TMI Tax Updates - e-Newsletter
June 2, 2022

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Central Excise CST, VAT & Sales Tax

Highlights / Catch Notes

• GST:

  Exemption from CGST/SGST - Healthcare services provided to business entity - composite supply or not - supply of Occupation Health Checkup Service by the hospital i.e. nursing staff, Doctors, Paramedical staff on hospital’s payroll working in different corporate for providing health check-up services, ambulance facility and allied medical services to their employees and also the camps conducted for health check-up outside the hospitals to be treated as Health Care Service and exempted under GST - AAAR
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• Income Tax:

  Reopening of assessment - Notice issued u/s 148A(b) - By not considering the reply of the Petitioner dated 31st March, 2022, the mandate of Section 148A(c) of the Act has been violated as it casts a duty on the Assessing Officer, by using the expression ‘shall’, to consider the reply of the petitioner/assessee in response to notice under Section 148A(b) of the Act before making an order under Section 148A(d) of the Act. - orders are quashed and the matter is remanded back to the Assessing Officer for a fresh determination. - HC
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• Income Tax:

  Compounding of offence u/s 279 - evasion of tax - petitioner failed to file returns of income without reflecting the investment in the form of bank balance in a foreign bank account - by prosecuting a septuagenarian, who is also an industrialist will serve no purpose. The petitioner entitled for buying a peace subject to his agreeing to pay the compounding fee that may be imposed by the fourth respondent. The petitioner has been sufficiently dealt for his past dalliances by the respondent. - this was a fit case for compounding the offence considering the age of the petitioner and considering the fact that the petitioner has paid the tax interest and penalty - HC
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• Income Tax:

  Addition u/s 41(1) - non-confirmation of credit by the creditors - The existence of liability is purely a matter of fact. Proposition of law is well settled that where a party is expected to be in possession of evidence but fails to produce the same, an adverse inference has to be drawn. - HC
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• Income Tax:

  Reopening of assessment u/s 147 - extension of period of limitation from 6 years to 10 years - In plain terms a notice which had become time barred prior to 01.04.2021 as per the then prevailing provisions, would not be revived by virtue of the application of Section 149(1)(b) effective from 01.04.2021. All the notices issued in the present cases are after 01.04.2021 and have been issued without following the procedure contained in Section 148A of the Act and are therefore invalid. - HC
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• Income Tax:

  Addition u/s 68 - unexplained cash credit - share application money receipts - Even though there were circumstances leading to suspicion, yet having taken an action u/s.132 and enquiries made in the assessment proceedings, the assessing authority had not brought any positive material or evidence to indicate that share application money as such represented assessee’s own undisclosed money brought back in the garb of share capital. Merely because of his subjective satisfaction that source of availability of money with the shareholder or their creditworthiness were not established, the AO could not treat the genuinely raised share capital as deemed income u/s.68. - AT
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• Income Tax:

  Nature of income - Income from other sources - interest income received u/s. 28 of Land Acquisition Act, 1984 as taxable u/s 56(2)(viii) r.w.s. 145A(b) - Scope of amended principles - The assessee could hardly rebut the fact that the foregoing statutory provision in fact makes both interest on compensation as well as on enhanced compensation deemed as income of the year in which it is received whereas the assessment year before their lordships was 1999-2000 only. We thus hold that the CIT(A) has rightly affirmed the assessment findings assessing the impugned interest income in assessee’s hands. - AT
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• Income Tax:

  Assessment u/s 153A - on-money in land transaction - simply because the buyer did not say anything about the ‘on money payment’, statement of the assessee in the absence of any contrary evidence can’t be rejected. The AO has made the addition u/s 68 of the Act. This Section applies when any sum is found credited in the books of accounts, source of which is not explained to the satisfaction of the AO. Noting on a paper can’t be said to be an entry in the books of accounts. -additions deleted - AT
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• Income Tax:

  Rejection of books of accounts - estimation of sales - the recording of the statement by survey team under section 131(1) is not valid. Thus, no cognizance of such statement could be taken. Hence, the addition which is also based on the statement is not legally sustainable. In view of the aforesaid factual and legal discussions, we hold that rejection of books of accounts was not valid and further no such estimation of rate of plot which is based on the statement of partner and accountant is not legally sustainable in absence of other corroborative evidence on record. - AT
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• Income Tax:

  Revision u/s 263 by CIT - AO offered the income arising on purchase and sale of shares as business income and duly accepted by the Assessing Officer, the realignment of income proposed in a revisional proceeding is not backed by any cogent basis and is in the realm of surmises. The assessee has paid taxes at the normal rate on such income, and therefore, no prejudice can be attributed to the interest of the Revenue merely because the higher rate of tax can be charged under Section 115BBE. - Tri
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• Customs:

  Revocation of Customs Broker License - exporters have fraudulently availed excess ITC, by receiving the goods at inflated prices from their supplier - The enquiry officer has more reasonably concluded in the matter, and the appellant CB can at the most be held guilty for contravention of the Regulation 10 (n). Various High Courts have held that punishment for the offences should be proportionate to the gravity of offence. In the present it is not found that appellant was in any way responsible for any act of misconduct but is vicariously responsible for the acts of their employees, hence the punishment of revocation of licence is much harsh and disproportionate to the offences committed. - AT
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• IBC:

  Initiation of CIRP - period of limitation - whether the issuance of Recovery Certificate would not trigger the right to sue. - A liability in respect of a claim arising out of a Recovery Certificate would be a “financial debt” within the meaning of clause (8) of Section 5 of the IBC. Consequently, the holder of the Recovery Certificate would be a financial creditor within the meaning of clause (7) of Section 5 of the IBC. As such, the holder of such certificate would be entitled to initiate CIRP, if initiated within a period of three years from the date of issuance of the Recovery Certificate. 85 - the application under Section 7 of the IBC was within limitation and the learned NCLAT has erred in holding that it is barred by limitation. - SC
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• IBC:

  CIRP - Validity of order of NCLT admitting the application, bearing the signature of one member only -Pronouncement of the order in accordance with Rule 151 and 152 of the NCLT Rules or not - Present is the case where the Technical Member was to be available after a couple of weeks to sign the order and with his consent the order was pronounced. There is no occasion for application of Rule 152(4). - AT
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• IBC:

  Quantification of CIRP cost - monthly fees payable to the Applicant under the Service Agreement - This Tribunal has clearly laid down that findings on questions of fact, how-so-ever erroneous cannot be allowed to be questioned. However, mistake which have due to oversight, inadvertence or human error can be corrected. Further it was held that it would be open to correct the conclusion if the same is not compatible with the finding recorded on the issues raised. - AT
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• IBC:

  CIRP - Company/ corporate debtor under liquidation - non-receipt of limited notice or receipt of defective limited notice - Personal Guarantor - whether the Demand Notice issued by the Respondent Bank is defective? - the stage of admission of the Application has not yet come and at that stage, the Appellant can raise all the objections before the Adjudicating Authority opposing the admission of the said Application. Needless to add, the Adjudicating Authority will consider the pleas and pass Orders under Section 100 in accordance with law. - AT
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• Central Excise:

  Admissibility of CENVAT Credit - capital goods used for setting up, erection and commissioning of the power plant - There are no merits in the submissions of the Revenue that just because for some time in the initial stages of installing and commissioning of the plant, the respondents had supplied electricity to MSEDCL on commercial basis from their captive power plant the same can be a reason for denial of the cenvat credit in respect of the Capital Goods used for setting up the Captive Power Plant. - AT
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• VAT:

  Refund/Reimbursement of the local tax paid - Intra-State purchase of declared goods - entitlement to refund is subject to the condition that CST is paid on inter-State sale of such declared goods - is stated that under the law in force in the State of Assam, no such manner has been provided as to how the amount has to be reimbursed. - the authorities concerned shall pass a reasoned order on the claim for reimbursement purely on the merits of the claim of the petitioner within a period of two weeks - HC
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TMI Short Notes

• Customs:

  Understanding "seizure" with respect to jurisdiction under the Customs Act, 1962.

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• Indian Laws:

  A study of the compounding of offences under section 147 of the Negotiable Instruments Act, 1881 at the stage of appeal as well as revision.

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Articles

• Know Your Fundamental Rights- Arrests in GST and Provisions in Indian Constitution

Notifications

• Companies Law

• G.S.R. 407(E) - dated 31-5-2022 - Co. Law
  Companies (Accounts) Third Amendment Rules, 2022 - for the preceding financial year (2020-2021), Form CSR-2 shall be filed separately on or before 30th June, 2022, after filing Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be

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• Customs

• 18/2022 - dated 31-5-2022 - ADD
  Seeks to further extend the levy of ADD on Jute products originating in or exported from Nepal and Bangladesh.

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• 48/2022 - dated 31-5-2022 - Cus (NT)
  Exemption of deposits u/s 51A (4) of the Customs Act, 1962 - Payments through electronic cash ledger - Change in effective date of notification - Seeks to amend Notification No. 19/2022-Customs (N.T.) dated the 30th March 2022.

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• 47/2022 - dated 31-5-2022 - Cus (NT)
  Exemption to deposits from the provision of Section 51A of the Customs Act - Exemption from Payments through Electronic Cash Ledger and Electronic Duty Credit Ledger.

