TMI Tax Updates - e-Newsletter
July 10, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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GST:
Supply or not - Applicant raises funds by collecting contributions, (also called as charges in the bye laws of Applicant Society), from members of the society - Held Yes
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Income Tax:
Validity of reopening of assessment u/s 147 - Issuing of notice u/s 148 in the wrong name - it was only a typographical error in first name of the assessee though other particulars such as assessee’s surname, name of his father and address were correct and which has been corrected during the course of proceedings wherein the assessee has participated and thereafter, the reassessment order has been issued in correct name of the assessee. Therefore, on this account, the notice issued u/s 148 cannot be held as invalid in the eyes of law.
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Income Tax:
Payment on account of Voluntary Retirement Scheme (VRS) - It is seen that section 35DDA has been inserted by the Finance Act, 2001 providing for amortization of expenditure incurred on Voluntary Retirement Scheme. The assessment year under consideration is prior to the insertion of section 35DDA and hence cannot rule the position.
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Income Tax:
Penalty u/s 271C - TDS u/s 194A - interest provision credited to the interest payable account - non deduction of TDS - when the penalty itself was initiated on an order, which was not passed by a proper jurisdictional officer, penalty initiated based on that order, even otherwise, could not survive.
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Income Tax:
Revenue recognition - accounting process - Simply because progress billing was more than the stage of percentage of completion, the same, in itself, could not be the basis to usurp the consistent method of accounting being followed by the assessee. - Additions made by AO deleted.
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Income Tax:
Addition u/s 56(2)(vii)(b) - Whether property acquired by the assessee was not a capital asset? - where the agricultural land doesn’t qualify as falling in the definition of capital asset, provisions of section 56(2)(vii)(b) cannot be invoked.
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Corporate Law:
Disqualification of director - The resignation of a Director takes immediate effect from the date on which the notice of resignation is received by the company. Hence there is no question of such resignation not being accepted by the company as was the case made out in the reply received by the petitioner on 19th March, 2016.
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Service Tax:
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Petitioner have declared Service Tax liability but the same could not be deposited while filing the return, which was deposited belatedly, but interest on delayed payment remained unpaid - Matter restored back for fresh decision.
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Service Tax:
Business Auxiliary Services - it is a case of sale/purchase of item from BSNL on principle to principle basis which is pure trading activity and on the cellular products, the BSNL has already discharged Service Tax, hence, demanding service tax again from the trader would amount to double taxation.
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Central Excise:
CENVAT Credit - duty paying documents - Allegation of non-receipt of goods - The benefit of doubt goes in favour of the appellants that they have received the goods against cenvatable invoices, in question and made payment through account payee cheque. The goods received by the appellant for manufacturing of goods, which has been cleared on payment of duty.
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VAT:
Unblocking of portal to enable the petitioner to access and procure Forms C and Forms F - as admittedly no order has been passed under Rule 5(4)(ii) of the Central Sales Tax (Delhi) Rules till date, this Court is of the opinion that the Commissioner cannot withhold issuance of declaration Form C to the petitioner in the present case
Articles
Notifications
Companies Law-
S.O. 2282(E) - dated
8-7-2020
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Co. Law
Seeks to amend Notification S.O. 3756(E) dated the 28th November, 2017
Customs-
17/2020 - dated
8-7-2020
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ADD
Seeks to levy definitive anti-dumping duty on imports of ' Steel and Fibre Glass Measuring tapes and their parts and components ',originating in, or exported from, People's Republic of China for a period of five years, in pursuance of final findings of sunset review investigations issued by DGTR
GST - States-
55/GST-2 - dated
6-7-2020
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Haryana SGST
Haryana Goods and Services Tax (Seventh Amendment) Rules, 2020.
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GST-2020-21/F. No. 509/50/Commercial Tax - dated
22-6-2020
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Uttar Pradesh SGST
Supersession Notification No.-1004 Dated 24 March, 2020
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572-F.T. - dated
30-6-2020
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West Bengal SGST
West Bengal Goods and Services Tax (Removal of Difficulties) Order, 2020.
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571-F.T. - dated
30-6-2020
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West Bengal SGST
West Bengal Goods and Services Tax (Sixth Amendment) Rules, 2020.
