowed by the Ld. CIT(A). Therefore, no infirmity in the order of the Ld. CIT(A) in deleting the disallowance made by the AO, therefore, we uphold the order of the Ld. CIT(A) on this ground and thus both the appeals of the revenue stand dismissed.
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2018 (5) TMI 1009
TPA - ALP determination - comparability analysis - functional dissimilarity - Held that:- We do not agree with the findings of the lower authorities that a captive sourcing service provider like the assessee can be considered functionally similar to a company providing liaisoning services like Axis Integrated Systems Ltd. Considering the functional dissimilarity between the assessee company and Axis Integrated Systems Services Ltd., we are unable to persuade ourselves to agree with the directions of the Ld. DRP in retaining this company as a comparable. We direct that Axis Integrated Systems Ltd. be excluded from the final set of comparables.
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2018 (5) TMI 1008
Stay on collection/recovery seeked - correct jurisdiction of hearing these appeals - Held that:- Assessing Officer having jurisdiction to assess the income of the assessee is located in New Delhi, which falls in jurisdiction of Delhi benches, we find that the jurisdiction for hearing of these applications, and hearing of the related appeals, vests in Delhi benches of this Tribunal. However, it is for the Hon’ble President to take a final call on the issue, as is the unambiguous thrust of Rule 4(1) of the ITAT Rules.
We, therefore, deem it fit and proper to direct the Registry to place all stay applications and related appeals, as indeed all other appeals of this assessee, before Hon’ble President for appropriate orders. In order to ensure, however, that these applications are not rendered infructuous or nugatory by recovery of the impugned outstanding tax demands in the meantime, we also take on record the categorical assurance so graciously extended by the learned Departmental Representative, not to take any coercive measures for recovery or collection of the outstanding disputed demands till the time the present stay applications are disposed of by the Tribunal.
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2018 (5) TMI 1007
Charging of interest u/s. 234B - Held that:- AO had not followed the order of the Tribunal, that he was specifically directed to consider the ad hoc payment, that he should not have adjusted the payments in question (Rs. 26 crores and ₹ 1. 99 crores) against the payments of interest u/s. 234B of the Act. Ground no. 1 is decided in favour of the assessee.
Denial of interest u/s 244 for the period from 03/10/20 to 29/11/2009, that there was delay on part of the assessee - Held that:- The letter of the AO(dtd. 23. 09. 2009)was received by the assessee on 30. 10. 2009 and the AO had not refuted said fact. As per the letter it was supposed to file the details by 06. 11. 2009 and it filed the requisite details on the last day of the month. In our opinion, delay for the period of 03. 10. 2009 to 30. 10. 2009 was not at all attributable to it. We find that in alternate ground the assessee has admitted that maximum delay attributable to it was of 23 days only and not of the entire period. Therefore, reversing the order of the FAA, we partly allow the ground raised by the assessee. We hold that except for the delay of 23 days there was no delay on part of the assessee.
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2018 (5) TMI 1006
Validity of assessments made u/s 153C - Held that:- Since the assessment records do not contain any satisfaction note by the AO and also the whole addition was made based on the diary belonging to M/s B. Ramdas Goud, there is no evidence which directly relates to the assessee was found during the search proceedings. Therefore, we set aside the orders of CIT(A) in all the AYs under consideration and hold that the assessments framed u/s 153C of the Act rws 143(3) of the Act are void ab-initio in all the AYs under consideration. Hence, the additions made in such assessments cannot stand in the eye of law. - Decided in favour of assessee.
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2018 (5) TMI 1005
Provisions of section 50C applicability - AO referred matter to DVO - value determined by DVO - Held that:- The value submitted by the DVO is in order and AO has followed the value as per the deemed provisions of section 50C. The submissions of the assessee cannot be accepted on the fact that assessee is an NRI and was not in a position to negotiate or the market value cannot be fluctuated with a span of 4 months. The AO has to follow the provisions laid down in section 50C and he also has followed the due process of law by referring the matter to the valuation cell and, accordingly, he has adopted the value as determined by the DVO.
Deduction u/s 54 - value of the property determined by the Valuation Officer of the Department - Held that:- Assessee cannot claim deduction u/s 54F in proportion to increase in capital gains after attracting the provisions of section 50C. Therefore, the ground raised by the assessee are dismissed.
Interest u/s 234A and 234C - Held that:- No doubt, assessee is NRI and remittance to the assessee comes under the provisions of section 195. Deduction of tax while remitting lies with the payee. By considering the above situation, ld. CIT(A) has deleted interest charged u/s 234B and retained interest charged u/s 234A & 234C as they are statutory provisions. When an income is chargeable to tax in India, irrespective of the residential status, assessee is bound to follow advance tax provisions as laid down u/s 234A and 234C. Therefore, these provisions are consequential in nature. Accordingly, this ground raised by the assessee is dismissed.
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2018 (5) TMI 1004
Addition u/s 68 - unexplained deposits - Held that:- On careful reading of the cash flow statement and bank statement submitted by the assessee, we find that there are cash deposits in the bank of Dhanalakshmi, Nellore to the extent of ₹ 2 lakhs per month in AY 2012-13 and no regular deposits in AY 2009-10 and 2010-11. However, we also find that such deposits of ₹ 2 lakhs were made in each month regularly in the AY 2012-13. It clearly shows that assessee was in receipt of ₹ 2 lakhs of professional income in cash.
It was not deposited regularly in AY 2009-10 and 2010-11. Therefore, the income of the assessee must be the official salary income, professional income of ₹ 24 lakhs per annum and relevant bank interest. Since assessee has disclosed the income based on bank deposits, which is not consistent with the source of income disclosed or found after search, we direct the AO to assess the income of the assessee only to the extent of above sources of income and wherever additional incomes based on the deposits are disclosed by the assessee should be eliminated as per the findings of CIT(A). Therefore, we are in agreement with the findings of the ld. CIT(A). The grounds raised by the assessee are partly allowed in all the three years under consideration.