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• 46/2022 - dated 31-5-2022 - Cus (NT)
  Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver

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• DGFT

• 12/2015-20 - dated 1-6-2022 - FTP
  Alignment of Appendix 4R with the Finance Act, 2022 with effect from 01.05.2022 - eligible RoDTEP export items, rates and per unit value caps, wherever applicable is available

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• GST - States

• S.R.O. No. 524/2022 - dated 27-5-2022 - Kerala SGST
  Corrigendum - Notification No. 33/2022/TAXES dated 31st March, 2022

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• S.O. 32/P.A.5/2017/Ss.50 and 148/Amd./2022 - dated 26-4-2022 - Punjab SGST
  Amendment in Notification No. S.O. 24 /P.A.5/2017/Ss.50, 54 and 56/ 2017, dated the 30th June, 2017

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• S.O. 31/P.A.5/2017/S.128/Amd./2022 - dated 26-4-2022 - Punjab SGST
  Amendment in Notification No. S.O.61/P.A.5/2017/S.128/ Amd./2019, dated the 9th May, 2019

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• 372/2022/02(120)/XXVII(8)/2022/CT-04 - dated 26-5-2022 - Uttarakhand SGST
  Seeks to amend Notification No. 284/2019/4(120)/XXVII(8)/2019/CT-14 dated 09th April, 2019

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• 320/2022/01(120)/XXVII(8)/2022/CT-01 - dated 4-5-2022 - Uttarakhand SGST
  Amendment in Notification No. 330/2020/5(120)/XXVII(8)/2022/CT-13 dated the 20th May, 2020

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• Income Tax

• 58/2022 - dated 31-5-2022 - IT
  U/s 10(46) of IT Act 1961 - Central Government notifies, ‘National Biodiversity Authority’ an Authority established under the Biological Diversity Act, 2002

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• 57/2022 - dated 31-5-2022 - IT
  Income-tax (Sixteenth Amendment) Rules, 2022

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Circulars / Instructions / Orders

• Customs - Instruction No.07/2022 - dated 31-5-2022
  Regulation regarding export of raw, white and refined sugar under OGL in the current sugar seasons 2021-22 (Oct-Sept.)

News

• Addition of 6% tax rate in GSTR-1 online

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• ₹1,40,885 crore gross GST Revenue collection for May 2022; increase of 44% year-on-year

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• Cabinet approves Expanding the mandate of Government e Marketplace - Special Purpose Vehicle (GeM - SPV) to allow procurement by Cooperatives as Buyers

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Case Laws:

• GST

• 2022 (6) TMI 34
  Exemption from CGST/SGST - Healthcare services provided to business entity - composite supply or not - supply of medicines, surgical items, implants, consumables and other allied services items provided by the hospital through their hospital in-house pharmacy, as well as food, room rent, other services to the in-patients - supply of Occupational Health Check-up (OHC) service by the hospital i.e. nursing staff, Doctors, Paramedical staff on hospital s payroll, working in different corporate for providing health check-up service, ambulance facility, and allied medical services to their employees and also the camps conducted for health check-up outside the hospitals - HELD THAT:- It is clear that objective of medical examination is diagnosis. The definition of diagnosis, as per Cambridge dictionary means a judgement about what particular illness or problem is, made after examining and as per freedictionary.com is the act of process of identifying or determining the nature and cause of a disease or injury through evaluation of patient s history, examination and review of laboratory data, are broad enough to include occupational health check ups within the meaning of word diagnosis. Further, occupational health check-ups provide preventive care which falls in the scope of the word care - As per Entry at Sr. No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017-State Tax (Rate) dated 30.06.2017 Health Care Services must be supplied by clinical establishment, an authorized medical practitioner or para-medics and these services are not limited to specified or particular conditions, diseases or anatomical reasons as well as these services can be provided in general practitioner s practices and also delivered by outpatient clinics, at home, in firms, schools etc or by phone, internet or other means. In view of definition of Health Care Services, it is clear that there is no disparity when provided by a clinical establishment to a patient inside the clinical establishment or outside the said establishment. The supply of Occupation Health Checkup Service by the hospital i.e. nursing staff, Doctors, Paramedical staff on hospital s payroll working in different corporate for providing health check-up services, ambulance facility and allied medical services to their employees and also the camps conducted for health check-up outside the hospitals to be treated as Health Care Service and exempted under GST in terms of Entry at Sr.No.74 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017-State Tax (Rate) dated 30.06.2017, as amended.

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• Income Tax

• 2022 (6) TMI 33
  Reopening of assessment - Notice issued u/s 148A(b) - as argued no opportunity for personal hearing was provided to the Petitioner Petitioner states that approval under Section 151 of the Act has only been taken for passing the order under Section 148A(d) of the Act and not for issuance of notice under Section 148 - HELD THAT:- Reassessment in the present case was sought to be initiated merely for verification. This Court is of the view that even if the reassessment was being done for verification in accordance with Explanation 1 to Section 148, nothing prevented the AO from conducting an enquiry with respect to the said information in accordance with Section 148A(a) of the Act. In any event, it was all the more necessary in the present case for the AO to thoroughly scrutinise the contentions and submissions advanced by the petitioner-assessee before passing an order under Section 148A(d) of the Act. This Court is of the view that since the impugned order under Section 148A(d) of the Act had been passed on 31st March, 2022 i.e. after receipt of the detailed reply by the Petitioner dated 24th March, 2022, the AO should have considered the same as it was available with him/her on record. By not considering the reply of the Petitioner dated 31st March, 2022, the mandate of Section 148A(c) of the Act has been violated as it casts a duty on the Assessing Officer, by using the expression shall , to consider the reply of the petitioner/assessee in response to notice under Section 148A(b) of the Act before making an order under Section 148A(d) of the Act. This Court is also of the opinion that significance of issuance of a show cause notice at a stage prior to issuance of a reassessment notice under Section 148 of the Act has been lost on the Respondents.Consequently, this Court is of the opinion that a progressive as well as futuristic scheme of reassessment whose intent is laudatory has in its implementation not only been rendered nugatory but has also had an unintended opposite result. Consequently, the impugned order dated 31st March, 2022 issued under Section 148A(d) of the Act and the notice dated 31st March, 2022 issued under Section 148 of the Act are quashed and the matter is remanded back to the Assessing Officer for a fresh determination. The Assessing Officer is directed to pass a fresh reasoned order under Section 148A(d) of the Act after considering the Petitioner s detailed reply dated 24th March, 2022 in accordance with law within eight weeks. In the event the Assessing Officer wants certain clarification or would like the petitioner s response to any specific information received by the revenue, it shall be at liberty to give a supplementary notice.

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• 2022 (6) TMI 32
  Reopening of assessment - notice u/s 148A on the basis of information available i.e. 'purchase of immovable property more than 20,00,000/-' - Need to file personal affidavits - HELD THAT:- As from the facts as mentioned in our order [ 2022 (5) TMI 1390 - ALLAHABAD HIGH COURT] of the personal affidavit of the respondent No.2 afore-quoted, it is clear that the impugned order passed by the respondent No.3 was patently erroneous and grossly illegal, which also reflects abuse of power by the concerned officers. Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes has issued instructions/ Circular F.No.225/101/2021-ITA-II on 23.04.2022, which was followed by a personal affidavit of the Revenue Secretary on behalf of Union of India. As prima facie, the impugned order dated 31.03.2022 under Section 148A(d) passed by the respondent No.3 appears to attract the aforesaid circular and required action as per personal affidavit on behalf of the Union of India. Therefore, we direct the respondent No.1 to ensure that appropriate proceeding in accordance with law is initiated against the erring officers. Considering the facts and circumstances of the case and the statement made by the respondent No.2 in paragraph-7 of the personal affidavit, the impugned order under Section 148A(d) of the Income Tax Act, 1961 for the Assessment Year 2018-19 passed by the respondent No.3 and the impugned notice under Section 148 are hereby quashed. The writ petition is allowed.

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• 2022 (6) TMI 31
  Reopening of assessment - Notice under Section 148A(d) - interest income derived from Non-Convertible Debentures [ NCDs ] floated by Genpact India Pvt. Ltd. [ GIPL ] had not been appropriately offered to tax due to mischaracterization of income - HELD THAT:- Issue notice. Mr.Puneet Rai, learned standing counsel accepts notice on behalf of the respondents. He states that the petitioner knew the stand of the Respondents-Revenue as a draft assessment order u/s 144C of the Act has already been passed in petitioner s case for the Assessment year 2017-18 on 30.09.2021, in which similar allegations had been made by the Revenue and the said income had been categorized as Income from Other Sources falling under Article 22 of the Double Taxation Avoidance Agreement between India and Luxembourg. In rejoinder, learned senior counsel for the petitioner states that in the impugned order issued under Section 148A(d) of the Act, the income of the petitioner in question seeks to be categorized as dividend income for the first time, which, in any event, would be exempt in the hand of the petitioner/assessee and the liability to pay the dividend distribution tax, if any, would be on the payer i.e. GIPL. This Court is of the view that the matter requires to be examined. Let a counter affidavit be filed by learned counsel for the respondents-Revenue within six weeks. Rejoinder affidavit, if any, be filed before the next date of hearing. List on 01st September, 2022.