SEBI-
SEBI/LAD-NRO/GN/2020/21 - dated
1-7-2020
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SEBI
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2020
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (7) TMI 200
Supply or not - Applicant raises funds by collecting contributions, (also called as charges in the bye laws of Applicant Society), from members of the society - If the activities of the applicant are treated as supply under CGST Act, 2017 then whether the applicant has correctly discharged the GST as per the illustrative copy of the invoice generated by the Applicant? HELD THAT:- A Reading of Circular No.109/28/2019-GST dated 22.07.2019, issued vide F. No. 332/04/2017-TRU by the Government makes it clearly evident that it is the intention of the Government to tax Housing Societies under GST Laws subjcet to the condition that the reimbursement of charges or share of contribution of the members exceed an amount of ₹ 7500/- per month per member for Supply of service rendered by Resident Welfare Association (unincorporated body or a non- profit entity registered under any law) to its own members. Applicant relied upon the decision in the case of IN RE: M/S. LIONS CLUB OF POONA KOTHRUD [ 2019 (11) TMI 420 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA] where it was held that the membership fee collected by them will not subject to the GST and only the registration fee charged from the members for participation in the training programs/workshops will be subjected to GST - In the subject case, first of all there is no collection of me membership fees. Further, the applicant has not mentioned that they are undertaking any administrative expenses. Both, collection of membership fees and utilization of the same for administrative purposes are facts of the matter in the Lions Club case but not in the subject matter - the decision of the Authority in the case of M/s Lions Club, Kothrud is not applicable in the instant case. If the activities of the applicant are treated as supply under CGST Act, 2017 then whether the applicant has correctly discharged the GST as per the illustrative copy of the invoice generated by the Applicant? - HELD THAT:- The question which has been raised by the applicant is not pertaining to any of the matters mentioned in Section 97 (2) of the GST Act. In other words, Section 97(2), which encompasses the questions, for the ruling by this Authority does not deal with the issue of whether the applicant has correctly discharged the GST as per the illustrative copy of the invoice generated. This question does not pertain to any matter in respect of which an Advance Ruling can be sought under the GST Act. Hence, it is held that this authority does not have jurisdiction to pass any ruling on such matters and the said question is not maintainable under the GST Act.
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2020 (7) TMI 199
Filing of Form TRAN-1/TRAN-2 - transitional Input Tax Credit - time limitation - Rule 117 of Central Goods and Services Tax Rules, 2017 - HELD THAT:- To await the judgment of the Supreme Court in UNION OF INDIA VERSUS BRAND EQUITY TREATIES LIMITED AND ORS. ETC. ETC. [ 2020 (6) TMI 517 - SC ORDER] . Issue Notice.
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2020 (7) TMI 198
Anti Profiteering Proceedings - Constitutional validity and legality of Section 171 of the Central Goods and Services Tax Act, 2017 and/or Rule 126 of the Central Goods and Services Tax Rules, 2017 - HELD THAT:- This Court is of the opinion that in order to take a holistic view it would be appropriate to hear all the aforesaid matters together. Accordingly, Registry is directed to list the present case as well as all connected matters on 24th August, 2020.
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2020 (7) TMI 197
Vires of Rule 117(1A) of Haryana GST Rules, 2017 - permission to upload form TRAN-I in order to avail credit of excess VAT reflected in Returns - HELD THAT:- The Petitioner has challenged vires of Rule 117 (1A) of Rules, however we do not think it appropriate to declare it invalid as we are of the considered opinion that Petitioner is entitled to carry forward Cenvat Credit accrued under Central Excise Act, 1944. The Respondents have repeatedly extended date to file TRAN-I where there was technical glitch as per their understanding. Repeated extensions of last date to file TRAN-I in case of technical glitches as understood by Respondent vindicate claim of the Petitioner that denial of unutilized credit to those dealers who are unable to furnish evidence of attempt to upload TRAN-I would amount to violation of Article 14 as well Article 300A of the Constitution of India. The Respondents are directed to permit Petitioner to upload TRAN-I on or before 30.06.2020 and in case Respondent fails to do so, the Petitioner would be at liberty to avail ITC in question in GSTR-3B of July 2020.
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2020 (7) TMI 196
Credit of the GST amount earlier Service Tax charged by the petitioner in the Invoice - whether Respondent No.1 has taken credit of Service Tax/GST amount charged by the Petitioner in the monthly rent invoices? - HELD THAT:- The present petition is misconceived. Apparently, Petitioner has not received the entire amount against the monthly rent invoices for the period commencing from November 2012 to June 2020. Petitioner contends that the outstanding amount is towards the tax component levied on the said invoices - In the present case, we have not been called upon to adjudicate as to whether the liability to pay the taxes is on the Petitioner or Respondent No. 1. This question would have to be determined inter-se Petitioner and Respondent No.1, in appropriate proceedings, having regard to the terms and conditions of the lease agreement and in particular the Clause 13, extracted in the foregoing paragraphs. In so far as the tax department is concerned, it is the Petitioner who is registered with them and is liable to pay taxes. Under GST, the point of taxation, that is the liability to pay GST will arise at the time of supply, as determined for goods and services. This obligation to pay Service Tax/GST is irrespective of Respondent No. 1 taking credit of the taxes paid. Thus, whether Respondent No. 1 has availed the credit of Service Tax/GST or not is immaterial and will not effect Petitioner s right, if any, to recover the same. Learned counsel for the Petitioner is also unable to show any provision of law that puts an obligation on the tax department to furnish the information for which the mandamus is being sought. In case the petitioner has no such legal right, the prayer cannot be granted. We find no merit in the petition and the same is dismissed.