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2018 (5) TMI 1003
Addition on the issue of upward adjustment made by the AO/TPO in the arm’s length price - Held that:- Transfer pricing addition to this extent and the CIT(A) dealt with certain aspects of the determination of ALP, against which the assessee filed its separate appeal. This appeal was tagged with the assessee’s cross-appeal for the instant year in which computation of ALP in respect of three international transactions, has been challenged. We are disposing off the assessee’s appeal by a separate order. Thus, it becomes evident that the ground raised by the Revenue alleging the deletion of addition of ₹ 1.50 crore and odd does not arise out of the impugned order and is hereby dismissed as infructuous.
Addition being stamp duty charges paid for leasehold premises - revenue or capital expenditure - Held that:- It is noticed that the stamp duty was paid for a property taken on lease by the assessee. It is a one-time payment and has no relation with the term of lease. The mere fact that the lease will continue for three years, would not make one time revenue expenditure, capital. As the expenditure incurred by the assessee is in respect of taking of a property on hire, in our considered opinion, no fault can be found in the opinion of the CIT(A) deleting this addition. He has rightly referred to several judgments in the impugned order in deleting the addition under similar circumstances. Similar view has been taken by the Hon’ble Bombay High Court in CIT VS. Cinecita (P.) Ltd. (1982 (2) TMI 58 - BOMBAY High Court). His view is, therefore, countenanced.
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2018 (5) TMI 1002
Application of mutuality principle - rental income and service fee received from its corporate member/payee M/s. Reliance Industries Ltd. - Held that:- The very mutual benefit to the assessee denied itself on the ground that the payee/corporate member concerned; although a member, displayed its advertisement for the purpose of its business. Learned coordinate bench thus concludes that assessee’s identical income received from the said payee is to be assessed as income from house property than that covered under ‘mutuality’ principle. We accept Revenue’s arguments as well as its former substantive ground seeking to revive the impugned addition of rental income.
Restore service fee addition received from the very payee - Held that:- We sought to know the exact nature of services provided by the tax payer. It emerges from the CIT(A)’s order in para-5.2 that the service charges in question have been received in respect of the very let out premises. We thus are of the view that the assessee is not entitled for the above mutuality benefit qua instant service fee received as well. The Revenue’s latter substantive ground as well as the impugned appeal is accepted accordingly.
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2018 (5) TMI 1001
Disallowance of interest cost - whether interest on loans taken on the basis of keyman insurance policies would not fall u/s.43B of the Act - Held that:- There is no dispute that interest to the extent of ₹ 70,35,356/- on loans borrowed from LIC, a public financial institution, stood payable as at the end of relevant previous year. Section 43B of the Act, mandates that interest payments could be allowed only in the year in which it is actually paid. Assessee having not paid interest during the relevant previous year, lower authorities were justified in applying Section 43B of the Act and making a disallowance. - Decided against assessee
Recomputation of book profit u/s.115JB by restricting the claim of depreciation on windmills to 5.28% as against 80% reckoned by the assessee - Held that:- Unless an assessee can show that depreciation was provided, by spreading 95% of the original cost, on the specified period, a claim in excess of what is set out in Schedule XIV of the Companies Act, 1956 cannot be allowed. We are therefore of the opinion that lower authorities were justified in recalculating the profit for the purpose of applying Section 115JB of the Act. We do not find any reason to interfere with the orders of the lower authorities. - Decided against assessee
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2018 (5) TMI 1000
Addition made u/s 40A(3) - payment made otherwise than by cheque or crossed demand draft above ₹ 20,000/- - Held that:- The said payment has been made by way of bearer cheques before registering authority. Another aspect of the same is that the said payment was made at the instance of sellers as they were reluctant to get the document registered till the amount was received in totality.
The assessee has furnished declaration signed by both the parties on which along with signature date mentioned was 12.03.2012. In the entirety of the above said facts and circumstances, where the payment has been (a) made before registering authority; (b) made by way of bearing cheques, since the entries in the bank statement reflects the names of two parties and also because of compelling circumstances of the sellers asking for such payment, then we hold that there is no merit in invoking provisions of section 40A(3)to such transactions. - Decided in favour of assessee.
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2018 (5) TMI 1027
Validity of notice issued for re-assessment - satisfaction of requirement of section 151(2) before issuance of notice u/s 148 - competent officer to issue notice - Held that:- Subsection( 2) of section 151 provides that in cases specified therein, no notice under section 148 of the Act would be issued by an Assessing Officer who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by the Assessing Officer that it is a fit case for issuance of such notice. Clearly thus, this requirement was fulfilled.
The legal proposition is that when the statute casts a duty on a certain administrative officer, the same must be performed by him and the satisfaction arrived at even by the higher authority would not be sufficient. However, in the present case, there was no lack of satisfaction or exercise of power by the Joint Commissioner. He in clear terms, expressed his satisfaction that on the basis of the reasons recorded by the Assessing Officer, it was a fit case for issuance of notice under section 148 of the Act. Merely because the papers were thereafter for some erroneous reason also placed before the Commissioner who also recorded his similar satisfaction would not take away anything from the previous conclusion. - Decided against assessee.
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2018 (5) TMI 999
Levy of penalty under section 271(1)(c) - income from other sources - wrong claim of deduction of the expenditure deliberately - Held that:- The assessee declared income from other sources. Therefore, it is the duty of the assessee to explain that expenses related to income from other sources have any direct nexus with the earning of such income. A.O. found specific fact against the assessee that assessee made a wrong claim of expenditure against the income from other sources. The assessee failed to prove any direct nexus with the expenses claimed with income from other sources. The assessee was, therefore, confronted with the fact vide order sheet dated 23rd September, 2016 and 06th October, 2016 as to why the claim of the assessee should not be disallowed. The assessee had no explanation but to accept the addition proposed by the A.O.
