TMI Tax Updates - e-Newsletter
May 18, 2021
Case Laws in this Newsletter:
GST
Income Tax
Corporate Laws
Insolvency & Bankruptcy
PMLA
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Provisional attachment of Bank accounts of petitioner / Director of the company - availment of ITC against fake/ineligible invoices - there is nothing placed on record to show that there was material available with the respondent, linking the petitioner to purported fake invoices. In other words, in the absence of such material, the impugned action concerning provisional attachment of the petitioner’s bank accounts, which is otherwise a “draconian” step, was unsustainable. - HC
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Income Tax:
Notice u/s 142(1) - Faceless Assessment - Broadly, the purpose of issuance of notice under Section 142(1) of the Act is, to gather information from the assessee. However, before an addition is made, it evident that the CBDT instruction, dated 29.12.2015, requires issuance of a show-cause notice and an opportunity to be given to the noticee, i.e., the assessee to respond to the same. This step, it appears, at least at this stage, was not taken by the AO qua the petitioner. - HC
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Income Tax:
Revision u/s 263 by CIT - defect of non-issuance of notice u/s. 143(2) - Section 292BB is only safeguarding the deficiency if any of the service/non-service of notice and it does not cure the omission of issuance of mandatory notice by the AO And since in this case, the AO has not issued the mandatory notice u/s. 143(2) of the Act as found by the Ld. Pr. CIT, the question of section 292BB coming to the rescue of the AO to pass the reassessment order does not arise. - AT
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Income Tax:
Disallowance of the claim incurred towards fees paid to Babson College, USA, for a management trainee - expenditure could not be treated as research & development expenses - Booking expenditure under a wrong head of expenditure cannot be a ground for disallowance. The expenditure was incurred for the purpose of business and hence the same is allowed. - AT
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Income Tax:
Addition towards cash found during the course of search u/s 69A - The department is not here to sermonise how a tax payer should keep its currency. - What is relevant is whether the cash found during the course of search has been duly accounted by the assessee and its group companies sharing the common office. - CIT(A) rightly deleted the additions - AT
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Income Tax:
Treating additional income earned on sale of shops as income u/s.69A - whether undisclosed income is “business income” or “income from other sources” - As per the assessee, the amount is net of expenses, therefore the said income would be assessable under the head business income without deducting any expenses from it, however, as noted by us above, that assessee has claimed proportionate expenses, which is not acceptable. - AT
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Income Tax:
Revision u/s 263 - assessee’s case selected for limited scrutiny under CASS - the Ld. PCIT could not have invoked jurisdiction u/s 263 of the Act because he could not have held the AO’s order to be erroneous because the AO was justified in not enquiring in to the issue of Insurance Premium (Keyman Policy) since the AO has gone as per the dictum of CBDT circular on the subject. - AT
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Income Tax:
Addition u/s 36(1)(iii) - deduction towards interest paid on loans borrowed for business purposes - Merely for the reason that there is no rental payment for current financial year, genuine rental agreement and consequent rent advance paid cannot be considered as diversion of funds for non-business purposes so as to disallow interest expenses paid on loan borrowed for the purpose of business. - AT
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Corporate Law:
Siphoning of funds - collection of money from the public issue by publishing prospects in the year 1994 by the directors and promoters of the Company - petitioner was professional director - the petitioner being professional director is not involved into day today affairs of the company and there is no material on record to even suggest that the petitioner availed any benefit in capacity of professional director of the company. - considering the bare averments made in the complaint, the same deserves to be quashed and set aside qua the petitioner - HC
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Indian Laws:
Disciplinary proceedings against Chartered Accountant (CA) - Initiation of parallel proceedings - the Committee viewed that the appointment of the Respondent was made under the Orders of the Hon’ble High Court of Karnataka and that the reports prepared by him were placed before and considered by the Hon’ble High Court of Karnataka. Accordingly, the Committee was of the view that the said report of the auditor was the property of the Hon’ble High Court of Karnataka which alone could pass any order on the same. - I find no infirmity in the view taken by the Disciplinary Committee of the ICAI - HC
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PMLA:
Jurisdiction - power of Special Courts - The contention that cases relating to scheduled offences punishable under the PC Act (as specified in Paragraph 8 of Part A of the Schedule to the PMLA) cannot be tried by the Special Courts designated under the PMLA, which are trying the interlinked offence punishable under Section 4 of the PMLA, for want of jurisdiction to do so, cannot be accepted - there is no ambiguity in the language of Section 44(1)(c) of the PMLA. - HC
Articles
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (5) TMI 528
Provisional attachment of Bank accounts of petitioner / Director of the company - availment of ITC against fake/ineligible invoices - HELD THAT:- There is nothing in the statement of the petitioner, which would show, that she had anything to do with the purported illegal transaction said to have been carried out between Milkfood Ltd. [i.e., the taxable person], and its suppliers. The petitioner claimed, in her voluntary statement, that she was paid ₹ 1.50 crores in the FY 2019-2020 for rendering services in her capacity as a mentor/advisor to Milkfood Ltd. Therefore, even if we assume, for the moment, that, since investigations are on against the taxable person, and therefore, proceedings are pending under Section 67 of the Act, there is nothing placed on record to show that there was material available with the respondent, linking the petitioner to purported fake invoices. In other words, in the absence of such material, the impugned action concerning provisional attachment of the petitioner s bank accounts, which is otherwise a draconian step, was unsustainable. The impugned provisional attachment orders dated 07.12.2020. are quashed - Petition allowed.
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2021 (5) TMI 505
Revocation of cancellation of registration - non filing of returns for a continuous period of six months - non submission of reply to the SCN within the time specified therein - HELD THAT:- The adjudicating authority has cancelled their registration due to non filing of GSTR-3B returns for the period Ist March-2019 to till date i.e. 10.06.2020 and effective date of cancellation of registration is 10.06.2020 whereas in the second proviso of Notification No.52/2020-Central Tax dated 24th June 2020 it is clearly stated that where the total amount of central tax payable in the said return is nil, the total amount of late fee payable for a tax period, under section 47 of the said Act shall stand waived for the registered person who failed to furnish the return in FORM GSTR-3B for the period of July, 2017 to January, 2020. In the instant case, the appellant has filed his GSTR-1 and GSTR 3B on 30.09.2020. Further, on going through the records, it is observed that the appellant has not filed return upto June-2020 whereas, the benefit of notification with regard to waiver of late fee has been given in the said notification upto January-2020 only. In view of this facts, it is found that the appellant did not deposited late fee for the period January-2020 onwards. The appellant has not been complied with the proviso of the Rule 23 of CGST Rules, 2017. The cancellation of registration of appellant may not be considered for revocation - Appeal dismissed - decided against appellant.