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• 2022 (6) TMI 30
  Compounding of offence u/s 279 - petitioner is being prosecuted under Sections 276C and 277 of the Income Tax Act pursuant to proceedings initiated under Section 148 wherein as held that the petitioner had willfully and deliberately failed to file returns of income without reflecting the investment in the form of bank balance in a foreign bank account, thereby, attempted to evade tax - whether the fourth respondent was justified in dismissing the compounding application filed by the petitioner under Section 279 particularly after order passed by the learned Single Judge was not appealed by the respondents? - HELD THAT:- As per para 4.4 (g) of Circular in F.No.285/90/2008-IT (Inv.)/12 dated 16 th May, 2008, cases are not to be compounded if CCIT/DGIT considers any other ground relevant for not accepting the compounding petition, in view of the nature and magnitude of the offence. It is clear that discretion can be exercised for compounding the offence. Normally, offences involving serious cross-border transaction are not to be compounded. However, discretion can be exercised. Both 2015 or 2019 guidelines are strictly binding on the authorities. They are intended to guide officers to bring a closure of cases where there are extenuating circumstance for compounding offence on application filed under Section 279(2) of the Act. The petitioner is now over 70 years and has been facing prosecution for over a period of last one decade for an offence allegedly committed by him during 2001-2002 for the relevant assessment year 2002-2003. Earlier, the petitioner faced, adjudication proceeding both under Section 148 and penalty proceeding under Section 279(2) of the Income Tax Act, 1961. The petitioner has paid the tax interest and the penalty imposed on him. Though, the petitioner has paid the penalty, the petitioner has filed an appeal against order of CIT (Appeals) confirming imposition of penalty to the extent of 100% of the tax. The Department is also in appeal as mentioned above. The 2019 Circular which has been pressed against the petitioner in the impugned order makes it clear that there is a fair amount of discretion vested with the fourth respondent. Even in the case covered by para 8, the phrase used is offence normally not to be compounded . Thus, even these cases can be compounded. In Prem Dass Vs. ITO [ 1999 (2) TMI 6 - SUPREME COURT] accepted the contention of the assessee that legislative intent of Section 279(1A) of the Income Tax Act, 1961 has to be kept in mind where there is a reduction of penalty. This aspect has also not been kept in mind by the fourth respondent while passing the impugned order. Further by prosecuting a septuagenarian, who is also an industrialist will serve no purpose. The petitioner entitled for buying a peace subject to his agreeing to pay the compounding fee that may be imposed by the fourth respondent. The petitioner has been sufficiently dealt for his past dalliances by the respondent. Thus this was a fit case for compounding the offence considering the age of the petitioner and considering the fact that the petitioner has paid the tax interest and penalty - we set aside the impugned order passed by the fourth respondent and remit the case back to the fourth respondent to compound the case by fixing the compounding fee to be paid by the petitioner, if it has not been already paid by the petitioner. WP allowed.

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• 2022 (6) TMI 29
  Reopening of assessment u/s 147 - Rejection of objections pursuant to the 148 notice - HELD THAT:- Assessment orders were passed under Section 147 of the Act, prior to which, 148 notice was issued and the objections were raised, which were rejected through the impugned order. Challenging the assessment orders writ petitions were filed and the same were allowed by a separate order passed by this Court today, where, after setting aside those assessment orders, matters were remitted back to the Assessing Authority with a direction to issue fresh show cause notice by giving not less than one week time to the petitioner assessee to respond. Therefore, the said directions issued by this Court shall be scrupulously followed and executed punctually by the respondent Assessing Authority. Therefore, at this juncture, the present challenge made against the 148 notice or the rejection order with regard to the objections raised by the petitioner for the proposed opening of assessment under Section 147 may not stand in the way. If any additional reasons have been given by the Assessing Authority, the same can also be objected to, for which, reply can be given with supporting documents and inputs by the petitioner assessee along with the reply to be given to the show cause notice which is going to be issued by the respondent Assessing Authority pursuant to the orders passed in the other writ petitions referred to above. After considering all these reply or inputs to be supplied by the petitioner, the Assessing Authority can go ahead with the assessment process and complete the same by passing an order of assessment, if need arises. Therefore, the present challenge made against these orders in these writ petitions may not hold good for the purpose of legal scrutiny and decision

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• 2022 (6) TMI 28
  Addition u/s 41(1) - non-confirmation of credit by the creditors - HELD THAT:- It goes uncontroverted that the appellant has not been able to lead any evidence to prove the existence of liability. The creditors could not verify the liability of the appellant as projected by him. The existence of liability is purely a matter of fact. Proposition of law is well settled that where a party is expected to be in possession of evidence but fails to produce the same, an adverse inference has to be drawn. See R. Venkata Swamy Naidu.[ 1956 (2) TMI 3 - SUPREME COURT ] - No substantial question of law - Decided against assessee.

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• 2022 (6) TMI 27
  Reopening of assessment u/s 147 - extension of period of limitation from 6 years to 10 years - Scope of Section 148A as newly inserted - Comparison between old and new provisions for reassessment - Individual identity of Section 148 as prevailing prior to amendment - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia w.e.f. 1.4.2021 - identity of Section 148 as prevailing prior to amendment and insertion of section 148A - Whether after introduction of new provisions for reassessment of income by virtue of the Finance Act, 2021 with effect from 01.04.2021, substituting the then existing provisions, would the substituted provisions survive and could be used for issuing notices for reassessment for the past period? - HELD THAT:- As relying on SUDESH TANEJA [ 2022 (1) TMI 1212 - RAJASTHAN HIGH COURT] no notice under Section 148 would be issued for the past assessment years by resorting to the larger period of limitation prescribed in newly substituted clause (b) of Section 149(1). This would indicate that the notice that would be issued after 01.04.2021 would be in terms of the substituted Section 149(1) but without breaching the upper time limit provided in the original Section 149(1) which stood substituted. Under no circumstances the extended period available in clause (b) of sub-section (1) of Section 149 which we may recall now stands at 10 years instead of 6 years previously available with the revenue, can be pressed in service for reopening assessments for the past period. This flows from the plain meaning of the first proviso to sub-section (1) of Section 149. In plain terms a notice which had become time barred prior to 01.04.2021 as per the then prevailing provisions, would not be revived by virtue of the application of Section 149(1)(b) effective from 01.04.2021. All the notices issued in the present cases are after 01.04.2021 and have been issued without following the procedure contained in Section 148A of the Act and are therefore invalid. By virtue of notifications dated 31.03.2021 and 01.04.2021 issued by CBDT substitution of reassessment provisions framed under the Finance Act, 2021 were not deferred nor could they have been deferred. The date of such amendments coming into effect remained 01.04.2021. In the result we find that the notices impugned in the respective petitions are invalid and bad in law. The same are quashed and set aside. The learned Single Judge committed no error in quashing these notices. All the writ petitions are allowed. Appeals of the revenue are dismissed.

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• 2022 (6) TMI 26
  Addition u/s 68 - unexplained cash credit - share application money receipts - sole basis for the AO to draw an adverse inference against assessee is investigation report of Income Tax Department Ahmadabad and statements of certain persons recorded at the time of investigation - HELD THAT:- AO never disputed fact that the assessee has filed necessary evidences, but he has ignored all the evidences filed by the assessee only on the basis of statement recorded from Mr. Shrish Chandrakanth Shah and came to the conclusion that transactions of share capital / share application money is nothing but undisclosed income of the assessee which has been routed through share application money from web off companies floated by Mr.Shrish Chandrakanth Shah through multiple layers. In our considered view, the conclusion drawn by the Assessing Officer on the basis of statement of some persons is completely on the basis of suspicion and surmises without there being any further evidences to support his findings. Further, we have gone through statements recorded from some persons, which are part of assessment order and we find that nowhere persons directly alleged that the assessee is involved in the activity of taking accommodation entries of share capital / share application money from those companies. In fact, the assessee has proved with necessary evidence that an allegation of the Assessing Officer is wrong and transaction between the assessee and investor companies are genuine business transactions. Therefore, we are of the considered view that the Assessing Officer has completely erred in making additions towards share capital / share application money received from certain companies as unexplained cash credit which is taxable u/s.68. Thus the assessee, by filing enormous details, has discharged its initial onus to prove identity, genuineness of transactions and creditworthiness of the shareholders. The AO, without carrying out further inquiries in order to ascertain the claim of the assessee, jumped into conclusion on the basis of report of Investigation wing, and financial statements of the subscribers that none of the subscribers had enough source of income to establish creditworthiness. Even though there were circumstances leading to suspicion, yet having taken an action u/s.132 and enquiries made in the assessment proceedings, the assessing authority had not brought any positive material or evidence to indicate that share application money as such represented assessee s own undisclosed money brought back in the garb of share capital. Merely because of his subjective satisfaction that source of availability of money with the shareholder or their creditworthiness were not established, the AO could not treat the genuinely raised share capital as deemed income u/s.68. AO was erred in making additions towards share capital, including share premium u/s 68 - Decided in favour of assessee. Disallowance of rent u/s.40A(2)(b) - lease rent paid by the assessee to related party - HELD THAT:- We find that a similar issue had been considered by the Tribunal for earlier and subsequent assessment years in assessee s own case [ 2019 (8) TMI 400 - ITAT CHENNAI] where, the issue has been set aside to the file of the Assessing Officer to reconsider the issue of disallowance of lease rent paid by the assessee to related party u/s.40A(2)(b) - Thus set aside this issue to the A.O and direct the Assessing Officer to reconsider the issue. Validity of assessment order u/s.143(3) r.w.s 153A - HELD THAT:- We find that there is no merit in legal ground taken by the assessee challenging validity of assessment order passed u/s.143(3) r.w.s. 153A - We further noted that assessment for the impugned assessment year has been completed consequent to search operation conducted in the case of the assessee, where certain incriminating materials were found and seized which suggest escapement of income. Therefore, we are of the considered view that there is no merit in legal ground taken by the assessee in light of certain judicial precedents and thus, grounds of appeal filed by the assessee are rejected.