Claim of assessee of deduction for expenditure was found false and bogus. It is, therefore, clear case, where fact of filing inaccurate particulars have been detected by the A.O. at assessment stage that assessee made a wrong claim of deduction of the expenditure deliberately. It is a common knowledge that only few returns are selected for scrutiny. If the assessee makes a claim which is not only incorrect in law but is also wholly without any basis and the explanation furnished by him for making such claim is not found to be bonafide, it would be difficult to say that assessee would still not liable to penalty under section 271(1)(c). Decision in the case of Zoom Communication Pvt. Ltd., (2010 (5) TMI 34 - DELHI HIGH COURT), squarely applied to the facts of the case. - Decided against assessee
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2018 (5) TMI 998
Reopening of assessment u/s 147 - addition on account of purchase of flat - Held that:- The assessment was made u/s 50C i.e. on Capital Gain arising from the sale of property without dealing with the purchase of any immovable property. No reasons recorded have been supplied to the assessee. The assessment has been made u/s 144. In the notice u/s 144 dated 21.11.2016, AO has first time referred to capital gain on sale of land which means the AO obtained the copy of the Registered Transferred Deed dated 04.12.2008 which was executed by Smt. Ritu Aggarwal for a consideration of ₹ 1,85,000/- on 04.01.2008 by Sh. Mahender Kumar. Now neither the notice nor the proceedings u/s 147 could be validated by this notice. In fact as per the sale deed seller is Smt. Ritu Aggarwal and purchaser is Sh. Mahender Kumar and no notice had been issued to either of them.
The proceedings initiated u/s 147 are bad in law and are directed to be quashed. The legal grounds raised by the assessee are allowed. Since the assessee succeeds on legal grounds, we do not decide the merit in the matter. - Decided in favour of assessee.
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Customs
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2018 (5) TMI 996
Valuation of imported goods - Gambier Extracts - enhancement of value based on contemporaneous bills of entry - principles of natural justice - Held that: - the appellant has made detailed submission with some other Bills of Entry of the relevant period, wherein the value US$ 1350 PMT was declared. However, the same was not properly considered by the adjudicating authority as well as the Commissioner (Appeals) - also, the copy of sole reliance of the Revenue on contemporaneous Bills of Entry of February and March, 1998 were not provided to the appellant. Thus, the adjudicating authority has violated the principles of natural justice.
The adjudication was not done in the proper manner - matter remanded to the adjudicating authority for passing a fresh order - appeal allowed by way of remand.
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2018 (5) TMI 995
Mis-declaration of imported goods - Stainless Steel Melting Scrap, Grade '304' - Customs authority was of the view that the goods declared is not tallying with the images of the goods imported, looking to the picture of the scrap, it is clear that these goods are in the form of Pipes/ Strips etc. - Held that: - even though the goods is in form such as pipes/ strips etc, whether the same is capable of being used as such or it can be used only for melting purpose is the major criteria to decide that the goods are SS Scrap or some other article. This being the highly technical issue, cannot be ascertained by eye estimate, therefore, an expert opinion is required.
There are various authorities such Chartered Engineer, National Environment Agency, GEOCHEM have confirmed that the goods is SS Scrap. Therefore, the case should have been decided only on the basis of the opinion of these authorities and not on the basis of a personal view of Customs authorities - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 994
Charge-ability of Education Cess - import under DEPB under N/N. 45/2002-Cus - in case of clearance of imported goods by debiting the duty in DEPB Passbook under N/N. 45/2002-Cus, whether Education cess is payable or otherwise? - Held that: - identical issue decided in the case of The Commissioner of Customs (Export) Versus M/s. Reliance Industries Ltd. [2015 (9) TMI 399 - BOMBAY HIGH COURT], where it was held that in case of import under DEPB under N/N. 45/2002-Cus, the Education Cess is not chargeable.
Revenue has placed reliance on the Hon'ble Madras High Court's judgment in the case of TANFAC Industries Ltd. Vs Asstt. Commissioner of Customs, Cuddalore [2009 (4) TMI 92 - MADRAS HIGH COURT], where it was held that it cannot be said that the customs duty is exempted under DEPB. Education Cess is also liable to be debited in DEPB or ought to have been paid in cash - this judgment has been Consideration by Hon’ble High Court of Gujarat in the case of Gujarat Ambuja Exports Ltd [2012 (7) TMI 679 - GUJARAT HIGH COURT]. Moreover the Hon'ble Madras High Court in another judgment in the case of DCW [2014 (12) TMI 728 - MADRAS HIGH COURT] held that question of leviability of Education Cess does not arise - In this development of law on the subject issue, the later judgment of Hon'ble Madras High Court in case of TENFAC Industries Ltd. stand distinguished.
Appeal allowed - decided in favor of assessee.
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Corporate Laws
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2018 (5) TMI 997
Rectification of the defects causing delay in presenting the Appeal - condonation of delay - Computation of period of limitation - computation of period of 45 days for filing the Appeal - Is the time given for complying the direction to cure the defects liable to be extended under sub-rule (3) to rule 26 of the Rules? - Held that:- In the case on hand, the initial presentation of the appeal under Rule 22 on 19-02-2018 is within the period of limitation. The subsequent presentation after curing the defects on 27-03-2018 is apparently much beyond the period of 45 days. It is true that the proviso to sub-section (3) to section 421 of the Act provides that the period of filing an appeal can be extended for a further period not exceeding 45 days. However, the power to extend the period provided under the proviso can be invoked only by the Hon’ble Appellate Tribunal.
Sub-rule (3) to rule 26 enables the Registrar to extend the time for compliance given under sub-rule (2) to rule 26. However, the Rules cannot override the provisions of the Act. The power under sub-rule (3) to rule 26 to extend the time given for compliance can be exercised by the Registrar, provided it is within the period of 45 days referred to in sub-section (3) to section 421 of the Act.
In the instant case, as presentation of the appeal after curing the defects is beyond the period of 45 days, the time granted for compliance under sub-rule (2) to rule 26 cannot be extended by invoking the power under sub-rule (3) to rule 26. Therefore, the matter be placed before the Hon’ble Appellate Tribunal for appropriate orders. Point answered accordingly.