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Income Tax
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2021 (5) TMI 529
Notice under Section 142(1) - Faceless Assessment - breach of the principles of natural justice - assessee not given a fair opportunity to explain his position on the proposed additions/disallowances - As submitted AO was required to issue a show-cause notice qua each of the additions/disallowances made to the petitioner's declared income - HELD THAT:- As each of the notices issued by the AO, under Section 142(1) of the Act, was replied. This is evident upon a perusal of paragraph 2 of the impugned assessment order. Broadly, the purpose of issuance of notice under Section 142(1) of the Act is, to gather information from the assessee. However, before an addition is made, it evident that the CBDT instruction, dated 29.12.2015, requires issuance of a show-cause notice and an opportunity to be given to the noticee, i.e., the assessee to respond to the same. This step, it appears, at least at this stage, was not taken by the AO qua the petitioner. Therefore, according to us, the matter requires further examination. Accordingly, issue notice.
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2021 (5) TMI 524
Revision u/s 263 by CIT - defect of non-issuance of notice u/s. 143(2) - validity of reopening of assessment u/s 147 - HELD THAT:- We note that the Hon'ble Supreme Court in the case of CIT V Hotel Blue Moon [ 2010 (2) TMI 1 - SUPREME COURT] has held that before the scrutiny assessment is made u/s. 143(3) of the Act the issuance of notice u/s. 143(2) of the Act is mandatory which is applicable also in the case of reopening of assessment once the assessee has filed return pursuant to notice u/s. 148 of the Act. In this case, in the impugned order itself the Ld. Pr. CIT has clearly given a finding of fact that the AO has not issued notice u/s. 143(2) of the Act after the event of the assessee having filed the return of income pursuant to the notice u/s. 148 We find merit in the contention of the assessee that the AO while passing the order u/s. 147/143(3) of the Act on 25.07.2017 has not issued notice u/s. 143(2) of the Act. And, therefore, the mandatory requirement of law to usurp the jurisdiction to frame the assessment u/s. 143(3)/147 of the Act pursuant to reopening is absent and, therefore, the legal effect is that the order of the AO dated 25.07.2017 is null in the eyes of law. Rescue u/s 292BB - Section 292BB is only safeguarding the deficiency if any of the service/non-service of notice and it does not cure the omission of issuance of mandatory notice by the AO And since in this case, the AO has not issued the mandatory notice u/s. 143(2) of the Act as found by the Ld. Pr. CIT, the question of section 292BB coming to the rescue of the AO to pass the reassessment order does not arise. Respectfully taking note of the ratio of Laxman Das Kandelwal [ 2019 (8) TMI 660 - SUPREME COURT] , we find no merit in the contention of the Ld. DR that section 292BB of the Act would cure the defect of non-issuance of notice u/s. 143(2) of the Act and since the AO in this case had not issued notice u/s. 143(2) of the Act before framing the re-assessment u/s. 143(3)/147 of the Act as discussed supra, the order passed by the AO dated 25.07.2017 u/s. 143(3)/147 of the Act is without jurisdiction and, therefore, is non-est in the eyes of law and therefore, the Ld. Pr. CIT could not have interfered by exercising his power u/s. 263 of the Act in respect of non-est order - Decided in favour of assessee.
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2021 (5) TMI 523
Disallowance of payment made to Related Parties u/s. 40(A)(2)(b) - assessee reimbursed amount to M/s. Ventura Securities Ltd. on sales lead received in the ratio of 90:10 out of total expenditure incurred by the related party - assessee failed to furnish the details of customers generated out of sales leads AND could not show how the sales were improved with the sale leads - HELD THAT:- The expenses so incurred are reimbursed by the assessee to that entity in certain ratio towards its share of expenses. The assessee would gain out of such marketing advertising which could not be identified with specific clients. The arrangement so made would make it difficult for assessee to furnish the specific customer-list as desired by Ld. AO. We find that similar arrangement is continuing since AY 2011-12 and the assessee is making similar payment since then. The assessment for AY 2011-12 as well as for AY 2016-17 was framed u/s. 143(3) wherein similar claim made by the assessee was accepted. Further, payer as well as payee, both are in highest tax bracket and therefore, the invocation of provisions of Sec. 40A(2)(b) would not be justified. Hence, on the facts and circumstances of the case, we are inclined to delete this addition - Decided in favour of assessee. Disallowance of Gift Article Expenses - assessee was asked to justify its deduction in terms of Sec. 37(1) and in the absence of satisfactory explanation forthcoming from the assessee, the amount was disallowed - HELD THAT:- As the purchase of coins is duly supported by the invoice. It has been submitted that as per normal business practice, coins were distributed to sub-brokers to incentivize them to generate good business for the assessee. The details of the brokers to whom the coins have been distributed as performance reward was already placed before Ld. CIT(A). We find that the claim has been disallowed more on mere presumption that expenses were not incurred for business purposes. As against this, the assessee had placed requisite documentary evidences on record, in support of the claim. Therefore, the addition so made would not be sustainable. By deleting the same, we allow this ground of appeal.
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2021 (5) TMI 522
Reopening of assessment u/s 147 - reassessment proceedings has been made by the AO by alleging that the return was processed u/s. 143(1)(a) of the Act but while processing, the assessee has not computed the income as per the provisions of section 115JB of the Act and paid tax accordingly - HELD THAT:- It is ample clear that there was no fresh or new tangible material before the AO which was not before him during processing of return u/s. 143(1)(a) of the Act. We are in agreement with the contention of ld. CIT DR that in this case, the direction issued by ld. CIT(A) while deleting the addition and on procedural mistake, he has directed the AO to take suitable course available to him u/s. 147 of the Act. Therefore, the limitation as prescribed u/s. 149 of the Act for initiation of proceedings u/s. 147 of the Act and issuance of notice u/s. 148 of the Act does not apply but it is not the case of the appellant/assessee in the present appeal that the initiation of reassessment proceedings is time barred. Therefore, the proposition rendered by ITAT Delhi in the case of Hanemp Properties Pvt. Ltd. [ 2006 (3) TMI 212 - ITAT DELHI-A] does not provide any fruitful support of the revenue in the peculiar facts and circumstances of the legal contention and grounds of the assessee in the present case. From the reasons recorded by the AO before initiating reassessment proceedings u/s. 147 of the Act and issuance of notice u/s. 148 of the Act, we are unable to see any tangible material in the hands of the AO which was not before him at the time of processing return of income u/s. 143(1)(a) of the Act. Therefore, the provisions rendered by Hon'ble Supreme Court in the case of Kelvinator of India Ltd.[ 2010 (1) TMI 11 - SUPREME COURT ] is applicable in favour of the assessee and consequently, we hold that the AO proceeded to initiate reassessment proceedings u/s. 147 of the Act and issuance of notice u/s. 148 of the Act without any new tangible material and without application of mind merely on the strength of direction of Ld. CIT(A) that the suitable course of action available to the AO under the Act is application of provisions of section 147 of the I.T. Act as the appellant has understated its income by not applying the provisions of section 115JB of the I.T. Act. But there was no new or tangible material before the AO to initiate reassessment proceedings u/s. 147 of the Act. We are unable to see application of mind by the AO of the materials available before him. The AO has not recorded any basis or factum gathered by him after application of mind of the assessment already completed which could reflect that before initiation of reassessment proceedings u/s. 147 of the Act, he applied his mind and thereafter reached to a conclusion that he had reasons to believe that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act empowering him to issue notice u/s. 148 - Decided in favour of assessee.