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• 2022 (6) TMI 25
  Assessment u/s 153A - approval u/s 153D - Addition u/s 68 - HELD THAT:- Hon'ble Supreme Court in the case of Sahara India vs. CIT Others ,[ 2008 (4) TMI 4 - SUPREME COURT] while discussing the requirement of prior approval of Chief Commissioner or Commissioner in terms of the provisions of section 142(2A) of the Act, opined that the requirement of previous approval of the Chief Commissioner or Commissioner in terms of the said provision being an inbuilt protection against arbitrary or unjust exercise of power by the Assessing Officer, casts a very heavy duty on the said high-ranking authority to see it that the approval envisaged in the section is not turned into an empty ritual. The Hon'ble Apex Court held that the approval must be granted only on the basis of material available on record and the approval must reflect the application of mind to the facts of the case. A similar view has been taken by this Bench of the Tribunal in a group of cases of Shri Navin Jain and others [ 2021 (9) TMI 1068 - ITAT LUCKNOW] wherein also, the approval under section 153D was given through the same letter by the ACIT, Central, Kanpur and the Ground raised in this regard by the assessee was allowed, and the assessment orders were annulled by us. While allowing the Ground raised by the assessee, the Tribunal had also considered various cases laws, including that of the Hon'ble Supreme Court. In view of these facts and circumstances and in view of the unrebutted judicial precedents relied on by the ld. Counsel for the assessee, the grievance of the assessee by way of Ground no.6 is allowed and the assessment order is annulled.

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• 2022 (6) TMI 24
  Revision u/s 263 - validity of reassessment issue had been framed without even examining or making section 194C r.w.s. 40(a)(ia) disallowance qua the payment(s) of transport charges without deducting TDS thereupon - As per assessee once the AO reopening reasons recorded in these three assessment years are not sustainable, these reassessments deserve to be quashed as non est leading to annulment of the PCIT's revision orders as well - HELD THAT:- There is hardly any dispute between the parties that the assessing authority had recorded similar reopening reasons in latter twin assessment years i.e. A.Ys. 2007-08 and 2008-09 as well which are very much compiled in the instant paper book. The sole difference is only qua assessee's payments made. We observe in light of above extracted re-opening reasons that the assessing authority had indeed failed to indicate as to under which provision of law in Chapter XVII of the Act the assessee was liable to deduct TDS on her impugned payments. Revenue sought to highlight at this stage that the Pr. CIT has made it clear in the impugned revision directions that the assessee made contractual payments liable for TDS deduction u/s. 194C of the Act. We find no merit in the Revenue's instant arguments once it is clear that the assessing authority had not specified in the reopening reasons about applicability of the particular statutory provision requiring TDS deduction or for that even suggest that the assessee's payments were in the nature of contractual expenses involving TDS deduction u/s. 194C of the Act or any other provision as the case may be. And further that there existed contractual relationship between payer-payees hereunder. We thus quote hon'ble jurisdictional high court's landmark decision in Hindustan Unilever Ltd. Vs. R B Wadkar [ 2004 (2) TMI 41 - BOMBAY HIGH COURT ] and the Assessing Officer's reopening reasons have to be read on standalone basis without any external help thereby rejecting any scope of addition, deletion or substitution therein at a later stage even it is found that at some point of time that the same were very well justifiable. We adopt the very reasoning cause hereinabove to quash all these three reassessments herein framed in 28-03-2013 as non-nest. We order accordingly. We also invoke sublato fundamento cadit opus that once the foundation of reopening is removed, collateral proceedings u/s. 263 in issues also follows the section as having no legs to stand. The assessee's foregoing identical additional substantive ground raised in all these three appeals succeeds thereby rendering all other pleadings on merits as well as validity (regarding applicability of section 147 1st proviso in assessment years i.e. AYs 2006-07 and 2007-08) as infructuous. Assessee appeal allowed.

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• 2022 (6) TMI 23
  Unexplained cash credits u/s. 68 - bogus share capital - CIT(A) has modified the assessment findings to confirm the impugned addition only on protective basis which has attained finality for want of Revenue's challenge thereto - HELD THAT:- This is an instance of a protective addition only which does not deserve to be upheld in light of Banyan Berry [ 1995 (12) TMI 12 - GUJARAT HIGH COURT ] - We accordingly hold that the impugned protective addition only deserves to be deleted in above terms. Ordered accordingly. Correctness of section 40A(3) disallowance - Learned counsel sought to clarify that the assessee's transportation fleet is almost of 150 vehicles wherein the normal wear and tear services requires cash payment only - HELD THAT:- We fail to understand as to how the impugned payment can be justifiable in the foregoing case only since lacking the supportive evidence as well as genuineness in foregoing details. We thus quote find no merit in the assessee's arguments pertaining to the above sole prayer. The facts also remains that keeping in mind that the nature of assessee's business involving 150 transportation vehicles as well as employees operating in different parts of country, the other small payments indeed deserve to be allowed involving peculiar day to day business requirements. We accordingly uphold the impugned addition of Rs. 23,10,630/- to the extent of Rs. 15,69,530/- only. The remaining disallowance component is directed to be deleted. Second component of assessee's permit charges expenditure of Rs. 13,45,280/- disallowed u/s. 40A(3). Learned counsel could hardly refer to any cogent supportive evidence containing all the relevant details. We thus affirmed the impugned disallowance. Next national permit charges of Rs. 16,40,000/- u/s. 40A(3) representing the expenditure incurred for remuneration paid to the directors only. There can be hardly any dispute that such cash payments made on behalf of the company to its directors carry overwhelming genuineness element which itself forms a very strong reason to be allowed in light of Anupam Tele services Vs. Income Tax Officer [ 2014 (2) TMI 30 - GUJARAT HIGH COURT ] We make it clear that there lordships have already considered Attar Singh Gurmukh Singh Vs. Income Tax Officer [ 1991 (8) TMI 5 - SUPREME COURT ] while concluding that the Rules 6DD providing specific instances of cash payments is not self exhaustive. We thus delete the impugned disallowance component of Rs. 16,40,000/- in very terms. Depreciation disallowance on account of assessee's alleged failure to prove existence of fixed assets, ownership and use of the chasis parts for the purpose of day to day transport business activity - CIT(A) detailed discussion affirming the Assessing Officer's action to this effect in Page No. 41 last para suggests that the assessee could not prove the purchase of body building works in remand proceedings followed by reconciliation between transport vehicles as well as other relevant actions. We therefore deem it proper to restore this last issue back to the file of Assessing Officer for his afresh adjudication, subject to the condition assessee only shall file all the relevant details in consequential proceedings. This last substantive ground is accepted for statistical purpose.

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• 2022 (6) TMI 22
  Nature of income - Income from other sources - interest income received u/s. 28 of Land Acquisition Act, 1984 as taxable u/s 56(2)(viii) r.w.s. 145A(b) - Scope of amended principles - HELD THAT:- As decided recently in Shri Madhav Pandharinath Kande [ 2022 (5) TMI 1026 - ITAT PUNE ] no merit inn assessee s instant argument once the legislature has inserted Section 56(2)(viii) vide Finance Act 2009 w.e.f. 01.04.2010 holding interest received on compensation or on enhanced compensation referred to in clause (b) of Section 145A as treating the corresponding income as income from other sources. The assessee could hardly rebut the fact that the foregoing statutory provision in fact makes both interest on compensation as well as on enhanced compensation deemed as income of the year in which it is received whereas the assessment year before their lordships was 1999-2000 only. We thus hold that the CIT(A) has rightly affirmed the assessment findings assessing the impugned interest income in assessee s hands. Thus the impugned interest income is very much taxable as per the amended provision i.e. Section 56(2)(viii) r.w.s. 57(iv) r.w.s. 145A(b) applicable w.e.f. 01.04.2010. - Decided against assessee.

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• 2022 (6) TMI 21
  Reopening of assessment u/s 147 - eligibility of reasons to believe - change of opinion - interest income earned on its fixed deposits to be brought to tax under the residuary head of income, i.e, income from other Sources - HELD THAT:- We find substantial force in the claim of the Ld. AR that the reopening of the concluded assessment of the assessee company was prompted on the basis of a mere change of opinion on the same set of facts as were there before the A.O while framing the original assessment vide his order passed u/s. 143(3), dated 23.12.2011. As stated by the Ld. AR, and rightly so, it is a matter of fact borne from record, that the A.O in the course of original assessment proceedings had vide his query letter issued a/w. notice u/s. 142(1), dated 10.10.2011 at Sr. No.20 specifically called upon the assesee to furnish details of its interest income. In reply, we find that the assessee had furnished complete details of the interest earned on the short term deposit. Backed by the aforesaid facts, we are of a strong conviction, that the A.O in the course of the regular assessment proceedings after calling for the requisite details had found no infirmity in the claim of the assessee company that prior to commencement of its commercial operations, the interest earned on the funds that were received by it as share capital and temporarily parked as short term fixed deposits with the banks, being in the nature of a capital receipt was to be reduced from the pre-operative expenses. As stated by the Ld. AR, and rightly so, in the absence of any fresh tangible material coming to the notice of the A.O after the original assessment proceedings had culminated vide his order passed u/s. 143(3), dated 23.12.2011, the reopening of its case on an issue which had been deliberated upon by him in the course of the regular assessment proceedings would be nothing short of taking recourse to re-assessment proceedings on the basis of a mere change of opinion , which as observed by us hereinabove is not permissible under law. Thus such a substitution of a view of a successor A.O cannot form a justifiable basis for reopening the case of an assessee. We find that the Hon'ble Supreme Court in its landmark judgment in the case of CIT Vs. Kelvinator of India [ 2010 (1) TMI 11 - SUPREME COURT] had observed, that the case of an assessee cannot be reopened on the basis of a mere change of opinion . At this stage, we may herein observe, that as per the mandate of law, even where a concluded assessment is sought to be reopened by the A.O within a period of 4 years from the end of the relevant assessment year, it is must that the A.O has fresh material or information with him, that had led to the formation of belief on his part that the income of the assessee chargeable to tax has escaped assessment. Thus quash the assessment framed by the A.O u/s. 143(3)/147 - Decided in favour of assessee. Correct head of income - characterization of receipts - interest income on funds that were received by way of share capital and were temporarily parked as short term fixed deposits with the banks - whether the interest income earned by the assessee company on the funds that were received by it by way of share capital and were temporarily parked as short term deposits with the banks, was rightly claimed by the assessee prior to commencement of its commercial operations as a capital receipt and reduced from the pre-operative expenses i.e project cost or, was liable to be assessed as its income under the residuary head of income, i.e, income from the sources, as claimed by the department? - HELD THAT:- As relying on Indian Oil Panipat power Consortium Ltd [ 2009 (2) TMI 32 - DELHI HIGH COURT] the interest income received by the assessee prior to commencement of its commercial operations on the amount of share capital that was temporarily parked as short term deposits with the banks could not have been brought to tax as its income from other sources and had rightly been claimed by the assessee as a capital receipt which was reduced from its pre-operative expenses, i.e, from the cost of the project. We, thus, not being able to persuade ourselves to subscribe to the view taken by the lower authorities set-aside the order passed by the CIT(Appeals) and, vacate the addition of interest income made by the A.O by treating the same as income of the assessee from other sources. - Decided in favour of assessee.