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Insolvency & Bankruptcy
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2018 (5) TMI 1032
Corporate Insolvency Resolution Process - Held that:- Hereby ordered the Corporate Debtor to be liquidated in the manner as laid down in chapter 3 of IBC Code, 2016; Subject to Section 52 of the I&B Code, no suit (or) other legal proceedings shall be instituted by or against the Corporate Debtor “provided that suit or other legal proceedings may be instituted by the liquidator on behalf of the Corporate Debtor with a prior approval of the Adjudicating Authority”
(ii) Hereby appointed Dr. K.V. Srinivas as Liquidator :
(iii) The Liquidator is also directed to submit preliminary report within 75 days from liquidation commencement date as per Rule 13 of IBBI, 2016
(iv) All the Directors, key managerial personnel and the partners of the Corporate Debtor, as the case may be, shall cease to have effect and shall be vested in the liquidator. And the personnel of the Corporate Debtor are directed to extend all assistance and cooperation to the liquidator as may be required by him in managing the affairs of the Corporate Debtor and provisions of Section 19 shall apply.
(v) The Liquidator appointed will be strictly governed by the Insolvency and Bankruptcy Board of India (Liquidation process) Regulations, 2016 as amended from time to time and strict adherence to laws and policies defined.
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2018 (5) TMI 1031
Initiation of Corporate Insolvency Resolution Process - Eligible outstanding debt proof - Held that:- Despite mandatory requirements of the Code and Rules, the dates and amount of various loans disbursed have not been furnished. Simply wild assertion that a huge financial assistance to the tune of ₹ 1120.98 lacs has been given from time to time since 2011 will not suffice.
Onus to proof lies on the applicant and the same becomes more onerous when the claim is disputed. The applicant being a legal entity is supposed to have relevant documents, balance sheet and resolutions etc. to support the contention of disbursement of various loans for time value of money. Mere pleading of the applicant in the absence of supporting documentary evidence will not suffice to prove the disbursement and default.
As reiterated that the applicant has miserably failed to furnish the details of various disbursements alleged to have been made since 2011 and also has failed to establish that such disbursements were made for time value of money, so as to come within the purview of “financial creditor” in order to maintain the present application preferred under Section 7 of the Code. Petition fails and the same is rejected.
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PMLA
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2018 (5) TMI 993
Offense under PMLA - attachment orders - no notice before passing the attachment order or statement recorded - Held that:- The Adjudicating Authority upon receipt of a complaint under section 5(5) of Act; under section 8 (1) of the Act is bound to peruse the same and upon perusal of such a complaint if it has reason to believe that any person has committed an offence under section 3 of the Act or is in possession of proceeds of crime may serve a notice on such person calling upon them to indicate the means by which he has acquired the property attached under section 5(1) of the Act.
There are no valid reasons to believe in order to pass the order of provisional attachment. Actually, the provisional attachment is just repetition of the allegation made in the complaint. Such allegations are treated as gospel truth.
The appellant was not issued any notice before passing the attachment order. No statement of her was recorded in order to verify the position. The Complainant before attaching the property owned by the Appellant herein described at Sl. No. 29 in Para-2 of the Complaint. No copy of reason to believe was served before passing the provisional attachment order.
The provisional order passed by the respondent is violative of principles of natural justice and violates the rights of this Appellant enshrined in Art. 14 and 21 of the Constitution of India.
The notice issued by the Adjudicating Authority under Section 8 of the Act, is issued in gross violation of Article 14 of the Constitution of India and is against principles of natural justice.
No case was brought out against the appellant either in the charge-sheet filed by the Lokayuktha Police Wing or the complaint filed by the Complainant and as such Section 2(u) of PMLA does not come into operation and as a consequence of the same Section 5 of PMLA.
Thus the present appeal is allowed with regard to the property owned by the appellant. The impugned order is set-aside. Consequently, the provisional attachment order pertaining to the appellant in relation to the property in question is quashed. Property is released forthwith.
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2018 (5) TMI 992
Offence under PMLA - provisional order of attachment - attachment of property involved in money-laundering - order of provisional attachment attaching property on the basis the statement given by this Appellant’s son S.V Srinivas on 12.6.2012 who was interrogated by the respondent (who was arrayed as the 9th Defendant) - Held that:- Adjudicating Authority is bound to go through reason to believe recorded before passing the provisional attachment order while coming to the conclusion to issue a notice under section 8(1) of the Act particularly to a person who is not an accused in the schedule offence and not a party to the prosecution complaint.
Stereotypes notice u/s 8(1) cannot be issued in such types matters in these types of cases. The case of appellant has not been dealt by the Adjudicating Authority in the impugned order. His property was provisionally attached without any notice and without recording his statement. He is senior citizen/ practicing Advocate. He was not aware that the amount spent on renovation was alleged tainted money. Even otherwise, any offence if committed by his son cannot be attributed to the father unless the father has link and nexus in the crime and involves in the criminal activities. In the present, such allegations against the appellant are not raised by the respondent.
The impugned order dt. 17/10/2012 passed by the Adjudicating Authority against the appellant is not sustainable in law and wholly contrary to section 5 and 8 of the Act. The appeal is accordingly allowed. The impugned order is set-aside against the appellant, consequently the provisional attachment order with regard to present appellant is also quashed. The property is released forthwith.
It is directed that in case, his son who is one of the accused in prosecution complaint which is still pending ( The proceedings have been stayed by the Hon’ble High Court at Karnataka ) and if he is hold guilty after trial if to be conducted after disposal of writ petition. The respondent would be entitled to attach a sum of ₹ 10 lacs if it established that it was a proceed of crime. The appeal and pending applications are disposed of.
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Service Tax
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2018 (5) TMI 986
Works contract - composite contract - construction works mainly for customers like BSNL, LIC, All India Radio and Works of erection of cell phone towers etc for BSNL - The department was of the view that appellants are liable to pay service tax under “Commercial or Industrial Construction Service” upto the period 31.5.2007 and in respect of the very same activities, they are liable to pay service tax under Works Contract Services with effect from 1.6.2007 - time limitation.
Held that: - The contracts being composite in nature, the demand prior to 1.6.2007 cannot sustain as laid in the decision of Apex Court in Larsen & Toubro [2015 (8) TMI 749 - SUPREME COURT] and therefore requires to be set aside.