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2021 (5) TMI 521
Registration u/s 12AA rejected - As argued CIT(E) passed the impugned order ex parte without commenting on the objects of the assessee which were charitable in nature - HELD THAT:- In the present case, it is noticed that the ld. CIT(E) passed the impugned order ex parte. He simply stated that opportunity was afforded to the assessee on 14/08/2019 and the matter was fixed for hearing on 22/08/2019. As not brought on record as to whether the notice for hearing was served upon the assessee or the aforesaid date was initiated to the assessee. It is well settled that nobody should be condemned unheard as per the maxim audi alterm partem . We therefore, by keeping in view the principles of natural justice, deem it appropriate to set aside the impugned order and restore the matter back to the file of the ld. CIT(E) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes.
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2021 (5) TMI 520
Long Term Capital Gains (LTCG) addition as per Department Valuation Officer (DVO's) report after invoking section 50C - Revenue's case as per the Assessing Officer's stand is that the DVO's report herein had determined final valuation of the assessee's property and the same ought not to have been disturbed in the CIT(Appeals) order keeping in mind all the corroborating material facts- HELD THAT:- No substance in the foregoing argument of Revenue for the clinching reason that the relevant capital asset herein is situated in industrial area developed by APIIC (a state government body itself) carrying necessary in-built conditions regarding the proposed activity to be carried out thereupon. The said asset could only be used for industrial and other specified purposes in an institutional/industrial area otherwise therefore. DR failed to dispute that the DVO report therein has not taken into consideration the same as he had gone by other consideration regarding plot size, location, approach from the main road and nature of the locality only. It is further evident that the CIT(Appeals) has already adopted twice the specified value fixed by M/s. APIIC value for industrial plots and still the same comes to ₹ 8,91,93,400 as against the declared sum of ₹ 9,06,00,000. We thus find no reason to interfere with the CIT(Appeals) conclusion under challenge deleting the impugned addition. - Decided in favour of assessee.
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2021 (5) TMI 519
Disallowance u/s 14 A computed applying Rule 8D - HELD THAT:- Tribunal has dealt with the identical issue in case of Oswal Woolen Mills Ltd. Vs. ACIT [ 2019 (7) TMI 1601 - ITAT CHANDIGARH] and directed the AO to restrict the disallowance u/s 14A of the Act, to proportionate amount computed by the assessee. Contention of the assessee in respect of disallowance under Rule 8D(iii) was that it had not incurred any administrative expenses for earning exempt income. Since the AO had not recorded any dissatisfaction taking into consideration the accounts of the assessee, the coordinate Bench directed the AO to restrict the disallowance to the proportionate amount computed by the assessee after including the personal expenditure and certain other expenses. In the present case also, the contention of the Ld. Counsel is that there is no change in the facts of the present case and the assessee has submitted the working in this case in accordance with the order passed by the Tribunal in the case discussed above. DR did not controvert the contention of the Ld. Counsel that there is no material change in the facts of the present case. However, during the course of arguments, submitted that even if the disallowance is to be computed as per the order of the Tribunal rendered in the case of Oswal Woolen Mills (supra), the working submitted by the assessee cannot be accepted as correct without verifying the same by the AO. Accordingly, the Ld. DR submitted that the issue may be sent back to the AO for determining the disallowance considering the plea of the assessee that the issue involved is covered by the order of the Tribunal. The assessee has placed on record the working of proportionate disallowance after including the personal expenditure. Thus no reason to take a different view in this assessment year. Hence, respectfully following the decision of the coordinate Bench rendered in assessee s own case for the assessment year 2010-11, we send this issue back to the AO for determining the disallowance on proportionate basis in accordance with the direction given by the coordinate Bench in the case of Oswal Woolen Mills Ltd. Vs. ACIT (supra) or to restrict the disallowance to the amount computed in working furnished by the assessee if found in accordance with the order of the Tribunal. Disallowance of interest of CC account for purchase of fixed assets - contention of the assessee is that it had sufficient funds in the shape of capital reserve and surplus, therefore the findings of the Ld. CIT(A) are contrary to the settled principles of law - HELD THAT:- We notice that the authorities below have not rebutted the contention of the assessee that it had sufficient funds for acquiring assets in question - The judgment of various Courts in the case of Hero Cycles(P) Ltd. [ 2015 (11) TMI 1314 - SUPREME COURT] , Bright Enterprises Pvt Ltd.[ 2015 (11) TMI 342 - PUNJAB HARYANA HIGH COURT] held that no disallowance of interest is called for where the assessee has got sufficient own funds. The Assessing Officer is directed to go through the fund position namely capital and interest free advances, reserves and surplus to determine whether any borrowed funds have been utilized more than available own funds and take a decision keeping in view the decisions rendered above. Thus we set aside the findings of the ld. CIT(A) and send this issue back to the AO for deciding the issue afresh.
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2021 (5) TMI 518
Ex parte order passed by the Ld. Commissioner for non-prosecution without considering the merits of the case - HELD THAT:- Commissioner is permitted to pass the ex-parte order but the same should be on merits. In the instant case, the Ld. Commissioner passed the order without considering the merits. The ITAT, Delhi Bench in the case of Pawan Kumar Singhal Vs. ACIT [ 2019 (7) TMI 869 - ITAT DELHI] held after considering the decisions of the various High Courts and Hon'ble Supreme Court that the Ld. Commissioner is required to pass the order on merits stating the points for determination, decision thereon and reasons for decision. In the instant case, there is no dispute that the Ld. Commissioner has confirmed the order of the AO for non-prosecution without considering the merits. Therefore, in the interest of justice, we consider it is appropriate to remand the matter back to the file of the Ld. Commissioner to decide the appeal on merits. Accordingly, appeal of the assessee is allowed for statistical purpose.