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• 2022 (6) TMI 20
  Assessment u/s 153A - Addition based on Cash found in search - HELD THAT:- AO accepted the income as shown in the Income Expenditure A/c - This income is source of cash found in search. Thus, taxing professional receipt on the one hand and also taxing the cash balance found in search has resulted into double taxation. Hence, separate addition of cash surrendered in search is uncalled for. So far as observation of AO that cash book is manipulated is concerned, we may point out that while making surrender for cash found assessee did not consider the receipt from private practice for which patient register maintained in normal course was seized. In fact the entries in the cash book are fully verifiable from the patient register found in search. The AO has not found any defect therein. Due to preconceived mind AO has treated the incomplete cash book which was later completed by the assessee on receipt of seized patients register as manipulation of the cash book. At the same time AO has accepted the cash book for assessing the income. Thus, the allegation of manipulation by AO is without basis. Considering the totality of facts and circumstances, we are of the view that the ld. CIT(A) has passed a well-reasoned order and no new facts or circumstances have been brought before us by the ld DR in order to controvert or rebut the factual findings so recorded by the ld. CIT(A), therefore, we see no reason to interfere into or deviate from the findings so recorded by the ld. CIT(A) qua this issue and we uphold the same. Receipt of on-money pertaining to land transaction - HELD THAT:- AO has stated that the agreement of the land are of July 2014 and Jan 2015 and therefore it is unbelievable that cash received on sale of this land was still lying with at the residential premises of the assessee after more than one and half years. In this connection, the ld. AR has stated that cash was received subsequently after the agreement to sale. In fact the purchaser first paid the cheque and thereafter paid the cash. The assessee has specifically stated that the cash was received few days back as the cash was to be paid before the registry and registry was to be done after 11th August 2016. Thus there is no basis with the AO to hold that amount was received more than one and half years back. Otherwise also there is no bar that the assessee can t keep cash with himself for more than one and half years and therefore the observation of the AO as to keeping of the cash at the residential premises is only on surmises and conjectures. Whether CIT(A) instead of giving relief to the assessee merely on the ground that opportunity to cross examine the buyers was not given should have himself done the needful by exercising its power u/s 250(4)? - As it was not mandatory for Ld. CIT(A) to carry out enquiries or get the cross examination done at her end inasmuch as section 250(4) of the Act only give a discretion to CIT(A) for further enquiry if the facts so warrant but do not compel him to make further enquiry/ provide opportunity of cross examination. Considering the totality of facts and circumstances, we are of the view that the ld. CIT(A) has passed a well-reasoned order and no new facts or circumstances have been brought before us by the ld CIT-DR in order to controvert or rebut the factual findings so recorded by the ld. CIT(A), therefore, we see no reason to interfere into or deviate from the findings so recorded by the ld. CIT(A) qua this issue and we uphold the same. Addition as buyer of the land denied to pay any on-money in land transaction to his wife - HELD THAT:- AO only on assumption and presumption held that this represents the undisclosed investment. There is neither any mention of name or the date to whom the alleged loan has been given and therefore on the basis of this paper no addition can be made on account of the alleged loan. So far as the statement of the buyers are concerned, we are of the view that neither any specific question was asked from them nor any person making payment of On money will accept about the same. Hence simply because the buyer did not say anything about the on money payment , statement of the assessee in the absence of any contrary evidence can t be rejected. The AO has made the addition u/s 68 of the Act. This Section applies when any sum is found credited in the books of accounts, source of which is not explained to the satisfaction of the AO. Noting on a paper can t be said to be an entry in the books of accounts. We also draw strength from the decision of Coordinate Bench of Mumbai Tribunal in the case of S.P. Goyal Vs. DCIT [ 2002 (4) TMI 952 - ITAT MUMBAI ] .wherein the Coordinate Bench has held that loose sheet of paper torn out of a diary could not be construed as books for the purpose of section 68 and further held that addition could not be made simply on the basis of certain notings on loose sheets of a diary without any corroborative evidence in the form of extra cash, jewellery or investment outside the books. - Decided against revenue.

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• 2022 (6) TMI 19
  Rejection of books of accounts - estimation of sales - addition based on statement recorded during survey operations - estimation of rate of sale of plots at Rs.1,500/- per square yard - HELD THAT:- As statement of Reetesh Accountant and Rajesh Pengawala recorded by survey team on 06.01.2010, it cannot be inferred that they admitted the rate of plots at Rs. 1400/- or Rs. 1500/- per square yard. Rather by bringing the sufficient material on record the assessee has proved that the alleged entry in the seized material / diaries are no where related with the plot No. A-306 or B-102 of water word project developed by the assessee. Therefore, the first basis of rejection of books of account has no leg to stand. Second ground of rejection of the books of accounts was non-recording the commissions payment - We find that Hon ble Supreme Court in CIT Vs Padam Chand Ram Gopal [ 1970 (4) TMI 2 - SUPREME COURT] held that insignificant mistake noticed in one year cannot be a ground of rejection of books of accounts, when no other mistake was found in any other year s books. Further, Hon ble Andhra Pradesh High Court in CIT Vs Margadarsi Chit Funds (P) ltd [ 1984 (6) TMI 17 - ANDHRA PRADESH HIGH COURT] held that the Income Tax Officer is obliged to state the defects inherent in the method followed by the assessee and also to record a clear finding that system of accounting is such that correct profit cannot be deducted from the books before rejecting the books. We have noted that the AO has not pointed out any other serious mistake in the books of assessee. Moreover, the additional income of Rs. 1.50 Crore disclosed by the assessee was included in the profit and due tax has been paid thereon. Therefore, in our considered view the rejection of books of account by AO is not justified in absence of serious defects. Hence, the action of AO in rejecting the books of the assessee is set-aside. Estimation of income by the assessing officer on the basis of statement of Reetesh Accountant and the partner of the assessee - When the revenue authorities have not demonstrated from the material as to whether the assessee failed to co-operate, which is an eventuality where the income tax authority would required to record its reasons to resort to the provisions of section 131(1) and convert the whole process into a search and seizure. When such facts are completely missing in the process and that such violation is fatal which can turn draconian to inherent safe guard of at least recording of such reason and satisfaction of non-cooperation to resort to other coercive steps needs to be set clearly by the income tax authority. We further find that the AO has not investigated in the facts, either by examining the purchaser in the project of the assessee-firm nor collected any evidence from the officer of sub-registrar about the rate of sale of the various plots. No adverse material collected by AO except rely of the statement recorded during the survey. It is settled law that the statement recorded during the survey is not admissible in evidence unless it is corroborated with the material evidences. The AO worked out average rate of all the plots in the project. It is a matter of general practice that no uniform rate of sale is applicable in the private projects, the rate may vary depending on various factors like size, location, time of booking and number of bookings. So uniform rate is not applicable is such private project. We also held that the recording of the statement by survey team under section 131(1) is not valid. Thus, no cognizance of such statement could be taken. Hence, the addition which is also based on the statement is not legally sustainable. In view of the aforesaid factual and legal discussions, we hold that rejection of books of accounts was not valid and further no such estimation of rate of plot which is based on the statement of partner and accountant is not legally sustainable in absence of other corroborative evidence on record. Thus, the assessee also succeeded on this submission as well.