Demand with effect from 1/6/2007 - time limitation - Held that: - Department has not adduced any evidence to establish that appellants had wilfully suppressed facts with intent to evade payment of tax. They had cooperated with department and furnished all details from which the demand has been quantified - the demand invoking the extended period cannot sustain and requires to be set aside - the demand for normal period is sustained
All penalties except that imposed under Section 77 are set aside.
Appeal allowed in part.
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2018 (5) TMI 985
Taxability - Drawings and designs - whether the same activity cannot be taxed as goods and as services? - Held that: - In view of the various decisions rendered by the Tribunal that the taxation of goods and that of services are mutually and explicitly conceived levies, it is clear that the same activity cannot be taxed as goods and as services - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 984
Liability of service tax - reverse charge mechanism - recipient of intellectual property service - Held that: - There is no doubt that the appellant is a person and as supplier of the technology related to software, their overseas provider is the holder of the intellectual property right. The service to be taxable is found within section 65(55b) of Finance Act, 1994 - It is clear, therefore, that what is envisaged for taxation is the utilisation of intellectual property which is recognised as such within the territory of India and such right over the intellectual property should be enforceable by the laws of the country.
In the absence of any allegation or evidence that the intellectual property right of the supplier of these services to the appellant is recognised under the intellectual property laws of India, the demand against the appellant will not sustain - Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 983
Liability of service tax - recipient of services - business auxiliary service - banking and financial services - management consultancy services - club and association service - Held that: - the impugned order has determined tax liability on the commission that was paid by the appellant to agents situated outside the country. It is also not in doubt that their services were utilised in connection with the promotion of their products which involved exports out of India and, consequent to such exports - the levy of service tax on an activity rendered by an entity located abroad and in relation to the goods after their arrival in those countries is not liable to tax.
Management consultancy service - Held that: - The appellant is not a recipient of 'management consultancy service' and consequently the demand under those head cannot sustain.
Club or association service - Held that: - The nature of the activity that was sought to be taxed as 'club or association service' were the payment of fees paid for membership of overseas stock exchanges. In the circumstances of a specific and distinct liability to tax under 'stock exchange service' and the inability of Revenue to connect that activity within the scope of taxable service under section 65(105) it is not permitted to attempt tax under any other taxable service. The charges paid to statutory authorities outside the country for an activity related to export of goods is not liable to tax as 'technical inspection and certificate service'.
Banking and other financial services - Held that: - the factual circumstances in which commission or other charges were paid to banks outside the country in relation to the external commercial borrowings or realisation of export proceedings were not placed before the original authority. These are questions of fact which must be ascertained on that level and subject to scrutiny by the original authority - matter on remand.
Appeal disposed off.
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2018 (5) TMI 982
Classification of services - appellant is engaged in collecting advertising material from their clients and forwarding the same to the newspaper for advertising in the newspaper - whether classified under advertising service or otherwise?
Held that: - the activity for which the Tribunal has decided the case for the appellant in earlier period SPRING ADVERTISING PVT LTD Versus COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, AURANGABAD [2014 (8) TMI 146 - CESTAT MUMBAI], is the same as in the present case, where it was held that The admitted fact is that the appellants are not undertaking any activity connected with the making, preparation, display etc and the appellants are only collecting the advertising and the same is forwarded to various newspapers for publication. A reading of the definition of "advertising agency" shows that a person should be engaged in providing any service connected with the making, preparation, display or exhibition of advertisement, assessee thus not liable to tax under the head.
Demand do not sustain - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 981
Penalty u/s 78 - service tax along with interest were paid before show cause notice - construction of residential complex service - Held that: - it is well known fact that the builders in all over India challenged the levy of service tax on construction of residential complex - it cannot be said that the appellants had any mala fide intention, particularly for the reason that the appellants have not suppressed the value as they have declared in the books of account.
Relying on the fact that the matter was under litigation therefore, penalty needs to be waived - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 980
Demand of service tax - mismatch between the value declared in ST-3 return and profit and loss account - sale of scrap - Held that: - once the service tax was discharged again only because the same amount was created as debtor causing the demand is double taxation of the same. If this is correct, then on the date of creating debtor on account of PF which was created by SCCL, the appellant is not liable to pay service tax subject to verification of facts that amount already suffered service tax.
Sale of scrap - Held that: - obviously the sale of scrap is not a service, hence the same is not liable for service tax.
Since the lower authority has not verified all these factual aspects, the matter needs to be remanded - appeal allowed by way of remand.
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2018 (5) TMI 979
Condonation of delay of 31 days in filing appeal - time limitation - sub-section (3A) of Section 85 - Held that: - the order-in-original was received by the appellant on 3.3.2015 and appeal was filed on 2.6.2015 i.e. well within the three months’ time of condonable period - the appeal before the Commissioner (Appeals) was well within the condonable period - appeal is allowed by way of remand to the Commissioner (Appeals) for deciding the matter on merits.
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2018 (5) TMI 978
Refund claim - time limitation - rejection on the ground that the fund claim was filed beyond one year from the date of invoice raised for providing the export services - Held that: - The lower authority considered the date of filing is the date when the physical refund claim along with all the documents were filed whereas the appellant had already filed the refund claim online through ACES portal of CBEC website - The date of filing of refund through ACES should be reckoned as date of filing of refund claim.
The refund claim was admittedly filed within one year from the quarter ending to which the refund pertained - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 977
Review order - time limitation - Mandap Keeper Service - Held that: - Section 84(5) of the Finance Act, 1994 provides that no order under this Section shall be passed after the expiry of two years from the date on which the order sought to be revised has been passed - the Order-in-Original was passed on 11/05/2005 as mentioned in the said order whereas the review order was passed on 28/06/2007 which is after the expiry of two years from the Order-in-original which is not legally sustainable - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 976
Penalty u/s 76 - appellant had delayed crediting of service tax to the Government Account - Manpower Recruitment or Supply Agency service - Held that: - Admittedly, the assessee had paid both the service tax and interest for its delayed payment before the issue of SCN - In similar set of facts, in assessee's own case, the Hon'ble Karnataka High Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX Versus M/s ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD. [2011 (9) TMI 114 - KARNATAKA HIGH COURT], has held that the Authority / Department should not serve any SCN and penalty under Section 76 of the Act, is not leviable - Penalty set aside - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 987
Extended period of Limitation - suppression of facts - Business Auxiliary Service - Whether the CESTAT was justified in restricting the demand of Service Tax to normal period despite holding the activity of the assessee to be classifiable under “Business Auxiliary Service” and liable to Service Tax, when the assessee has concealed and suppressed the said information? - Held that: - the definition of ‘Business Auxiliary Service’ was expanded and made much more wide with effect from 10.9.04. The appellant was already paying service tax under various categories and separate litigation was there whether the activity undertaken by the appellant is covered within the definition of ‘tour operators’. It is further on record that the appellant has been subjected to periodical audit repeatedly both by the the department as well as statutory audit by CAG. It is further on record that the appellant is a State Government undertaking which can have no intention to deliberately evade payment of service tax - the demand made in the show cause notice has to be restricted to that falling within the normal time limit under section 73.