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2021 (5) TMI 517
Ex parte order passed by the Ld. Commissioner for non-prosecution - HELD THAT:- As gone through the ex parte order passed by the Ld. Commissioner for non-prosecution without discussing the merits of the case. The assessee has raised more than 09 grounds and furnished statement of facts filed along with Form No. 35. The ld. Commissioner is permitted to pass the ex parte order but the same should be on merits. In the instant case, the ld. Commissioner passed the order without considering the merits. The ITAT, Delhi Bench in the case of Pawan Kumar Singhal [ 2019 (7) TMI 869 - ITAT DELHI] held after considering the decisions of the various High Courts and Hon'ble Supreme Court that the ld. Commissioner required to pass the order on merits stating the points for determination, decision thereon and reasons for decision. In the instant case, there is no dispute that the Ld. Commissioner has confirmed the order of the AO for non-prosecution, therefore, in the interest of justice, we consider it is appropriate to remand the matter back to the ld. Commissioner to decide the appeal on merits. Accordingly, appeal of the assessee is allowed for statistical purpose.
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2021 (5) TMI 516
Disallowance of the claim incurred towards fees paid to Babson College, USA, for a management trainee - Assessing Officer disallowed this amount on the ground that the expenditure cannot be treated as research development expenses, there is no nexus between the expenditure of higher education for a management trainee and propagation of business of the assessee and the expenditure cannot be treated is business expenditure as it is incurred for future services to be obtained by the company.HELD THAT:- The genuineness of this agreement cannot be doubted in the absence of any adverse material. The fact is that, Mr. Karan Kanodia, is not related to any of the Directors of the assessee company. Mr. Karan Kanodia, is working for this company till date for more than a period of five (5) years after completion of his education and training on a small pay of ₹ 50,000/- p.m. only. As relying on M/S. GOURNITYE TEA INDUSTRIES LTD. VERSUS COMMISSIONER OF INCOME TAX CIRCLE I [ 2010 (6) TMI 764 - CALCUTTA HIGH COURT] Expenditure in question has to be allowed. Booking expenditure under a wrong head of expenditure cannot be a ground for disallowance. The expenditure was incurred for the purpose of business and hence the same is allowed. Appeal of the assessee is allowed.
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2021 (5) TMI 515
Assessment framed u/s 153A - unabated/ concluded assessments on the date of search in the absence of any incriminating material found during the search relating to such unabated assessment year - HELD THAT:- We find that the Hon ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] has already dealt with the issue under consideration. In the aforesaid case, it was held that in order to initiate a valid assessment proceeding u/s 153C of the Act, the seized document must be incriminating in nature and must relate to the Assessment Year whose assessment is sought to be reopened. Hence, if no incriminating material is found during the course of search in respect of an assessment year then the AO does not have any jurisdiction to invoke the provisions of section 153C of the Act. Thus it can be safely concluded that no addition/ disallowance could be validly made in the assessments framed u/s 153A of the Act in respect of concluded assessments on the date of search, unless any incriminating materials were found during the course of search relatable to such assessment year, enabling the ld AO to disturb the earlier stand taken by him in either in the intimation u/s 143(1) of the Act or in the scrutiny assessment u/s 143(3) of the Act, as the case may be - Decided in favour of assessee. Disallowance u/s 14A read with Rule 8D(2) under normal provisions of the Act - Mandation of recording of satisfaction - suo moto disallowance made by the assessee companies rejected - HELD THAT:- We are in complete agreement with the arguments advanced by the ld AR that the ld AO had not recorded any objective satisfaction with cogent reasons for rejecting the suo moto disallowance made by the assessee companies. The basis of suo moto disallowance of expenses u/s 14A of the Act was duly submitted before the lower authorities by the assessee companies. We find tha the ld AO had rejected the same and had simply stated that he is not satisfied with the suo moto disallowance made by the assessee, without adducing any reasons. Hence the decision of Hon ble Supreme Court in the case of Maxopp Investment [ 2018 (3) TMI 805 - SUPREME COURT] clearly supports the case of the assessee. Tribunal in the case of Arnav Gruh Ltd. vs. DCIT [ 2018 (1) TMI 782 - ITAT MUMBAI] wherein this Tribunal has held that Assessing Officer was not justified in making disallowance under s. 14A r/w r. 8D without recording his satisfaction as mandated under s. 14A of the Act read with Rule 8D(1) that the claim of assessee was not acceptable AO grossly erred in making disallowance u/s 14A of the Act read with Rule 8D(2) of the Rules without recording the mandatory satisfaction in terms of section 14A(2) of the Act read with Rule 8D(1) of the Rules. Hence the suo moto disallowance of expenses, wherever made by the assessee, voluntarily in the return of income alone would survive. Similarly, the principle of recording objective satisfaction with cogent reasons would squarely apply for cases falling under section 14A(3) of the Act also, where assessee claims that no expenditure was incurred for earning exempt income - Decided in favour of assessee. Disallowance u/s 14A while computing book profits u/s 115JB - HELD THAT:- We find that the ld CITA had deleted the disallowance u/s 14A of the Act while computing book profits u/s 115JB of the Act by following the order of the Special Bench of Delhi Tribunal in the case of ACIT vs Vireet Investments Pvt Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] - We find that the Special Bench of Delhi Tribunal in the case of Vireet Investments referred to supra had categorically held that the computation mechanism provided in Rule 8D(2) of the Rules would not apply for making disallowance in terms of clause(f) of Explanation (1) to section 115JB(2) of the Act. But it no where restricted the ld AO to identify the actual expenses incurred for the purpose of earning exempt income which has to be disallowed in terms of clause (f) of Explanation (1) to section 115JB(2) of the Act. We find that the assessee itself had made suo moto disallowance of expenses by identifying the actual expenses incurred thereon which were attributable for the purpose of earning exempt income. These expenses voluntarily disallowed by the assessee in the normal computation should be treated as actual expenditure and be considered for disallowance in terms of clause (f) of Explanation (1) to section 115JB (2) of the Act, wherever disallowance has been made by the assessee. But in the case of IIC Limited, there was no voluntary disallowance of expenses made by the assessee in the returns of income for the Asst Yea₹ 2014-15 and 2015-16. Hence we direct the ld AO to identify the actual expenditure incurred thereon, if