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Income Tax
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2020 (7) TMI 195
Assessment of trust - Carry forward of b/f losses - whether there is no provision in the statute to carry forward loss/excess application to subsequent years in case of charitable trusts being assessed under section 11 12? - CIT(A) set aside the action of the Assessing Officer and allowed the plea of the assessee for setting-off of carried forward amount of deficit of earlier years in order to compute the assessable income for the year under consideration - HELD THAT:- It was a common ground between the parties that the legal position laid down in the case of Raghuvanshi Charitable Trust [ 2010 (7) TMI 158 - DELHI HIGH COURT] continues to hold the field. In fact, the learned counsel for the assessee brought to the notice of the Bench that Hon'ble Supreme Court in the case of CIT(E) Vs. Subros Educational Society [ 2018 (4) TMI 1622 - SC ORDER] has impliedly affirmed the position of law enumerated by the Hon ble High Court of Delhi while considering a similar question raised by the Revenue before it, as the Hon'ble Supreme Court did not find any merit in the same. - Decided against revenue.
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2020 (7) TMI 194
Validity of reopening of assessment u/s 147 - jurisdiction of the AO the ITO Ward 2(2) - notice in the name of wrong person - non approval of the prescribed authority - Notice issued after four years - disallowance of construction cost of building and disallowing the benefit u/s 54 - HELD THAT:- AO in spite of having information in his possession, he has merely gone by the information received from DIT (I CI) and shows non-application of mind on his part and failure on his part to carry out preliminary enquiry on receipt of such information and thus, the reasons so recorded and the very basis, that the assessee has not filed the return of income and therefore, the income on sale of property has escaped assessment, is vitiated in the instant case. On perusal of the original return filed by the assessee, we find that in the said return, he had computed and disclosed income under the head long term capital gains showing full value of consideration and after claiming deduction for cost of acquisition and improvement, has computed long term capital gains and has claimed exemption of equivalent amount on account of fresh investment. The said disclosure matches with the transactions and the full value of consideration (including the impugned transaction which is subject matter of 148 notice) which has been finally brought to tax by the Assessing officer and thus, shows that the impugned transaction which is subject matter of 148 notice was duly reflected and offered to tax in the original return so filed by the assessee and therefore, on this count as well, there is no escapement of income in respect of impugned transaction. Therefore, in our considered view, such action on the part of the Assessing Officer for assumption of jurisdiction U/s 147 cannot be accepted and the notice under section 148 is thus set-aside. Issuing of notice u/s 148 in the wrong name - We agree with the contention of the ld DR that it was only a typographical error in first name of the assessee though other particulars such as assessee s surname, name of his father and address were correct and which has been corrected during the course of proceedings wherein the assessee has participated and thereafter, the reassessment order has been issued in correct name of the assessee. Therefore, on this account, the notice issued u/s 148 cannot be held as invalid in the eyes of law. Notice issued after four years - As noted that the notice u/s 148 was issued on 27.03.2015 after period of four years from the end of the relevant assessment year 2008-09 and such notice has admittedly been issued after seeking approval from Add.CIT, Range 2 Jaipur which is not in conformity with the provisions of section 151(1) wherein such notice issued after period of four years from the end of the relevant assessment year can be issued after seeking approval from concerned PCCIT/CCIT/PCIT/CIT and on this count as well, where the notice is issued without approval of the prescribed authority, the same is vitiated and cannot be sustained in the eyes of law. Notice issued under section 148 is vitiated on accounts of reasons stated supra and is hereby set-aside for want of valid jurisdiction and requisite approval. The ground of appeal is thus decided in favour of the assessee and against the Revenue. Disallowance of construction cost of building and disallowing the benefit u/s 54 - There is nothing on record in terms of buyers confirmation/affidavit or photographs of the property at the time of sale which can corroborate that what has been purchased/sold is not just a plot of land but a plot of land along with constructed house thereon which could then have been verified by the Assessing officer. - Since we have already quashed the notice u/s 148, no useful purpose would be served in setting aside the matter to the AO to allow the deduction under section 54F as the consequent proceedings stand quashed. The ground is disposed off accordingly.