Demand of service tax is sustained within the normal period of limitation and set aside for the period beyond it - case is remanded to the original adjudicating authority for requantification of the demand falling within the normal time limit.
Appeal dismissed - decided in favor of Revenue.
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2018 (5) TMI 975
Pre-deposit - failure to comply with the provisions of Section 35F - condonation of delay in filing appeal - Held that: - the COD application which has been filed by the appellant is not maintainable before this Tribunal as the delay of 26 days have been caused before the Commissioner(Appeals) and not before this Tribunal - there is inordinate delay of around 9 months in filing appeal before this Tribunal for which the appellant has not filed COD application - appeal dismissed.
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Central Excise
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2018 (5) TMI 974
Penalty on co-noticee u/r 26(1) of the CER 2002 - clandestine manufacture and clearance of Gutka - entire case of Revenue against the appellant is based on the assertion that the Mahindra jeep, which was used for clandestine clearance of Gutka is owned by the appellant - Held that: - the records show otherwise. The record of the Government of Maharashtra Motor Vehicle Department, Pune, produced by the appellant shows Shri Kantilal B. Mohite, the main noticee, is the owner of MH12 BG3268 having chassis No MA1NV2ABA12M 22644 with effect from 23.3.2009. The said record also shows that the previous owner was the appellant - there is no no merits in the claim of the appellant that the appellant was the owner of the vehicle at the material time when alleged evasion of excise duty happened.
Another allegation is that the appellant had supplied the packing machines to the main noticee - Held that: - the assertion of Revenue made to the effect that the appellant had passed money and machines for purchase of D.G. Sets and manufacture of gutka through Shri Javed cannot be sustained - Revenue has not been able to ascertain the identity of Shri Javed and the appellant has denied any knowledge of any person by the name of ‘Javed’. The appellant has also denied given any money or machines to Shri Javed - this ground against appellant also fails.
Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 973
Principles of natural justice - Clandestine removal - case of appellant is that the original adjudicating authority has failed to consider the grounds raised by them before him - Held that: - all the contentions put forth at the time of hearing has been held inadmissible - The order also does not record that there was a request for adjournment - the order passed without considering the defence of the appellant raised in their letter dated 7.11.2000, without granting personal hearing is in gross violation of principles of natural justice - matter remanded to the original adjudicating authority to decide after granting due opportunity to the appellants to defend their case - appeal allowed by way of remand.
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2018 (5) TMI 972
CENVAT credit - duty paying invoices - endorsed Bill of Entry - whether the appellant is entitled for the cenvat credit on the strength of Bill of Entry which is in the name of the principal who imported the inputs, but the Bill of Entry was endorsed in favour of the appellant?
Held that: - apart from the endorsement, the fact is not under dispute that the input on which credit was availed has been received in the factory of the appellant and used in the manufacture of final product. In case of job work on the imported inputs which is directly supplied from the port of import to the job worker, there cannot be any other procedure other than endorsement of Bill of Entry - It is also admitted that in some of the Bills of Entry, the endorsement was signed by the Customs authority.
Credit cannot be denied - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 971
CENVAT credit - inputs/input services used both for dutiable and exempt final product - records with regard to the inputs being maintained by the assessee as required under Rule 6(2) of the CCR - applicability of Rule 6(3)(c) of CCR - Held that: - Both the authorities have not given any reasons as to how provisions of Rule 6(3)(c) are not applicable in the present case and how Rule 6(3)(b) is applicable - Since in the present case, the appellant is a manufacturer as well as registered as a service provider and they have maintained separate accounts with regard to inputs, therefore, the provisions of Rule 6(3)(c) will be applicable to them which specifically states that the provider of output service shall utilize credit only to the extent of an amount not exceeding 20% of the amount of service tax payable on taxable output service - Appeal allowed - decided in favor of appellant-assessee.
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2018 (5) TMI 970
Demand of interest and penalty - reversal of input credit on obsolete material - Held that: - the appellant on their own at the time of audit itself reversed the cenvat credit of ₹ 5,61,616/- on obsolete raw materials for the year 2008, 2009, 2010 and 2011 - during the period in dispute there was no recovery mechanism to recover the cenvat credit wrongly taken under the provisions of Rule 3(5B) and the recovery mechanism was brought into existence from 01.03.2013 vide N/N. 3/2013 dated 01.03.2013 - the demand of cenvat credit for inputs for which the provisions to write off has been made is not sustainable in law and therefore, the appeal of the appellant allowed to the extent of dropping the demand of interest and penalty - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 969
Ship stores supplied to Indian Navy - exemption under N/N. 64/1995-CE - exemption on electric motor, which is being supplied to Indian Navy, alongwith certificate from Indian Navy - denial on the ground that since electric motors are not consumed by Navy within a short period and have a long life, they cannot be treated as items meant for consumption on board a vessel.