any, for the purpose of earning exempt income in the similar fashion as was done in the case of other two assessee M/s. Rattanindia Power Limited for the Asst Yea₹ 2014-15 to 2017-18. In any case, the said disallowance shall not exceed the exempt income for the respective years. This would meet the ends of justice in our considered opinion. However, for the Asst Year 2013-14 in the case of IIC Limited, no disallowance u/s 14A of the Act could be made as it falls in unabated assessment year and we have already held that no incriminating material was found during search relatable to that assessment year. Addition towards cash found during the course of search u/s 69A - AO had contended that the bundles of money found at the Aerocity office had staples on them while RBI directives prohibited banks from stapling notes and thus the money was not earned through regular banking channels - HELD THAT:- These are absolutely irrelevant observations for the purpose of assessment of income under the Act. The department is not here to sermonise how a tax payer should keep its currency.What is relevant is whether the cash found during the course of search has been duly accounted by the assessee and its group companies sharing the common office. CIT-A had rightly appreciated the contentions of the assessee and granted relief to the assessee in respect of addition made u/s 69A of the Act in respect of cash found during the course of search - CIT(A) had rightly granted relief to the assessee in the instant case. Disallowance of write off of advance given to subsidiary - HELD THAT:- CIT(A) had granted relief by deleting the disallowance made on account of write off of irrecoverable business advance given to the subsidiary allowing it to be a business loss, on merits of the case. We find that the revenue had not raised any ground before us contesting the deletion of disallowance by the ld CIT(A) on merits. As we have already stated earlier, the assessee had not pursued the legal issue u/s 153A of the Act before the ld CIT(A) for the Asst Year 2014-15 and no relief has been granted by the ld CIT(A) on the same. Disallowance of alleged bogus expenditure on protective basis in the case of IIC Limited and disallowance of depreciation on alleged bogus expenditure capitalised on substantive basis - HELD THAT:- We find that the ld AO on one hand disallowed the entire purchases made by IIC Limited from the aforesaid 5 vendors as non-genuine purchases, spread over different assessment years as tabulated supra, on protective basis, and on the other hand, simultaneously disallowed the depreciation on such expenditure along with profit thereon, in the hands of Sinner Thermal Power Limited (formerly known as Rattanindia Nasik Power Limited) at the rate of 15% on substantive basis. We find that the nature and principle of the substantive and protective disallowance are also totally different. Hence the basic principles of substantive vs protective disallowance itself has been violated by the ld AO in the instant case. We find that a query was raised by the ld AO in terms of section 142(1) of the Act, which was duly replied by the assessee by filing voluminous documents with supporting evidences thereon. Thereafter the ld AO is bound to carry out inquiries on the said documents and evidences in terms of section 142(2) of the Act, which was admittedly not carried out in the instant case. Hence the applicability of provisions of section 142(3) of the Act does not arise in the instant case since no enquiries were conducted by the ld AO to test the documentary evidences submitted by the assessee. Therefore the question of any adverse material against the assessee does not arise. CIT-A had rightly deleted the disallowance of business expenditures made on protective basis in the hands of IIC Limited and had rightly deleted the disallowance of depreciation on such expenditure made on substantive basis in the hands of Sinner Thermal Power Limited (formerly known as Rattanindia Nasik Power Limited). Disallowance of business loss in the case of IIC limited - HELD THAT:- We hold that incurrence of long term capital loss on conversion of investment into stock in trade (which has been accepted by the ld AO in the assessment order itself) and incurrence of loss on sale of such stock in trade is to be treated as business loss and hence they are separate, independent and distinguishable events arising from a bonafide transaction. The said business loss cannot be treated as capital loss in the facts and circumstances of the instant case. Disallowance of deduction with respect to Preliminary expenses - HELD THAT:- We find that the assessee company had filed the chart showing details of preliminary expenses incurred together with its supporting evidences - preliminary expenses are incurred by the assessee company solely as fees for registering the company under the provisions of the Companies Act, 1956. We find that the law is amended after 31.3.1998 in the proviso to section 35D(1) of the Act which stipulates grant of deduction at the rate of 1/5th of expenditure incurred thereon. We find that this has been set right by the ld CITA by granting deduction in accordance with the amended law. Hence we do not find any infirmity in the said order of the ld CITA granting relief in this regard.
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2021 (5) TMI 513
Treating additional income earned on sale of shops as income u/s.69A - whether undisclosed income is business income or income from other sources - proportionate expenses claimed in profit and loss account in relation to undisclosed income - unaccounted income from sale of shops as deemed income u/s 69A of the Act instead of Business Income and denied set off of unabsorbed business loss/depreciation of the earlier years - HELD THAT:- Ld Counsel has submitted before us that assessee does not deal into any other business except of development of market to sell textile shops. We believe on the submission of ld Counsel, as assessee himself also during survey statement affirmed this fact, that said undisclosed income belongs to business. Therefore, we treat amount as undisclosed income of business. As partner has admitted to ₹ 7,20,00,000 as net income which is over and above regular business income of the firm FY 2009-10, relevant to assessment year 2010-11 . In view of the above admission, the amount of ₹ 7,20,00,000/- must have been offered separately in the computation of income under the head business income without claiming proportionate expenses. As per assessee the said undisclosed income of ₹ 7,25,03,689/-( ₹ 7,20,00,000 by sale of shops and ₹ 5,03,689 excess cash found during survey) is net of expenses, therefore the said income would be assessable under the head business income without deducting any expenses from it, however, as noted by us above, that assessee has claimed proportionate expenses, which is not acceptable. Therefore, we remit this issue back to the file of the assessing officer to exclude the proportionate expenses from the said undisclosed income and allow the assessee the benefit of set off of business loss/depreciation in accordance with law. The assessee is directed to file the detail of proportionate expenses claimed by him in profit and loss account in relation to undisclosed income. Appeal filed by the assessee is allowed for statistical purposes.