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• 2022 (6) TMI 18
  Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Where the assessee mentioned that the dividend income earned was Rs.4.88 crores from small time investments in mutual funds and claimed exempted U/sec 10(34) - the assessee s own funds are higher than the investments and the disallowance u/s 14A r.w.r 8D(2)(ii) has to be worked out on the net interest expenditure. A.O has erred in not considering the facts and own funds available with the assessee. Alternative plea of the assessee that the disallowance u/s 14A of the Act should be restricted to exempt income and relied on the judicial decisions. CIT(A) observed that there is no clarity of own funds available with the assessee and is of the opinion that they are mixed funds and some interest portion is attributed to the investments. CIT(A) relied on the decision of the coordinate bench of the Hon ble Tribunal in the case of Morgan Stanely Security Pvt Ltd [ 2014 (1) TMI 1412 - ITAT MUMBAI] and observed that the net interest debited to profit and loss account should be considered for the purpose of computation under Rule 8D(2)(ii) of I T Rules and the A.O is directed accordingly and partly allowed this ground of appeal. Disallowance u/s 14A r.w.r 8D(2)(iii) being the third limb where the A.O has made the addition based on the average value of investment @ 0.5% - The main claim of the assessee that if any disallowance is computed it should be restricted to the exempted income and relied on the financial statements, judicial decisions and the assessee own case for the A.Y.2014-15. Further, we find that there is no specific mention in the assessment order, whether the A.O has considered only the investments which yield dividend income for calculation of average value of investments. In the present case the assessee has suo moto made disallowance of Rs.62,65,593/- and further the assessee prayed that the disallowance u/sec14A r.w.r 8D(2) of the I T rules should be restricted to exempt income. We rely on the ratio of decision of Hon ble Tribunal special bench in ACIT Vs Vireet Investments Pvt Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] (i) That only those investments which yield exempt income should be considered for computing average value of investments and (ii) while computing book profits u/s 115JB of the Act, the disallowance u/s 14A r.w.r 8D(2) of the I T rules are not to be considered.- Accordingly, we direct the Assessing officer to restrict the disallowance u/s 14A r.w.r 8D(2) of the I T rules to the extent of exempt income earned by the assessee and partly allow the ground of appeal of the assessee. Disallowance of 50% of the payments/reimbursements to Lodha Developers UK Ltd - agreement and bills provided by the appellant are not sufficient evidence of providing the services. - CIT(A) has confirmed the addition and dismissed the ground of appeal - HELD THAT:- On further appeal before the Hon ble Tribunal, the Ld. AR submitted that the assessee has appointed agents as per the agreement and there is increase in the revenue due to NRI customers investments in properties in India. AR for the first time has filed the details of payments, marketing selling expenses incurred by the Lodha Developers U K Ltd, sample invoices of marketing expenses incurred in UK, and statement of sale of properties in India to NRI customers in the F.Y.2012-13 and prayed for allowing the claim based on the substantial evidence filed. DR submitted that the A.O. should be provided an opportunity to verify and examine the additional evidence filed by the assessee. Further on perusal of the assessment order, we find that the assessee could not substantiate the claim with proper evidences for various reasons. Accordingly, to meet the ends of justice and the principles of natural justice, we restore the disputed issue for limited purpose to the file of the Assessing officer to verify and examine the claim and grant the relief and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information and we allow this ground of appeal of the assessee for statistical purposes.

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• 2022 (6) TMI 17
  Revision u/s 263 by CIT - treatment to gains arising from sale of impugned penny stock - transactions in penny stocks and taxability of the sale consideration under Section 68 of the Act r.w. Section 115BBE - HELD THAT:- As we note that educational background of the assessee gives an impression that the assessee is well versed with the functioning of the stock market and has reasonable experience in the field. Hence, the action of assessee to treat the gains arising from sale of impugned penny stock as business income appears to be unquestionable. Noticeably, the assessee has not availed any benefit under Section 10(38) of the Act thus, facially, no prejudice appears to have caused to the Revenue. CIT has attempted to realign the nature of income from business income to capital gain without giving any reasonable basis for doing so in the revisional order. The whole objective of revisional proceedings appears to be to tax the income arising on sale of impugned shares on higher rate, i.e., 60% under Section 115BBE of the Act. Paradoxically, while on one hand the Pr.CIT seeks inquiry and verification in respect of transactions in penny stock whereas, on the other hand, the Pr.CIT has given a conclusive direction to the Assessing Officer to treat the complete sale transactions to be brought to tax under Section 68 of the Act and imposition of tax thereon at higher rate under Section 115BBE of the Act. In our mind, such approach of the Pr.CIT effectively nullifies the direction of the Assessing Officer to make proper inquiry. Once a finding of conclusive nature is given, the outcome of enquiry losses its relevance. Such action of the Pr.CIT cannot be countenanced in law. AO offered the income arising on purchase and sale of shares as business income and duly accepted by the Assessing Officer, the realignment of income proposed in a revisional proceeding is not backed by any cogent basis and is in the realm of surmises. The assessee has paid taxes at the normal rate on such income, and therefore, no prejudice can be attributed to the interest of the Revenue merely because the higher rate of tax can be charged under Section 115BBE. The judgment of Hon ble Delhi High Court in Krishna Devi Ors. [ 2021 (1) TMI 1008 - DELHI HIGH COURT] casts doubt on such treatment arising from sale of shares. Under such circumstances, startling spike, cannot be the reason, in itself, to invoke jurisdiction under Section 263 of the Act particularly, where the gains arising from sale of shares are not covered by tax concession under Section 10(38) of the Act. The operation of Section 263 is a non starter in the absence of any prejudice show to have caused to revenue. The decision referred to on behalf of the Revenue in case of Pooja Gupta [ 2019 (1) TMI 1630 - ITAT DELHI] is in the context of different factual matrix, i.e., the assessee therein claimed exemption from tax liability under Section 10(38) of the Act causing prejudice to the revenue. Revisional order of the Pr.CIT is set aside and quashed. - Appeal of assessee allowed.

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• Customs

• 2022 (6) TMI 16
  Seeking grant of bail - export of fake jewellery by mis-declaring the same as gold jewellery with respect to the past consignment - substantive evidences or not - retraction of statements - offences under Section 135(1)(b) and 135 (1)(ia) of Customs Act, 1962 - HELD THAT:- This Court is of the view that merely the Custom Department has cleared the goods it will not take away the cloud in those transactions, without interrogating the importer in Dubai from the petitioners during the relevant point of time. To verify whether the earlier consignments sent to the Dubai customer was really 22 carat gold jewels is subject matter of probe. Also it is necessary to probe into the mode of layering by which the money sent to Dubai Company through Non-Banking Source. The observation of the Bombay High Court in MR. BIHARILAL SINGHAL VERSUS THE UNION OF INDIA AND OTHERS [ 2010 (4) TMI 136 - BOMBAY HIGH COURT] , which says for the demand of the past imports revenue cannot withhold the current consignment and in the absence of any position action by issuing show cause notice hence no relevancy, since it is not a case of action without show cause notice nor withholding of present consignment for recovery of old demand of duty in respect of goods already assessed and exported - Similarly, in SANJAY CHANDRA VERSUS CBI [ 2011 (11) TMI 537 - SUPREME COURT] and GOVIND GOPAL GOYAL VERSUS STATE OF GUJARAT 1 [ 2017 (11) TMI 309 - GUJARAT HIGH COURT] , bail in these sorts of cases were dealt in terms of facts and circumstances of those cases and it is for the Courts to balance the Nations economic interest as against the individual personal liberty. Not in all cases, the period of incarceration alone matters, the stage of investigation, the ramification of the crime its network and the possibility of screening vital links, if the petitioners are let out on bail are the factors to be taken into consideration. In the instant case, the release of petitioners on bail is not conducive for investigation and therefore, petition for bail is dismissed. Considering the ramification of the offence and the design conceived by the petitioners herein to evade custom duty, without any interference requires investigation. The release of these petitioners will lead to tampering the witnesses - Petition dismissed.

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• 2022 (6) TMI 15
  Revocation of Customs Broker License - Forfeiture of security deposit - levy of penalty - licence of CB has been revoked for the reason that the exporters have fraudulently availed excess ITC, by receiving the goods at inflated prices from their supplier - HELD THAT:- The role of CB is limited to facilitation of the imports and exports by filing the documents after due verification. Is the role beyond that envisaged in terms of any regulation under CBLR. The fraudulent credit if availed is a matter for investigation by the concerned Central/ State Tax Authorities. How can a CB be responsible for not advising the client, exporter in that respect?. How in case of exports when the exporter has been registered on the GSTN, after due verification and diligence by the GST authorities, the availability of the said GSTIN on the Export Invoices and the shipping documents be not enough to verify the identity of the exporter. In any case without GSTIN will it be possible to claim the IGST Refund in any circumstances. There are no merits in any of the findings recorded by the Principal Commissioner, in respect of any of the charges framed against the appellant under regulation 10 (a), (d), (e), (m) (n), whereas the findings recorded by the enquiry officer are more justifiable and logical. The enquiry officer has more reasonably concluded in the matter, and the appellant CB can at the most be held guilty for contravention of the Regulation 10 (n). Various High Courts have held that punishment for the offences should be proportionate to the gravity of offence. In the present it is not found that appellant was in any way responsible for any act of misconduct but is vicariously responsible for the acts of their employees, hence the punishment of revocation of licence is much harsh and disproportionate to the offences committed. The order of revocation of the license of CB and forfeiture of the security deposit is set aside - penalty is reduced from Rs 50,000/- to Rs 25,000/- - appeal allowed in part.

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• Corporate Laws

• 2022 (6) TMI 14
  Seeking appointment of Petitioner as the Administrator of the 1st Respondent Company pending disposal of the instant proceedings - seeking in the alternative to appoint an Independent Administrator to manage the affairs of the company pending disposal of the instant proceedings - Section 241-242 of the Companies Act, 2013 - HELD THAT:- It is to be seen whether this is a fit case to appoint an Administrator to manage the affairs of the 1st respondent Company. The petitioner has brought out strong grounds for this purpose which is supported by the R2 appeared. R1 3 did not appear. Hence, it is presumed to be taken that they have no objection in such an appointment. Various discussion clearly indicates that all is not well in the affairs of the 1st respondent Company. It appears that the respondents are violating the mandatory stipulations contained in the Companies Act. The affairs of the company are to be put on right track so that the object for which the company was incorporated could be saved. Therefore, it is proper and justifiable to appoint an Administrator to look into and manage the affairs of the Company. Since there is no opposition to the prayer for the alternative prayer in appointing an Independent Administrator to manage the affairs of the company, this Tribunal can pass an interim order to appoint an Independent Administrator as per Section 242(4) of the Companies Act, 2013. Application allowed.