Held that: - Tribunal in the case of Essar Steel Ltd. Vs. Commissioner of Central Excise, Surat-I [2008 (3) TMI 275 - CESTAT AHMEDABAD] has held that MS plates and sheets supplied to Navy against a certificate issued by them have to be extended the benefit of the notification, as against the Revenue stand that the same are raw material and not covered by the expression ‘stores’ - Hon'ble Supreme Court decision in the case of Commissioner of Central Excise, Surat Vs. Essar Steel India Limited [2014 (6) TMI 345 - SUPREME COURT] has observed that once end-use certificate stand issued by the Indian Navy, the doubt entertained by the Customs cannot prevail - benefit allowed - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 968
CENVAT credit - the entire appeal of Revenue is based on the claim that the Commissioner has not correctly quantified the amount of scrap generated and has relied on the quantification done by the job worker - Held that: - there is no evidence on record to state that the quantification done by the job-worker is incorrect. It is not in dispute that the job-worker has paid the excise duty on the scrap generated in the premises and has accounted for the Same in the records.
It cannot be disputed that the there would be a gain on account of insulation of paper, his claim that there is no loss on account of drawing cannot be considered as correct. Drawing is a mechanical process and there would be definitely a loss in end cutting/ trimming.
Appeal dismissed - decided against Revenue.
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2018 (5) TMI 967
CENVAT credit - credit availed on the invoices issued by Bosch Rexroth and Siskon Engineering - denial on the ground that no evidences have been furnished to show that the repairs and maintenance charges are included in the transaction value and as part of the sales warranty being a after sales activity - Held that: - the appellant has given the detailed information in the form of tabulated statement which have been enclosed with the appeal papers along with sample invoices for both the input service and output taxes paid but both the authorities have not examined these documents in order to decide whether the credit availed is right or wrong - the said services of repair were not rendered as part of warranty requirement or as having any nexus to the manufacture and clearance of final products but the said credit of the invoices raised by the input services providers have been availed.
CENVAT credit - invoices issued by Ajax Engineering Pvt. Ltd. - Held that: - appellant has produced on record the copy of the said agreement dt. 31/09/2009 which has been renewed and valid up to 01/04/2014 but the same has not been considered by the authorities below and have wrongly come to the conclusion that the said agreement has lapsed after 01/04/2009 - credit wrongly denied.
CENVAT credit - invoices issued by Jayalakshmi Enterprises - denial on the ground that the temporary registration is issued in the name of the buyer and not in the name of the appellant and the said activity has been wrongly considered as having no relation to manufacturing activity - Held that: - without obtaining temporary registration from RTO, it is not possible for the appellant to effect any clearance in view of the requirement of Motor Vehicles Acts and Rules - the appellant has availed the credit pertaining to common input services as distributed by the Yeshwanthpur office of the appellant which is also holding ISD registration under Service Tax and the said credit has been distributed by the Yeshwanthpur office to the factory of the appellant herein under challans after excluding 10% of the amount proportionately for the trading turnover and hence only 90% of the credit as per the input service invoices had actually been taken in the said factory and more over, the appellant has only one manufacturing unit and there is no dispute regarding the receipt of the services and its utilization thereof.
Since the appellant has only one factory and the credit was availed on the registered office and not at the factory is only technical lapse and the cenvat credit cannot be denied for technical infractions.
The CENVAT credit availed on the invoices issued by M/s. Gomti Incinco and M/s. Saleh Ahmed, amounting to ₹ 33,305/- with interest of ₹ 9,242/which have already been reversed / paid before issue of show-cause notice, the imposition of penalty is not warranted.
Appeals allowed subject to verification of the documents concerning the CENVAT credit of ₹ 4,62,870/- and ₹ 33,063/- - appeal allowed by way of remand.
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2018 (5) TMI 966
CENVAT credit - capital goods - graphite bush, racks and table stand - Held that: - graphite bush is explained to have been used in VMC machines and is a part of hydraulic clamping system - graphite bush is lubricant moving parts while use of the racks and table stand are for storage of input/parts at the assembly line.
The items are used in the factory premises of the appellant and the definition of inputs during the period in question i.e. June and July 2013, the definition allows CENVAT credit of the duty paid on any goods used in the factory of the manufacture - It is undisputed that the appellant is a manufacturer of goods.
Credit allowed - Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1034
CENVAT credit - insurance premium for policy taken on workers - Held that: - The specific exclusion prescribed by Rule 2(l) of CENVAT Credit Rules, 2004 does not cover when the inputs are utilized for safety of employee under a statutory obligation - Workmen compensation is liability under the Labour Law. Insurance service availed to protect workmen has direct nexus to the manufacturing activity of the appellant since appellant is engaged in the manufacture of explosives - credit allowed - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (5) TMI 965
Condonation of delay - Tribunal refused to condoned the delay of 448 days which occurred in filing of the Reference applications - the decision in the case of Commissioner of Sales Tax, UT Administration of Daman And Diu Versus M/s Shreeji Plasticizer [2016 (1) TMI 143 - BOMBAY HIGH COURT], contested - Held that: - there are no sufficient cause that the delay that has occurred in filing the present Special Leave Petitions should be condoned - That apart, the delay of 448 days in filing the Reference Application(s) was refused to be condoned by the High Court on grounds which we consider to be good grounds - SLP dismissed.
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2018 (5) TMI 1033
Condonation of delay of 444 days in filing Tax Appeal - satisfactory explanation for the delay - whether the delay can be condoned or not?
Held that: - the reasons cited for preferring the appeal after delay mainly raised on two grounds. First is that the administrative clearances and decisions take sometime - the delay is properly explained. It is true that there was a clear error on part of the Government Pleader's Office in not taking prompt steps for drafting and filing the Tax Appeal. However, Government Pleader's Office owned up this mistake. It is stated that after receiving the papers on 13.07.2016, the same were misplaced. When this came to light, the VAT department was contacted in March 2017 for supplying second set of papers. Government Pleader's office received such papers on 29.06.2017. Tax Appeal was drafted and sent to VAT Department on 12.07.2017 and the appeal was filed on 09.08.2017.
This is therefore not a case where long stretch of delay had remained totally unexplained - Considering the explanation rendered for the delay caused in filing appeal and the tax implications involved, we are inclined to condone the delay. Of course, upon the cost being paid to the respondent.