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2021 (5) TMI 512
Eligibility to deduction u/s 80P(2)(a)(i)/80P(2)(d) - assessee has earned interest income on investments made in fixed deposits with Saraswat Co-operative Bank Ltd. and Apna Sahkari Bank Ltd. - HELD THAT:- The Hon ble Supreme Court of India in the case of Totgars, Co-operative Sale Society Ltd. vs. ITO [ 2010 (2) TMI 3 - SUPREME COURT] has held that interest earned by assessee would come in category of 'Income from other sources' taxable under section 56 and would not qualify for deduction as business income under section 80P(2)(a)(i) of the Act. Similar view has been expressed by the Hon ble Gujarat High Court in the case of State Bank of India vs. CIT, [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] . In the light of aforesaid decisions, primary contention of the assessee is liable to be rejected. Therefore, ground No.1 of the appeal is dismissed. Deduction of interest income on investment with Co-operative Banks u/s 80P (2)(d) - whether interest income derived from deposits with cooperative banks is eligible for deduction under section 80P(2)(d) of the Act or not has not crystallised so far? - HELD THAT:- Coordinate Bench of the Tribunal in the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd[ 2018 (4) TMI 1678 - ITAT MUMBAI] after considering various decisions by Hon ble High Courts and the Tribunal and the provisions of the Act, has held that interest income derived by a co-operative society from investments with a co-operative bank, would be entitled for deduction under section 80P(2)(d). Following the decision of Totagars Co-operative Sale Society [ 2017 (7) TMI 1049 - KARNATAKA HIGH COURT] and SURAT VANKAR SAHAKARI SANGH LTD [ 2016 (7) TMI 1217 - GUJARAT HIGH COURT] the deduction claimed by the assessee under section 80P(2)(d) of the Act in respect interest derived from investments with the cooperative banks is allowed. We find merit in alternate contention raised by the assessee. Assessee is allowed the benefit of deduction under section 80P(2)(d) on the interest income earned from Cooperative Banks.
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2021 (5) TMI 511
Deduction u/s 80P(2)(d) - assessee inter-alia earned interest income from Co-operative Banks - Whether the assessee is eligible for the benefit of deduction u/s. 80P(2)(d) of the Act on interest income from Co-operative Banks? - conflicting decisions - HELD THAT:- No judgement by the Hon ble Jurisdictional High Court on this issue was brought to our notice. The Hon'ble Bombay High Court in the case of K. Subramanian vs. Siemens India Ltd. [ 1983 (4) TMI 3 - BOMBAY HIGH COURT] has held that when two conflicting decisions of non-jurisdictional High Courts are available, the view that favours the assessee is to be preferred. Accordingly, following the decision of Hon'ble Karnataka High Court in the case of Totagars Co-operative Sale Society [ 2017 (7) TMI 1049 - KARNATAKA HIGH COURT] and case of Vankar Sahakari Sangh. [ 2016 (7) TMI 1217 - GUJARAT HIGH COURT] we answer the first question in affirmative. Thus, we hold that the assessee is eligible to claim deduction under section 80P(2)(d) of the Act in respect interest income on fixed deposits with the cooperative banks. Computation of deduction u/s. 80P(2)(d) - Whether the assesses claim of deduction u/s. 80P(2)(d) of the Act can be accepted on the bases of revised computation of income? - HELD THAT:- In the present case, the assessee had reflected interest income in the Balance Sheet. Drawing analogy from decisio RAMCO INTERNATIONAL [ 2008 (12) TMI 413 - PUNJAB AND HARYANA HIGH COURT] we hold that the assessee s claim of deduction u/s. 80P(2)(d) was not a fresh claim, the details were already available on record. It is pertinent to mention here that no separate form or certificate is required to be filed for claiming deduction u/s.80P. By filing revised computation of income, the assessee merely regularised its claim of deduction. Thus, in peculiar facts of the case, we answer second question in favour of the assessee. However, we restrict the assessee s claim of deduction u/s.80P(2)(d) of the Act to the extent of interest income from Cooperative Banks only.
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2021 (5) TMI 510
Revision u/s 263 - assessee s case selected for limited scrutiny under CASS - AO not conducting any enquiry on the issue of Insurance Premium (Keyman Policy) - HELD THAT:- PCIT could not have exercised his revisional jurisdiction on the issue on which he found fault with the action/omission on the part of AO because in the first place the AO could not have been faulted for not conducting any enquiry on the issue of Insurance Premium (Keyman Policy) since the assessee s case was selected for scrutiny only for limited purpose under CASS and the issue of Insurance Premium (Keyman Policy) was not the reason for selection of the case for limited scrutiny. As per the CBDT circular AO could not have initiated enquiry on the issue of Insurance Premium (Keyman Policy) of ₹ 10,00,000/- and it is settled law that CBDT circulars are binding on income tax authorities. Therefore in such a scenario, the Ld. PCIT could not have invoked jurisdiction u/s 263 of the Act because he could not have held the AO s order to be erroneous because the AO was justified in not enquiring in to the issue of Insurance Premium (Keyman Policy) since the AO has gone as per the dictum of CBDT circular on the subject. Therefore, the AO s action/ omission of not looking into the issue of Insurance Premium (Keyman Policy) cannot be termed as erroneous. - Decided in favour of assessee.
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2021 (5) TMI 509
Computation of deduction u/s 10A - authorities below upheld exclusion of other income, while computing deduction - HELD THAT:- As perused the order relied by the CIT.DR, she placed specific reference wherein interest income earned on fixed deposits made for obtaining credit facility was considered by assessee to be eligible for deduction under section 10A of the Act. This Tribunal while considering the issue upheld the computation of 10A deduction made by assessee, wherein such income was included as eligible for deduction under section 10A. We note that this view nowhere assist the revenue. In any event this issue needs to be remanded to the Ld.AO for due verification of evidences filed by assessee. We therefore direct the Ld.AO to verify the details filed by assessee and to consider the claim in accordance with law. Neeedless to say that proper opportunity of being heard should be granted to assessee in accordance with law. Foreign exchange gain as excluded from the export turnover but not from the total turnover for the purposes of 10A deduction - HELD THAT:- Admittedly this issue now is stands squarely settled by the decision of Hon ble Supreme Court in case of HCL Technologies Ltd.[ 2018 (5) TMI 357 - SUPREME COURT] - as been submitted that foreign exchange gain is excluded from export turnover, should also be excluded from the total turnover for computing deduction under section 10A of the Act. We accordingly direct the Ld. AO to compute the deduction is in accordance with the ratio laid down by Hon ble Supreme Court in case of HCL Technologies Ltd. (supra). Neeedless to say that proper opportunity of being heard should be granted to assessee in accordance with law. Adjustment of unbilled revenue - AR submitted that Ld.AO reduced the said sum towards unrealised export sales from export turnover for computing 10 A deduction, but did not reduce the same from total turnover - On the objections being raised before the DRP, the DRP directed the Ld. AO to verify the same - HELD THAT:- We note that the Ld.AO failed to follow the directions of DRP and therefore, this issue needs to be remanded to the file of Ld.AO. The Ld.AO shall verify the details filed and consider the claim of assessee in accordance with law
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2021 (5) TMI 508
Addition u/s 36(1)(iii) - deduction towards interest paid on loans borrowed for business purposes - HELD THAT:- There is no merit in the findings of the AO, because the assessee has filed rental agreement copy to prove that it has taken premises on rent by paying lease rental deposit to Mr. G.Ramesh on a monthly rental of ₹ 75,000/- and such rent shall commence from 01.04.2013. The assessee has also produced necessary evidence to prove that it has started paying rental for the premises from next financial year. Assessing Officer has not disputed rental agreement entered into between the assessee and Mr. G.Ramesh, but he has disallowed interest only on the ground that although, rental agreement has been entered into by paying deposit, but no rental payment has been made for the current financial year. We find that reasons given by the AO to disbelieve rental agreement between the parties is not on sound footing, because it is for the parties to decide from which date rental payment shall commence. Merely for the reason that there is no rental payment for current financial year, genuine rental agreement and consequent rent advance paid cannot be considered as diversion of funds for non-business purposes so as to disallow interest expenses paid on loan borrowed for the purpose of business. But, the learned CIT(A) without appreciating the facts simply confirmed additions made towards disallowance of interest expenses. We set aside the order passed by the learned CIT(A) and direct the Assessing Officer to delete additions made towards disallowance of proportionate interest u/s.36(1)((iii) - Appeal filed by the assessee is allowed.