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2020 (7) TMI 193
Non granting deduction towards payment on account of Voluntary Retirement Scheme (VRS) relating to employees of its Calcutta unit - HELD THAT:- Assessee paid the above sum towards VRS of certain employees of Calcutta unit. It is noticed that similar issue came up for consideration before the Tribunal in assessee‟s own case for the immediately succeeding assessment year. Vide order [ 2010 (3) TMI 1171 - ITAT MUMBAI] the Tribunal has decided it in favour of the assessee. Revenue carried the matter before the Hon ble Bombay High Court against the said order of the Tribunal. Vide judgment [ 2013 (6) TMI 227 - BOMBAY HIGH COURT] Hon ble Bombay High Court dismissed the appeal of the Revenue. A copy of the judgment is available on record. It is seen that section 35DDA has been inserted by the Finance Act, 2001 providing for amortization of expenditure incurred on Voluntary Retirement Scheme. The assessment year under consideration is prior to the insertion of section 35DDA and hence cannot rule the position. The instant year would be governed by the earlier provisions. - Decided in favour of assessee.
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2020 (7) TMI 192
Exemption u/s 80P(2)(d) - society has interest income on fixed deposits with Co-operative Banks and Karnataka State Co-operative Apex Bank Ltd. - as per AO interest earned on surplus funds are taxable and not eligible for deduction under Section 80P(2)(d) - society has invested/deposited funds which are not required for business being surplus funds and interest on deposits cannot be considered as income from other sources and observed that the interest income is not covered under Section 80P(2)(d) - HELD THAT:- As relying on M/S. THE JAYANAGAR CO-OPERATIVE SOCIETY LTD. [ 2019 (7) TMI 1219 - ITAT BANGALORE] we restore the disputed issue to the file of the CIT (Appeals) to consider the submissions of the assessee for fresh adjudication in light of the judicial decisions of Hon ble Supreme Court in the case of Totgars Co-operative Sale Society [ 2010 (2) TMI 3 - SUPREME COURT] and Tumkur Merchants C-operative Society [ 2015 (2) TMI 995 - KARNATAKA HIGH COURT] and the assessee should be provided adequate opportunity of hearing and shall co-operate in submitting the documents and allow grounds of appeal of the assessee for statistical purposes. Deduction u/s 80P(2)(a)(i) denied as the assessee society accept the deposits from general public being Nama Matra Sadasyaru/Nominal Members and the identity was not established in respect of ordinary members and nominal members in the assessment proceedings - We find nominal members are part of the society for earning surplus/income to the society. Accordingly, we set aside the order of the CIT (Appeals) on this issue and restore this disputed issue to the file of CIT(A) for fresh adjudication on the four categories of members and eligibility of nominal members under Karnataka State Co-operative Societies Act, 1959 and pass a speaking order. Further the assessee should be provided adequate opportunity of hearing and shall co-operate in submitting the information and allow the grounds of appeal of the assessee for statistical purposes.
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2020 (7) TMI 191
Business connection/PE in India - Revenue earned from supply of soft ware taxed as royalty - assessee has offered to tax only receipts on account of professional services in the tax return filed by it to be taxed @ 15% in terms of Article 12 of the DTAA between India and USA - HELD THAT:- On finding party that there is no change in the factual matrix in Assessment Year under consideration as compared to earlier years, which has also been accepted by the lower authorities, respectfully following the findings of the co-ordinate bench, being upheld by ASPECT SOFTWARE INC. [ 2015 (5) TMI 726 - ITAT DELHI] we are of the considered view that receipts would constitute business receipts and is to be assessed as such, subject to the assessee having business connection/PE in India. Installation and dependent agent/PE in India - HELD THAT:- Tribunal has set aside the issue of dependent agent/PE, the ld. DR vehemently stated that the other inter-related issues relating to attribution of income and claim of remuneration to be at arms length need to be re-examined by the Assessing Officer after examining the issue relating to dependent agent/PE. We find force in this contention of the ld. DR. AO is directed to decide the issue relating to dependent agent/PE in line with the direction of the co-ordinate bench and thereafter should decide attribution of income and the issue relating to transactions being at arms length price. Grant of TDS credit - HELD THAT:- AO is directed to give credit of TDS as per provisions of law.