Identical issue decided in the case of STATE OF GUJARAT Versus WELSPUN GUJARAT STAHL ROHREN LTD. [2013 (3) TMI 626 - GUJARAT HIGH COURT], where it was held that explanation in the form of administrative clearances and consumption of time in the office of the Government Pleader in preferring the appeals are pressed in service for explaining the delay. Further, the duty amount involved in the appeal is also substantially large. Considering these aspects of the matter, delay is condoned by awarding cost of ₹ 15,000/-, which shall be paid to the respondent within four weeks from today.
Delay condoned with cost - COD application allowed.
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Indian Laws
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2018 (5) TMI 991
Recovery of amount for supply of goods to partnership firm - the only ground urged before this Court in this appeal, was that the goods which were supplied by the respondent no.1/plaintiff to the appellants/defendant nos.1 and 3 were defective and hence the respondent no.1/plaintiff was not entitled to the amount - Held that: - neither in the leave to defend application nor in this Court documents have been filed showing any RFA No.401/2018 Page 5 of 6 intimation sent by the appellants/defendant nos.1 and 3 to the respondent no.1/plaintiff/seller, that the goods supplied under the subject invoices as stated in para 4 of the plaint, are defective. Once that is so, the provision of Section 42 of the Sale of Goods Act applies and hence it was not open to the appellants/defendant nos.1 and 3 to contend that payment could not be claimed by the respondent no.1/plaintiff on account of having supplied the defective goods.
Unless a defendant in an Order XXXVII CPC suit raises genuine triable issues, leave to defendant cannot be granted on the basis of the defences which are frivolous and vexatious - In the present case the defence of the defective goods is completely frivolous and vexatious and the defence does not raise genuine triable issue in view of Section 42 of the Sale of Goods Act.
Petition dismissed - decided against petitioner.
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2018 (5) TMI 990
Entitlement to Executive Car Facility - petitioner-Kulranjan Toppo is holding the post of DGM (IT) in the Grade Pay of ₹ 7600/- and petitioner-Sunil Dwivedi is holding the post of DGM (Finance) in the same Grade Pay - Held that: - All that is required as per respondent’s Executive Car Policy (Annexure-4) is that the concerned Officer has to be DGM (M3a). It is not the case of respondent that petitioners are not DGM (M3a). It is matter of record that petitioners had applied for the Executive Car Facility in question before the Office Order of 3rd October, 2016 came into force.
It needs no reiteration that an Office Order is to operate prospectively. In case of petitioners, it is sought to be operated retrospectively on the plea that it is a clarification and not an amendment. Since Executive Car Facility was extended to petitioner-Kulranjan Toppo way back in the year 2012, therefore, it cannot be said that impugned Office Order of 3rd October, 2016 is of clarificatory nature.
Respondent is directed to provide the Executive Car Facility to petitioners upon completion of necessary formalities within a period of six weeks from today - petition allowed.
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2018 (5) TMI 989
Genuinity of petitioner - Allotment of flat to petitioner, wife of Late Sh. Gurdial Singh, who had applied for allotment of MIG flat under the New Pattern Registration Scheme, 1979 - It is the case of the petitioner that the non-allotment of the flat to the petitioner and withdrawal of the earlier decision on the basis that the case is not covered under the “wrong address policy” is absolutely illegal and without merit - whether the respondent was justified in withdrawing the earlier decision of allotting flat on the ground that the case does not fall under the “wrong address policy”?
Held that: - the dispute is whether the identity of the petitioner is genuine; that she is the wife of original registrant and there was change of address / residence and duly informed to the respondent and the same has been properly / rightly recorded in the ration card, the only authenticated source of information. There was some doubt in the mind of the authorities, but doubt can be clarified if the relevant information was sought from the ration card authorities, who would have the relevant information, including the application submitted and other supporting documents.
The only action respondent need to take is to verify the identity of the petitioner; the genuineness of the address on the ration card and the change to the present address as well - Accordingly, this Court is of the view that the petitioner shall file appropriate certificate from the ration card Authority related to the change of addresses (till the present address) and furnish a fresh affidavit on the lines already submitted to the respondent within eight weeks from today - petition disposed off.
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2018 (5) TMI 988
Detention of petitioners - Smuggling - COFEPOSA Act - detention of the petitioners stand vitiated on account of non supply of either the printed copies/ hard copies of the documents contained in the CDs.
Held that: - It is well settled in law that the RUDs are an integral part and parcel of the GOD. The GOD contains the reasons and justification provided by the Detaining Authority on the basis of which he arrives at his subjective satisfaction regarding the necessity of preventively detaining of the detenue under Article 22 of the Constitution of India, read with Section 3 of the COFEPOSA Act. It is obligatory on the part of the Detaining Authority to supply copies of all the RUDs on which the subjective satisfaction of the Detaining Authority is based - The documents which are supplied on CDs, by themselves, are not viewable to the human eye. To read the documents on CDs, it is essential that the relevant hardware in the form of a CD player, or a laptop computer with the facility of reading the CD, or a Desktop computer with facility of reading a CD is employed. Without such aids, the person who is delivered the CD would never know as to what is the document, if any, contained therein. The CD is only a storage medium. To retrieve the documents stored therein, the necessary equipment is essential.
Reliance placed on Section 3(3) of COFEPOSA Act is misplaced for the reason that the said section itself mandates that the grounds of detention must be communicated to the detenue soon after the detention “but ordinarily not later than five days”. The use of the negative language in Section 3(3) itself shows that the Parliament, in ordinary circumstances, did not consider it appropriate to grant more than five days to the Detaining Authority to serve the GOD and the RUD upon the detenue. However, in exceptional circumstances and for reasons to be recording in writing, not more than fifteen days from the date of detention, have been provided for the purpose of serving the GOD and the RUD on the detenue.
The RUD contained in CDs taken note of herein above have been relied upon extensively in the GOD formulated by the Detaining Authority. The GOD are more or less identical in both the cases, since they stem out of the same transaction. The GODs repeatedly refer to the whatsapp messages contained in the CDs, as well as to the CDRs which have been relied upon by the Detaining Authority to establish the connection between the detenue and others concerned - The detention of the petitioners under Section 3(1) of the COFEPOSA Act cannot be sustained.
Detention of petitioner set aside - petition allowed.
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