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2021 (5) TMI 507
Disallowing expenses exclusively for business purpose - disallowance of interest - assessee has paid interest on OD limit from Bank of Baroda - HELD THAT:- The assessee has utilized OD limit jointly held with Shri Satbir Singh for the purchase of business assets. There are two entities namely Regent Grand and Regent Continental, the EMI has been paid from Regent Continental which was wrongly debited to Satbir Singh capital account upto 31.03. 2012. The interest paid by the assessee has to be given benefit of deduction unless found contra. We in principle hold that the assessee is eligible to file revised computation which has to be given due consideration by the revenue authorities. The matter is referred to the file of the Assessing Officer for verification of the facts to examine the claim of the assessee with regard to the loan availed, interest paid and if the interest has been debited to capital account of Shri Satbir Singh or not by going through the bank statements. Disallowance of 20% of the expenses - disallowance was made by the revenue authorities on the basis that the appellant was unable to file complete bills/vouchers and other details, such as log books, and other documentary evidence to support the expenses - also been pointed out by the AO that some expenses have been incurred in cash and there are hand written and self- made vouchers - CIT (A) held that there is always possibility to inflate the expenditure on the basis of self- made vouchers which we are unable to accept - HELD THAT:-As gone through the assessment order and the reason given by the Assessing Officer that the expenses are neither fully vouched nor fully verifiable. The AO did not bring on record as to what enquiries he wanted to conduct for verification of the vouchers. No disallowance is warranted owing to non-verification of the vouchers produced by the assessee. With regard to the expenses for which no vouchers have been produced, the assessee is hereby given another opportunity to produce all the bills and vouchers before the revenue authorities. Appeal of the assessee allowed for statistical purposes.
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2021 (5) TMI 506
Nature of land - Failure to treat padat bhoomi (barren land) as non-agricultural land - agricultural land OR capital asset within the meaning of section u/s.2(14) - HELD THAT:- We are of the opinion that the assessee is entitled for exemption u/s.2(14) of the Act as claimed by the assessee. Ld. DR also could not controvert the findings recorded by the CIT(A) in this regard by bring any cogent material on record. Accordingly, we do not see any good reason to interfere with the observations made by the CIT(A) deleting the addition made by the AO. Thus, we dismiss the grounds raised by the revenue. Consequently, appeal of the revenue is dismissed.
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Corporate Laws
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2021 (5) TMI 525
Siphoning of funds - collection of money from the public issue by publishing prospects in the year 1994 by the directors and promoters of the Company - petitioner was professional director - It is the case of the petitioner that being professional director of the Company, the petitioner was not responsible for day-to-day transactions including the financial transactions of the Company - HELD THAT:- The contentions raised on behalf of the respondents are required to be rejected as it is not in dispute that the petitioner was appointed as a professional director of the company in the year 1994 and in view of the facts which are emerging from the record, the impugned complaint filed by the respondent no.2 is also not sustainable as the petitioner being professional director is not involved into day today affairs of the company and there is no material on record to even suggest that the petitioner availed any benefit in capacity of professional director of the company. Therefore, the averments made in the complaint on its face value do not disclose any ingredient of the alleged offence under Sections 403, 406, 409, 415, 418, 420, 424, 120 B and 114 of the Indian Penal Code so far as the petitioner is concerned and therefore, considering the bare averments made in the complaint, the same deserves to be quashed and set aside qua the petitioner and accordingly same is hereby quashed and set aside. Application allowed.
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Insolvency & Bankruptcy
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2021 (5) TMI 514
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - suit for for supplying inferior quality of goods to the applicant - existence of debt and dispute or not - HELD THAT:- The main objection raised by the respondent (point No. 3 -page 4 to the reply) is that the petitioner firm had filed a suit No. 3201 of 2019, on 03.12.2019, before the Hon'ble Judge of Bombay Civil Court against one Amivarsha Industries for supplying inferior quality of goods to the applicant, which, in turn, would have been supplied to the respondent company - Such plea raised by the respondent cannot be considered as a pre-existing dispute, because the said dispute is between the applicant and a third party viz. Amivarsha Industries and it has nothing to do with the respondent. Similarly, any dispute between the applicant and a third party regarding quality, quantity and nonpayment to the third party Amivarsha Industries cannot be considered as a reason for non-payment of the debt of the applicant by the respondent. The Adjudicating Authority is only required to consider whether there is any default and the debt is due and payable. In the instant case, the applicant has placed on record enough documents evidencing the default and hence, the present application deserves to be admitted - On perusal of the record it is also found that the instant petition filed by the applicant is well within limitation and there is no pre-existing dispute regarding the operational debt from the side of the corporate debtor. In the instant application, from the material placed on record by the Applicant, this Authority is satisfied that the application is complete in all respect and the Corporate Debtor committed default in paying the operational debt due and payable to the Applicant - The documents produced by the operational creditor clearly establish the 'debt' and there is default on the part of the Corporate Debtor in payment of the 'operational debt'. This adjudicating authority is of the considered view that operational debt is due to the Applicant and it fulfilled the requirement of I B Code. No dispute has been raised by the respondent at any point of time. That, Applicant is an Operational Creditor within the meaning of Section 5 sub-section 20 of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default and the amount claimed by operational creditor is payable in law by the corporate debtor as the same is not barred by any law of limitation and/or any other law for the time being in force. The corporate debtor has committed default in payment of operational debt and, therefore, it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - Application admitted - moratorium declared.