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2020 (7) TMI 190
TDS u/s 194A - interest provision credited to the interest payable account - non deduction of TDS - assessee company has provided interest on deposits collected under GFDA scheme floated by assessee and debited the same to the profit and loss account by applying the average rate of interest on the balance amount of deposits bypassing monthly credit entries in the interest payable account without crediting the corresponding interest accrued on each individual deposit to the individual depositors account - default u/section 201(1) and 201(1A) - HELD THAT:- Any sum credited to suspense account or interest payable account shall be deemed to be credited for the purpose of tax deduction at source. Therefore, if the individual account interest payments exceed ₹ 2500/- merely because they are credited to the different account than the account of depositors, TDS liability of the deductor cannot be eliminated. But, there has to be provision of interest of individual account where credited to the account of depositor or to interest payable account is more than ₹ 2500/- for the FY, then only tax is required to be deducted. As per assessee there are no accounts where the individually interest payable to them is in excess of ₹ 2500/- and wherever it is requisite tax is deducted. This is not disputed by the ld DR. Therefore, we hold that there is no infirmity in the order of the ld CIT (A) in holding that assessee was not required to deduct tax at sources where the interest payable to individual account holder does not exceed ₹ 2500/- in FY. Jurisdictions of assessing officer as well as TDS officers - Looking at the orders passed under section 127 of the income tax act by the Commissioner of income tax Lucknow, it is apparent that jurisdiction over TDS has not been transferred to the other specified officers other than ITO (TDS), Lucknow. Further in case of sister concerns also the ITO TDS Ward 2, Lucknow and not the officer of the central circle, has passed the respective orders under section 201 (1A relating to several years which have been mentioned in paragraph number 28 of the order of the learned CIT A. Further in sub paragraph number five of para 28 of that order , in case of the assessee itself the orders have been passed by the ITO (TDS), Ward 2 Lucknow under section 201 (1A) of the act. Therefore, it is apparent that the jurisdiction of all TDS matters over the assessee was with ITO (TDS) Ward 2, Lucknow and not with The Deputy Commissioner of Income Tax, Central Circle 1, Lucknow. On reading of all these notifications produced before us and considered by the learned CIT A on jurisdictions of assessing officer as well as TDS officers, it is apparent that the order passed by the learned Assistant Commissioner of Income Tax, central circle 1, Lucknow under section 201 (1) and 201 (1A) of the act on 1/6/1999 has correctly been held by the learned CIT A as without jurisdiction. No infirmity in the order of the learned CIT A in quashing the order passed by the learned assessing officer under section 201 (1) and 201 (1A) of the act on 16 1999 on the issue of jurisdiction as well as on the merits. - Decided against revenue. Penalty u/s 271C - HELD THAT:- Penalty u/s 271C is also dismissed for the reason that, there is no default by the assessee under section 194A of the income tax act relating to deduction of tax at source on interest paid for the year. Further the action of penalty was initiated based on the order under section 201 (one) and 201 (1A of the act passed by the learned assistant Commissioner of income tax, central circle one, Lucknow was also found to be without jurisdiction. Therefore, when the penalty itself was initiated on an order, which was not passed by a proper jurisdictional officer, penalty initiated based on that order, even otherwise, could not survive.
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2020 (7) TMI 189
Provision for cost on completed contracts on completed contracts - expenses incurred between the stage of commissioning of the plant and final acceptance of the same by its customer - provision had been disallowed by them primarily for the reason that they were not made on a scientific basis and the estimation of the same was not backed by supporting documentary evidence - HELD THAT:- Revenue would be recognized by the assessee on commissioning of a plant, however, in the backdrop of the complex nature of its business certain expenditure would certainly be required to be incurred between the stage of commissioning of the plant and final acceptance of the same by its customer. Assessee had to carry out estimation of such future expenditure and create a provision for cost on the completed projects. A major portion of the provision was reversed in the subsequent years - reasoning of the lower authorities would not justify disallowance of the provision made by the assessee. It is not the case of the revenue that the reversal of the provision in the subsequent year had not been offered to tax by the assessee. On a perusal of the records, we find that the provision for costs on completed contracts made by the assessee are based on identified and ascertained present liabilities on the basis of technical assessments and projections of the project managers, who are experts in their field. Practice of providing for all known liabilities on an estimate basis by the assessee is in accordance with the Accounting Standard-1 issued u/s 145 vide CBDT Notification No. S.O 69(E), dated 25.01.1996, as per which provisions should be made for all known liabilities and losses even though the amount cannot be determined with certainty and represents only a best estimate in the light of available information. Provision made by the assessee is in conformity with Accounting Standard-7 issued by the ICAI. Further, we find that the assessee consistently by way of a regular method of accounting had been making such provision for costs on completed contracts, which would be reviewed by it each and every year and were immediately written back if the same were not required. Issue as regards allowability of the provision for costs incurred on completed contracts is a recurring issue which in the preceding years