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• Insolvency & Bankruptcy

• 2022 (6) TMI 13
  Initiation of CIRP - period of limitation - whether the issuance of Recovery Certificate would not trigger the right to sue. - time limitation - HELD THAT:- From the scheme of the IBC, it could be seen that where any Corporate Debtor commits a default, a financial creditor, an operational creditor or the Corporate Debtor itself is entitled to initiate CIRP in respect of such Corporate Debtor in the manner as provided under the said Chapter. The default has been defined to mean non-payment of debt. The debt has been defined to mean a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. A claim means a right to payment, whether or not such right is reduced to judgment, fixed, disputed, etc. It is more than settled that the trigger point to initiate CIRP is when a default takes place. A default would take place when a debt in respect of a claim is due and not paid. A claim would include a right to payment whether or not such a right is reduced to judgment. It is a settled principle of law that the provisions of a statue ought to be interpreted in such a manner which would advance the object and purpose of the enactment. Whether a person, who holds a Recovery Certificate would be a financial creditor within the meaning of clause (7) of Section 5 of the IBC? - HELD THAT:- A person to be entitled to be a financial creditor has to be owed a financial debt and would also include a person to whom such debt has been legally assigned or transferred to. Therefore, the only question that would be required to be considered is, as to whether a liability in respect of a claim arising out of a Recovery Certificate would be included within the meaning of the term financial debt as defined under clause (8) of Section 5 of the IBC - It is thus clear that it is a settled position of law that when the word include is used in interpretation clauses, the effect would be to enlarge the meaning of the words or phrases occurring in the body of the statute. Such interpretation clause is to be so used that those words or phrases must be construed as comprehending, not only such things, as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include. In such a situation, there would be no warrant or justification in giving the restricted meaning to the provision. The trigger point for initiation of CIRP is default of claim. Default is nonpayment of debt by the debtor or the Corporate Debtor, which has become due and payable, as the case may be, a debt is a liability or obligation in respect of a claim which is due from any person, and a claim means a right to payment, whether such a right is reduced to judgment or not. It could thus be seen that unless there is a claim , which may or may not be reduced to any judgment, there would be no debt and consequently no default on nonpayment of such a debt . When the claim itself means a right to payment, whether such a right is reduced to a judgment or not, we find that if the contention of the respondents, that merely on a claim being fructified in a decree, the same would be outside the ambit of clause (8) of Section 5 of the IBC, is accepted, then it would be inconsistent with the plain language used in the IBC - the definition is inclusive and not exhaustive. Taking into consideration the object and purpose of the IBC, the legislature could never have intended to keep a debt, which is crystallized in the form of a decree, outside the ambit of clause (8) of Section 5 of the IBC. Having done the exercise of considering the relevant provisions of the IBC afresh and come to a conclusion that a liability in respect of a claim arising out of a Recovery Certificate would be a financial debt within the meaning of clause (8) of Section 5 of the IBC and a holder of the 54 Recovery Certificate would be a financial creditor within the meaning of clause (7) of Section 5 of the IBC - It is more than well settled that when the language of a statutory provision is plain and unambiguous, it is not permissible for the Court to add or subtract words to a statute or read something into it which is not there. It cannot rewrite or recast legislation. From the plain and simple interpretation of the words used in subsection (22A) of Section 19 of the Debt Recovery Act, it would be amply clear that the Legislature provided that for the purposes of winding-up proceedings against a Company, etc., a Recovery Certificate issued by the Presiding Officer under subsection (22) of Section 19 of the Debt Recovery Act shall be deemed to be a decree or order of the Court. It is thus clear that once a Recovery Certificate is issued by the Presiding Officer under subsection (22) of Section 19 of the Debt Recovery Act, in view of subsection (22A) of Section 19 of the Debt Recovery Act it will be deemed to be a decree or order of the Court for the purposes of initiation of winding-up proceedings of a Company, etc. However, there is nothing in subsection (22A) of Section 19 of the Debt Recovery Act to imply that the Legislature intended to restrict the use of the Recovery Certificate limited for the purpose of winding-up proceedings. A liability in respect of a claim arising out of a Recovery Certificate would be a financial debt within the meaning of clause (8) of Section 5 of the IBC. Consequently, the holder of the Recovery Certificate would be a financial creditor within the meaning of clause (7) of Section 5 of the IBC. As such, the holder of such certificate would be entitled to initiate CIRP, if initiated within a period of three years from the date of issuance of the Recovery Certificate. 85 - the application under Section 7 of the IBC was within limitation and the learned NCLAT has erred in holding that it is barred by limitation. The appeal is allowed.

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• 2022 (6) TMI 12
  CIRP - Validity of order of NCLT admitting the application, bearing the signature of one member only -Pronouncement of the order in accordance with Rule 151 and 152 of the NCLT Rules or not - HELD THAT:- The order clearly mentions that the order was pronounced under Rule 151 of the NCLT Rules, 2016 with consent of the other Member. There are no error in the pronouncement of order by one Member with consent of the other Member of the Bench under Rule 151 of the NCLT Rules. Rule 152(4) on which reliance is placed is with regard to the matter where the order cannot be signed by reason of death, retirement or resignation or for any other reason by any one of the Members of the Bench who heard the case. Present is not the case where order cannot be signed by reason of death, retirement or resignation or for any other reason. Present is the case where the Technical Member was to be available after a couple of weeks to sign the order and with his consent the order was pronounced. There is no occasion for application of Rule 152(4). The Appeal is dismissed.

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• 2022 (6) TMI 11
  Quantification of CIRP cost - Seeking a declaration that monthly fees payable to the Applicant under the Service Agreement for the relevant period shall form part of the CIRP costs in terms of the IBC - HELD THAT:- The Resolution Plan contemplated that if the CIRP cost exceeds the current estimates, the excess amount as per actuals would be borne by the Successful Resolution Applicant subject to a maximum of Rs.475 Crores. Thus, payment of the CIRP costs which was not included in the estimates under the Resolution Plan was also contemplated upto Rs. 475 Crores. Unfortunately, at the time of hearing of the Appeal, the aforesaid clauses (g) and (h) of the Resolution Plan were not brought into the notice of this Tribunal. This Tribunal has clearly laid down that findings on questions of fact, how-so-ever erroneous cannot be allowed to be questioned. However, mistake which have due to oversight, inadvertence or human error can be corrected. Further it was held that it would be open to correct the conclusion if the same is not compatible with the finding recorded on the issues raised. In exercise of jurisdiction of this Tribunal under Rule 11 of the NCLAT Rules, present is a fit case where judgment dated 06.05.2022 needs correction and clarification - impugned order is set aside - application allowed.

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• 2022 (6) TMI 10
  CIRP - Company/ corporate debtor under liquidation - non-receipt of limited notice or receipt of defective limited notice - whether the Order of the Adjudicating Authority has to be set aside on the ground that limited Notice under Section 95(1) of the Code was not issued to the Personal Guarantor seeking his appearance? - whether the Demand Notice issued by the Respondent Bank is defective? - HELD THAT:- It is the main case of the Appellant that the limited Notice contemplated under Section 95(1) of the Code was never served upon them. The material on record shows that the Personal Guarantor was represented on that date and therefore it cannot be said that the Appellant was not aware of the proceedings. The object behind the issuance of the limited Notice to the Personal Guarantor is to appear before the Adjudicating Authority following the Principle of Natural Justice. The documentary evidence on record establishes that the Demand Notice dated 06/10/2021 was received by the Appellant on 12/10/2021. It is the contention of the Learned Counsel for the Appellant that this Demand Notice, though received by them was sans the annexures and therefore is a defective one. The same was communicated to the Respondent Bank on 24/10/2021 and the Bank had once again sent another copy on 24/11/2021. The ratio laid down by this Tribunal in Chandresh Jajoo Vs. Siemens Financial Services Pvt. Ltd. Anr. [ 2022 (5) TMI 1364 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI ], is squarely applicable to the facts of this case wherein it is observed that there was no reason to direct for issuance of any limited Notice to the Appellant as he was aware of the proceedings . Morever the stage of admission of the Application has not yet come and at that stage, the Appellant can raise all the objections before the Adjudicating Authority opposing the admission of the said Application. Needless to add, the Adjudicating Authority will consider the pleas and pass Orders under Section 100 in accordance with law. Last contention of the Learned Counsel for the Appellant is that Section 95 Application cannot be adjudicated by Bench No. III of the NCLT since the Liquidation Proceedings of the Corporate Debtor was Pending before Bench No. VI of the NCLT. It is not understood as to why the Appellant has not brought the same to the Notice of the Bench or exercise his right by filing an Application before the Principal Bench under Rule 16 of the NCLT Rules, 2016. Appeal dismissed.

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• 2022 (6) TMI 9
  Jurisdiction - Power of Liquidator to act beyond the period of liquidation - it is claimed that date of initiation of the Liquidation proceedings, is 10.01.2020 and the initial period of one year and the extended period of one year expired on 10.01.2022, and this application filed on 22.03.2022 is ultra vires to IBC 2016 - HELD THAT:- A conjoint reading of Section 424(3) of Companies Act, 2013 and Rule 57 of NCLT Rules, 2016, it is clear that for the purpose of enforcement of an order of this Tribunal, the Tribunal shall be deemed to be a Civil Court and the order to be enforced as a deemed decree, for which an application is to be filed under Rule 56 of NCLT Rules, 2016 - Section 67 deals with the proceedings under Section 66, Rule 11 deals with Inherent powers of this Tribunal to make orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of this Tribunal and Rule 51 deals with the Power of the Tribunal to regulate the procedure. Nowhere in the Sections or Rules, there is any provision to order execution of the proceedings. In this case, the discretionary power cannot be used since this is a case for execution of the decree which can be done by this Tribunal under Rule 57 of the NCLT Rules, 2016, if application to that effect is filed and that too after hearing the affected parties. Since this application has been filed under Section 60(5) and 67 of IBC, the second relief for enforcement and execution of the order/decree passed by this Tribunal in IA/IBC/27/KOB/2021 vide order dated 13.07.2021 also cannot be granted. Application dismissed.