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PMLA
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2021 (5) TMI 530
Jurisdiction - power of Special Courts constituted under Section 43 of the PMLA to try an offence punishable under the PC Act - HELD THAT:- Both, the PC Act as well as PMLA, are in one sense special enactments. The PC Act was enacted to consolidate and amend the law related to prevention of corruption and for all matters connected therewith. It specifies the offences as well as the penalties that can be imposed. The PC Act also contains special provisions with regard to investigation of cases under the PC Act as well as contains provisions regarding the procedure to be followed. In terms of Section 22 of the PC Act, the Cr.PC would be applicable subject to the modifications as specified therein - The principle that a special act overrides a general act is not applicable in the present case. PC Act and PMLA are both special statutes in their own fields. Both relate to different offences and none of the two enactments can be considered as general or special in relation to the other. Thus, the question whether the provisions of Section 44(1)(a) and Section 44(1)(c) of the PMLA have to be given effect to despite being repugnant to Section 4(1) of the PC Act must be considered keeping in view other principles. The purpose and objective of including provisions to ensure that the Special Courts under the PMLA also have the jurisdiction to try scheduled offences is obvious when one examines the nature of the offence of money laundering. The said offence is described in Section 3 of the PMLA, which provides that whoever directly or indirectly attempts to indulge or knowingly assists or is otherwise party in any process or activity connected with proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as an untainted property, shall be guilty of committing an offence of money laundering. It is not necessary that persons accused of committing an offence of money laundering be also accused of committing the predicate scheduled offence. Nonetheless, the said accused cannot be convicted of committing an offence of money laundering unless the existence of a scheduled offence is established. In cases where the allegation of commission of an offence of money laundering against a person is founded on the allegation that he had committed a scheduled offence; it would follow that he cannot be convicted of an offence of money laundering, unless it is established that he is guilty of committing the predicate scheduled offence. The link between the offence of money laundering and the predicate scheduled offence is inextricable. In such circumstances, it stands to reason that in a given case, it would be expedient if the same Court tries the scheduled offence as well as the offence for money laundering in the interest of consistency and to avoid any possible conflict of opinion. The contention that cases relating to scheduled offences punishable under the PC Act (as specified in Paragraph 8 of Part A of the Schedule to the PMLA) cannot be tried by the Special Courts designated under the PMLA, which are trying the interlinked offence punishable under Section 4 of the PMLA, for want of jurisdiction to do so, cannot be accepted - there is no ambiguity in the language of Section 44(1)(c) of the PMLA. The concerned court, which is trying the scheduled offence, is required to transfer the same to the Special Court designated under the PMLA, on an application moved by the authority, authorised to make a complaint under the PMLA. This is provided that the said Special Court has taken cognizance of the offence punishable under the PMLA. This Court finds no infirmity with the impugned order - petition dismissed.
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CST, VAT & Sales Tax
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2021 (5) TMI 527
Levy of Sales Tax - sale of articles like food and drinks sold to customers in 3 Star, 4 Star and 5 Star hotels as recognized by(Classified or approved by) the Tourism Department - Relevant documents produced or not - violation of principles of natural justice or not - HELD THAT:- The issue as to whether the petitioner had indeed collected tax from the guests visiting the petitioner's hotels or not has to be decided on merits on production of relevant documents including the manner in which the amounts had been shown in the returns filed before the Income Tax Department. Since this exercise has not been carried out by the Special Commissioner and Commissioner of Commercial Taxes/1st respondent herein, the impugned order passed is liable to be interfered on the ground of violation of Principles of Natural Justice. The 1st respondent/Special Commissioner and Commissioner of Commercial Taxes ought to have heard the petitioner before passing the aforesaid order. Therefore without expressing any opinion on the merits of the case as to whether the petitioner was entitled to waiver, the case remitted back to the 1st respondent/Special Commissioner and Commissioner of Commercial Taxes or any officer competent to consider the petitioner's request for waiver after considering the applicability of the above Government Orders - petition allowed by way of remand.
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2021 (5) TMI 526
Suo motu revisional power - restoration of order of assessment passed by the first respondent - CST Act - assessment year 1994-95 - whether the goods were sold in the other States/UTP in the same transport carrier and would it tantamount to a case of inter-state sales and not that of a branch transfer? - HELD THAT:- An identical issue was considered by the Hon'ble Division Bench of this Court in the case of STATE OF TAMIL NADU VERSUS PMP. IRON AND STEEL INDIA LIMITED AND ANOTHER [ 2009 (11) TMI 856 - MADRAS HIGH COURT] wherein it was held that the mere fact that the goods dispatched by the assessee and received by the agents have been sold on the very same date after their arrival or the next day itself could not be a reason to hold that the transactions were interstate sales. In the said case, the assessee produced before the Appellate Authority the copies of sale pattials, invoices rendered by the agents as well as the excise gate pass and the above said documents clearly proved that the transactions were consignment sales as held by the Appellate Authority. The order passed by the First Appellate Authority dated 25.7.1997 is restored - Petition allowed.
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Indian Laws
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2021 (5) TMI 531
Disciplinary proceedings against Chartered Accountant (CA) - Initiation of parallel proceedings to challenge the sanction of merger by Karnataka High Court - case of petitioner is that petitioner is a public spirited citizen and has noticed that the reports that were submitted to the Karnataka High Court were not correct and accordingly filed a complaint before the Institute of Chartered Accountants of India for taking disciplinary action against respondent No. 3 - HELD THAT:- Since the petitioner has no connection or locus and in fact counsel for the petitioner has himself sought to challenge the scheme of merger which was rejected by the Karnataka High Court by its order dated 17.03.2021, there are no ground to permit petitioner to start parallel proceedings to challenge a scheme of merger which has been sanctioned by the Karnataka High Court, before this Court or indirectly challenge the same by way of asking the Institute of Chartered Accountants to return a finding on the reports submitted by respondent No.3 before the Karnataka High Court and acted upon by it. There are no infirmity in the view taken by the Disciplinary Committee of the Institute of Chartered Accountants that as respondent No.3 was appointed by Karnataka High Court and reports were submitted to the Karnataka High Court, it is only the High Court of Karnataka, which could take a view on the reports submitted by respondent No.3. The Petition is dismissed with costs, which is quantified at ₹ 50,000/-.
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