involving identical facts had travelled upto the Tribunal. As observed by us hereinabove, the issue as regards the allowability of provision for costs on completed contracts is squarely covered by the order passed by the Tribunal in the assessee s own case for the immediately preceding year i.e A.Y 2006-07 [ 2019 (4) TMI 873 - ITAT MUMBAI] wherein after exhaustive deliberations it was observed that the assessee s claim for provision for costs on completed contracts was in order - We vacate the disallowance of provision for costs incurred on completed contracts. Disallowance of cost overruns on incomplete contracts - assessee had made a provision for cost overruns on incomplete contracts i.e accounting for expected loss to be incurred on a particular contract - HELD THAT:- We find, that the assessee had furnished before them complete project wise estimation for the year under consideration, and there is nothing discernible from the record which would suggest that there was any change in the method of accounting being followed by the assessee. Insofar the case of the assessee for A.Y 2004-05 is concerned, we find that the claim of the assessee in context of the issue under consideration was allowed by the Tribunal. As regards A.Y 2005-06, a similar claim of the assessee was allowed by the A.O himself. Accordingly, in terms of our aforesaid observations and finding no reason to take a different view delete the disallowance of provision for cost overruns on incomplete contracts Revenue recognition - accounting process - profits in respect of the projects accounted under the percentage completion method - HELD THAT:- As decided in own case [ 2019 (4) TMI 873 - ITAT MUMBAI] assessee is following consistent method of accounting to recognize the revenue under these contracts. The percentage of completion of the project has been worked out as per total cost incurred on the project to date vis- -vis total budgeted cost and that fraction is applied to the contract value for the purpose of revenue recognition. Similar formulae have been adopted by the assessee in preceding two years which has been accepted by the revenue. No case of revenue leakage has been established before us. Nothing on record suggest that remaining income under the project has not been offered by the assessee in subsequent years, following the same method of accounting. Simply because progress billing was more than the stage of percentage of completion, the same, in itself, could not be the basis to usurp the consistent method of accounting being followed by the assessee. Therefore, the additions made by the revenue, under the circumstances, could not be sustained. Nature of expenditure - computer software charges - revenue or capital expenditure - A.O treated treated the same as a capital expenditure and allowed depreciation @60% on such capitalized value - HELD THAT:- As decided in own case [ 2019 (4) TMI 873 - ITAT MUMBAI] we find that when the expenditure is in the nature of annual maintenance charges, the same could not be held to be capital in nature. Keeping in view the fact that the issue stood covered in assessee s favor by the orders of Tribunal for earlier years, we hold the expenditure to be revenue in nature and hence, fully allowable to the assessee. Consequently, the depreciation allowed against the same shall stand reversed. This ground stand allowed. Levy of interest u/s 234B - HELD THAT:- As the levy of interest u/s 234B is mandatory as per the judgment of the Hon ble Supreme Court in CIT Vs. Anjum M.H Ghaswala Ors [ 2001 (10) TMI 4 - SUPREME COURT] therefore, the A.O is directed to rework out the same after giving appellate effect to this order.
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2020 (7) TMI 188
Addition u/s 56(2)(vii)(b) - Whether property acquired by the assessee was not a capital asset? - nature of immoveable property which has been purchased by the assessee - difference between the sale consideration as per the sale deeds and the stamp valuation determined by the Stamp Valuation Authority - As contended that the assessee had purchased two pieces of agriculture land during the year and the agriculture land not being a capital asset, the provisions of section 56(2)(vii)(b) are not applicable - HELD THAT:- Only those immovable properties which are held as capital assets and is in nature of land or building or both are only covered u/s 56(2)(vii). We agree with the contention of the ld AR that where the term property has been defined to mean a capital asset as so specified and where an immoveable property as so specified being land, building or both is not held as an capital asset, it will not be subject to the provisions of section 56(2)(vii)(b) of the Act. In the instant case, therefore, where the agricultural land doesn t qualify as falling in the definition of capital asset, provisions of section 56(2)(vii)(b) cannot be invoked. In the instant case, whether agriculture land so acquired falls in the definition of capital asset or not, one has to refer to the provision of section 2(14) which exclude agriculture land in India subject to certain exceptions. However, there are no findings of the lower authorities in this regard. Therefore, we deem it appropriate to set-aside the matter to the file of the AO for the limited purposes of examining whether the two plots of agricultural land so acquired falls in the definition of capital asset or not. We find that the AO has not appreciated the objection of the assessee regarding adoption of DLC value as against the sale consideration. Therefore, where the assessee has objected to the stamp duty valuation, as per the provisions of section 50C(2) of the Act which are equally relevant for the purpose of provisions of section 56(2)(vii)(b)(ii) of the Act, the matter should have been referred by the Assessing Officer to the DVO for determination of fair market value. Therefore, in the instant case, where it is so determined by the Assessing officer that the agricultural land so acquired falls in the definition of capital asset, he has to refer the matter to DVO to further determine the fair market value of the two plots of agricultural land and thereafter, decide the matter afresh. Appeal of the assessee is allowed for statistical purposes.