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• 2022 (6) TMI 8
  Appointment of Insolvency Professional - Section 21(6A)(b) of the IBC, 2016 read with Regulation 16A(1) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- It is seen from the records that the Applicant/Liquidator has complied with all the procedures prescribed under the law. The Form AB is verified the Written Consent produced by Shri Rajendran P.R. to act as the Authorized Representative of the class of creditors. Since this Tribunal is satisfied that Shri Rajendran P.R. can be appointed as the Authorized Representative of the class of creditors, Mr. Rajendran P.R., Insolvency Professional having Registration Number IBBI/IPA-001/IP-P01748/2019-2020/12717 residing at Padinjareparippil, Kulayettikkara P.O., Kanjiramattom, Ernakulam, Kerala-682 317, is appointed as the Authorized Representative for the Class of Creditors in the Kerala Chamber of Commerce and Industry. Application allowed.

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• 2022 (6) TMI 7
  Rejection of claim of workmen/employees by the liquidator - veracity of the documents produced also not verified before rejection of such claim - Section 42 of IBC, 2016 - HELD THAT:- It is true that the Liquidator has rejected the claims of the appellants within hours of receipt of the claims, without verifying the veracity of the documents produced - As per Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, the Liquidator was required to process the claims submitted in Form 'E' by the Appellant as claim made by the Operational Creditor . Regulation 20 provides for the processing of claims by other stakeholders and the Appellant were required to prove its claim inter alia on the basis of relevant documents which adequately establish their claim. Under Regulation 23, the Liquidator has the power and duty to call for such other evidence or clarification as he deems fit from a claimant for substantiating the whole or part of its claim. The Liquidator has avoided performing the duty as was required to be performed under the 'I B Code' and the Regulations. The submission of the Learned counsel for the appellants is accepted that the Liquidator was required to look into the documents and come to the 'best estimate' and give the benefit to the Appellants - Moreover, on verification of the documents such as Form 16, 26AS issued by the Income Tax Department as also the Appointment Order and the salary particulars produced by the Appellants, it is evident that they were working under the Corporate Debtor from various years from 2014 onwards and their income tax TDS has been deducted by the Corporate Debtor. The Liquidator is directed to take steps to process the claims of the Appellants and arrive at best estimate of the amount of claim made by the Appellants and give the necessary benefit to the Appellant in the form of a speaking order considering all the documents produced and the averments made in these Appeals - appeal disposed off.

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• 2022 (6) TMI 6
  Seeking direction to Registrar, NCLT Kochi to take necessary steps in relation with the pending appeals filed under Section 42 of the Code which are served upon the Liquidator but not yet listed before this Bench - seeking commencement of distribution of assets/proceeds of sale as per Section 53 read with Regulation 42 Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT:- As far as the 1st prayer of the Applicant to direct the Registry of this Tribunal to take necessary steps in relation to the pending appeals filed under Section 42 of the Code which is served upon the Liquidator but not yet listed before this Bench is concerned on verification of the records of this Registry, it is seen that the appeals stated to have been filed by the workmen have been returned to them being defective and that they have not re-presented them till date. Hence, there are no appeals pending consideration by this Tribunal. As regards the 2nd prayer to direct/permit commencement of distribution of assets/proceeds of sale as per Section 53 read with Regulation 42 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 is concerned, it is seen that the Hon'ble High Court while dismissing the OP(C) 484/2020 precluded the Applicant from the disbursement of any amount to any of the creditors of the Corporate Debtor till the time the pending appeals filed under Section 42 by the workmen/employees before this Tribunal were disposed of. Since all the appeals filed by the workmen/employees were dismissed by this Tribunal for the reasons stated therein, there is no bar in granting the prayer of the Applicant for commencement of distribution of assets/proceeds of sale as per Section 53 of IBC, 2016 read with Regulation 42 of IBBI (Liquidation Process) Regulations, 2016. The Applicant/Liquidator is permitted to proceed with the distribution of assets/proceeds of sale to the stakeholders on receipt of this order - application disposed off.

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• Central Excise

• 2022 (6) TMI 5
  Rejection of rebate claim - denial of rebate on the ground of discrepancy in the export documents - HELD THAT:- Refund of input tax credit on exports made under bond/LUT under Rule 5 of the Central Tax Credit Rules, 2004 and rebate under Rule 18 of the Central Excise Rules, 2002 is an export incentive given apart from the export incentive in the form of duty drawback under Section 75 of the Customs Act, 1962 r/w Customs, Excise and Service Tax Drawback Rules, 1995 as replaced by 2017 Rules apart from various export incentive that are given to an exporter under the provisions of the Foreign Trade Policy. The order of the original authority after remand confirmed that the petitioner had indeed exported goods and therefore, the petitioner would be entitled for rebate. However, the portion of the rebate has been rejected on the ground that there is a mismatch in the Shipping Bill and From ARE-1 - It appears that the petitioner has not produced a clear copy of BRC. As far as this issue is concerned, the same is condonable and can be reexamined by the authorities. As far as the 2nd issue is concerned, ie., mismatch in the declaration in the Shipping Bill and Form ARE-1 filed, there can be co-relation with the export invoice of the petitioner. The Original Authority/The Assistant Commissioner, CGST and Central Excise, Trichy is suo motu impleaded as 3rd respondent to verify the records to conclude that extent of rebate that can be granted. The case remanded back to the Original Authority/3rd respondent, who has been suo motu impleaded today by this Court, to re-examine the exported documents and to sanction the rebate claims of the petitioner to the extent rebate claims have not been sanctioned - petition allowed by way of remand.

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• 2022 (6) TMI 4
  CENVAT Credit - capital goods - cement and iron steel items used for construction of storage tank - Explanation 2 of Rule 2(k) of Cenvat Credit Rules, 2004 with effect from 7.7.2009, retrospective or prospective - Capital goods becoming immovable property or not - HELD THAT:- The issue involved in this matter is squarely covered by the decision of the Tribunal in appellant own case AMBUJA CEMENTS LTD (UNIT: DADRI) VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, MUMBAI [ 2022 (1) TMI 1067 - CESTAT MUMBAI] where it was held that As the facts of the case are not in dispute that the steel items in question has been used for fabrication of the capital goods which has ultimately been used for manufacture of their final product, in that circumstances, we hold that the appellant are entitled to CENVAT credit on the items in question. In appellant s own case THE COMMISSIONER, COMMERCIAL TAX, U.P. LUCKNOW VERSUS M/S. AMBUJA CEMENT LTD., SAHARANPUR [ 2017 (4) TMI 1280 - ALLAHABAD HIGH COURT] it was held that The mere fact that machine, machinery, equipment, apparatus, tools or appliances, etc., are generally understood to be movable property, would not mean that plant also has to be necessarily treated as movable property only. There does not appear to be any rational to import the concept of movable or immovable goods while interpreting Section 2(f) of the Act, when the provision does not say so. Appeal allowed - decided in favor of appellant.

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• 2022 (6) TMI 3
  Admissibility of CENVAT Credit - capital goods used for setting up, erection and commissioning of the power plant - period December 2009 to February 2011 - penalty - HELD THAT:- Undisputedly the captive power plant was set up by the respondent for supply of uninterrupted power to their PVC plant and was supplying power to the PVC plant after stabilization of power supply therefrom. Since the fact of supply of the power to the PVC plant is not in dispute the availment of CENVAT Credit on the Capital Goods used for setting up the same cannot be disputed. There are no merits in the submissions of the Revenue that just because for some time in the initial stages of installing and commissioning of the plant, the respondents had supplied electricity to MSEDCL on commercial basis from their captive power plant the same can be a reason for denial of the cenvat credit in respect of the Capital Goods used for setting up the Captive Power Plant. Penalty - HELD THAT:- There are no merits in the appeals filed by the revenue against the order dropping the proceedings for imposition of penalty on the employees of respondent. Appeals filed by the Revenue are dismissed.

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• 2022 (6) TMI 2
  Benefit of concessional rate of duty - self-assessment under Rule 6 of Central Excise Rules, 2002 - Nil' duty under Sr. No. 90 of Notification No. 4/2006-CE dated 01-03-2006 as amended - whether the entry at Sl No 90 of the exemption Notification prescribing nil rate of duty is absolute exemption from the payment of duty, appellant were barred from payment of duty as per Sl No 93 of the same notification? - HELD THAT:- The very same entries of the said notifications were considered by the tribunal in case of BALKRISHNA PAPER MILLS LTD, LAXMI BOARD AND PAPER MILLS LTD, COMMISSIONER OF CENTRAL EXCISE, THANE-I VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE I AND LAXMI BOARD AND PAPER MILLS LTD [ 2015 (11) TMI 210 - CESTAT MUMBAI ], where it was held that the appellant-assessees cannot be forced to pay duty as per serial No. 90 of Notification 4/2006 and they have option to pay the duty under other numbers, viz. 91 and 93. Since issue is no longer res- integra, there are no merits in the impugned order - appeal allowed.

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• CST, VAT & Sales Tax

• 2022 (6) TMI 1
  Refund/Reimbursement of the local tax paid - Intra-State purchase of declared goods - entitlement to refund is subject to the condition that CST is paid on inter-State sale of such declared goods - Section 36(1) of the AVAT Act, 2003 read with Rule 22(1)(x) of the AVAT Rules, 2005 - HELD THAT:- A reading of Section 15 (b) of the CST Act, 1956 goes to show that the reimbursement made under the said provision has to be done in such a manner subject to such condition as provided in any law in force in that State. It is stated that under the law in force in the State of Assam, no such manner has been provided as to how the amount has to be reimbursed. In view of the limited grievance raised, it is provided that in the event any such application is made by the petitioner, the authorities concerned shall pass a reasoned order on the claim for reimbursement purely on the merits of the claim of the petitioner within a period of two weeks from the date of such application along with a certified copy of this order and thereafter, within a period of six weeks from the date of such reasoned order to be passed, the process be brought to its logical end. Petition disposed off.

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