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2020 (7) TMI 187
Disallowance u/s 14A r.w.r. 8D - investment in shares - Addition partly sustained by the Ld. CIT(A) - HELD THAT:- Entire investment in shares was made by the assessee out of her own funds and it is observed that this position was accepted by the AO as well as by the CIT(A) thus disallowance made on account of interest u/s 14A as worked out by applying Rule 8D(2)(ii) thus is not sustainable and direct the AO to delete the same. Disallowance on account of other expenses u/s 14A r.w.r. 8D(2)(iii) - assessee has contended that the same is required to be worked out by taking into consideration only the value of investment in shares which actually fetched the exempt dividend income to the assessee and not the value of entire investment as done by the AO - HELD THAT:- Since this contention of the assessee is duly supported by the decision of Hon ble Kolkata High Court in the case of REI Agro Ltd [ 2013 (12) TMI 1517 - CALCUTTA HIGH COURT] we direct the AO to re-compute the disallowance to be made by applying Rule 8D(2)(iii) taking into consideration only the value of investment in shares which actually fetched exempt dividend income to the assessee during the year under consideration. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [ 2020 (5) TMI 359 - ITAT MUMBAI ]
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Customs
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2020 (7) TMI 186
Refund of deposit made by the petitioner - requirement of deposit of documents within the time bound schedule - HELD THAT:- The concerned respondent authorities are directed to decide the claim of refund of the petitioners in accordance with law within a period of four weeks from the date of receipt of the copy of the order of this Court. If the documents as demanded from petitioners are not supplied, even then the respondents shall decide the claim of the refund in accordance with law. Defreezing of the Current Account of the petitioner - HELD THAT:- It is fairly submitted by the counsel for the respondents that they have already written a letter to the concerned bank for de-freezing the bank account. Thus, the grievance about the de-freezing of account does not survive. Release of the goods which were seized - HELD THAT:- It appears that there is some unlawful activity by unknown persons and an FIR has also been lodged against Mr. Ajit Singh. Thus, the matter is pending before the concerned Trial Court on criminal side in Delhi and therefore an application has to be preferred by the petitioners for the release of the goods in accordance with the provisions of the Code of Criminal Procedure, 1973. Liberty is granted to the petitioners that upon proper presentation of the application under the Code of Criminal Procedure with proper averments, allegations and annexures for the release of the goods, the said application will be decided by the concerned Trial Court in accordance with law, rules and regulations and on the basis of the evidence on record. As and when the concerned Trial Court allows the release of the goods in favour of the petitioners, the respondents herein have no objection for the release of the goods in accordance with law - petition allowed.
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Corporate Laws
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2020 (7) TMI 185
Validity of undated document disclosing a DIN status which shows that the petitioner has been disqualified by the Registrar of Companies under Section 164(2) of the Companies Act, 2013 - HELD THAT:- On perusing the relevant documents, although the impugned DIN Status indicating the disqualification of the petitioner by the ROC is not dated, paragraph 6 of the writ petition states that the petitioner had renewed his digital signature (DSC) on 17th January, 2020. The petitioner came to know of the impugned document in March, 2020 which has been stated in paragraph 6 of the writ petition. It can therefore be assumed that the impugned document is after January, 2020 and before March, 2020 when the petitioner came to know of it. Section 168(2) of the 2013 Act is very clear. The resignation of a Director takes immediate effect from the date on which the notice of resignation is received by the company. Hence there is no question of such resignation not being accepted by the company as was the case made out in the reply received by the petitioner on 19th March, 2016. The resignation of the petitioner came into immediate effect on 18th March, 2016 with the letter of the petitioner - the petitioner is entitled to an injunction restraining the respondents from giving any effect to the disqualification/DIN Status of the petitioner or acting in terms thereof. Petition disposed off.
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Service Tax
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2020 (7) TMI 184
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Petitioner have declared Service Tax liability but the same could not be deposited while filing the return, which was deposited belatedly, but interest on delayed payment remained unpaid - HELD THAT:- On similar issues a Coordinate Bench has already disposed of a similar writ petition in ASSAM CRICKET ASSOCIATION VERSUS THE UNION OF INDIA AND 4 ORS., THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, THE PRINCIPAL COMMISSIONER, THE DESIGNATED COMMITTEE, ADDL. DIRECTOR GENERAL [ 2020 (6) TMI 38 - GAUHATI HIGH COURT] - it is submitted that by this order this Hon ble Court has remanded the matter back to the authorities concerned. The matter is remanded back to the authorities to reconsider the application/declaration furnished by the petitioner being and pass appropriate orders thereon in terms of the scheme and the rules framed thereunder - Petition allowed by way of remand.
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2020 (7) TMI 183
Business Auxiliary Services - distributor s margin received by the Appellant from BSNL for Re-sale of cellular products - HELD THAT:- While dealing with the similar facts and circumstances in the case of COMMISSIONER CENTRAL EXCISE, LUCKNOW VERSUS M/S CHOTEY LAL RADHEY SHYAM [ 2017 (9) TMI 509 - ALLAHABAD HIGH COURT] , it is held that there is no agency service or sales promotion service provided in such transactions, but it is a case of sale/purchase of item from BSNL on principle to principle basis which is pure trading activity and on the cellular products, the BSNL has already discharged Service Tax, hence, demanding service tax again from the trader would amount to double taxation. Appeal allowed - decided in favor of appellant.
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2020 (7) TMI 180
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - rejection of first declaration made by the petitioner on the ground of Incorrect Declaration - rejection of second declaration/application filed by the petitioner on the ground that since earlier application on the same issue has been disposed of, this cannot be accepted - HELD THAT:- On similar issues a Co-ordinate Bench of this Court has already disposed of writ petition being WP (C) No. 2149/2020 passed in Assam Cricket Association Vs. The Union of India 4 Ors. Mr. Keyal [ 2020 (6) TMI 38 - GAUHATI HIGH COURT ] submits that by that order this Hon ble Court has remanded the matter back to the authorities concerned for consideration afresh. Appeal allowed by way of remand.
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Central Excise
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2020 (7) TMI 182
CENVAT Credit - duty paying documents - credit denied on the ground that the appellants have received only cenvatable invoices and not the goods - HELD THAT:- Considering the fact that similar investigation has been conducted by the DGCEI against Shri Amit Gupta and show cause notices were issued to the recipients of goods against whom the invoices were issued by Shri Amit Gupta to various firms, one such firm M/s. Unnati Alloys Pvt. Ltd. Neither cross examination of Shri Amit Gupta nor Shri Amit Gupta was made party to the show cause notice which shows that the investigation conducted against the appellant is not proper. Moreover, the transporters were also not examined at all nor made party to the show cause notice. The benefit of doubt goes in favour of the appellants that they have received the goods against cenvatable invoices issued by M/s. Unnati Alloys Pvt. Ltd., in question and made payment through account payee cheque. The goods received by the appellant for manufacturing of goods, which has been cleared on payment of duty - Cenvat credit allowed to the appellants - also the show cause notices are not required to the issued to the appellants. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2020 (7) TMI 181
Unblocking of portal to enable the petitioner to access and procure Forms C and Forms F - Sections 6 and 6A of the Central Sales Tax Act, 1956 - petitioner submits that neither CST Act nor the rules framed therein provide for blocking of a portal due to pendency of assessment orders - HELD THAT:- This Court is of the opinion that by virtue of power conferred under Rule 5(4)(ii) of the Central Sales Tax (Delhi) Rules, the Commissioner can withhold issuance of declaration Form C to an assessee/applicant provided he passes a reasoned order after affording an opportunity of hearing to the assessee/applicant - However, in the present case, despite the petitioner highlighting its grievances vide letters dated 25th March, 2019 and 17th May, 2019, the notice under Section 59(2) has been issued on 03rd July, 2020 and that too after receipt of an advanced copy of the present writ petition. In any event, as admittedly no order has been passed under Rule 5(4)(ii) of the Central Sales Tax (Delhi) Rules till date, this Court is of the opinion that the Commissioner cannot withhold issuance of declaration Form C to the petitioner in the present case - the present writ petition is allowed and the Commissioner, Delhi Valued Added Tax, is directed to unblock the portal forthwith so as to enable the petitioner to access and procure the requisite statutory Forms (Form C and Form F) provided under Sections 6 and 6A of the CST Act. Petition disposed off.
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